INTRO TO CONSUMER BEHAVIOR

1

• INTRO TO CONSUMER BEHAVIOR

2
Marketing Concept
A consumer-oriented philosophy that suggests that
satisfaction of consumer needs provides the focus
for product development and marketing strategy to
enable the firm to meet its own organizational
goals.
3
Consumer Behavior
The behavior that consumers display in searching
for, purchasing, using, evaluating, and disposing
of products, services, and ideas.
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Specific Questions

• Acquisition / use / disposal of products,
  services, time, ideas
• Whether?
• What?
• Why?
• How?
• When?
• Where?
• How much?
• How often?

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Net Takeaway

• 3 types of decisions
• acquisition, usage, disposal
• 8 specific questions
• whether, what, why, how, when, where, how much,
  how often
• 2 types of explanations
• psychological, cultural

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Black Box

• The marketing mix
• Competing marketing mixes
• Social influences (culture, social class,
  reference groups family)

• Exchange
• No exchange
• More information sought

Stimuli
Responses
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Firms Marketing Efforts 1. Product 2.
Promotion 3. Price 4. Channels of distribution
Sociocultural Environment 1. Family 2. Informal
sources 3. Other noncommercial sources 4. Social
class 5. Subculture and culture
Input
External Influence
Need Recognition Prepurchase Search Evaluation
of Alternatives
Psychological Field 1. Motivation 2.
Perception 3. Learning 4. Personality 5. Attitudes
Process
Consumer Decision Making
Experience
Purchase 1. Trial 2. Repeat purchase
Figure 1-1 A Simple Model of Consumer Decision
Making
Postdecision Behavior
Output
Postpurchase Evaluation
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Net Takeaway

• KEY TERMS
• Consumer behavior
• Consumer Research
• Deontology
• Market segmentation
• Marketing concept
• Marketing ethics
• Organizational consumer
• Personal consumer
• Societal marketing concept
• Teleology
• Utilitarianism

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• CONSUMER RESERCH

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The Research Process
STEP1 Defining the Problem and Research
Objectives
STEP 2 Developing the Research Plan
STEP 3 Implementing the Research Plan
STEP 4 Interpreting and Reporting the Findings

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Marketing Research ProcessStep 1. Defining the
Problem Research Objectives
Types Levels of Information Needed
Exploratory Research

• Gathers preliminary information
• that will help define the problem
• and suggest hypotheses.

• preliminary information identify issues
• problem definition
• first stage of descriptive or causal research

• Describes such things as market
• potential for a product or attitudes
• and demographics of consumers
• who buy the product.

• expand understanding of factors
• describe phenomenon
• representative sample

Descriptive Research

• Test hypotheses about cause-
• and-effect relationships.

Causal Research

• test cause and effect hypothesis
• experimentation

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Secondary Data
Data that has been collected for reasons other
than the specific research project at hand.
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Primary Research
Original research undertaken by individual
researchers or organizations to meet specific
objectives.
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2 High Level Research Methods

• Quantitative Research
• Survey
• Observation
• Experimental
• Qualitative Research
• Focus Group
• Projective
• In-Depth Interview

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Designing Primary Research
Quanti Research

• Quantitative studies more likely for collecting
  descriptive information.

Quali Research

• Qualitative studies may be used to get new ideas.

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Data Collection Methods
Observation
Experimentation
Surveys
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Validity
The degree to which a measurement instrument
accurately reflects what it is designed to
measure.
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Reliability
The degree to which a measurement instrument is
consistent in what it measures.
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Attitude Scales

• The three most frequently used scales are
• Likert scales easy for researchers to prepare
  and interpret, and simple for consumers to
  answer.
• Likert scales ask the respondent to check or
  write the number corresponding to their level of
  "agreement" or "disagreement" to statements.

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A Classification of Marketing Research Data
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SEGMENTATION, TARGETING, AND POSITIONING

• Consumer Behavior

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STP Segmentation Targeting Positioning
Market Segmentation
Market Targeting
Market Positioning
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Market SegmentationRequirements for Effective
Segmentation
Measurable
Accessible

Substantial

• Size, purchasing power, profiles
• of segments can be measured.

Differential

• Segments can be effectively
• reached and served.

Actionable

• Segments are large or profitable enough to serve.

• Segments must respond differently
  to different marketing mix elements programs.

• Effective programs can be designed to attract
  and serve the segments.

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Bases for Segmentation

• Geographic Segmentation
• Demographic Segmentation
• Psychological Segmentation
• Psychographic Segmentation
• Sociocultural Segmentation
• Use-Related Segmentation
• Usage-Situation Segmentation
• Benefit Segmentation
• Hybrid Segmentation Approaches

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Sequential Segmentation
Heavy Users 48.7
9.1

• Percentages in branches represent size of the
  segment

North Central 40.3
Medium Light Users 20.0
12.8
3.7
Females 24.3
54 and Under 21.4
34.6
43.0
55.8
Rest of U.S. 19.5

• Total
• Sample
• 16.5

Over 54 6.5
8.4
More Than High School 10.2
28.6
44.2

• Percentages in boxes represent market share

Males 6.7
High School or Less 3.8
15.6
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AIOs
Psychographic variables that focus on activities,
interests, and opinions. Also referred to as
Lifestyle.
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The VALS TM 2 Framework
Actualizers
High resources
Action
Experiencers
Achievers
Fulfilleds
Oriented
Status
Oriented
Principle
Oriented
Makers
Believers
Strivers
Strugglers
Low resources
Segmentation Strategies
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Usage-Situation Segmentation

• Segmenting on the basis of special occasions or
  situations

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Use-Related Segmentation

• Rate of Usage
• Heavy vs. Light
• Awareness Status
• Aware vs. Unaware
• Brand Loyalty
• Brand Loyal vs. Brand Switchers

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Hybrid Segmentation Approaches

• Psychographic-Demographic Profiles
• Geodemographic Segmentation
• SRI Consultings Values and Lifestyle System
  (VALSTM)

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Maslows Hierarchy of Needs





5
Self-Actualization (Self-fulfillment, personal
enrichment)
Ego Needs (Prestige, status, self esteem)
4
Social Needs (affection, friendship, belonging)
3
Safety and Security Needs (Protection, order,
stability)
2
Physiological Needs (Food, water, air, shelter,
sex)
1
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Toothpaste Example of Market Segments
Segment Name
The Sensory Segment
The Sociables
The Worriers
The Independent Segment
Price
Decay prevention
Brightness of teeth
Flavor, product appearance
Principal Benefit Sought
Men
Large families
Teens, young people
Children
Demographic Strengths
Heavy users
Heavy users
Smokers
Users of spearmint flavored toothpaste
Special Behavior Characteristics
Brands on sale
Crest
Macleans, Plus White, Ultra Brite
Colgate, Stripe
Brands disprop- ortionately Favored
High autonomy
High hypo- chondriasis
High sociability
High self- involvement
Personality Characteristics
Life-style Characteristics
Value oriented
Conservative
Active
Hedonistic
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Determining the
SEGMENT DIMENSIONS is not EASY
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All Potential Dimensions
Qualifying Dimensions
Determining Dimensions (product type)
Determining Dimensions (brand type)
Snack Food Market
Health nutrition Dieters calories Families
fill up
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THINGS TO REMEMBER ABOUT SEGMENTATION

• Segments must exist in the marketplace
• More than one segmentation pattern may exist
• Segments can shift over time
• Targeting one or more segments is more profitable
  than targeting the entire market
• Segmentation is at the core of a successful
  marketing strategy

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Step 2. Market TargetingEvaluating Market
Segments

• Segment Size and Growth
• Analyze current sales, growth rates and expected
  profitability for various segments.
• Segment Structural Attractiveness
• Consider effects of competitors, availability
  of substitute products and, the power of buyers
  suppliers.
• Company Objectives and Resources
• Company skills resources needed to succeed in
  that segment(s).
• Look for Competitive Advantages.

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TARGETING STRATEGIES

• Undifferentiated marketing
• Differentiated marketing
• Concentrated marketing
• Countersegmentation

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Marketing Differentiation Strategy
Company Marketing Mix
All Market
Company Marketing Mix
Marketing strategies
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Counter segmentation Strategy
A strategy in which a company combines two or
more segments into a single segment to be
targeted with an individually tailored product or
promotion campaign.
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Step 2. Market TargetingChoosing a
Market-Coverage Strategy
Company Resources
Product Variability
Products Stage in the Life Cycle
Market Variability
Competitors Marketing Strategies
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STEP 3 POSITIONING

• Market Positioning arranging for a product to
• occupy a clear, distinctive, and desirable place
• relative to competing products in the minds of
• target consumers. i.e. Chevy Blazer is like a
  rock.
• Part of the marketing strategy which allows to
  give the product/service its own identity
• Positioning is a competitive tool
• Positioning can be operated at the physical level
  or at the perceptual level
• A strong position in buyers minds gives the
  product a competitive advantage

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Step 3. Choosing a Positioning Strategy
Step 1. Identifying Possible Competitive
Advantages
Step 2. Selecting the Right Competitive Advantage
Step 3. Communicating and Delivering the Chosen
Position
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Step 3. Choosing a Positioning Strategy

• Products Position - the way the product is
  defined by consumers on important attributes -
  the place the product occupies in consumers
  minds relative to competing products.
• Marketers must
• Plan positions to give their products the
  greatest advantage in selected target markets,
• Design marketing mixes to create these planned
  positions.

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Examples of Perceptions

• Coca-Cola cool, all-American, and real
• Pepsi young, exciting, and hip
• Dr Pepper nonconforming, unique, and fun
•  
•  
• Virginia Slims feminine
• Marlboro masculine
• Apple young
• IBM older

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Identifying Possible Competitive Advantages

• Key to winning and keeping customers is to
  understand their needs and buying processes
  better than competitors do and deliver more
  value.
• Competitive advantage is an advantage over
  competitors gained by offering consumers greater
  value, either through lower prices or by
  providing more benefits, that justify competitive
  advantage,

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Identifying Possible Competitive Advantages
Services Differentiation i.e. Delivery,
Installation, Repair Services, Customer
Training Services
Product Differentiation i.e. Features,
Performance, Style Design, or Attributes
Image Differentiation i.e. Symbols, Atmospheres,
Events
Personnel Differentiation i.e. Hiring, Training
Better People Than Competitors Do
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Choosing the Right CompetitiveAdvantages
Important
Profitable
Distinctive
Criteria For Determining Which
Competitive Advantage
Superior
Affordable
Communicable
Unique Selling Proposition
Preemptive
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Selecting an Overall Positioning StrategyRalphs
Pay less for Higher Standards
Price More The same Less
More for Less
More The Same Less
More for More
More for the same
Benefits
The same for less
Less for much less
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Repositioning
Changing the way a product is perceived by
consumers in relation to other brands or product
uses.
GTE
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PERCEPTUAL MAPS

• Indicate where a product stands in buyers minds
  relative to its direct and indirect competitors
• Horizontal and vertical axes are perceived
  relevant dimensions of the product category
• Distances between two brands are perceived
  competitive distances
• Ideal tool for positioning strategies

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Perceptual Map
Has a touch of class A car Id be proud to own
Distinctive looking
Porsche
Lincoln
4
BMW
5
Cadillac
Conservative looking
2
Spirited performance Sporty look
Mercedes
Chrysler
Buick
Pontiac
Oldsmobile
1
Ford
Datsun
Chevrolet
Fun to drive Appeals to young people
Appeals to older people
Dodge
3
Toyota
Plymouth
VW
Very practical Gives good gas mileage
Affordable
Marketing strategies
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POSITIONING STRATEGIES

• Move brand closer to ideal point
• Move ideal point closer to brand
• Change relevance of dimensions
• Introduce a new brand close to ideal point

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Steps in Market Segmentation, Targeting, and
Positioning
Market Segmentation 1. Identify bases for
segmenting the market 2. Develop segment profiles
Market Targeting 3. Develop measure of
segment attractiveness 4. Select target segments
Market positioning 5. Develop positioning for
target segments 6. Develop a marketing mix
for each segment
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Review of Concept Connections

• List and discuss the major levels of market
  segmentation and bases for segmenting consumer
  and business markets.
• Explain how companies identify attractive market
  segments and choose a market-coverage strategy.
• Define the three steps of target marketing
  market segmentation, market targeting, and market
  positioning.
• Discuss how companies can position their products
  for maximum competitive advantage in the
  marketplace.

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Chapter 4

• Consumer Motivation

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RationalVersus Emotional Motives

• Some consumer behaviorists distinguish between
  so-called rational motives and emotional motives.
• Traditional economic sense, which assumes that
  consumers behave rationally when they carefully
  consider all alternatives and choose those that
  give them the greatest utility.
• In a marketing context, the term rationality
  implies that consumers select goals based on
  totally objective criteria, such as size, weight,
  price, or miles per gallon.

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RationalVersus Emotional Motives

• Emotional motives imply the selection of goals
  according to personal or subjective criteria
  (e.g., pride, fear, affection, status.)
• The assumption underlying this distinction is
  that subjective or emotional criteria do not
  maximize utility or satisfaction.

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RationalVersus Emotional Motives

• Positivist research
• Rationally motivated
• Isolate the causes
• Can predict, and thus influence, future behavior
• Interpretivists
• hedonistic pleasures
• consumption behaviors such as fun, fantasy
  sensuality
• Understanding behaviors in various circumstances.

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The Buyer Decision Process
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Arousal of Motives

• Physiological arousal
• Bodily needs are rooted in an individual's
  physiological condition at that moment
• Most physiological cues are involuntary

• Emotional arousal
• Thinking or daydreaming results in the arousal or
  stimulation of latent needs

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Arousal of Motives

• Cognitive arousal
• Personal achievement can lead to a cognitive
  awareness of needs

• Environmental arousal
• Set of needs may be activated by specific cues in
  the environment
• People living in a complex and highly varied
  environment may have more opportunities for need
  arousal

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Philosophies Concerned With Arousal of Motives

• Behaviorist School
• Behavior is response to stimulus
• Elements of conscious thoughts are to be ignored
• Consumer does not act, but react
• Cognitive School
• Behavior is directed at goal achievement
• Need to consider needs, attitudes, beliefs, past
  experiences, etc. in understanding consumer
  behavior

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Positive Motivation
A driving force toward some object or condition.
- Negative Motivation
A driving force away from some object or
condition.
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Substitute Goal

• A goal that replaces an individuals primary goal
  when the goal cannot be achieved or acquired.
• Although the substitute goal may not be as
  satisfactory as the primary goal, it may be
  sufficient to dispel uncomfortable tension.

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Defense Mechanism
Methods by which people mentally redefine
frustrating situations to protect their
self-images and their self-esteem.
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Motivational Research
Qualitative research designed to uncover
consumers subconscious or hidden motivations.
The basic premise of motivational research is
that consumers are not always aware of, or may
not wish to renewal, the basic reasons underlying
their actions.
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Chapter 5

• Personality and Consumer Behavior

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What is Personality?
The inner psychological characteristics that both
determine and reflect how a person responds to
his or her environment.
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The Nature of Personality

• Personality reflects individual differences
• Personality is consistent and enduring
• Personality can change

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Theories of Personality

• Freudian theory
• Unconscious needs or drives are at the heart of
  human motivation
• Neo-Freudian personality theory
• Social relationships are fundamental to the
  formation and development of personality
• Trait theory
• Quantitative approach to personality as a set of
  psychological traits (sort of scales)

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Freudian Psychoanalytic Theory
A theory of motivation and personality that
postulates that unconscious needs and drives,
particularly sexual and other biological drives,
are the basis of human motivation and personality.
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Neo-Freudian Personality Theory
A school of psychology that stresses the
fundamental role of social relationships in the
formation and development of personality.
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Trait Theory
A theory of personality that focuses on the
measurement of specific psychological
characteristics.
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Horneys CAD Theory

• Using the context of child-parent relationships,
  individuals can be classified into
• Compliant individuals
• moves toward others e.g., one who desires to be
  loved, wanted, and appreciated by others
• Aggressive individuals
• moves against others (e.g., competes with
  others).
• Detached individuals
• moves away from others (e.g., who desires
  independence, self-sufficiency, and freedom from
  obligations).

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Personality and Consumer Diversity

• Some specific consumer traits are of particular
  interest to marketers
• Consumer Innovativeness
• Cognitive Personality Factors
• Consumer Materialism, Fixated Consumption
  Behavior, and Compulsive Consumption
• Consumer Ethnocentrism

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Inner-Directed Consumers
Consumers who tend to rely on their own inner
values or standards in evaluating new products
and are likely to be consumer innovators.
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Outer-Directed Consumers
Consumers who tend to look to others for
direction on what is right and wrong. They
are less likely to be consumer innovators.
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Optimum Stimulation Levels (OSL)
A personality trait that measures the level or
amount of novelty or complexity that individuals
seek in their personal experiences. High OSL
consumers tend to accept risky and novel products
more readily than low OSL consumers.
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Variety-Novelty Seeking
A personality trait similar to OSL, which
measures a consumers degree to variety seeking
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Visualizers
Consumers who prefer visual information and
products that stress the visual, such as
membership in a videotape cassette club.
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Verbalizers
Consumers who prefer verbal or written
information and products, such as membership in
book clubs or audiotape clubs
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Consumer Materialism
A personality-like trait of individuals who
regard possessions as particularly essential to
their identities and lives.

• The emotional connection between consumers'
  self-images and their possessions is explained by
  the concept of the extended self.

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Compulsive Consumption
Consumers who are compulsive buyers have an
addiction in some respects, they are out of
control and their actions may have damaging
consequences to them and to those around them.
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Consumer Ethnocentrism
A consumers predisposition to accept or reject
foreign-made products.
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Brand Personification
Specific personality-type traits or
characteristics ascribed by consumers to
different brands.
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A Brand Personality Framework
Brand Personality
Ruggedness
Sophistication
Competence
Excitement
Sincerity

• Down-to-earth
• Honest
• Wholesome
• Cheerful

• Daring
• Spirited
• Imaginative
• Up-to-date

• Reliable
• Intelligent
• Successful

• Upper class
• Charming

• Outdoorsy
• Tough

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Role
A pattern of behavior expected of an individual
in a specific social position, such as mother,
daughter, teacher, lawyer. One person may have a
number of different roles, each of which is
relevant in the context of a specific social
situation.
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Extended Self
Modification or changing of the self by which
consumers use self-altering products or services
to conform to or take on the appearance of a
particular types of person (e.g., a biker, a
physician, a lawyer, a college professor).
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QUIZ 1MKT 348 CB

• Training
• Dr. Franck Vigneron

90

• Q1 Individuals high in the need for cognition
  would respond to ads that
• used celebrity endorsers.
• used color and graphics to grab consumer
  attention.
• C. were heavy in product content and description.
• D. used images, cartoons, and clip art to explain
  the product.
•  
• Q2 A primary advantage of differentiated
  marketing is that it costs less than mass
  marketing. A. TRUE B.
  FALSE

91

• Q3 Despite the drawbacks, some see motivational
  research
• A. valuable because the unconscious mind has a
  bigger part in our decisions than was earlier
  thought.
• B. as empirically verifiable once the proper
  quantitative techniques are developed.
• C. as consistent with biogenic needs and
  motivations.
• D. as the future of market research as
  traditional methods become less effective.
•  
•  
• Q4 The semantic differential scale
• A. asks a respondent how strongly he/she agrees
  or disagrees with a series of statements.
• B. asks for a consumer to compare a particular
  brand against the "ideal" brand.
• C. consists of a series of bipolar adjectives at
  each end of an odd numbered continuum.
• D. involves choosing which of a pair of choices
  (e.g., two brands) a consumer prefers.

92

• Q5 The _____ believes that all consumer behavior
  is goal oriented.
• affective school
• behaviorist school
• C. cognitive school
• D. psychoanalytic school
•  
•  
• Q6 An individual's self-image
• has no impact on the selection and achievement of
  goals.
• only affects higher order needs, ego and
  self-actualization.
• C. directs the individual to choose goals
  congruent with that image.
• D. determines what are his/her biogenic needs.

93

• Q7 Needs and goals constantly change because
• once fully satisfied new needs must be selected.
• the surrounding environment remains stable.
• C. new needs emerge from the satisfaction of
  old needs.
• D. all of the these.
•  
•  
• Q8 For Maslow _____ needs are lower-level needs.
• A. egoistic B.
  psychogenic
• C. inanimate object D. biogenic
•  
•  
• Q9 Psychologists consider psychogenic needs as
  acquired needs and secondary. A. TRUE
  B. FALSE

94

• Q10 To reach inner-directed consumers, ads
  should
• A. feature social acceptance.
• B. demonstrate an improvement of life or the
  environment.
• C. stress features and personal benefits.
• D. be conceptual in nature.
•  
• Q11 Some products or services, by their very
  nature, appeal to consumers who are bored with
  their everyday life existence and seek something
  novel or exciting. Research suggests that there
  is a link between consumer behaviors such as
  willingness to take risks, try new products, be
  innovative, seek purchase-related information,
  and accept new retail facilities, and
• A. high optimum stimulation levels.
  B. high inner-directedness.
• C. low optimum stimulation levels.
  D. low inner-directedness.

95

• Q12 The largest drawback of motivational
  research is
• A. it does not allow to test new ideas
  
• B. about generalizing findings to the total
  market
• C. it limits the research scope
  
• D. it does not explain the cues of decisions
  making.
•  
• Q13 Interpretivists would be interested in
• A. consumer response to promotions.
• B. predicting consumer behavior.
• C. generalizing their research to specific target
  markets.
• D. the meanings consumers place on key symbols in
  an ad.
•  
• Q14 The emotional connection between consumers'
  self-images and their possessions is explained by
  the concept of the
• A. extended self.
  B. social self-image.
• C. ideal self-image.
  D. expected self-image.