Elements of Consumer Behavior and Defining the Market

Elements of Consumer Behavior, and Defining the Market Hierarchy BA 396 Supplement

Consumer Behavior v EKB Model Need Recognition Information Search Information Evaluation Purchase Decision Post-purchase Attitude Formation

Consumer Behavior v EKB Model Need Recognition Information Search Information Evaluation Purchase Decision Post-purchase Attitude Formation Needs: * Functional - product related * Psychological - stimulation - social - status/power - self-reward Information: * Amount of information * Sources - internal/external * Reduce search?

Consumer Behavior v Buying Process and Decision Making Need Recognition Information Search Information Evaluation & Trial Adoption Purchase Decision Post-purchase Attitude Formation

Consumer Behavior v Buying Process and Decision Making Need Recognition Habitual Decision Making Limited Problem Solving Information Search Information Evaluation & Trial Adoption Purchase Decision Post-purchase Attitude Formation Extended Problem Solving

Consumer Behavior l Who are your competitors, and how do customers end up selecting your product? l Hierarchy of Markets » Competition at different ‘levels’ » Try to understand consumer’s decision process » Within a household competition regarding the importance of different generic markets w this will increase when resources are limited -- transportation will compete with food or housing

Consumer Behavior l Hierarchy of Markets » Desire w all products and services that compete for the consumer’s dollars » Generic Level w demand for broadly defined need » Specific Product Level w car, bicycle, single family dwelling, apt. » Brand w Honda, Chevrolet, Schwinn, Trek, Bik. EE

Hierarchy of Markets Diet Food v. Example 1 prepared Entrée frozen Stouffers Weight Watchers unprepared Supplement fresh Store Deli frozen fresh restaurant

Hierarchy of Markets v. Example 2 Food prepared Entrée ‘Fast’ American unprepared Supplement E S Sit-down Asian Mexican American Asian

Census Information v http: //www. census. gov/dmd/www/products. html v Click on “intro to Census 2000 data products” United States (PDF) v Click on the Public Use Presentation Library and browse through the different presentations v About ½ way down the list, there is presentation on the geographic concepts discussed in class. Look for: v Title: Census 2000: Geographic Concepts and Products (September 2002) Number of slides: 36 Description: This presentation gives an overview of Census 2000 geographic concepts and products and the various geographic units for which Census 2000 data are available.

Census Information v http: //www. census. gov/dmd/www/products. html v Click on the Public Use Presentation Library and browse through the different presentations v About the sixth presentation on the list, there is presentation that covers the short form and long form information. Look for: v Title: Census 2000: and Its Data Products (September 2002) Number of slides: 41 Description: An overview of the Census 2000 questions, the data sets, and the products released and the released media.

Segmentation Requirements v Customers have different response elasticities v Salesx 1=Advx. 5 x Sales. Prx. 2 x Distrx. 3 v Salesx 2=Advx. 2 x Sales. Prx. 4 x Distrx. 2 v Response differences can be identified and matched with customer descriptions v Knowledge of market segments must be translatable to retail mix combinations v Sufficient demand in at least one segment v Characteristics stable over time

Bases of Segmentation v Geographic v Nations, regions, states v Demographic v Age, gender, family size, income v Psychographic v Social class, lifestyle, personality, AIO inventories v Behavioral v Usage rate, occasion for use, benefits, loyalty