Models of Consumer Behaviour - PowerPoint by 761BJA

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									          Consumer Behaviour and
              Food Marketing
                     Week 1 – 30 April 2003




Consumer Behaviour and Food                   1
    Marketing – AE 613
             Consumer Behaviour
          & Food Marketing (AE 613)

• BSc      Agricultural Economics
  BSc      Rural Resource Management
  BSc      Agricultural and Business Management
  BSc      Food Marketing & Economics
• Module convenor
    Mario Mazzocchi (Room 310; ext. 6484;
     m.mazzocchi@rdg.ac.uk)
Module is held on Wednesday 11am-1pm in
 the Nike lecture theatre (Ag building)

Consumer Behaviour and Food                       2
    Marketing – AE 613
                        Module content
   • Behavioural theories of consumer
     choice and models of consumer
     decision-making process

   • Factors influencing consumer choice
     with respect to foods

   • Implications of such factors for
     marketing of food products
Consumer Behaviour and Food                3
    Marketing – AE 613
                   Learning outcomes
   • The module aims at providing you with
         – An understanding of the consumer
           decision-making process
         – An understanding of internal and external
           influences on consumer choice
         – An appreciation of the relevance of the
           consumer choice process to food
           marketing
         – An understanding of how market research
           methods relate to elements of the
           consumer decision-making process
Consumer Behaviour and Food                            4
    Marketing – AE 613
                  Module structure
Week     Date       Time        Topic
    1   30-Apr      11-Jan     Introduction to the course + Models of Consumer behaviour
    2   07-May      11-Jan     No lecture - Bank Holiday
    3   14-May      11-Jan     Information processing
    4   21-May      11-Jan     Attitudes, beliefs and behaviour
    5   28-May      11-Jan     The role of social influence & culture in food consumption
    6   04-Jun      11-Jan     Consumer & The Shop
    7   11-Jun      11-Jan     External seminar (Prof. Morrow)
    8   18-Jun      11-Jan     The loyalty concept: brand and store purchase propensity
    9   25-Jun      11-Jan     Response to advertising
   10    02-Jul     11-Jan     Consumer satisfaction and quality + Course summary

 Consumer Behaviour and Food                                                         5
     Marketing – AE 613
                   Module assessment
   • The assessment will take the form of a
     presentation (20%) + essay (80%) which
     relates consumer behaviour to the
     marketing of food products.
   • Choice among any of the topics covered
     in the course
   • Groups of 3 students
   • Max 2500 words
   • Deadline: 3 July 2002 (end WK10)
Consumer Behaviour and Food                   6
    Marketing – AE 613
           Presentation and Essay
                Development
   • Presentation will start from week 4
   • Essay questions are given (available on
     the web)
   • The following week a 3-people team will
     give a short Powerpoint presentation (15-
     20 minutes)
   • The presentation will origin the essay to
     be delivered at the end of the course
   • Schedule of presentation

Consumer Behaviour and Food                  7
    Marketing – AE 613
           Presentation and essay
           writing basic guidelines
   • Try to be concise and communicative
   • Base your answers to essay questions
     on sources given at the end of the
     lecture, but also make use of library
     resources to research independently
   • Use your own words to interpret sources
     through a case study
   • All sources must be correctly referenced
     in the text

Consumer Behaviour and Food                 8
    Marketing – AE 613
                   Suggested reading
• The course will be mainly based on the
  following textbooks:
      – East (1997). Consumer Behaviour: Advances and
        Applications in Marketing. London: Prentice-Hall.
• Further references will be given for each class.
  A reading list is under preparation.
• Food-specific books (in the Library):
      – Marshall (1995, ed.). Food Choice and the Consumer.
        London: Blackie Academic & Professional
      – Meiselman and McFie (1996, eds.). Food Choice,
        Acceptance and Consumption. Blackie Academic &
        Professional
Consumer Behaviour and Food                                 9
    Marketing – AE 613
      Consumer Behaviour (East)
   • How and why people buy and use
     products
   • How they react to prices,
     advertising and other promotional
     tools
   • What underlying mechanisms
     operate to help and hinder
     consumption

Consumer Behaviour and Food              10
    Marketing – AE 613
        Food plays a central role in
               people’s lives
Food preferences are culturally bound
  and socially influenced
• Source of nutrition
• Source of hedonistic experience
• Social function
• Cultural function
• Central economic role

• Complexity
• Multidisciplinary approach
Consumer Behaviour and Food             11
    Marketing – AE 613
              Economic Factors:
             Microeconomic theory
• Demand is a function of prices, income
  and preferences - but preference
  changes are difficult to measure
• Effects of income and price changes on
  demand, under given preferences
• Unresolved issue: quality and
  preferences

Consumer Behaviour and Food           12
    Marketing – AE 613
                         The Engel Law
   • As income grows, the household
     expenditure share for food
     decreases
         – Share not quantity
         – Saturation of food consumption
              • Healthy foods
              • Functional foods
              • Marketing and differentiation (product
               bundle)

Consumer Behaviour and Food                              13
    Marketing – AE 613
                                   Food share on Italian
                                   household expenditure
                                        Consumi alimentari e totali in Italia (1951-1997)

                         1000000                                                            40.0


                         900000
                                                                                            35.0

                         800000




                                                                                                   % consumi alimentari
                                                                                            30.0
Consumi finali interni




                         700000
  (mld di lire 1990)




                                                                                            25.0
                         600000


                         500000                                                             20.0


                         400000
                                                                                            15.0

                         300000
                                                                                            10.0
                         200000

                                                                                            5.0
                         100000


                              0                                                             0.0
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                              Total Consumi finali interni   Exp. share for
                                                                Anno
                                                             % consumi alimentari
           Consumer Behaviour and Food
                              expenditure                    food (%)                       14
               Marketing – AE 613
                              Real value of food
                                 consumption
                            Spesa reale per alimentari e bevande (a prezzi 1990, mld di lire)

     180000

     160000

     140000

     120000

     100000

      80000

      60000

      40000

      20000

          0
              1951
                     1953
                             1955
                                    1957
                                           1959
                                                  1961
                                                         1963
                                                                1965
                                                                       1967
                                                                              1969
                                                                                     1971
                                                                                            1973
                                                                                                   1975
                                                                                                          1977
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                                                                                                                        1981
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                                                                                                                                             1987
                                                                                                                                                    1989
                                                                                                                                                           1991
                                                                                                                                                                  1993
                                                                                                                                                                         1995
                                                                                                                                                                                1997
Consumer Behaviour and Food                                                                                                                                                       15
    Marketing – AE 613
                              But ...
• How do preferences form?
• Why do they change?
• How are decisions made?
• Do income and prices influence
  preferences too?
• These questions are central to
  marketing strategies:
   How can consumer decisions be
               influenced?
Consumer Behaviour and Food             16
    Marketing – AE 613
                Long-term change of
                consumer preferences
                              Influence of income and prices
           STRONG                    DECREASING                     WEAK
  Get enough food                     Health trend        Concern about residuals,
  Eat more                     Eat better and healthier food etc.
                               Less calories                 Concern about the
                               More vitamins                 environment
                                      Diversification        Buy, prepare and eat food
                               Eat a variety of foods        more eventfully
                               Enjoy food                    Less anonymous mass
                                    Convenience trend        consumption
                               Buy, prepare and eat food     More transparency/Safety
                               with more convenience         Back to nature
                                                             Ethical concerns



Consumer Behaviour and Food                                                          17
    Marketing – AE 613
                Models of Consumer
                    Behaviour
   • Types of consumption
   • Purchase paradigms
   • Modelling food consumption
     behaviour

   Most of the topics of this lecture are
    covered by East (Chap. 1)
Consumer Behaviour and Food                 19
    Marketing – AE 613
            What determines food
                  choice?
   • There are three types of influences
     on preference and choices for food:
         – Characteristics of the product
         – Characteristics of the individual
         – Characteristics of the environment




Consumer Behaviour and Food                     20
    Marketing – AE 613
              Types of consumption
   •   Important purchases
   •   Repetitive consumption
   •   Involuntary consumption
   •   Group consumption




Consumer Behaviour and Food          21
    Marketing – AE 613
               Important purchases
   • Product purchased for the first time
   • Infrequently purchased products
         – Time and effort to choose
         – Little experience
         – High involvement


                  Going to a new restaurant

Consumer Behaviour and Food                   22
    Marketing – AE 613
            Repetitive consumption
   •   Frequent purchase
   •   (Low price)
   •   Little conscious attention
   •   Low involvement
   •   Experience goods

                   Sugar at the supermarket
Consumer Behaviour and Food                   23
    Marketing – AE 613
          Involuntary consumption
   • Unavoidable consumption
                    –   Petrol for the car
                    –   Telephone
                    –   Repair of roads (social form, public goods)
                    –   …

   • Choice between brands?

                                 Tap water

Consumer Behaviour and Food                                           24
    Marketing – AE 613
                   Group consumption
   • Purchase based on some group
     influence process
         – Family expenditures
         – Company purchases



                              Mineral water

Consumer Behaviour and Food                   25
    Marketing – AE 613
                Purchase paradigms,
                theories and models
         Paradigm (perspective, framework)


                    Theory     MODEL




Consumer Behaviour and Food                  26
    Marketing – AE 613
                 Purchase paradigms
   • Are not mutually exclusive
   • Subjective preferences
   • Appropriateness for particular
     conditions




Consumer Behaviour and Food           27
    Marketing – AE 613
                 Purchase paradigms
   1. Cognitive paradigm (US)
         –     Purchase as the outcome of problem-solving

   2. Reinforcement paradigm (UK)
         –     Purchase as learned behaviour

   3. Habit paradigm
         –     Pre-established pattern of behaviour




Consumer Behaviour and Food                                 28
    Marketing – AE 613
           The Cognitive paradigm
   • Decision-making as an explanation
     for consumer behaviour
         “The cognitive consumer is credited with the
           capacity to receive and handle considerable
         quantities of information, to engage actively in
            the comparative evaluation of alternative
          products and brands, and to select rationally
                       among them” [Foxall]



Consumer Behaviour and Food                             29
    Marketing – AE 613
                   Cognitive paradigm
   • Does it work?
   • Typical purchase (especially for
     food)
         – Few alternatives
         – Little external search
         – Few evaluative criteria
   • Engel, Blackwell and Miniard (1995)

Consumer Behaviour and Food             30
    Marketing – AE 613
     Extended Problem Solving
   • New and important purchases
                               Problem/need recognition


                                Search for information


                               Evaluation of alternatives


                                       Purchase

                                     Consumption


                              Post-consumption evaluation
Consumer Behaviour and Food                                 31
    Marketing – AE 613
           Limited problem solving
   • Even in new purchase there are no
     time, resource and motivation to the
     search
   • Search for information and
     evaluation of alternatives are
     limited


Consumer Behaviour and Food             32
    Marketing – AE 613
        Habitual decision-making
   • Loyalty to the brand
   • Inertia
         – The need is satisfied, but there is no
           special interest in the product
   • Food products
   • “Satisficing behaviour”
   Accept the first solution that is good enough to
     satisfy your need, even if a better solution may
     be missed
Consumer Behaviour and Food                             33
    Marketing – AE 613
       Satisficing behaviour
    (Simon, 1957; Klein, 1989)
                     Need recognition



             Evaluation of single Option

                                          NO
                          Purchase?

                                    YES
                              END
Consumer Behaviour and Food                    34
    Marketing – AE 613
Consumer Behaviour and Food   35
    Marketing – AE 613
                  The Reinforcement
                      paradigm
   • Reinforcer: an experience which
     raises the frequency of “responses”
     associated with it
   • Punisher: an experience which
     reduces the frequency of such
     response
   [Skinner, 1938; 1953]

Consumer Behaviour and Food                36
    Marketing – AE 613
            The learned behaviour
                   theory
   • Past behaviour teaches us, and
     after learning we can modify later
     behaviour
         – Satisfaction/unsatisfaction with a
           product
         – It is valid for both the reinforcement
           and habit paradigm


Consumer Behaviour and Food                         37
    Marketing – AE 613
           Some types of learning
 • Classic conditioning (Pavlov’s dog)
 • Learning is generalised
       – Use of an existing brand for a new product
       – Use of stimuli: packaging, brand names,
         colours, smells, music, context of
         purchase/consumption
 • Reinforcement learning
       – Trial and error learning
       – Shaping (behaviour changed by reinforcing
         the performances that show change in a
         desired direction)

Consumer Behaviour and Food                           38
    Marketing – AE 613
               The satiation effect
   • Heavily used reinforcements lose
     power (satiation effect)
         – Wearout in advertisement
         – Desensitisation: stimulus satiation




Consumer Behaviour and Food                      39
    Marketing – AE 613
      Stimuli and reinforcement
               learning
   • Continuous and Intermittent
     learning
         – Continuous is quicker
         – Intermittent has a larger final effect
         – Extinction period after the end of
           reinforcement is longer for intermittent
           learning


Consumer Behaviour and Food                       40
    Marketing – AE 613
                Punishment and
            reinforcement learning
   • Food poisoning consequences
         – One failure is enough
         – Undiscovered later improvements of
           the product
         – Effect is long-lasting




Consumer Behaviour and Food                     41
    Marketing – AE 613
                  Reinforcement and
                  marketing strategy
   • Control stimuli to “direct” behaviour
   • Reinforcers
         – Pleasure
         – Information
   • Degree of “opennes” (range of
     activities available to the consumer)
   • Environment affects behaviour
Consumer Behaviour and Food              42
    Marketing – AE 613
                The Habit paradigm
   • While the cognitive and reinforcement
     paradigms are based on dynamics and
     change, the habit one is related to
     aggregate stable markets, where
     behaviour is seen as relatively
     unchanging.
   • The habit paradigm excludes problem-
     solving or planning
   • Judgment comes after purchase and
     habits may be broken
Consumer Behaviour and Food                  43
    Marketing – AE 613
           The involvement factor
   • Involvement
         – Importance of purchase
         – Risks involved
              • Potential costs
              • Irreversibility of the decision
         – Type of cognitive process that is
           generated
     Example:                 beef consumption after the BSE crisis

Consumer Behaviour and Food                                           44
    Marketing – AE 613
                   Frustration factor
   • Frustration as “blocked motivation”
   • No options are available
   • Minor frustrations in using
     products may lead to change
     products
   • New products should be designed to
     avoid frustration

Consumer Behaviour and Food             45
    Marketing – AE 613
     Managerial control and the
        purchase paradigms
   • Cognitive paradigm
         – Provide information and persuasion
         – Suitable for one-off decisions
   • Reinforcement paradigm
         – Change the environment and stimuli
   • Habit paradigm
         – Packaging
         – Advertising
Consumer Behaviour and Food                     46
    Marketing – AE 613
      Food properties and quality
       (Hooker, Caswell, 1996)
Food safety attributes           Value attributes
    Foodborne pathogens              Purity
    Heavy metals                     Compositional integrity
    Pesticide residues               Size
    Food additives                   Appearance
    Naturally occurring toxins       Taste
    Veterinary residues              Convenience of preparation
Nutrition attributes             Package attributes
    Calories                         Packaging materials
    Fats and Cholesterol             Labelling
    Sodium                           Other information provided
    Carbohydrates and Fiber
                                 Process attributes
    Proteins                         Animal welfare
    Vitamins                         Biotechnology
    Minerals                         Environmental impact
                                     Pesticide use
  Consumer Behaviour and Food        Worker safety                47
      Marketing – AE 613
Consumer Behaviour and Food   48
    Marketing – AE 613
        Problem/need recognition
   • In general, individuals recognise
     they have a need for something
     when there is a discrepancy
     between their actual state and
     ideal state.




Consumer Behaviour and Food              49
    Marketing – AE 613
              Need recognition and
               marketing strategy
   • Advertising
   • In-store promotion
   • Visibility




Consumer Behaviour and Food          50
    Marketing – AE 613
                  Need recognition…




Consumer Behaviour and Food           51
    Marketing – AE 613

								
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