Principles of Marketing by 07XL6Q


									Consumer Behavior
(alternate title “Why did I buy that?”)
(alternate title “You bought what?)

(alternate title “Men Buy, Women Shop”)

Mauricio Featherman, Ph.D.

                       Chapter Overview

• Consumer behavior – studying the process individuals or groups
    employ to research, select, purchase, use, and dispose of goods
    or services to satisfy their needs.

• Why do we consume the branded products that we do?

• What factors affect where, when, why and how we purchase the

• This chapter can be considered applied psychology, applied
    sociology and applied cultural anthropology. Furthermore
    cognition and decision-making are covered.
•   There is an entire class on this topic as there are entire MBA’s
    on market research, competitive analytics                          2
                               What are shoppers thinking??

                                                                           Is this my color?
                                                    Does it have special
                                 What will my                                 I’ll just buy it,
I like how    What will my                          care instructions?
                                 ??? think?                                   its only $40
it feels…     friends think?                        Does it cover    Will it match my new
                                 Does this look
                                                    my tats?         pants?
                                                  Should I keep
                           Is this a
                           good value?

                               I’m late…maybe Maybe I should
                               I’ll just buy  wait till I see
                               this one..     what ??? has
Maybe I should
                     How will I feel   Wait what’s my       Should I try this on?
wait till I travel
                     when I wear it?   credit card balance?      I never heard
                     Where’s a !@#$%^                            of this brand ..
  I’m sooo hungry!                            Have I ever
                     salesrep when you                      What is the
                                              been in this
                      want one?
 Will I look                                  store before? country of origin?
 hot?            Do I have one                                                     3
                 like this already?       Who made this?      Is the labeling tight?
                    Comment on the prior slide

• The prior slide listed the thoughts a consumer may have when
 shopping for a specific product. The thoughts are product, store,
 personal, referent based, etc.

• Marketing researchers actually use this thought-listing (cognitive
 elaboration) exercise to discover what consumers consider
 when shopping (i.e., what pops in their head, what info gets

• Exploratory research therefore includes thought listing “think out
 loud” exercises – where shoppers’ thoughts are recorded.

                    Consumer Behavior
                     Thought – Listing

• The idea is that if you know what the typical consumer is
 thinking about pre-purchase when handling your product:

 then you can counter their negative thoughts, amplify
 their positive thoughts, and put new thoughts in their
 minds using promotional materials, labeling and
• Example, Another , Another (view these)

• Hey are your thoughts during shopping as ridiculous as mine?
 (we just pretend to be rational decision makers, but maybe we
 base purchases and price insensitivity on non-important criteria)
                       Some Purchase Decisions Are more High
                       Effort Than Others

    • Consumer’s product evaluations & purchase
      decision making can differ widely based on a
      continuum of effort.
                        Examples           Please

Repurchase                                                              Consumption

                                                         High effort used,
Low effort – Just purchase                               Purchase decisions are
known products based on habit,                           based on extended, vigilant
Heuristics, and brand loyalty…. hunters                  problem solving…adventure

           FYI – males are usually way lazier on this cognitive effort scale     6
• What are some high cognitive effort
 purchases that you made recently?

• What are some low cognitive effort
 purchases that you made recently?

                      What makes a purchase decision
                      more deliberate?

• The amount of perceived risk experienced pre-
 purchase = the perception that danger is imminent
= the subjective estimated importance and likelihood
 of potential losses such as to the consumers’ time,
 $$, privacy, health, status, ego

  • The level of situational involvement (short-term
     interest, ex: lunch) or enduring involvement (long
     term interest, ex: Porsche, Twinkies, peeps) also
     makes consumers more deliberate

What are some purchases that are risky?
What are some product categories that elicit your enduring involvement?   8
                         Steps in High Effort Consumer

                                          All steps affected by:
1. Problem Recognition                     Cultural, situational,
                                           Social, Individual &
                                          Psychological Factors
   2. Information Search

                                          We will also examine
      3. Evaluate Alternatives            Low effort consumer
                                          decision-making , and
                                          How marketers can turn
                                          Consumers into vigilant
           4. Product Choice
                                          Info processors into
                                          Lazy heuristic processors

           5. Post Purchase Behavior

                    Steps in Consumer DM)
                     1. Problem Recognition (PR)

• When you recognize a gap between your current and
  desired or ideal state (recognize that a need is unmet)
• PR can be driven by internal factors (hunger or
  belongingness) or external (friends or family) factors

• ex: I’m hungry, or I need to restock my refrigerator
• Marketers help you remember or ID these gaps (often
  create needs too) – such as TV
  commercials that show you good
  food and people having fun                                11
                         Steps in Consumer DM
                           2. Information Search

•   Consumers search for appropriate info to make a reasonable
    decision (what options which solve my problem/need are available
    in the market)? Motivation for Info search varies widely and often
    consumers use brands or retail stores to shortcut info search

•   search: Internal sources (memory based on past experience)

•   and External sources (,, others???.)

•   Search effort increases when consumer’s perceived risk &
    interest/involvement are high (or are bored with current item
    /novelty-seeking), and confidence, knowledge, experience are low
                                                               Make sense?
•   Marketers put the right promotion in the right place when
    consumers are seeking it, willing to pay attention and view it   12
               Just Curious: Gauging the
               effect of Social Influence
• Please recall the last time you were uncertain when
 considering a significant purchase. Maybe you feared
 making a purchase mistake, and did not want to suffer
 personal losses,

 did you consult?

 a) friends or BF
 b) cool friends (mavens)
 c) parents or other elders
 d) significant other
 e) ??
                          Steps in Consumer DM
                            3. Evaluate Alternatives

•   Info search  “full set of considered options aka the evoked
    (consideration) set” ex: all auto’s

•   Then individuals narrow the competing products being considered
    using different evaluation criteria Ex: mpg, # airbags, torque,
    reliability, style (using key criteria -hybrid, or cut-offs -30mg)

•   Marketers need to identify which attributes consumers focus in on
    when making their ‘short-list’ or final choice (use focus groups!). Not
    all attributes are equally important!!! (more cupholders or mpg, or spm?)

•    Marketers try to influence consumers info search process telling how
    to evaluate the consideration set (accentuating their top features…
    Volvo does this…as does BMW … the ultimate driving machine) 14
                    Steps in Consumer DM
                        4. Product Choice

• If the consumer has the $$ and time then finally the
  choice is made – often based on …
  Heuristics = short-cut mental rules that facilitates quick
  decision making (expensive is good, buy what my
  friends use, buy the munchies that Phelps likes)
• Brand loyalty – stick with what works, do people build
  their identities based on brands?
• Or the simple affirmation of reptilian (base) desires (or do
  people just seek happiness, kicks & inspiration Poppy,
   (show all)

• includes payment and new ways to pay and shop
                        Steps in Consumer DM

                      5. Post Purchase Behavior

•   But consumers often neurotically question themselves post-purch.
•   There can be a gap between post-purchase satisfaction and the
    expectations the consumer had
• Larger gap = less satisfaction = more complaining = more negative
 word of mouth (WOM) - Ihatemy???.com, ???, bad reviews
 on, more spambombs.
•    Marketers and consumers both try to reduce post-decisional
    anxiety and regret (reduce the cognitive dissonance) , and reduce
    the flaming bad WOM on reviewer sites (It’s not that bad…)
•   Other post-purchase behaviors - Repeat purchase, Good (WOM),
    brand loyalty
• Have you ever witnessed anyone depart from ‘rationality
 as they stepped through the CDM stages for a recent
 important purchase decision …

• Anybody have a story about their ‘friend’?

            Problem Recognition
                  Information Search
                         Evaluate Alternatives

                             Product Choice
                                  Post Purchase Behavior    17
Influences on Consumer DM

                     Internal Influences on CDM

• Perception – the process by which people select, organize, and
 interpret info their senses pick up from the outside world

• Motivation – an internal state which drives us to satisfy needs
• Learning – a change in behavior caused by info or experience
• Attitudes – a lasting evaluation of something (which predisposes
 you toward liking/disliking it)

• Personality – the set of psychological characteristics that
 consistently influences the way a person acts

• Lifestyle – a pattern of living which guides your choices         19
                       Internal Influences on YOUR
                           Target Market’s CDM

• Perception – do you understand the perceptual abilities of your
 target market ?
• Motivation – do you understand how strong your target market’s
 typical drive state is to satisfy their need ? Can you tweek ‘em?
• Learning – how capable is your target market to learn about
 your product, its attributes, and its differential benefit?
• Attitudes – what predispositions do you need to break down?
• Personality – what traits of your target market can you connect
• Lifestyle(s) – what lifestyles are you connecting with?
• Please take a minute to reflect on how these influences affect 20
 your target market

• Discuss some of the perceptions
 this consumer is experiencing

• The consumers’ likely Motivation
 for shopping

• What learning is occurring
• What attitudes have surfaced and/or are likely being formed
• What personality attributes (psychological characteristics)
 are surfacing and affecting decision-making

• What lifestyle factors are subconsciously influencing this
 shopping act?
                             Internal Influences on CDM

•       If you can grab consumers’ attention then they may
        perceive your promotional message, interpret it
        (fit it into their reality) and react.

•       Perception – people and target markets
        (based on age, gender, IQ, etc.) differ in their
        ability to attend to, organize, interpret information

    •    Attention– degree to which mental-processing
         activity devoted to a stimulus (ads have to grab
         our attention)

    •    Interpretation – assigning meaning to a
         stimulus based on past associations or
                      See anything?

Subliminal (view@home) advertising - priming outside awareness
   can change perception and behavior. Subliminal means
   "below the threshold." Basically, subliminal things are items
   that you sense (with your eyes, nose, mouth, ears, or skin),
   but you are not aware of.

                                    Todd Hall Coke Machine   1st   &   2nd   Floor
                      Internal Influences on CDM: Motivation
                      to satisfy needs:
•   Motivation - An internal state driving us to satisfy different
    needs by activating goal-oriented behavior…like
    learning…(Maslow’s Hierarchy of Needs 1943)

 What products or
 services do you buy
 that satisfy different
 levels of needs?

changed?                                                      24
               Updated Hierarchy of
               Needs Model?

What about
my need
For luxury?

And my
need to feel

                   Internal Influences on CDM

•   Consumers vary greatly in their motivation drive states to
    satisfy basic human needs

•   Business’s try to help you
    satisfy your needs,
    and sell you things to
    satisfy or attain them …
    or prey on them

•   Each day we
    move amongst
    the different levels…argh! Why are we so needy?
                    Internal Influences on CDM

•   Learning – a change in behavior due to experience or
    acquired information
• Consumers are learning all the time and marketers are
    educating the consumers to believe that their branded
    products are the best available

• Consumers actively learn (ex: when viewing web-content
    to learn about a vendor’s offering and its cost/benefit ratio)

• Consumers also passively learn when they are multi-
    tasking (ex: hearing a vendor’s slogan or jingle while
    driving, or )                                               27
            Encouraging Learning
               in Customers

•   Have you figured out how you are going to
    teach your target market about your product
    offerings? What active learning techniques,
    what passive learning techniques

•   Test out your approach on your neighbor!

                      Internal Influences on CDM

•    Attitudes – a person’s predisposition to like/dislike something
     which is often based on past experience
• Evaluation of a person, an object, a behavior, a product, an
      idea, an issue, doing something etc.
•     Composed mainly of affect (feelings), and cognition (beliefs or
      knowledge a person has) toward something.
    • Attitudes toward a brand or advertisement don’t always lead to
      market demand and purchase behaviors (no $$= no demand)
    • Attitudes are relatively malleable, marketers often have to
      ‘reprogram’ consumer attitudes.(ex: idaho potatoes) – perhaps
      branding a commodity or rebranding an existing product. 29
                         Internal Influences on CDM

•    Personality = A collection of psychological traits that influences
     the way we each respond to situations
 • Some traits that affect consumer behavior are need for
         cognition, innovativeness, materialism, sociability, confidence

• Self-concept: beliefs & feelings about self (+/-) also affect
    consumer behavior (who we are, who we think we are, who we
    want to be perceived to be, who we want to make ourselves
      • Branded personalities – we often buy branded products that
         express our identity and shape our self-concept (identity)

     •     Each successive generation is MUCH more branded         30
                    The Big 5 Personality Traits
• Each of the 5 are a cluster of related traits (Thurstone, Myers-Briggs)

• Neuroticism. Do you often feel anxious and worry. Individuals
 high in this trait tend to experience emotional instability, anxiety,
 moodiness, irritability, and sadness.

• Openness. Are you the adventurous type, a risk-taker? Do you
 like to try new things? This trait features characteristics such as
 imagination and insight, and those high in this trait also tend to
 have a broad range of interests.

• Extroversion. Are you assertive, talkative, and do you prefer to
 be the center of attention or would you rather be alone? This
 trait includes characteristics such as excitability, sociability,
 talkativeness, assertiveness, and high amounts of emotional       31
                         The Big 5 Personality Traits
•   Conscientiousness. Level of organization and discipline, dedication
    and loyalty. Leads to excellent performances and strong

    Common features of this dimension include high levels of
    thoughtfulness, with good impulse control and goal-directed
    behaviors. Those high in conscientiousness tend to be organized and
    mindful of details

•   Agreeableness. How friendly, pleasant and easy are you to be around
    (ask others)? Are you a social creature? This personality dimension
    includes attributes such as trust, altruism, kindness, affection, and
    other pro-social behaviors.

•   Take the test (maybe have your significant other
    do it as well, or a someone rate you as well!).
    Hmm what about your target market?
                     Other Influences on CDM

•   Your Age, Family Life Cycle - (where you
    are in the circle of life),
• Your current (or desired) occupation
• Lifestyle - pattern of living that  how you
    spend your time, $, energy, reflects on your values, tastes, &
• Psychographics – using lifestyle factors to create market
    segments such as AIO – activities (A), interests (I) and
    opinions (O) – if you understand the segments you can sub-
    divide them and refine products & promotions

•   Which psychographic groups do you belong to? Do you use
    blogs to follow or maintain this group identity?
Other Influences on CDM

                  Social Influences on CDM

•   Social Class - People buy products to align with a social
    class (or to break out of it?) - Status symbols help define
    social rank (at least in the consumer’s mind)
•   Reference groups - Actual/imaginary group that a person
    identifies with. They align their evaluations, aspirations,
    behavior with the group to please or imitate them.
    Marketers reinforce reference groups
•   Gender Roles – people try to fit in

•     Culture – very strong values, beliefs,
      customs, tastes that are valued by groups and shape
      consumer DM
                      Social Influences on CDM

•   Culture –shapes purchases - Are Americans consumerists?
•   Culture is learned and people succumb to the social norms of
    the culture they grew up with (ex: US Arabs don’t consider a
    dog “Man’s best friend”, US Indians do not eat cows)
•   Culture teaches– figures of speech & slang which the
    marketer using a diversification strategy must get right
• Marketers need to not make mistakes of being
    ethnocentric…but can make money pushing its values
•   Marketers must be careful not to stereotype – other cultures
    are not as homogeneous as you think all ### are not ###
•   Careful on choice of color, and diff cultures differ on risk
    perception, and differences in individualism vs. collectivism
                  Economic influence on CB

• In tough economic times …(view@home)
• why do Starbucks sales go down but lipstick sales go up?
• why do travel plans get limited but sporting events get more

• Why do communication gadget sales remain strong?
• Should Businesses keep innovating??
• Is discounting (or the perception of discounting) needed more in
 down cycles to entice consumers? Or use mfr. outlets?

• Do marketers revert to the hard-sell or rather increase bundling
 & cross-sell and tricks such as auto-replenishment systems      37

• So… consumer decision-making can be purposeful and use all
  5 steps, or mindless, CDM is affected by reference groups, &
  based on lifestyle choices, and the big 5 personality traits
• Consumers’ attention is hard to attain
• Consumers are learners and firms are teaching
• By their purchases, people express ‘who they are’ or want to be
  perceived as
• People create themselves and their life in part by their
  purchases. Is lifestyle created by what you purchase?
• We believe we are rational in our consumption patters, but…
• What else have you learned about consumer decision making and   38
  purchasing behavior??
         Social Commentary
         on Materialism & CB

• The story of stuff
• Crtitiques pt 1. , pt 2., pt 3., pt 4.
• Interesting commentary on an aspect of
 consumer behavior: Bottled Water


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