An Introduction to Applied Buyer Behavior

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An Introduction to Applied Buyer Behavior

• Partha Krishnamurthy
• Spring 2006

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Agenda

• Whats this course is about
• Contrast buyer and consumer behavior
• Define consumer behavior
• What is marketing exchange
• Who is interested in consumer behavior
• How do we study consumer behavior
• Exercise for Chapter 1

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Whats this course about?

• This course is about buyer behavior.
• rather, consumer behavior.
• Whats the difference?

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Buyer Behavior

• Buyer behavior focuses primarily on buyers and
  buying.
• But, often you buy for others (significant
  others, spouses, friends, children)
• To buy, you have to engage in activities other
  than buying e.g., searching, learning to search,
  using, knowing how to use, and disposing.
• so buyer behavior cannot be the whole story

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Consumption and Consumer Behavior

• Consumption
• Activities, thoughts and feelings (of individuals
  and groups) directed toward achieving
  satisfaction (often using market offerings).
• Consumers
• Those who engage in consumption activities
• Consumer Behavior (Brief definition)
• How consumers go about achieving satisfaction.

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Examples of Consumption(and why it is just not
buying)

• Ulusaba South African Private Game Reserve
• 10000 per night, up-close and personal with wild
  game
• Nimmo Bay British Columbia
• 26000 for 3-6 guests, 4 days/nights.
• Helicopter and Chef on demand, exclusive fishing,
  dining.
• Cant keep the fish though!
• Personal Perfume
• Created for you, and only you.
• Based on your style, taste, activities etc.
• Only 32,000

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What Does it Mean to Study Consumer Behavior?

• It is a study of the feelings, thoughts, and
  behaviors of consumers.
• Specifically, from a managerial point of view, it
  is a study of how people respond to marketing
  entities such as products, advertisements,
  promotion, price etc.
• This study is aimed at increasing the likelihood
  and frequency of the marketing exchange.

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What is Marketing Exchange?

• Marketing is an exchange process between the
  consumer and the producer benefits are
  exchanged for profits more concretely, goods and
  services exchanged for money.
• Marketing strategies are activities geared toward
  increasing the probability and frequency of the
  exchanges so that the exchange is profitable and
  satisfying.

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Why should Consumer Behavior be Studied

• Suppose, your product is not selling well.
  Should you decrease the price, increase
  advertising, offer consumer promotions?
• If you dont know how consumers respond to these
  marketing actions, how can you make the decision?
  
• Hence, for marketing strategies to be successful,
  understanding consumer behavior is absolutely
  important.

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How to Study Consumer BehaviorA Real World
Application ofHow Studying Consumer Behavior
Facilitates Marketing Exchanges

• Activebuyersguide.com is a website which assesses
  your goals, preferences, what you like and dont
  like about the features of products and then
  creates a list of products that fit your needs.
• It provides the degree of fit between your
  preferences and the product features,
  descriptions of features etc.
• It encourages/facilitates marketing exchange

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A Correction

• In this course, our study of consumer behavior
  will also focus on
• consumer satisfaction.
• consumer well-being.
• sometimes these goals may have little to do
  with the probability/frequency of marketing
  exchange.

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Returning to Consumer Behavior

• What do we study?
• Primarily, three aspects
• Affect/Cognition
• Feelings (I love the restaurant)
• Thoughts (14.99 for a bowl of soup? Why is it
  so expensive?)
• Behavior
• Action (Going to the restaurant)
• Environment
• Context (The lighting in the restaurant)
• In other words, we will be examining consumers
  affective/cognitive and behavioral responses in
  the environmental context.

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Groups Interested in Consumer Behavior
Marketing organizations
Marketing strategies
Public Policy
Government and political organizations
Consumer activities
Consumers
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Approaches to the Study of Consumer Behavior
Approach
Interpretive
Core Disciplines
Cultural anthropology
Understand consumption and its meaning
Primary Objectives
Primary Methods
Long interviews focus groups
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Approaches to the Study of Consumer Behavior
(contd)
Approach
Traditional
Core Disciplines
Psychology Sociology
Explain consumer decision making and behavior
Primary Objectives
Primary Methods
Experiments Surveys
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Approaches to the Study of Consumer Behavior
(contd)
Approach
Marketing Science
Core Disciplines
Economics Statistics
Predict consumer choice and behavior
Primary Objectives
Primary Methods
Math-modeling Simulation
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Exercise 1Out of Class Exercise

• Home Work Vacation Fantasy Consumption Story
• Surf the web, and based on information available
  in the web, and create an imaginary vacation,
  complete with details about the vacation (5000
  budget). Describe the vacation as if it were a
  story (2 pages, 10 points).
• To be handed in class next Monday.
• Type written, double-spaced, 1-inch margins on
  all sides, times-roman 12-point font only.