Definition of Consumer Behavior

1. Definition of Consumer Behavior • Individuals or groups acquiring, using and disposing of products, services, ideas, or experiences • Includes search for information and actual purchase • Includes an understanding of consumer thoughts, feelings, and actions

2. Acquisition Receiving Finding Inheriting Producing purchasing Consumption Collecting Nurturing Cleaning Preparing Displaying Storing Wearing Sharing Acquisition, Consumption and Disposal

3. Disposal Giving Throwing away Recycling depleting Acquisition, Consumption, Disposal

4. Contributing Disciplines • Anthropology • Sociology • Psychology • Economics • History • Political Science

5. Reasons for Studying Consumer Behavior • To stay in business by attracting and retaining customers • To benefit from understanding consumer problems • To establish competitive advantage • …because it is interesting!

6. The Circle of Consumption • Production • Acquisition • Consumption • Disposal

7. The Circle of Consumption, continued • Typically, attention of marketers has focused on acquisition as the critical phase • Only recently has more attention been given to include the full circle and the links between its elements • Disposal to acquisition • Disposal to production • Disposal to consumption • Production to consumption • Acquisition to consumption • Acquisition to disposal

8. Consumer Research The systematic and objective process of gathering, recording, and analyzing data for aid in understanding and predicting consumer thoughts, feelings, and behaviors. In a global environment, research has become truly international.

9. Important Factors in Consumer Research • Speed • The Internet • Globalization • Data Overload

10. Types of Consumer Research • Basic Research • To expand knowledge about consumers in general • Applied Research • When a decision must be made about a real-life problem

11. The Consumer Research Process • Defining the Problem and Project Scope • The Research Approach • The Research Design • Data Collection • Data Analysis and Interpretation • Report

12. Marketing Management Philosophies • Production Concept • Product Concept • Selling Concept • Marketing Concept • Societal Marketing Concept • Green Marketing • Cause-Related Marketing • De-Marketing

13. Production Concept • Focus on Production • View of consumers: • They will buy as long as the product is available and affordable. • Model T: You can have any color as long as it’s black. • Focus on production justified: • Demand higher than supply • Non-competitive product cost

14. Product Concept • Focus on the product • View of consumers: • We have to have the best quality and the most features and they will buy. • Consumers might not care about quality • Consumers might not be willing to pay for the best quality • Consumers might not be able to discern quality difference • Consumers might prefer simplicity

15. Selling Concept • Focus on selling • View of consumers: • We have to sell to them or else they won’t buy. • Focus on selling justified: • Introductory stages of product life cycle • Unsought goods

16. Marketing Concept • Focus on marketing • Creating mutually rewarding exchange relationships • Consumer needs and wants have priority • View of consumers: • They will buy if you fulfill their needs better than the competition.

17. Societal Marketing Concept • Same as Marketing Concept plus an added concern for the well-being of society

18. Market Research:Research Designs • Exploratory Research • Descriptive Research • Causal Research

19. Exploratory Research • Literature Research • Experience Survey • Focus Groups • In-Depth Interviews

20. Exploratory Research • Insights and Ideas • Precision: Specific Hypotheses • Establishment of Priorities • Increase of Familiarity with Problem • Clarification of Concepts

21. Descriptive Research • Description of Characteristics of a Certain Group • Estimation of the Proportion of People in a Specified Population who Behave in a Certain Way • Specific Predictions

22. Descriptive Research • Longitudinal Studies • True Panel • Omnibus Panel • Cross-Sectional Analysis • Field Study • Sample Survey

23. True Panel: Advantages • Brand Switching Analysis • Collecting Classification Information • Compensation for Participation/Time • Accuracy • Reduced Interaction Bias

24. True Panel: Disadvantages • Non-Representativity • Drop-out Rate • Payment

25. Causal Research • Laboratory Experiments • Field Experiments • Internal and External Validity

26. Market Segmentation Bases • Demographic • Geographic • Geo-Demographic • Benefit • Usage • Lifestyle

27. Market Segmentation:Advantages • Specific Definition of the Market • Satisfaction of Consumer Needs • Meeting Changing Market Demands • Assessment of Competitive Strengths and Weaknesses • Efficient Allocation of Marketing Resources • Precise Setting of Marketing Objectives

28. Haley, 1968Toothpaste Market • Sensory Segment • Worrier Segment • Sociable Segment • Independent Segment

29. Applications of Benefit Segmentation • Positioning • Repositioning • Competitive positioning • New market opportunities/niches • Positioning of multiple brands

30. Usage Segmentation • Rate of Usage • Brand Loyalty • Usage Situation

31. Lifestyle SegmentationPsychographics • Activities • Interests • Opinions • Demographics • VALS I and II • Maslow’s Hierarchy of Needs

32. Consumer Decision Making:Types of Decisions • Extensive Problem Solving • Limited Problem Solving • Routinized Response Behavior

33. Problem Recognition:Causes in Current State • Depletion of Stock • Dissatisfaction • Decrease in Finances • Increase in Finances

34. Problem Recognition:Causes in Desired State • New Need Circumstances • New Want Circumstances • New Product Opportunities • Purchase of Other Products

35. Incidental Learning Directed Search and Evaluation Internal only loyalty impulse Internal and External Information Searchand Evaluation

36. Purchasing Process • When to buy? • Where to buy? • How to pay? • How much to buy?

37. Post-purchase Behavior • Cognitive Dissonance • Satisfaction/Dissatisfaction

38. Motivation • Definition • Categories of Needs • Arousal of Motives • Motive Structuring • Motive Conflict • Motivation Theories

39. Motivation Theories • Freud • Lewin • Maslow

40. Freudian Theory • Basic Principles • Homeostasis • Hedonism • The Structure of Personality • Id • Ego • Super-ego

41. Projective Techniques • Word Association • Sentence Completion • Cartoon Test • Thematic Apperception Test (TAT) • Rorschach Test (inkblots)

42. Lewin’s Field Theory • Life Space • Person • Environment • Formula • Conflict • Approach-Approach • Avoidance-Avoidance • Approach-Avoidance

43. Perception • Definition • Threshold Levels • The Perceptual Process • Selection • Organization • Interpretation

44. Internal Factor Attitudes Expectations Motives Attention Span Perceptual Defense Perceptual Vigilance Adaptation Perceptual Blocking External Factors Color Contrast Size Position Intensity/Magnitude Movement Humor Fear Selection

45. Organization • Closure • Figure and Ground

46. Interpretation • Physical Appearance • Stereotypes • Irrelevant Cues • First Impressions • Jumping to Conclusions • Halo Effect

47. Learning • Definition • Learning Theories • Marketing Applications

48. Learning Theories • Behavioral Learning Theories • Classical Conditioning • Instrumental Conditioning • Cognitive Learning Theories • Consumer Information Processing • The Structure of the Memory • Memory Processes

49. Marketing Applications • Classical Conditioning • Creating Associations • Stimulus Generalization • Family Branding • Product Line Extensions • Licensing • Look Alike Packaging

50. Marketing Applications • Instrumental Conditioning • Rewards • Reinforcement Schedules/Advertising • Intermittent • Continuous