OVERVIEW: Consumer Behavior

1. OVERVIEW: Consumer Behavior

2. What is Consumer Behavior? • Definition: the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires. • A PROCESS or Series of Steps: • Acquisition • Consumption • Disposing

3. Consumer Behavior is a “Process”

4. Areas of Consumer Behavior • Personality • Emotions • Attitudes 1. Internal Factors = within the self • Perception • Learning • Memory • Motives 2a. Decision Making • Rational perspective • Shortcuts 3. External Factors = outside the self • Group influence • Culture • Subcultures • 2b. Situational factors • Time constraints • Retail environment • Contexts • Economic and Social Conditions • Demographics • Families and households

5. Why is Theory Important in Understanding CB? • A. Theory provides guidance • 1. Overarching framework to explain behavior • 2. Underlying principles explain observations • 3. Hypotheses • Theory allows us to make predictions about factual events based on our understanding of underlying principles. • Pitfalls to avoid when studying CB • “Me” mentality • Single-minded explanation • Application only

6. Applications of Consumer Behavior • Marketing Strategy • competitive advantage • reduce bad decisions

7. Marketing Strategy • Marketing strategies and tactics are based on explicit or implicit beliefs about consumer behavior. • Decisions based on explicit assumptions and sound theory and research are more likely to be successful than are decisions based solely on implicit intuition. • Knowledge of consumer behavior reduces the odds of bad decisions and market failures!

8. Marketing Strategy and Consumer Behavior

9. The Meaning of Consumption • People often buy products not for what they do, but for what they mean • Consumers can develop relationships with brands: Self-Attachment Concept Nostalgic Attachment Interdependence Emotional Bonds

10. Applications of Consumer Behavior • Marketing Strategy • Public Policy • protect consumers (e.g., FTC, FDA, SEC, EPA) • consumer rights (safety, informed, redress, choice)

11. Need: a basic biological motive Want: one way that society has taught us that the need can be satisfied Do Marketers Create Artificial Needs? Objective of marketing: create awareness that needs exist, not to create needs versus

12. Are Advertising & Marketing Necessary? Does advertising foster materialism? • Products are designed to meet existing needs; • Advertising only helps to communicate their availability Advertisers are often blamed for promoting a materialistic society by making their products as desirable as possible. • Do you agree with this? • If yes, is materialism a bad thing? • If no, what are your reasons?

13. Applications of Consumer Behavior • Marketing Strategy • Public Policy • *****Social Marketing ***** • drinking and smoking prevention • literacy promotion • charitable giving • obesity prevent and/or exercise promotion • environmental issues

14. The Dark Side of CB • Assume we are rational decision makers trying to maximize health and well-being of ourselves, families and society • BUT • Consumer terrorism • Additive consumption • Compulsive consumption • Consumed consumers