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Models of Consumer Behaviour (PowerPoint)

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					Consumer Behaviour and Food Marketing
Week 1 – 30 April 2003

Consumer Behaviour and Food Marketing – AE 613

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Consumer Behaviour & Food Marketing (AE 613)
• BSc BSc BSc BSc Agricultural Economics Rural Resource Management Agricultural and Business Management 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 Marketing – AE 613 2

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
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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
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Module structure
Week 1 2 3 4 5 6 7 8 9 10 Date 30-Apr 07-May 14-May 21-May 28-May 04-Jun 11-Jun 18-Jun 25-Jun 02-Jul Time 11-Jan 11-Jan 11-Jan 11-Jan 11-Jan 11-Jan 11-Jan 11-Jan 11-Jan 11-Jan Topic Introduction to the course + Models of Consumer behaviour No lecture - Bank Holiday Information processing Attitudes, beliefs and behaviour The role of social influence & culture in food consumption Consumer & The Shop External seminar (Prof. Morrow) The loyalty concept: brand and store purchase propensity Response to advertising Consumer satisfaction and quality + Course summary
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Consumer Behaviour and Food 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)
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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 (1520 minutes) • The presentation will origin the essay to be delivered at the end of the course • Schedule of presentation
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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
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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
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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
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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
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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
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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)
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Food share on Italian household expenditure
Consumi alimentari e totali in Italia (1951-1997)
1000000 900000 800000 40.0 35.0

Consumi finali interni (mld di lire 1990)

30.0 700000 600000 500000 400000 300000 10.0 200000 100000 0 5.0 25.0

20.0

15.0

0.0

Total Consumer Behaviour and Food expenditure Marketing – AE 613

19 51 19 53 19 55 19 57 19 59 19 61 19 63 19 65 19 67 19 69 19 71 19 73 19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97

Consumi finali interni

% consumi alimentari

Exp. share for food (%)
Anno

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% consumi alimentari

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

1979

1981

1983

1985

1987

1989

1991

1993

1995

Consumer Behaviour and Food Marketing – AE 613

1997

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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?
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Long-term change of consumer preferences
STRONG
Get enough food Eat more

Influence of income and prices DECREASING WEAK Health trend Concern about residuals,
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

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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)
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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 Marketing – AE 613

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Types of consumption
• • • • Important purchases Repetitive consumption Involuntary consumption Group consumption

Consumer Behaviour and Food Marketing – AE 613

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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
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Repetitive consumption
• • • • • Frequent purchase (Low price) Little conscious attention Low involvement Experience goods
Sugar at the supermarket
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Involuntary consumption
• Unavoidable consumption
– – – – Petrol for the car Telephone Repair of roads (social form, public goods) …

• Choice between brands?

Tap water
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Group consumption
• Purchase based on some group influence process
– Family expenditures – Company purchases

Mineral water
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Purchase paradigms, theories and models
Paradigm (perspective, framework) Theory

MODEL

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Purchase paradigms
• Are not mutually exclusive • Subjective preferences • Appropriateness for particular conditions

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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

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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]

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Cognitive paradigm
• Does it work? • Typical purchase (especially for food)
– Few alternatives – Little external search – Few evaluative criteria

• Engel, Blackwell and Miniard (1995)
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Extended Problem Solving
• New and important purchases
Problem/need recognition Search for information Evaluation of alternatives Purchase Consumption Post-consumption evaluation
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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

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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
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Satisficing behaviour (Simon, 1957; Klein, 1989)
Need recognition

Evaluation of single Option
NO Purchase? YES
Consumer Behaviour and Food Marketing – AE 613

END

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Consumer Behaviour and Food Marketing – AE 613

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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]
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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

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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)
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The satiation effect
• Heavily used reinforcements lose power (satiation effect)
– Wearout in advertisement – Desensitisation: stimulus satiation

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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

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Punishment and reinforcement learning
• Food poisoning consequences
– One failure is enough – Undiscovered later improvements of the product – Effect is long-lasting

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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
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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 problemsolving or planning • Judgment comes after purchase and habits may be broken
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The involvement factor
• Involvement
– Importance of purchase – Risks involved
• Potential costs • Irreversibility of the decision

– Type of cognitive process that is generated
Example:
Consumer Behaviour and Food Marketing – AE 613

beef consumption after the BSE crisis
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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
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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
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Food properties and quality (Hooker, Caswell, 1996)
Food safety attributes
Foodborne pathogens Heavy metals Pesticide residues Food additives Naturally occurring toxins Veterinary residues

Value attributes
Purity Compositional integrity Size Appearance Taste Convenience of preparation

Nutrition attributes
Calories Fats and Cholesterol Sodium Carbohydrates and Fiber Proteins Vitamins Minerals
Consumer Behaviour and Food Marketing – AE 613

Package attributes
Packaging materials Labelling Other information provided

Process attributes
Animal welfare Biotechnology Environmental impact Pesticide use Worker safety

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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.

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Need recognition and marketing strategy
• Advertising • In-store promotion • Visibility

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Need recognition…

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