1 - 1 copyright 2007 by prentice hall consumer behavior: meeting changes and challenges chapter one

Copyright 2007 by Prentice Hall 1 - 1

Consumer Behavior:

Meeting Changes and Challenges

CHAPTERONE


Consumer Behavior

The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.


Personal Consumer

The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend. Organizational Consumer: A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.


Development of the Marketing Concept

Production Concept

Selling Concept

Product Concept

Marketing Concept


The Production Concept

• Assumes that consumers are interested primarily in product availability at low prices

• Marketing objectives:– Cheap, efficient production– Intensive distribution– Market expansion


The Product Concept

• Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features

• Marketing objectives:– Quality improvement– Addition of features

• Tendency toward Marketing Myopia


The Selling Concept

• Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so

• Marketing objectives:– Sell, sell, sell

• Lack of concern for customer needs and satisfaction


The Marketing Concept

• Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition

• Marketing objectives:– Make what you can sell– Focus on buyer’s needs


Implementing the Marketing Concept

• Consumer Research: The process and tools used to study consumer behavior– Two perspectives:

• Positivist approach• Interpretivist approach

• Segmentation: Process of dividing the market into subsets of consumers with common needs or characteristics

• Targeting: The selection of one or more of the segments to pursue

• Positioning: Developing a distinct image for the product in the mind of the consumer


The Marketing Mix

• Product

• Price

• Place

• Promotion


Successful Relationships

• Customer Value - ratio between customer’s perceived benefits and the resources used to obtain those benefits.

• Customer Satisfaction - The individual's perceived vs. expected performance. Loyalists, apostles, defectors, terrorists, hostages, and mercenaries

• Customer Retention - Provide value to retain highly satisfied (and profitable) customers


Customer Profitability-Focused Marketing

• Tracks costs and revenues of individual consumers

• Categorizes them into tiers based on consumption behavior

• A customer pyramid groups customers into four tiers (Platinum, Gold, Iron, Lead)


Traditional Marketing Concept Vs. Value and Retention Focused Marketing

Table 1-2

Traditional Marketing Concept

Make only what you can sell

instead of trying to sell what you

Make

Do not focus on the product; focus

on the need that it satisfies

Market products and services that

match customers’ needs better

than competitors’ offerings

Value & Retention Focused Marketing

Use technology to help customers

customize what you make

Focus on the product’s

perceived value, as well as the

need that it satisfies

Understand customers’ needs to

develop offerings that they

perceive as more valuable than

competitors’ offerings


Impact of Digital Technologies

• Consumers have more power and access to information

• Marketers can gather more information about consumers

• The exchange between marketer and customers is interactive and instantaneous and goes beyond the PC to mobile phones, TVs etc..

• Marketers must offer more products and services


The Consumer Research Process

CHAPTERTWO


Concept of Consumer Research

No direct way to look into the Black Box,

so we make logical inferences bystudying other variables:

- Inductive logic- from specifics to generalities

- Deductive logic-from generalities to specifics

IK


Quantitative Research

• Descriptive

• Enables marketers to “predict” consumer behavior (positivism).

• Uses experiments, survey techniques, and observation.

• Findings are descriptive, empirical, and can be generalized to larger populations.


Qualitative Research

• Consists of depth interviews, focus groups, metaphor analysis, collage research, and projective techniques.

• Administered by highly trained interviewer-analysts.

• Findings tend to be subjective.

• Small sample sizes.


Qualitative vs. Quantitative Research

Qualitative ResearchStudy Purpose• Provide insights about ideas• Exploratory research before

quantitative study

Types of Questions• Open-ended• Unstructured

Data Collection Methods• Projective techniques• Depth interviews• Focus groups

Quantitative ResearchStudy Purpose• Describe target market• Results for strategic

marketing decisions

Types of Questions• Close-ended• Attitude scales

Data Collection Methods• Observation• Experimentation• Questionnaires


Qualitative vs. Quantitative Research, contd.

Qualitative ResearchSampling Methods• Small• Nonprobability samples

Data Analysis• Analyzed by

researchers who collected data

• Look for “key words”• Subjective

Quantitative ResearchSampling Methods• Large• Probability samples

Data Analysis• Coded, tabulated, and

entered into database• Use of statistical

methods


Secondary Data

• Data that have been collected for reasons other than the specific research project at hand

• Includes internal and external data


Designing Primary Research

• Quantitative Research Designs– Include research design, data collection

methods, instruments to be used, and the sample design

• Qualitative Research Designs– Include depth interviews, focus groups,

projective techniques, and metaphor analysis


Surveys Data Collection Methods

• Personal interview

• Mail

• Telephone

• Online


Validity and Reliability

• A measuring instrument is valid if it measures what it is supposed to measure.

• A measuring instrument is reliable if it measurement results are the same under all circumstances.


Attitude Scales

• Likert scales: easy to prepare and interpret; simple for consumers to answer

• Semantic differential scales: relatively easy to construct and administer

• Behavior intention scales: also easy to construct and administer

• Rank-order scales: subjects rank items in order of preference in terms of some criteria


Likert ScalePlease place the number that best indicates how strongly you agree or disagree with each of the following statements about shopping online in the space to the left of the statement.

1 = Agree Strongly2 = Agree3 = Neither Agree or Disagree4 = Disagree5 = Disagree Strongly

_____ a. It is fun to shop online._____ b. Products often cost more online._____ c. It is a good way to find out about new products.


Semantic Differential Profiles of Three Pay-Per-Movie Services

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Rank-Order Scale

Rank the following computer manufacturers in terms of hotline help by placing a 1 next to the one who provides the best telephone help, a 2 next to the second best, until you have ranked all six.

_____ IBM _____Hewlett Packard_____ Dell _____ Gateway_____ Compaq _____ NEC


Qualitative Collection MethodDepth Interview

• Usually 30 minutes to 1 hour

• Unstructured

• Interpreted by a trained researcher

• Listen to words as well as “body language”


Qualitative Collection Method Focus Group

• 8-10 participants

• Lasts about 2 hours

• Always taped or videotaped to assist analysis

• Often held in front of two-way mirrors


Qualitative Collection Methods Projective Techniques

• Research procedures designed to identify consumers’ subconscious feelings and motivations

• Consist of a variety of disguised “tests”


Projective Techniques

1. Word Association Techniques1. Simple2. Controlled3. Successive

2. Completion Techniques1. Sentence2. Story

3. Picture & Visual Techniques1. Thematic Apperception Technique (TAT)2. Cartoon Test


Qualitative Collection Method

• Metaphor Analysis: Based on belief that metaphors are the most basic method of thought and communication

• Zaltman Metaphor Elicitation Technique (ZMET) combines collage research and metaphor analysis to bring to the surface the mental models and the major themes or constructs that drive consumer thinking and behavior.


Customer Satisfaction Measurement

• Customer Satisfaction Surveys

• Gap Analysis of Expectations versus Experience

• Mystery Shoppers

• Customer Complaint Analysis

• Analysis of Customer Defections


Sampling and Data Collection

• Samples are a subset of the population used to estimate characteristics of the entire population.

• A sampling plan addresses:– Whom to survey– How many to survey– How to select them

• Researcher must choose probability or nonprobabililty sample.


Common Sampling Techniques

Probability: - Simple random sample - Systematic random sample- Stratified random sample- Cluster (area) sample

Non-probability: - Convenience sample- Judgment sample- Quota sample- Incremental sample

IK


Market Segmentation and Strategic

Targeting

CHAPTERTHREE


Market Segmentation

The process of dividing a potential market into distinct subsets of

consumers and selecting one or more segments as

a target market to be reached with a distinct

marketing mix.


Three Phases of Marketing Strategy

Phase 2Target Market and Marketing Mix Selection

Phase 3

Product/Brand Positioning

Phase 1Market Segmentation


Segmentation Studies

• Discover the needs and wants of groups of consumers to develop specialized products to satisfy group needs

• Used to identify the most appropriate media for advertising


Bases for Segmentation

• Geographic

• Demographic

• Psychological

• Psychographic

• Sociocultural

• Use-Related

• Usage-Situation

• Benefit Sought

• Hybrid


High

Low

Consumption

High Low

LoLows(starve)

HiHighs(stroke)

LowHighs(chase)

HiLows(tickle)

Segment Strategies by Customer UsageTable 3-8

Current Share


Use-Situation Segmentation

• Segmenting on the basis of special occasions or situations

• For example:– “Whenever our daughter Jamie gets a raise, we

take her out to dinner”– “When I’m away on business, I try to stay at a

suites hotel”– “I always buy my wife flowers on Valentine’s Day”

• Benefit Segmentation: Segmenting on the basis of the most important and meaningful benefit


VALS Framework

Figure 3-7


Criteria for Effective Targeting of Market Segments

• Identification

• Sufficiency

• Stability

• Accessibility


Implementing Segmentation Strategies

• Concentrated Marketing– One segment

• Differentiated– Several segments with individual

marketing strategies


Consumer Motivation

CHAPTERFOUR


Types of Needs

• Innate Needs– Physiological, Primary or Biogenic needs:

• Positive or Supply needs• Negative or Avoidance needs• Specie maintenance need

• Acquired needs─ Psychological, Secondary or Psychogenic

Ego defensive needs• Ego bolstering needs• Affectional needs


Goals

• The sought-after results of motivated behavior

• Generic goals are general categories of goals that consumers see as a way to fulfill their needs

• Product-specific goals are specifically branded products or services that consumers select as their goals


Goal ConflictsPositive Motivation: A driving force toward some object or

condition → Approach Goal (A positive goal toward which

behavior is directed)

Negative Motivation: A driving force away from some object

or condition → Avoidance Goal (negative goal from which

behavior is directed away)

Conflicts:

Approach/Approach

Approach/Avoidance

Avoidance/Avoidance


Rational versus Emotional Motives

• Rational implies that consumers select goals based on strictly objective criteria such as size, weight, price, or miles per gallon

• Emotional motives imply the selection of goals according to personal or subjective criteria


The Dynamic Nature of Motivation

• Needs are never fully satisfied

• New needs emerge as old needs are satisfied

• People who achieve their goals set new and higher goals for themselves


Goal AdjustmentsSubstitute Goals• Are used when a consumer cannot attain a

specific goal he/she anticipates will satisfy a need

• The substitute goal will dispel tension• Substitute goals may actually replace the

primary goal over timeFrustration• Failure to achieve a goal may result in

frustration. • Some adapt; others adopt defense mechanisms

to protect their ego.


Defense Mechanism

Methods by which people mentally

redefine frustrating situations to protect

their self-images and their self-esteem:

- Aggression - Projection

- Rationalization - Daydreaming (Autism)

- Regression - Identification

- Withdrawal - Repression


Arousal of Motives

• Physiological arousal

• Emotional arousal

• Cognitive arousal

• Environmental arousal


Philosophies Concerned with Arousal of Motives

• Behaviorist School– Behavior is response to stimulus– Elements of conscious thoughts are to be ignored– Consumer does not act, but reacts

• Cognitive School– Behavior is directed at goal achievement– Needs and past experiences are reasoned,

categorized, and transformed into attitudes and beliefs


Maslow’s Hierarchy of Needs Figure 4.10


Table 4.3 Murray’s List of Psychogenic Needs

Needs Associated with Inanimate Objects:Acquisition, Conservancy, Order, Retention, Construction

Needs Reflecting Ambition, Power, Accomplishment, and Prestige:

Superiority, Achievement, Recognition, Exhibition, Infavoidance

Needs Connected with Human Power:Dominance, Deferrence, Similance, Autonomy, Contrariance


Table 4.3 (con’t)

Murray’s List of Psychogenic Needs

Sado-Masochistic Needs :Aggression, Abasement

Needs Concerned with Affection between People:Affiliation, Rejection, Nurturance, Succorance, Play

Needs Concerned with Social Intercourse:Cognizance, Exposition


A Trio of Needs

• Power– individual’s desire to control environment

• Affiliation– need for friendship, acceptance, and

belonging

• Achievement– need for personal accomplishment– closely related to egoistic and self-

actualization needs


Personality and Consumer Behavior

CHAPTERFIVE


The Nature of Personality

• Personality reflects individual differences

• Personality is consistent and enduring

• Personality can change


Theories of Personality

• Freudian theory– Unconscious needs or drives are at the

heart of human motivation

• Neo-Freudian personality theory– Social relationships are fundamental to the

formation and development of personality

• Trait theory– Quantitative approach to personality as a

set of psychological traits


Freudian Theory

• Id

• Superego

• EgoConsumer researchers using Freud’s

personality theory see consumer purchases as

a reflection and extension of the consumer’s

own personality


Neo-Freudian Personality Theory

• Social relationships are fundamental to personality

• Alfred Adler:– Style of life (seeking rational goals)– Feelings of inferiority

• Harry Stack Sullivan– We establish relationships with others to reduce

tensions and anxiety• Karen Horney’s three personality groups

– Compliant: move toward others– Aggressive: move against others– Detached: move away from others

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 65Chapter Five Slide


Trait Theory

• Focus on measurement of personality in terms of traits

• Trait - any distinguishing, relatively enduring way in which one individual differs from another

• Personality is linked to broad product categories and NOT specific brands

66Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter Five Slide


Personality and Understanding Consumer Behavior



Consumer Innovativeness

• Personality trait that fosters a willingness to create and accept change

• Further broken down for hi-tech products– Global innovativeness– Domain-specific innovativeness– Innovative behavior

68Chapter Five SlideCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall


Consumer Innovativeness ScalesTable 5.3 (excerpt)

A “GENERAL” CONSUMER INNOVATIVENESS SCALE

1. I would rather stick to a brand I usually buy than try something I am not very sure of.

2. When I go to a restaurant, I feel it is safer to order dishes I am familiar with.

A DOMAIN-SPECIFIC CONSUMER INNOVATIVENESS SCALE

1. Compared to my friends, I own few rock albums.

2. In general, I am the last in my circle of friends to know the titles of the latest rock albums.



Dogmatism

• The degree of rigidity a person displays toward things unfamiliar and information contrary to his or her own established beliefs

• Need for Uniqueness: Consumers who avoid conforming to expectations or standards of others



Social Character

• Ranges on a continuum for inner-directedness to other-directedness

• Inner-directedness – rely on own values when evaluating

products– Innovators

• Other-directedness– look to others– less likely to be innovators



Optimum Stimulation Level• A personality trait that measures the level or amount

of novelty or complexity that individuals seek in their personal experiences

• High OSL consumers tend to accept risky and novel products more readily than low OSL consumers.

• Sensation Seeking: The need for varied, novel, and complex sensations and experience. And the willingness to take social and physical risks for the sensations.



Variety-Novelty Seeking

• Measures a consumer’s degree of variety seeking

• Examples include:– Exploratory Purchase Behavior– Use Innovativeness– Vicarious Exploration



Cognitive Personality Factors• Need for cognition (NFC)

– A person’s craving for or enjoyment of thinking– Individual with high NFC more likely to

respond to ads rich in product information

• Visualizers• Verbalizers

.



From Consumer Materialism to Compulsive Consumption

Materialistic People:

• Acquire and show-off possessions

• Self-centered and selfish

• Seek lifestyle full of possessions

• Do not get greater personal satisfaction from possessions


From Consumer Materialism to Compulsive Consumption

• Fixated consumption behavior– Characteristics

• Passionate interest in a product category• Willingness to go to great lengths to secure

objects• Dedication of time and money to collecting

• Compulsive consumption behavior– “Addicted” or “out-of-control” consumers



Consumer Ethnocentrism and Cosmopolitanism

• Ethnocentric consumers feel it is wrong to purchase foreign-made products because of the impact on the economy

• Target by stressing nationalistic themes

• Cosmopolitan orientated consumers consider the world to be their marketplace and would be attracted to products from other cultures and countries.



Product Anthropomorphism andBrand Personification

• Product Anthropomorphism – Attributing human characteristics to

objects,

• Brand Personification – Consumer’s perception of brand’s

attributes for a human-like character– Mr. Coffee is seen as dependable, friendly,

efficient, intelligent and smart.



A Brand Personality FrameworkFigure 5.12



Product Personality Issues

• Gender– Coffee and toothpaste perceived as masculine;

bath soap and shampoo perceived as feminine• Geography

– Actual locations, like Philadelphia cream cheese and Arizona iced tea

– Fictitious names such as Hidden Valley and Bear Creek

• Color– Color combinations in packaging and products

denotes personality



Self and Self-Image• Consumers have a variety of enduring images

of themselves• Self image contains traits, skills, habits,

possessions, relationships, and way of behavior

• Developed through background, experience, and interaction with others

• Consumers select products congruent with their self-image



Different Self-Images



Extended Self• Possessions can extend self in many

ways:– Actually – Symbolically– Conferring status or rank– Bestowing feelings of immortality– Endowing with magical powers



Virtual Personality• You can be anyone…

– Gender swapping– Age differences– Mild-mannered to aggressive

• Altering the Self-Image: Using self-altering products to express individualism by:– Creating new self– Maintaining the existing self– Extending the self– Conforming



Consumer Perception

CHAPTERSIX


Perception• The process by which an individual

selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world

• Elements of Perception– Sensation– Absolute threshold– Differential threshold– Subliminal perception

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 86Chapter Six Slide


Sensation

• Sensation is the immediate and direct response of the sensory organs to stimuli– A stimulus is any unit of input to any of the

senses.

• The absolute threshold is the lowest level at which an individual can experience a sensation.

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide 87


Differential Threshold (Just Noticeable Difference – j.n.d.)

• Minimal difference that can be detected between two similar stimuli

• Weber’s law– The j.n.d. between two stimuli is not an

absolute amount but an amount relative to the intensity of the first stimulus

– The stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.



Marketing Applications of the J.N.D.



Subliminal Perception• Stimuli that are too weak or too brief to

be consciously seen or heard – They may be strong enough to be

perceived by one or more receptor cells.

• Is it effective?– Extensive research has shown no

evidence that subliminal advertising can cause behavior changes

– Some evidence that subliminal stimuli may influence affective reactions



Aspects of Perception



Perceptual Selection


Selection Depends Upon:


Perceptual SelectionImportant Concepts

Selective Exposure: Tendency to seek out message that are pleasant, close to self identity and promise goal attainment (e.g., will help make good purchases)

Selective Attention: Motivation, contrast etc.

Perceptual Defense: Tendency to screen out

unpleasant or threatening stimuli

Perceptual Blocking: Avoid being bombarded by tuning out, TiVo etc.


Perceptual Organization.Figure and ground: The figure is sharp, ground is

usually hazy. Marketers usually design so the figure is the noticed stimuli.

Grouping: Grouping stimuli by proximity, similarity etc.. It helps memory and recall.

Closure: Supplying in missing details to complete an experience

Good Figures: People tend to perceive familiar, well-known, symmetrical designs better than unfamiliar or odd ones


Interpretation

• People hold meanings related to stimuli



Interpretation

• Positive attributes of people they know to those who resemble them

• Important for model selection



Interpretation

• Verbal messages reflect stereotypes



Interpretation

• First impressions are lasting

• The perceiver is trying to determine which stimuli are relevant, important, or predictive



Interpretation

• Consumers perceive and evaluate multiple objects based on just one dimension



Product Positioning• Establishing a specific image for a

brand in the consumer’s mind in relation to competing brands

• Conveys the product in terms of how it fulfills a need

• Successful positioning creates a distinctive, positive brand image



Packaging as a Positioning Element

• Packaging conveys the image that the brand communicates to the buyer.

• Color, weight, image, and shape are all important.

• Repositioning might be necessary because:– Increased competition– Changing consumer tastes

101Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide


Perceptual Mapping

• An analytical technique that enables marketers to plot graphically consumers’ perceptions concerning product attributes of specific brands



Positioning of Services

• Image is a key factor for services

• Services often want a differentiated positioning strategy to market several versions of their service to different markets.

103Chapter Six SlideCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Perceived Price and Perceived Quality

• Reference prices – used as a basis for comparison in judging another price– Internal– External

• Perceived Quality of Products– Intrinsic vs. Extrinsic Cues



Perceived Quality of Services• Difficult due to characteristics of services

– Intangible– Variable– Perishable– Simultaneously Produced and Consumed

• SERVQUAL scale used to measure gap between customers’ expectation of service and perceptions of actual service.

• A more recent measure is:RATER - Reliability, Assurance, Tangibles, Empathy, and Responsiveness



Price/Quality Relationship

The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product.)



Perceived Risk

• The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision

• Types– Functional Risk– Physical Risk– Financial Risk– Social Risk– Psychological Risk– Time Risk

107Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide


How Consumers Reduce Risk• Seek Information• Buy the same brand• Buy the most popular brand• Select by Brand Image• Rely on Store Image• Buy from the same salesperson• Buy the Most Expensive choice• Buy the cheapest• Seek Reassurance, etc.



Consumer Learning

CHAPTERSEVEN

1 - 1 copyright 2007 by prentice hall consumer behavior: meeting changes and challenges chapter one

Documents

consumer slide

prentice hall development

marketing myopia slide

satisfaction slide

selling concept

features marketing objectives

customer needs

customer satisfaction