Buyer Behavior MKTG 407

1. Buyer BehaviorMKTG 407 What is Consumer Behavior? (Ch1-Ch2) Affect & Cognition (Ch3)

2. What is Marketing? • American Marketing Association Definition: • Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. • In sum, • Marketing is about delivering value to all people affected by a transaction. • Marketing is about meeting needs.

3. What is Consumer Behavior? • American Marketing Association (and Book) Definition: • The dynamic interaction of affect and cognition, behavior, and the environment by which human beings conduct the exchange aspects of their lives.” (p. 5 in text). • Dynamic • Always changing with faster product cycles and greater need for continued innovation • Involves Interactions • Among cognition, affect, behavior and the environment • Involves Exchanges • Exchanging value for value

4. What is Consumer Behavior? • Another Nice Definition (Hoyer & MacInnis): • The totality of consumers’ decisions with respect to the acquisition, consumption, and disposal of goods, services, activities, experiences, people, and ideas by (human) decision-making units (over time). (cf. Jacoby, 1976)

5. What is Consumer Behavior? Consumer Behavior • Consumer Activities • Purchase • Use/Consumption • Disposal • Consumer Responses • Emotional • Cognitive • Behavioral Kardes et al. (2008)

6. Consumer Influences Organizational Influences Culture, Ethnicity, Personality, Family, Life Stage, Values, Attitudes, Motivations, Feelings, Knowledge Brand, Advertising, Promotions, Price, Product Features, Packaging, Service, Loyalty Programs, Store Atmosphere Obtaining Consuming Disposing What to buy? Where to buy? How to pay? Purchase other products? How do you use product? How much do you use? Does product match expectations? How do you get rid of product? How much do dispose? Do you recycle? Blackwell et al. (2006)

7. Approaches to Studying CB (1.1)

8. Why Study Consumer Behavior? • Improve Business Performance • Become a Better Consumer • Help Other Consumers to Make Better Choices

9. The Wheel of Consumer Analysis Reciprocal Determinism

10. Affective or Cognitive?

11. Blemish-free skin doesn’t have to mean dry skin. Finally a breakthrough cleanser designed for adults. AVEENO Clear Complexion Foaming Cleanser lets you prevent blemishes without drying out your skin. It’s the only cleanser with a blemish fighter recommended by dermatologists plus moisture-rich soy to even out skin tone. Clear, smooth, blemish-free skin. It’s a beautiful thing. Discover nature’s secret for clearly beautiful skin.

12. My Wii Storey –Linda Perry “Wii is totally different from any other video game because you’re not zoning out on the couch in front of the TV. You're up, you’re moving and your pulse is thumping. It’s really easy to break a sweat. Plus, you don’t have to learn any commands. To play tennis, you swing the racket. To box, you punch—you’re actually doing something. I have friends who play boxing for exercise. My girlfriends and I play a lot actually, and it can get pretty competitive. I’ve knocked a few of them out. They have yet to knock me out.”

14. Sheer cover is not like any liquid, cream or mineral foundation you’ve tried. Our mineral foundation combines 100% pure minerals with soothing botanicals, powerful anti-oxidants and natural SPF 15 to protect your skin from premature aging. Sheer Cover makes your skin look beautiful and helps keep it that way. Plus, the mineral foundations contains no oils, perfumes, dyes or talc so they’re gentle and non-irritating– even for sensitive skin. …If you’re not delighted with the results simply return the product within 60 days of receipt, even if the containers are empty, we’ll refund the purchase price (less s/h) “Finally, there's a quick, easy way to cover up your flaws beautifully and naturally and let the real you shine through!”

15. A strange thing happens to people who take a vacation to New Zealand. After exlporing a rainforest and traversing a glacier in the same day. Or maybe even jumping off a bridge or two. They discover that they can do what they never thought they could. And they come back changed. Instead of merely relaxed. The journey begins at airnewzealand.com

16. The Affective System • Five Characteristics: • Largely reactive • Little direct control over affective responses • Felt physically in the body • Responds to virtually any type of stimulus • Most affective responses are learned

17. Types of Affective Responses Feelings

18. Functions of the Cognitive System • Interpret Information • Attention and Comprehension • Integrate Information • Evaluate and Make Decisions • Draw on Knowledge Stored in Memory • Once activated, influences interpretation and integration

19. Environment Interpretation (Attention & Comprehension) Memory (Stored Knowledge) COGNITIVE PROCESSES New Knowledge Integrate Information (To Form Attitudes, Intentions, and Choices Among Options) Consumer Behavior

20. Types of Knowledge • General Knowledge (schemas) • Stored as Propositions Linking Two Concepts • Procedural Knowledge (scripts) • Stored as Propositions Linking a Concept/Event with Behavior Avatar Great is Eating Choc. Order Coffee always

21. An Associative Network or Schema

22. Accessibility of Knowledge Structures • Priming • Temporary activation of an “associative network” which influences interpretation, encoding, decision-making, behavior • Chronic Accessibility • Constructs which are almost always highly accessible (e.g., based on individual differences)

23. Using Metaphors to CommunicateAffective and Cognitive Meaning • Metaphors: • Represent one thing in terms of something else • Can communicate thoughts and feelings about a product, brand or company • Are critical part of effective marketing strategies

24. Nothing says lovin’ like something from the oven Ernest Dichter (1907-1991) “Father of Motivational Research” Applied Freud’s Psychoanalytic Approach to Consumer Motivations Put a tiger in your tank

25. Relationship BetweenAffective/Cognitive Systems (cont.) • Differing Views • Affective and cognitive systems are independent • Affect is largely influenced by the cognitive system • Affect is the dominant system • Affective and cognitive systems are highly interdependent

26. Relationship BetweenAffective/Cognitive Systems

27. Focus on Research An Illustration of How Concepts Stored in Memory Affect Interpretation and Decision-Making (e.g., priming)

28. Jiang et al. (2009, JCP, Study 4) • Background (a Person x Situation Interaction): • # 8 is lucky in Chinese culture • May depend on whether a person is “promotion” or “prevention” focused • Promotion focused individuals focus on obtaining gains • Prevention focused individuals focus on avoiding loses Lucky (8) vs. Unlucky (4) Priming Risky Consumer Behavior Regulatory Focus(Promotion vs. Prevention Focus)

29. Jiang et al. (2009, JCP, Study 4) • Background (a Person x Situation Interaction): • # 8 is lucky in Chinese culture • May depend on whether a person is “promotion” or “prevention” focused • Promotion focused individuals focus on obtaining gains • Prevention focused individuals focus on avoiding loses • Method • Hong Kong University Students • Independent Variable (evaluate how much they like 20 numbers) • Good Luck Priming Condition • 12 of 20 numbers have an ‘8’ in them • Bad Luck Priming Condition • 12 of 20 numbers have a ‘4’ in them • Dependent Variables • Participation in Lottery (for a chance to win expensive dinner) • Investment in on-line stock trading

32. Environment Interpretation (Attention & Comprehension) Memory (Stored Knowledge) COGNITIVE PROCESSES New Knowledge Integrate Information (To Form Attitudes, Intentions, and Choices Among Options) Consumer Behavior

33. Apply the PrecedingInformation-Processing Model(Including “Activation”of Knowledge) to a Recent Consumer Decision

34. Cognitive Processing Ability is Limited • Implications • Consumers may base decisions on only a few attributes • Consumers may base decisions on heuristics (or rules of thumb) • Processing may become “automatic” (and behavior “habitual”)

35. Focus on Research An Illustration of How Heuristics Affect Consumer Behavior

36. Valenzuela et al. (2009, JCP) The “Center Stage” Effect 29% 50% 21% • Effect stronger when choice will be “evaluated” (by others) • Effect does not occur due to increased attention • Rather, effect occurs because people believe the middle option is more popular • Effect does not occur if told the arrangement of the options is random

37. Think of a Recent Example ofHow a Simple HeuristicAffected Your Consumer Behavior

38. Take Home Points • CB is an interaction between affect/cognition, behavior, & environment; each can affect the others (reciprocal determinism) • Affect and cognition are interdependent • Affect is a physical sensation which is largely learned, not under our control, and reactive • Cognitive system helps us interpret and integrate information and draw on existing knowledge to form preferences, intentions and decisions • General knowledge (schemas) and procedural knowledge (scripts) are stored as “propositions” and are organized in “associative networks” • Much of marketing (CB) is about building up propositions (associations) and making them highly accessible • Accessibility can vary as a function of priming or chronic accessibility • Because consumer has limited cognitive capacity, much cognitive processing is relatively simple and can be based on “heuristics”, and much processing/decision-making can become “automatic” or habitual