StarbucksWhy are consumers willing to

pay $2.00 for a cup of coffee?Who are Starbucks’ target

markets?What is the marketing communication message Starbucks wants to convey?Why has Starbucks been successful?

3-1Discussion Slide

Chapter OverviewConsumer purchase processConsumer buying

environmentTraditional factors affecting

consumer buyingRecent trends in consumer

behaviorPerception and its marketing

implications

3-2Discussion Slide

Analyzing Consumer Markets and Segmentation/Targeting/Positioning

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Information Search

Internal search Evoked set

External search

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External SearchAbility to searchMotivation

Level of involvementNeed for cognitionShopping enthusiasm

Perceived costPerceived benefit

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Attitude

AffectiveCognitiveConative

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Attitude Sequence

Cognitive Affective ConativeAffective Conative CognitiveConative Cognitive Affective

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3-8

What emotion does this Pamper Wipes advertisement solicit?

Which attitude sequence would be the most likely for this product?

“Some things can be rough.” “Her wipe shouldn’t be one of them.”

Personal ValuesComfortable lifeEqualityExcitementFreedomFun, exciting lifeHappinessInner peaceMature lovePersonal

accomplishment

PleasureSecuritySelf-fulfillmentSocial acceptance

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3-10

Which personal values does this Aetna ad target?

Information Processing Elaboration Likelihood Model (ELM): People take time to consider messages to make rational decisions. Central route: Giving high degree of attention to core

elements. “We do chicken right!”. Peripheral route: Giving less attention on core elements,

but high attention on other cues such as music and background pictures.

Hedonic, Experiential Model (HEM): The tendency to maximize pleasure while minimizing pain. Paying attention to elements of the message related to emotions and feelings that maximize pleasure. Central route: “Malaysia, truly Asia” Peripheral route: Pictures at the background and music.

Route depends on Motivation: Importance of product and cost. Ability: Desire to use cognitive skills.

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Principles concerning processing of information and cognitive mapping.

Cognitive mapping enhances movement of messages from short-term memory to long-term memory.

Repetition is necessary to establish new linkages.

Difficult to modify or create new linkages.

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Evaluation of AlternativesEvoked set method

Evoked set: Consists of brands people consider in a purchasing situation. “Shampoo”.

Inept set: Consists of brands not considered because of negative feelings (bad experience).

Inert set: Consists of brands people aware of but have neither positive nor negative attitudes.

Multi-attribute approach: Examining sets of attributes across sets of products or brands. “Computers”.

Affect referral: Choosing the brand we like without evaluating alternatives. Milk, soft drinks, chocolate.

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3-15

How important is it for each of the following brands to be a part of a consumer’s evoked set?

Panadol (pain medicine) Head & Shoulders (shampoo) Black & Decker (power tools) Hall’s (cough drops) American Hospital

Discussion Slide

3-16

Housing 22.7% 19.1% 25.0%Food 13.8% 13.6% 13.0%Transportation 11.6% 17.8% 16.0%Household expenses 11.1% 14.5% 11.0%Entertainment 9.3% 8.5% 4.5%Health care 5.1% 5.1% 5.0%Savings 4.7% 4.9% 10.0%Clothing 3.4% 5.4% 5.0%Education, child care 3.4% 2.1% 4.5%

How Consumers Spend their MoneySpending Category Survey Results Actual Expenditure Experts

1st Column: What consumers said they spent in each category.2nd Column: What consumers actually spent in each category.3rd Column: What financial planners said consumer should spend in each category

Source: James E. Reynolds, “An Exclusive Poll Shows We Spend Far More Than We Say and Save Far Less,” Money, October 1997, Vol. 26, No. 10, pp. 215-218.

Alternative Purchase Decisions

Temporary change in consumer’s situation.Short on money or time.

Desire for variety. Soft drinks with different ingredients.

Impulse purchase. Especially on low-priced items. Pen, pencils, batteries, small toys, etc.

Marketing communication material.Influence of friend or relative.

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3-18

How likely is each of the following marketing material to alter your purchase decision for food items?

An advertisement A coupon A sweepstake or contest offer A price-off offer An in-store display The food package A in-store sample A billboard

Discussion Slide

Post purchase EvaluationEvaluation of product performance.Cognitive dissonance. Doubt about purchase,

especially on socially visible purchasing experience or products such as cars, computers, cloths, etc.

Impacts future purchases.Impacts word-of-mouth communications.

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Traditional factors affecting consumer purchasing behaviors

Demographics (age, gender, income, etc.)

Home environmentFamily life cycleLife changing eventsCultural environmentSocial environment

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3-21

What makes this advertisement appealing to teenagers?

Is it an effective ad design?

Discussion Slide

Family Life CycleSingleNewlywedsFirst families

Divorce and mixed families

Full nestEmpty nestRemaining partner

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3-23

An advertisement directed to first families and the arrival of a new baby.

Common Reasons Purchases Are MadeProducts/services provide utilityTo satisfy physical needsTo satisfy psychological needsTo satisfy social needsTo satisfy emotional needsTo satisfy epistemic needs

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Recent Trends AffectingConsumer Buying Behavior

Changes in cultural values and attitudesTime pressure and busy lifestyleIndulgences and pleasure binges:

Occasional purchases for self-rewarding such as expensive dinner.

Desire for excitement, fantasy: Theme parks, virtual playrooms, etc.

Emphasis on health: Health-tourism.

Clanning: Social needs such as occasionally visit friends, going movie theater with friends.

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PerceptionPerception

The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world.

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Elements of PerceptionSensationThe absolute thresholdThe differential thresholdSubliminal perception

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Sensory ReceptorsSensory Receptors

The human organs (eyes, ears, nose, mouth, skin) that receive sensory inputs.

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Absolute ThresholdAbsolute Threshold

The lowest level at which an individual can experience a sensation.

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Sensory AdaptationSensory Adaptation

“Getting used to” certain sensations; becoming accommodated to a certain level of stimulation.

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Differential ThresholdDifferential Threshold

The minimal difference that can be detected between two stimuli. Also known as the j.n.d. (just noticeable difference).

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Weber’s LawWeber’s Law

A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e., the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different).

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Marketing Applications of the JNDNeed to determine the relevant j.n.d. for their productsso that negative changes are not readily

discernible to the publicso that product improvements are very

apparent to consumers

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Subliminal PerceptionSubliminal Perception

Perception of very weak or rapid stimuli received below the level of conscious awareness.

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Is Subliminal Persuasion Effective?Extensive research has shown no evidence

that subliminal advertising can cause behavior changes

Some evidence that subliminal stimuli may influence affective reactions

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