Consumer Behavior IIB 3430 By Dr Kevin Wongleedee

Consumer Behavior IIB 3430 By Dr. Kevin Wongleedee

Definition of Consumer Behavior n n n 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

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

Acquisition, Consumption, Disposal n n n n Giving Throwing away Recycling depleting

Contributing Disciplines n n n Anthropology Sociology Psychology Economics History Political Science

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

The Circle of Consumption n n Production Acquisition Consumption Disposal

The Circle of Consumption, continued n n 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 n n n Disposal to acquisition Disposal to production Disposal to consumption Production to consumption Acquisition to disposal

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.

Important Factors in Consumer Research n n Speed The Internet Globalization Data Overload

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

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

Marketing Management Philosophies n n n Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept n n n Green Marketing Cause-Related Marketing De-Marketing

Production Concept n n Focus on Production View of consumers: n n n 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: n n Demand higher than supply Non-competitive product cost

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

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

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

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

Market Research: Research Designs n n n Exploratory Research Descriptive Research Causal Research

Exploratory Research n n Literature Research Experience Survey n n Focus Groups In-Depth Interviews

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

Descriptive Research n n n 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

Descriptive Research n Longitudinal Studies n n n True Panel Omnibus Panel Cross-Sectional Analysis n n Field Study Sample Survey

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

True Panel: Disadvantages n n n Non-Representativity Drop-out Rate Payment

Causal Research n n n Laboratory Experiments Field Experiments Internal and External Validity

Market Segmentation Bases n n n Demographic Geo-Demographic Benefit Usage Lifestyle

Market Segmentation: Advantages n n n 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

Haley, 1968 Toothpaste Market n n Sensory Segment Worrier Segment Sociable Segment Independent Segment

Applications of Benefit Segmentation n n Positioning Repositioning Competitive positioning New market opportunities/niches Positioning of multiple brands

Usage Segmentation n Rate of Usage Brand Loyalty Usage Situation

Lifestyle Segmentation Psychographics n n n Activities Interests Opinions Demographics VALS I and II n Maslow’s Hierarchy of Needs

Consumer Decision Making: Types of Decisions n n n Extensive Problem Solving Limited Problem Solving Routinized Response Behavior

Problem Recognition: Causes in Current State n n Depletion of Stock Dissatisfaction Decrease in Finances Increase in Finances

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

Information Search and Evaluation n Incidental Learning n Directed Search and Evaluation n Internal only n n n loyalty impulse Internal and External

Purchasing Process n n When to buy? Where to buy? How to pay? How much to buy?

Post-purchase Behavior n n Cognitive Dissonance Satisfaction/Dissatisfaction

Motivation n n n Definition Categories of Needs Arousal of Motives Motive Structuring Motive Conflict Motivation Theories

Motivation Theories n n n Freud Lewin Maslow

Freudian Theory n Basic Principles n n n Homeostasis Hedonism The Structure of Personality n n n Id Ego Super-ego

Projective Techniques n n n Word Association Sentence Completion Cartoon Test Thematic Apperception Test (TAT) Rorschach Test (inkblots)

Lewin’s Field Theory n n n Life Space Person Environment Formula Conflict n n n Approach-Approach Avoidance-Avoidance Approach-Avoidance

Perception n Definition Threshold Levels The Perceptual Process n n n Selection Organization Interpretation

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

Organization n n Closure Figure and Ground

Interpretation n n n Physical Appearance Stereotypes Irrelevant Cues First Impressions Jumping to Conclusions Halo Effect

Learning n n n Definition Learning Theories Marketing Applications

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

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

Marketing Applications n Instrumental Conditioning n n Rewards Reinforcement Schedules/Advertising n n Intermittent Continuous

Involvement n n High Involvement Hierarchy of Effects Cognition Attitude Behavior n n Low Involvement Hierarchy of Effects Cognition Behavior Attitude

Communication n n The Nature of Communication Model n n Sender Message Receiver Psychological Noise

Sender n Source Credibility n n n Trustworthiness Expertise Status Other Dimensions The Sleeper Effect

The Sleeper Effect n n n Consumer forget the source of the message faster than the message itself. Over time, high-credibility sources lose power to change attitudes. Over time, low-credibility sources gain power to change attitudes. High-credibility sources need to reinstate message. Low-credibility sources should not reinstate message.

Message n n n n Size, Color, Position Order of Presentation Humor Agony Advertising Content Fear Appeals (moderate!) Audience Participation

Order of Presentation n n Climax order Anticlimax order Pyramidal order What works best, depends on consumer involvement.

Receiver n n n Selective Attention Selective Perception Selective Appeal

Cultural Dynamics n n n Definition of Culture Cultural Sensitivity Culture and its Elements n n n Material Culture Social Institutions Humans and the Universe Aesthetics Language

Culture Defined n n The sum total of knowledge, beliefs, art, morals, laws, customs, and any other capabilities and habits required by humans as members of society. The distinctive way of life of a group of people, their complete design for living, a mosaic of human life.

Subculture n n Definition Types of Subcultures Selected Subcultures Acculturation n the Learning of another Culture/Subculture

Types of Subcultures n n n n Nationality Religion Region Ethnicity Age Gender …and many more.

Stages of Acculturation n n Honeymoon Rejection Tolerance Integration

Social Groups n n n Definition Types of Groups Group Properties

Types of Groups n n Primary and secondary Formal and informal Membership and symbolic In and out

Group Properties n n n Status Roles Norms (Sanctions) Power Socialization

Power n n n Reward Coercive Legitimate Referent Expert

Reference Groups n Influence on product category choice Influence on brand choice n Factors: n n Luxuries vs. necessities Publicly vs. privately consumed Visibility