consumer behavior buad 307 marketing fundamentals

CONSUMER BEHAVIORBUAD 307

MARKETING FUNDAMENTALS

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 2

Why does Staples sell Starbucks coffee?


CONSUMER

PERCEPTION/SENSATION

COGNITION

AFFECT

BELIEFS

SOCIAL ANDOTHER INFLUENCE

INFOSEARCH

CHOICES

PREFERENCES

COMMUNICATION

MARKETRESEARCH

STRATEGY

Influences on and of Consumer Behavior


Learning Outcome Objectives

• Understand how consumer cognitive (thinking) processes and limitations, affect, beliefs, social influences, and other contextual factors influence consumer decision making, choices, and behavior

• Appreciate how these insights can be used to design and implement effective marketing strategies

• Appreciate individual and segment differences in process and outcome


True or False?

1. If you have bad breath, you cannot smell it yourself.

2. If you eat a balanced diet, you do not need vitamin supplements.

3. Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation.

4. Dell Computers tend to be of higher quality than those made by HP and Sony.

5. Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.


Questions Faced By Consumers

• Are veggie burgers actually healthy?• What makeup should you use to get an

“even” skin tone?• Do I get any useful benefits from spending

more than $125 on a digital camera?• Should I get a “make-over?” What am I

looking for? What should I do?• Is my mechanic honest?• Which tie should I wear for a job interview?• Should I give my wife roses, chocolate, or

software?


Consumer Problems and Recognition

• Consumer problem: Discrepancy between ideal and actual state--e.g., consumer:– Has insufficient hair– Is hungry– Has run out of ink in his or

her inkjet cartridge• Problems can be solved

in several ways--e.g., stress reduction <----- vacation, movie, hot bath, medication


CONSUMER DECISIONS:Theory and Reality in Consumer Buying

INFORMATIONSEARCH

PROBLEMRECOGNITIO

N

EVALUATION OF

ALTERNATIVES

PURCHASE

POSTPURCHASE

EVALUATION/BEHAVIORS

Theory

Complications


Approaches to Search for Problem Solutions

INTERNAL

EXTERNAL

MemoryThinking

Word of mouth, media,store visits, trial

CATALOG


Options Identified and Considered

UNIVERSAL SET

RETRIEVED SET

EVOKED SET

All possible options

Options that readily come to mind

Options that will be considered by the consumer

Note: Retrieved and evoked sets will vary among different consumers


REMINDER

• For low involvement products, efforts aimed at affecting internal search tend to be more effective—the consumer is usually not willing to expend energy on external search.

• External search is more likely for higher involvement products.


Decision Making Issues

• Involvement level– Temporary– Enduring

• Consumer locus of control– Internal– External

• Product category complexity• Consumer knowledge


Evaluation Type

– Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones)

– Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission)

– Hybrid: Combination of the two (e.g., one non-compensatory measure, then compensatory tradeoffs on other attributes

– Abandoned strategy: Consumer finds initial criteria unrealistic and proceeds to less desirable solution

IMPORTANT

LESSIMPORTANT


Heuristics—Low Involvement Decision Rules

• If either Coke or Pepsi is on sale, buy that brand; otherwise, buy Coke

• The larger the navels, the better the orange

• The larger package is likely to offer a lower unit price (not true in reality)


Attitudes―components

BELIEFSAFFECT

(FEELING)

BEHAVIORALINTENTIONS


Attitude Components

• Beliefs– Can be positive,

negative, or neutral

– May or may not be accurate

– May contradict other beliefs held by the other person

• Affect– May be positive or

negative

– May take on specific dimension (e.g., pleasure, disgust)

• Behavioral Intentions– An individual’s plan or

expectations of what he or she will do

– May appear inconsistent with beliefs

– May not predict well what the individual will do in reality


Generating Beliefs Through Advertising

• Statements must be

– Perceived

– Comprehended

– Remembered

– Believed (at least in part)


Positioning Through Creating Beliefs

• “It’s not delivery; it’s De Journo!”

• “Wal-Mart. Always low prices. Always.”

• “I just saved a bunch of money on my auto insurance.”

• “U-um Good!” (Campbell’s Soup)


Multiattribute Models of Attitude

• Attitude computed as a function of multiple attributes weighted for importance:

Ab= attitude toward brand b

Wi: weight of attribute I

Xib: belief about brand b’s performance on attribute I

• Model assumes rationality

n

iibiXWA

1b

Calculations will not be required on the exam. You should know conceptually what this involves conceptually—i.e., weighing importance and intensity of feeling.


Multiattribute Models

• Caveats– Different segments exist that will weight

factors differently—thus, overall averages can be misleading. Separate analyses should be done for different segments of interest. (Segments can be identified by certain statistical techniques).

– Individual differences exist in scale intensity—for some, it is much “easier” to be extremely good or extremely bad.

– Prior research may be needed to identify issues (dimensions) to be weighted.

– Some factors may be intangible—What are the substantive differences between Windows and Apple computers?

– Non-compensatory factors—“must-haves”—may determine final result.

• Applications– Determining

• Overall performance• Areas of strength and weakness

– Comparison to competitors• Overall• Areas of strength and weakness

REMINDER: PERCEPTIONS ARE NOT

NECESSARILY ACCURATE. We are looking to work with what

consumers believe.


Affect

• Based on– past emotional

associations of product– emotional effect of beliefs


Attitude Characteristics

• Availability/accessibility

• Constructed vs. natural

• Strength


Measurement of Attitude Components

• Beliefs– Semantic Differential Scales

– Good -------------------Bad

– Fast --------------------Slow

– Reliable-----------------Unreliable

• Feelings– Likert Scales (Strongly agree … Strongly Disagree)

– “This product makes me happy.”


Measurement

• Behavioral Intention

– Rating of likelihood of purchase

– May need projection if social desirability affects willingness to admit to product use


Attitude Change Strategies, Part I

• Change Affect– Classical conditioning

• “Pairing” the brand or product with desired stimulus—e.g., a car with a beautiful woman

– Attitude toward the ad• A likable ad for a brand in a

mundane product category—e.g.,

– Energizer Bunny– Snuggles (fabric

softener)– Mere exposure


Attitude Change Strategies II

• Change behavior (e.g., sampling)– Attitudes are inferred from

behavior (e.g., I buy the product I must like it or It must be good)

• Change Belief Component– Change existing beliefs

• Difficult• Advertiser’s motives are suspect

– Change importance of attributes– Add beliefs– Change ideal (fashion)


Adding Beliefs (True or Not): Examples

• Brushing and flossing do not reach all areas of the mouth

• People under stress need more vitamins

• Baking soda will reduce odor of refrigerators

• Fragmented hard drives may cause computer errors


REMINDER

• Changing currently held beliefs tends to be difficult—people know the marketer has an ulterior motive

• Adding new beliefs that are not inconsistent with what is already believed may be more effective


One-sided vs. two sided appeals

• One-sided: only saying what favors your side

• Two-sided: stating your case but also admitting points favoring the other side– Why is this effective?


Potential Family Life Cycle Stages

YOUNGSINGLE

BLENDED

SINGLE PARENT

FULL NEST I/II/III

EMPTY NESTI/II

OLDERSINGLE

YOUNGCOUPLE


Economic/Marketing Implications of Household Cycles

• Income tends to increase with time

• But children/ obligations add cost

• Divorce– increases costs– may change

income distribution marriage

• Product demand due to– singles with low

expenses– new couples– divorced

families– children– empty nesters

--> more income


Household Decision Making

• Roles/influence– Information gatherers/holders

– Influencers

– Decision makers

– Purchasers

– Users


The Means-End Chain

Large engine

Fast acceleration

Performance

Feeling of power

Self-esteemAim promotion/

positioning at higherlevels of chain!

Attributes

Consequences

Values


Subliminal Perception: A Diabolical Marketing Tool?

• Subliminal messages in ads are illegal in U.S.

• Some research support for modest effects– Probably limited to one

syllable words– Complex messages can

probably not be processed subliminally


Message Framing

• Many tradeoffs can be stated in two, mathematically equivalent ways—e.g.,– “80% lean” vs.

“20% fat”– $49.00 per

person per night based on double occupancy


Some Consumer Behavior Issues That Will Come Up Elsewhere in the Course

• Demographics (segmentation)

• Lifestyle (segmentation)

• Culture/subculture (segmentation, international marketing)

• Diffusion of innovation (product)

• Attention (promotion)


Organizational Buyers

• Types– Industrial– Reseller– Government and

non-profit organizations

• Purchase types– Straight rebuy– Limited decision

making– Extended decision

making

• Characteristics– Greater involvement– Bureaucracy– Long term

relationships– Price is important but

may not be the most important factor

consumer behavior buad 307 marketing fundamentals

Documents

consumer behavior buad

consumer behavior slide

consumer behavior lars

consumer problems

consumer decision making

recognition consumer

income slide

outcome slide