consumer behavior

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MAR 4333-521

Promotion Management Fall 2003—SarasotaSeptember 20, 2003

Perspectives of Consumer Behavior

Rich Gonzalez University of South Florida

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URLs (used today)

www.smirnoff.com

www.diageo.com

www.pny.com

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September 20, 2003--Agenda Quiz # 2 Consumer Behavior For September 27

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For Today: September 20 Chapter 4- Perspectives on

Consumer Behavior

“Diageo Effort to Revamp SmirnoffReflects 'Superpremium' Successes,”Deborah Ball, WSJ, September 5, 2003

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For September 27 Chapter 5- The Communications

Process

“RIAA Takes Off Gloves In Mounting Its Fight Against Music Thieves ,”Lee Gomes, WSJ, September 15, 2003

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Last Time National Assoc. Realtors—Benefits,

Consistency Gateway--Inconsistency Examples of IMC In Ads—New

Balance—”Fit” Example of Broad Objective—Ford Advertising & Media Biz Structure

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Marketing Communication Requirements 1. Clearly Positioned 2. Directed to a Target Market 3. Created to Achieve Objective 4. Accomplishes Objective Within

Budget Constraint

Shimp 2003

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Ford Brands Jaguar Ford Lincoln Mercury Mazda Volvo Aston-Martin

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Gateway 9/09/03--Gateway Inc. …eliminating

about 850 jobs … at the Sioux Falls, S.D., plant and an additional 100 workers will be laid off from North Sioux City, S.D. …in Kansas City, Kan.

In addition to those 850 … will close its Hampton, Va., plant and lay off 450 … …save the company as much as $130 million a year…

…cumulative losses of $1.73 billion since the fourth quarter of 2000.

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Diageo Biggest Vodka Brand? What Does James Bond Drink?

32% Market Share6.8 Million Cases (2002)Up 8% in Volume#2 Competitor Behind By 2 Million Cases

Worldwide Market Leader Since 1970s

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Diageo Assignment Why is Smirnoff in trouble?

What is Diageo doing about it?List some promotional activities

Your opinion on efficacy We’ll open the class on 9/20

discussing this.

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Diageo--Smirnoff Smirnoff is in trouble because: Share is down to 32% (-36%) Superpremiums: BIG Success Marketing Wasn’t Effective Enough James Bond Dropped Them Relied On “Older” Customers

Didn’t Get Younger Ones

Class Discussion

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Competitors?

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Diageo--Smirnoff Diageo is doing: Parties with bartenders, salespeople,

waitstaff Teaching specialty drinks Pitching “Neat” Changing Packaging New Commercials (J.Walter Thompson) Sponsoring Music Events Contest Forcing

Participation/ConsumptionClass Discussion

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Diageo--Smirnoff Diageo will (will not) be effective: Courting bartenders is a smart move Changing Package Is Risky Diageo Knows They Need to Change

Marketing If commercials use “real people,” will be

effective Must innovate to offset the long term

trend toward less per capita consump.Class Discussion

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Quiz 2 Q1

1. The consumer decision process, consisting of several stages, begins with the problem recognition stage, then:

A) terminates if the interpersonal determinants do not last.

B) continues on to search and evaluation of alternatives stages.

C) frequently gets cut short due to consumer attitudes.

D) the next stage is purchase. E) proceeds to the search stage, then immediately

to purchase.

B: Chap 4 105

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Quiz 2 Q2 2. Attitudes are learned predispositions to

respond to an object. Consumer attitudes are important to marketers because they represent positive or negative feelings ________

A) and desires. B) and discretionary income. C) and neutrality. D) which cannot be changed. E) and behavioral tendencies.   E: Chap 4 p 117

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Quiz 2 Q3

3. When consumers engage in information search, they often start with

A) external search. B) sensation search. C) TV commercials. D) internal search. E) cognitive dissonance.

D: Chap 4 p 112

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Quiz 2 Q4

4. A(n) _____________ is a group whose perspectives or values are being used by an individual as the basis for his or her judgments, opinions, and actions.

A) decision team B) reference group C) purchasing agent D) lead example E) income group

B: Ch 4 p 129

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Quiz 2 Q5

5. The various brands identified as purchase options to be considered

during the alternative evaluation process is the consumer’s __________ Evoked Set

Ch. 4, P116

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Brand Equity Awareness Loyalty Quality Associations

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Promotional Mix Advertising Direct Marketing Interactive/Internet Marketing Sales Promotion Public Relations Personal Selling

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Consumer Behavior

The process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and wants.

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It Would Be Logical Are consumers and buyers like Mr.

Spock?

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The Consumer Decision Process

Problem RecognitionProblem Recognition

Information SearchInformation Search

Alternative EvaluationAlternative Evaluation

Purchase DecisionPurchase Decision

Postpurchase EvaluationPostpurchase Evaluation

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An Integrated Model of the Consumer Decision Process

Problem Recognition

Search

Alternative Evaluation

PurchasePurchase

EvaluationPurchase Act

Interpersonal Determinants

•Cultural Influences•Social Influences•Family Influences

Personal Determinants•Needs and Motives•Perception•Attitudes•Learning•Self-Concept

Fee

dbac

k

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Consumer Decision Process and Relevant Internal Psychological Processes

Problem RecognitionProblem Recognition

Information SearchInformation Search

Alternative EvaluationAlternative Evaluation

Purchase DecisionPurchase Decision

Postpurchase EvaluationPostpurchase Evaluation

MotivationMotivation

PerceptionPerception

Attitude FormationAttitude Formation

IntegrationIntegration

LearningLearning

Decision Process Stages Psychological Processes

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Sources of Problem Recognition

Out of stock

Dissatisfaction

New needs or wants

Related product purchase

Market-induced recognition

New products

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Floppy Disk Benefits Costs Deficiencies

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New Product Flash Drive (Thumb Drive)

www.pny.com

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Maslow’s Hierarchy of Needs

Physiological needs(hunger, thirst)

Safety needs(security, protection)

Social needs(sense of belonging, love)

Esteem needs(self-esteem, recognition, status)

Self-actualization needs(self-development, realization)

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Pampers appeals to needs for love and belonging in this ad

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Las Vegas Convention & Visitor’s Bureau View 4 Commercials

What is the Objective?

Good Taste or Bad Taste?

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Las Vegas Convention & Visitor’s Bureau Objective(s) Go to Vegas Go to Vegas and be BAD Lose your inhibitions Message: You won’t pay for your

actions

Class Discussion

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Las Vegas Convention & Visitor’s Bureau Comments

Might offend some people A little risque Inconsistent with family positioning No mention of gambling YOUR mental image of what it is that

“stays here”Class Discussion

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Probing the Minds of ConsumersPsychoanalytic Theory & Motivation Research

In-Depth Interviews The consumer talks freely in an unstructured interview to

obtain insights into his or her motives, ideas or opinions.Projective Techniques

Methods allowing consumers to project values, motives, attitudes or needs on some external object.

Association Tests Consumers respond with the first thing that comes to mind

when presented with some verbal or pictorial stimulus.Focus Groups

A group of consumers with similar backgrounds or interests discuss a product, idea or issue.

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Information SearchInternal Search– information stored in memory

External Search – actively seeking information from various sources

Personal sources Friends, relatives, co-workers

Market-controlled sources Ads, salespeople, in-store displays

Public sources Print articles, news reports

Personal experience Handling, examining, testing, using

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Perception

Stages in the perception process:

Sensation Attending to information Interpreting information Responding to information

The process by which an individual receives, selects, organizes and interprets information

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Selective Retention

The Selective Perception Process

Selective Comprehension

Selective Attention

Selective Exposure

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Evaluation of AlternativesAll available brands

Brand A Brand B Brand C Brand D Brand E

Brand F Brand G Brand H Brand I Brand J

Brand K Brand L Brand M Brand N Brand O

Evoked Set of Brands

Brand B Brand E

Brand I

Brand M

Brand F

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Toothpaste Crest Colgate

Aim Pepsodent Mentadent Close-Up Aquafresh Rembrandt Sensodyne Arm & Hammer UltraBrite

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Evaluative Criteria

Criteria - Dimensions or attributes of a product or service used to compare various alternatives Objective criteria - price, warranty, color, size Subjective criteria - style, appearance, image

Consequences – outcomes that result from using a product or service

Functional consequences – concrete and tangible

Pyschosocial consequences – abstract, intangible

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This ad focuses on the favorable consequences of using Top Flite golf balls

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Consumer Attitudes

Learned predispositions to respond toward an object—an individual’s overall feelings toward or evaluation of an object.

Consumers may hold attitudes toward: Individuals Brands Companies Organizations Product categories Retailers Advertisements Media

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Multiattribute Attitude Model

Attitudes are a function of:A = Σ Bi X Ei

A = AttitudeBi = Beliefs about brands performance on

attribute iEi = Importance attached to attribute iN = Number of salient attributes

considered by consumer

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Ways to Influence or Change Attitudes

Increase or change the strength or belief rating of a brand on an important attribute

Change consumers’ perceptions of the importance or value of an attribute

Add a new attribute to the attitude formation process

Change perceptions of belief ratings for a competing brand

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Integration Processes and Decision Rules

Types of decision rules: Heuristics – simple rule of thumb rules that are

easy to use and apply Buy least expensive brand Buy brand on sale or for which I have a coupon

Affect referral rule – make decision on basis of overall affective impression or feelings about the brand

Compensatory rules – evaluate the strengths and weaknesses of each brand

Integration processes are the way product knowledge, meaning, and beliefs are combined to evaluate alternatives

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Market leaders such as Budweiser appeal to consumer affect in their advertising

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St. Elizabeth Health Center Objective:

Increase PreferenceReach Consumer On Emotional Level

View 2 Commercials 1. Heart Surgery--Rational 2. Traumatic Potential—Emotional

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St. Elizabeth Health Center Consistent?

Contrast?

Effective?

Class Discussion

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Consumer Learning Processes

Cognitive Learning Consumers learn through information processing

and problem solving

Behavioral Learning Learning via association (classical conditioning) Learning via reinforcement (instrumental cond.)

Modeling Processes Based on observation of outcomes and

consequences experienced by others

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Goalachievement

Goalachievement

InsightInsight

Purposivebehavior

Purposivebehavior

Cognitive Learning Process

GoalGoal

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Classical Conditioning Process

Conditionedstimulus

(Brita waterfiltration pitcher)

Conditionedstimulus

(Brita waterfiltration pitcher)

Association develops throughcontiguity and repetition

Unconditionedstimulus(waterfall)

Unconditionedstimulus(waterfall)

Unconditionedresponse

(freshness, purity)

Unconditionedresponse

(freshness, purity)

Conditionedresponse

(freshness, purity)

Conditionedresponse

(freshness, purity)

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This Brita ad uses classical conditioning

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Increase or decrease inprobability of repeatbehavior (purchase)

Increase or decrease inprobability of repeatbehavior (purchase)

Instrumental Conditioning Process

Positive or negativeconsequences occur(reward or punishment)

Positive or negativeconsequences occur(reward or punishment)

Behavior(consumer uses

product or service)

Behavior(consumer uses

product or service)

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External Influences

Culture

Subculture

Social class

Referencegroups

Situations

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The Hispanic subculture is a very important market in many parts of the U.S.

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Variations in ConsumerDecision Making

Types of Decision Processes:

Extended Problem Solving

Limited Problem Solving

Routine Response Behavior

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Cholesterol-Free Half & Half Objective:

Introduce New Product

View 2 Commercials 1. Rational Appeal 2. Emotional Appeal

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Cholesterol-Free Half & Half Do customers consider cholesterol

content in food product purchase decisions?

Effective?

Class Discussion

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End