why study consumer behavior

7/28/2019 Why Study Consumer Behavior

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Why study Consumer Behavior?

1.If marketers understand why and how individuals make their consumpon decisions, they are

beer able to shape their markeng strategies.

. Studying CB helps marketers understand consumer percepons about a parcular product or range

of products.

2. Studying CB helps marketers understand consumer percepons about a parcular productor range of products.

Uncovering and correcng erroneous percepons about a parcular product may give marketers an

addional compeve advantage over competors.

3. Consumer atudes very oen determine consumer beliefs about certain products. Discovering consumer atudes allows marketers to ne tune their campaigns to resonate

with a parcular consumer niche.

4. Changing populaon demographics around the world aect the way markeng campaigns are

designed.

Understanding cultural nuances and subtlees may allow marketers to help further dene their

parcular target market.

5. Consumer lifestyles also determine what products appeal to certain consumer markets..Understanding consumer lifestyles is a key component to CB, it lets marketers make the appropriate

appeals in promong lifestyle product

5. Analyzing CB aempts to answer the deeper queson of why consumers behave as they do andpurchase, or not purchase certain products.

If a large sports car is not selling well, then the manufacturer wants to know if it is a generaldistaste for sports cars or a seasonal decision connected to the price of fuel.

Informaon like this can tell companies if a products performance is intrinsic to its ownmerit or defects or linked to external variables.

6. Analyzing the underlying factors in CB can help predict how products will perform in thelong run.

The decision to connue or disconnue producon of a parcular item can prove costly mistake if acompany confuses a temporary lull in sales with broader distaste for the item.

Similarly, making the inverse mistake of scking with a product due to misplaced faith in seasonal

factors can prove just as costly

7.CB analysis helps producers pick winners in their line up of products. The ones that CB indicates

are popular, will stay around and make money for the company. Those products that CB indicates will

fail will be cut to minimize Company losses.

8. Understanding CB and preferences also helps to guide future product development. This analysis

will not just look at product type, but individual features as well.

9. Like consumer atudes, experience also colours consumer responses to certain products.


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By studying CB, markeng professionals can tap into consumer experiences with similar products to

promote consumpon and gain compeve advantage over competors.

10. Another reason for studying Consumer Behavior is to beer understand macro-markeng

problems how a society meets the needs of its people as an aggregate.

Aggregate: (in the aggregate)as a whole

Who is a consumer?

Consumer purchaser of goods and services

Buyer a purchaser, a customer

Customer - The term is typically used to refer to someone who regularly purchases from a

parcular store or company.

What is Consumer Behavior?-

a study of how individuals, groups and organizaons select, buy, use

and dispose of goods, services, or ideas to sasfy their needs and desires.

It is a study about:

what they purchase, why they purchase the way they do, how much they buy, how theybuy, where they buy, when they buy, how oen they buy and how they dispose the things

they buy

For eg: toothpaste:

What type of toothpaste do consumers buy?(gel, paste,liquid

What brand?

( colgate, aquafresh, close up)

Why do people buy it?( to prevent cavies, to brighten or whiten teeth, as a mouthwash, to

remove stains )

Where do they buy it?(supermarket, convenience store, chemist)

How oen do they use it?(when they wake up, aer each meal, when they go to bed)

How oen do they buy it?(weekly, biweekly monthly)

Essenal elements in the denion

1.Disposal of goods and services.

Why would marketers have interest in the disposal of the product?

Marketers are also interested in how individuals dispose of their once-new purchases.

For example, aer consumers have used a product, do they store it, throw it or give it away, sell it

rent it or lend out?

Answers to these quesons are very important to marketers in the following respect:

Marketers must match their producon to the frequency with which consumers buy replacements.


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solid waste disposal has become a major environmental problem that marketers must address in

their development of new products and packaging.

2. Personal and organizaonal consumers.

It is important to note that the term consumer is used to describe two dierent kinds of consuming

enes:

The personal consumer

The organizaonal consumer.

The personal consumer buys goods and services for his/her own use (shaving cream, perfume), for

the use of the household( a tv set) or as a gi for a friend(a book)

The organizaonal consumer encompasses for-prot and not-for-prot businesses, government

agencies, instuons(schools, hospitals, prisons),

all of which must buy products, equipment and services in order to run their organizaons.

BUYING ROLES

There is need to know what people are involved in the buying decision and what role each person

plays.

there are ve roles that people play in a buying decision which can be disnguished.

Iniator:the person who rst suggests the idea of buying the product or service.

Inuencer: the person whose view or advice inuences the decision.

Decider: the person who decides on any component of a buying decision: whether to buy, what tobuy, how to buy, or where to buy.

Buyer: the person who makes the actual purchase.

User: the person who consumes or uses the product or service.

How is the buyer role analysis important to the marketer?

It is important to note that the person who makes a product purchase is not always the user, or the

only user of the product.

A mother may buy toys for her children(who are the users); she may buy a handbag(and be the

only user)

Marketers must therefore decide at whom to direct their promoonal eorts, the buyer or the

user.

Marketers must therefore decide at whom to direct their promoonal eorts, the buyer or the

user.

Who is the best prospect for marketers promoonal eorts, the buyer or the user?

TYPES OF CONSUMERBEHAVIOR

Consumer decision making varies with the type of buying decision.


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The decision to buy toothpaste, a personal computer and a new car are all very dierent.

Complex and expensive purchases are likely to involve more buyer deliberaon and more

parcipants.

Henry Assael disnguished four types of consumer buying as follows:

1. complex buying behavior. 2.habitual buying behavior 3.variety seeking buying behavior 4. Dissonance reducing buying behavior.

1. Complex Buying Behavior

Consumers engage in complex buying behavior when the product is expensive, bought

infrequently, risky and highly self-expressive like a vehicle.

The marketer of a high involvement product must understand consumers informaon gathering

and evaluaon behavior

The marketer needs to develop strategies that assist the buyer in learning about the products

aributes.

The brands features, benets and advantages

2. Habitual buying behavior

This happens on products that are bought on low involvement and the absence of signicant brand

dierences.

should be clearly dierenated to inuence the nal brand choice.

Consider salt!

Consumers have lile involvement in this product category. They go to the store and reach for the

brand.

There is good evidence that consumers have low involvement with low cost frequently purchased

products.

Strategies that could be employed to upli low involvement products to higher involvement.

1.Marketers of such products nd it eecve to use price and sales promoons to smulate product

trial.

2.They could also use Television adversing which is deemed more eecve than print

because it is a low nvolvement medium.

3. They can link the product to some involving issue, as when Colgate toothpaste is linked to avoiding

cavies.

4. They can link the product to some involving personal situaon eg by adversing a coee brand

early in the morning when the consumer wants to shake o sleepiness.


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5.They might design adversing to trigger strong emoons related to personal values or ego defense.

Ego:

self esteem.

6.They might add an important feature for eg forfying a plain drink with vitamins.

3. Variety-seeking buying behavior

Some buying situaons are characterized by low involvement but signicant brand dierences.

Here consumers do a lot of brand switching

Think about cookies. The consumer chooses a brand of cookies without much evaluaon and

evaluates the product during consumpon.

Brand switching occurs for the sake of variety rather than dissasfacon.

The marketer may encourage habitual buying by dominang the shelf space, avoiding out of stock

condions, and sponsoring frequent reminder adversing

4.Dissonance-reducing buyer behavior

This is when a buyer is highly involved in an expensive, infrequent and risky purchase. Aerthe purchase, the consumer experience dissonance that stems from nocing certain

disquieng features or hearing favourable things about other brands

Dissonance: unharmonious, incongruous, clashing

In this instance the consumer rst acted, then acquired new beliefs, then ended up with a set of

atudes.

In this case, markeng communicaons should beliefs and evaluaons that help the consumer feel

good about his or her brand choice.

THE BUYING DECISION MAKING PROCESS

The BDMP is a series of intellectual and procedural acvies which a consumer goesthrough when deciding which product to buy rather than the other.

intellectual: faculty of reasoning, knowing and thinking

procedural: series of acons conducted in a certain order or manner

It is a process that describes the behavioral processes that happen from the me the consumer

recognizes some need, to the point at which some post-purchase evaluaon of the parcular

purchase is made.

The conguraon of the BDMP consists of ve processes linked in a sequence:

o Problem recogniono Informaon searcho Evaluaon of alternaveso Purchase decision


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o Post-purchase behaviorConguraon: arrangement in a parcular form.

The decision to purchase may have evolved over several months, or in some instances, theenre process may involve only a few seconds.

It is not that the exact sequence of the ve processes within a specic me frame is strictly

followed but that a similarity in decision paerns does exist among consumers.

BELOW IS A DMP MODEL BY ENGEL, KOLLATT AND BLACKWELL(1978).

STEPS IN CUSTOMER DECISION MAKING PROCESS

1. NEEDS IDENTIFICATION/ PROBLEM RECOGNITIONThe buying process starts when the buyer recognizes a problem or need.

how?The problem can be triggered by internal or external smuli.

With an internal smulus, one of the persons normal needs hunger, thirst, rises to a threshold

level and becomes a drive.

A need aroused by external smulus would be for eg, a person passing a bakery and sees freshly

baked bread. That smulates hunger. One can admire a neighbors car or see on television ad an

aracve product.

By gathering informaon from a number of consumers, marketers can idenfy the most frequent

smuli that spark an interest in a product category. They can then develop markeng strategies

that trigger consumer interest.

Problem recognion can also be viewed as either simple or complex.Simple problem recognion refers to the needs that occur frequently and that can be dealt with

almost automacally, such as becoming hungry and purchasing something to eat.

Complex problem recognion is characterized as a state in which a problem develops over me, as

the actual and desired state gradually move apart.

2. INFORMATION SEARCHAn aroused customer will be inclined to search for more informaon.

Consumer informaon sources fall into four groups:

Personal sources: family, friends, neighbors, acquaintances

Commercial sources: adversing, salespersons, dealers, packaging, displays

Public sources: mass media, consumer organizaons

Experienal sources: handling, examining, using the product.

Personal sources: family, friends, neighbors, acquaintances

Commercial sources: adversing, salespersons, dealers, packaging, displays


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Public sources: mass media, consumer organizaons

Experienal sources: handling, examining, using the product.Experienal: based on experience

The consumer receives the most informaon about a product from commercial sources. Howeverthe most eecve informaon comes from personal sources.

Commercial informaon normally performs an informing funcon, and personal sources perform a

legimizing or evaluaon funcon.

For example, physicians oen learn of new drugs from commercial sources but turn toother doctors for evaluave informaon.

3. EVALUATION OF ALTERNATIVES The acquired informaon enables the consumer to evaluate product benets and brand

image to arrive at a decision or brand choice.

how?

When evaluang potenal alternaves, consumers tend to use two types of informaon:

A list of brands from which they plan to make their selecon-the choice set The criteria they will use to evaluate each brand.

awareness

Total set-awareness set

-consideraon set

-choice set

TOTAL SET: Brands available to the consumer

AWARENESS SET: a subset of the total set of brands which the individual consumer will get to

know.

CONSIDERATION SET: brands which will meet inial buying criteria.

CHOICE SET: the few brands that remain as strong contenders.

The nal purchase is made from the choice set.

The criteria that consumers use to evaluate brands that constute their choice set isexpressed in terms of important product aributes.

Examples of aributes that consumers have used as criteria:

Cameras: Picture sharpness, auto focusing, built in ash, size and weight

Paper towels: strength, design, color price, absorbency,

Shaving cream: fragrance, consistency, price, smoothness of shave

Tyres: safety, tread life, price, ride quality

Hotels: locaon, cleanliness, atmosphere, price


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Color tvs: picture quality, size of screen, length of warranty, price,

4. PURCHASE DECISIONIn the evaluaon stage, the consumer forms preferences among the brands in the choice set.

However, two factors can intervene between the purchase intenon and the purchasedecision:Atude of others

Unancipated situaonal factors

The inuence of others becomes complex when people close to the buyer holdcontradictory opinions and the buyer would like to please them.

Related to atudes of others is the role played by infomediaries who publish their evaluaons. Eg,

consumer reports, music reviewers, chat shows where people discuss products.

Unancipated situaonal factors may erupt to change the purchase.

A person might lose their job, some other purchase might become more urgent, or a store

salesperson may turn someone o, weather.

o In execung a purchase intenon, the consumer may make up to ve purchase sub-decisions:

o A brand decision(brand A)o Vendor decision(dealer)o Quanty decision(one computer)o Timing decision(weekend)o Payment method decision(credit card)

Purchases of everyday products involve fewer decisions and less deliberaon.

5. post purchase behavior

Aer purchasing the product, the consumer will experience some level of sasfacon or

dissasfacon

The marketers job does not end when the product is bought. Marketers must monitor post

purchase sasfacon, post purchase acons, and post purchase product uses.

Post purchase sasfacon:

The buyers sasfacon is a funcon of the buyers expectaons and the product perceived

performance.

If performance falls short of expectaons, the customer is disappointed.

If it meets expectaons, the customer is sased.

If it exceeds expectaons, the customer is delighted.


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Consumers form their expectaons on the basis of messages received from sellers, friends, and

other informaon sources.

Post purchase acons: Sasfacon or dissasfacon with the product will inuence a consumers subsequent

behavior.

Post purchase use and disposal: Marketers should also monitor how buyers use and dispose of the product.

If consumers store the product in a closet, the product is probably not very sasfying, if they sell or

trade the product, new product sales will be depressed, if the consumers throw the product away,

the marketer needs to know how they dispose of it especially if it can hurt the environment eg:

beverage containers, disposable diapers.

For example:

Recycling and ecological concerns as well as consumer complaints about having to throw away

beauful boles, led French perfume maker Rochas to think about introducing a new rellable

fragrance line.

Five-stage model of the Consumer Buying Process

Could also be referred as the External inuences on consumer behavior

This segment looks at individual pyschological factorso Consumer Needs and Movaono Consumer Personalityo Consumer Atudeso Consumer Percepono Consumer Learning

NEEDS Every individual has needs: some are innate, others are acquired. Innate:

Inborn,

natural

Innate needs are physiological (biogenic). They include the needs for:

food,

water,

air,


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clothing,shelter etc.

Because they are needed to sustain biological life, the biogenic needs are consideredprimary needs or moves.

A move is a need that is suciently pressing to drive the person to act. Acquired needs on the other hand are also referred to psychogenic needs. These are needs

that we learn in response to our culture or environment.

These may include needs for:self esteem,

Presge,

aecon,

recognion,

Belonging,

Power,

learning.

Because acquired needs are generally psychological, they are considered secondary needsor moves.

They result from the individuals psychological states of tension and from relaonshipswith others.

For example: Finding a place to live fullls an important primary need for a newly transferred execuve.

However, the kind of residence he rents or buys may be the result of secondary needs.

MOTIVATION Movaon can be described as the driving force within individuals that impels them to

acon.

The driving force is produced by a state of tension, which exists as the result of anunfullled need.

Individuals strive to reduce this tension through behavior that they ancipate will fullltheir needs and thus relieve them of the stress they feel.

Psychologists have developed theory of Human Movaon. Abraham Maslow sought to explain why people are driven by parcular needs at parcular

mes.

Maslow arranged human needs in a hierarchy, from the most pressing to the leastpressing.


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In order of importance, they are:physiological needs

safety needs

social needs

esteem needs

self-actualizaon needs.

1. Physiological needs: are the demands that our bodies place on us for survival and health. These

are needs that must be sased before other needs are acvated.

2. Safety needs: Aer the rst level of needs is sased , safety and security needs become the

driving force behind an individuals behavior.

In addion to physical safety, Maslow referred to psychological security. Thuso order,o stability,o familiarity,o Controlo Roune/predictability o certainty

over ones life and environment are important needs.

Certainty for example, the knowledge that the individual will eat dinner not only that dayand the following day, but also every day far into the future.

Health is also a safety concern.

o Social welfare programs,o saving accounts,o insurance policies,o educaon,o vocaonal training

are all means by which individuals sasfy the need for security.

3. Social needs: the third level of Maslows hierarchy include such needs as:

love,

aecon,

belonging,

acceptance.


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If both physical and safety needs are fairly graed, the needs to give and receive love oraecon, and feel the sense of belonging are likely to emerge.

If these needs are not sased, a person is likely to feel lonely and perhaps depressed. Depending on the situaon, a special friend, or a small group can help toward resolving

this set of needs.

Because of the importance of social moves in most sociees, adversers of personal careproducts oen emphasize this appeal in their adversements.

4. Egoisc needs: egoisc needs can take either an inward or outward orientaon, or both. Ego:

self-esteem

Inwardly directed ego needs reect an individuals need for:self

-acceptance,

self-esteem,

success,

independence,

personal sasfacon

a job well done.

Outwardly directed ego needs include the needs for:presge,

reputaon,

status,

recognion

from others.

5. Need for Self-Actualizaon: this need refers to an individuals desire to fulll his or herpotenal to become everything he or she is capable of becoming.

Fulllment of a persons unique potenal, the becoming of everything that one is capableof becoming.

In Maslows words, what a man can be, he must be This need is expressed in dierent ways by dierent people. A young man may desire to be

an Olympic star and work single-mindedly for years to become the best in his sport.

A research scienst may strive to nd a new drug to eradicate disease. Adversements for banking services, and for military recruitment oen try to appeal to

the self-actualizaon need.


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Evaluaon of Maslows Hierarchy Maslows hierarchy is a useful tool for understanding consumer movaons and is readily

adaptable to markeng strategy because consumer goods oen serve to sasfy each of the

need level.

1.Maslows theory helps marketers understand how various products t into the plans, goals, and

lives of consumers.

2. the hierarchy oers a useful, comprehensive framework for marketers trying to developappropriate adversing appeals for their products.

3. the hierarchy is oen used as the basis for market segmentaon with specicadversing appeals directed to individuals on one or more need levels.

For example, so drink ads directed to teenagers oen stress a social need appeal byshowing a group of young people sharing good mes as well as the adversed product.

4. another way to ulize the need hierarchy is posioning products. The key to posioningis to nd a niche that is not occupied by a compeng product or brand.

This applicaon of the need hierarchy relies on the noon that no need is ever fullysased, that it always connues to be somewhat movang. Safety, for example, is a

connuing need.

5. versality of the need hierarchy: one way to illustrate the usefulness of the needhierarchy in designing promoonal programs is to show how workable appeals for a single

product can be developed for each level.

queson

Is Maslows hierarchy sll relevant today? Jusfy your answer.

queson

Marketers dont create needs, needs preexist marketers. Discuss this statement.queson

Consumers have both innate and acquired needs. Give examples of each kind of need andshow how the same purchase can serve to fulll either or both kinds of needs.

queson

Specify the innate and/or acquired needs that would be useful bases for developingpromoonal strategies for airbags in cars, vitamins, swimming pools, a Mercedes benz,

insurance policy

queson

You are a member of an adversing team assembled to develop promoonal campaign fora new running shoe. Develop three slogans for this campaign, each based on one of the

levels in Maslow hierarchy of needs.

queson


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Choose three magazine adversements for dierent consumer goods. Through theadversing appeal used, idenfy which need/s each product is presumed to sasfy.

Herzberg Theory Frederick Herzberg developed a two-factor theory that disnguishes dissasers that is, factors that cause dissasfacon and Sasers-

factors that cause sasfacon

Sasers must be acvely present to movate a purchase. For example: ease of use of a computer would be a saser, but a computer that does not

come with a warranty would be a dissaser.

Herzbergs theory has two implicaons: 1. sellers should do their best to avoid dissasers (for example a poor training manual) 2. the manufacturer should idenfy the major sasers or movators of purchase in the

market and then supply them.

The sasers will make the major dierence as to which brand the customer buys. special terms in this topic

Perceive/ percepon

Dened by Paul Young(1961) in a model as follows:

To perceive=

tosee

to hear

to touch a thing

to taste some event

to smell relaon

to sense internally

Percepon:

way of seeing or understanding

smulus

A smulus is any unit of input to the senses. Examples of smuli include products, packages, brand names, adversements, and

commercials.


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Smuli characteriscs such as color, size, photos, scent, loudness, design, music, and soforth help marketers understand which properes of a smulus will cause it to receive

aenon.

Sensory receptors

Humans rely on ve senses to bridge the gap between the external world and their mental worlds.

That is, we see, we hear, we taste, we smell, and we touch the world around us in order to sense it.

Our Sensory receptors are our human organs:

o the eyeso earso noseo mouth,o and skin

that receive inputs from the environment.

All ve of our sensory receptors are employed in Consumer Behavior.

sensaon

Sensaon: is the immediate and direct response of the sensory organs to simple smuli(an ad, a

package, a brand name)

sensivity

sensivity refers to the experience of sensaon.

Sensivity to smuli varies with the quality of an individuals sensory receptors(eyesight orhearing) and the amount or intensity of the smuli to which he or she is exposed.

absolute sensory threshold The lowest level at which an individual can experience a sensaon is called absolute

threshold.

The point at which a person can detect a dierence between something and nothing is thatpersons absolute threshold for that smulus.

For e.g. the distance at which a driver can note a specic billboard on the highway is thatindividuals

absolute threshold.

adaptaon Under condions of constant smulaon, such as driving through a corridor of

billboards, the absolute threshold increases.

Aer an hour of driving through billboards, it is doubul that any billboard will make animpression.


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The term adaptaon refers specically to geng used to certain sensaons. Sensory adaptaon is a problem experienced by many TV adversers, and it is for this

reason that adversers tend to change their adversing campaigns regularly.

Dierenal threshold/Just noceable dierence(JND) The minimum actual change that can be detected between smuli is called the dierenal

threshold or j.n.d.

For example, if the price of an automobile were increased by $100, it would probably notbe noced(the increase would fall below the j.n.d.)

It may take an increase of $200 or more before a dierenal in price would be noced. However, a one dollar increase in the price of petrol would be noced very quickly by

consumers because it is a signicant percentage of the inial cost.

Subliminal percepon Subliminal means below the threshold. A subliminal smulus therefore is one that

cannot be discriminated by our conscious perceptual processes.

Smuli that are too weak or too brief to be consciously seen or heard may nevertheless bestrong enough to be perceived by one more receptor.

What then is percepon? In a broad sense,

percepon can be described as, how we see things around us

Two individuals may be subject to the same smuli under apparently the same condions,but how they recognize them, select them, organize them, and interpret them is a highly

individual process based on each persons own needs, values and expectaons.

One

One person might perceive a fast talking salesperson as aggressive and insincere, another,as intelligent and helpful. Each will respond dierently to the salesperson.

William. L. Wilke (1994)gives a more specic denion that says:percepon is the process of sensing, selecng, organizing and interpreng consumer

smuli in the external world.

Analysis of denion perceptual selecon. Consumers subconsciously exercise a great deal of selecvity as to which aspects of the

environment, - smuli they perceive.

An individual may look at some things, ignore others, and turn away from sll others. Consider for example a woman in a supermarket: she may be exposed to over 2000 products of dierent colors, sizes, and shapes


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to perhaps 100 people looking, walking, searching, talking to smells from fruit, from meat, from disinfectant, from people to sounds, within the store cash registers ringing, shopping carts rolling, air condioners

humming, and clerks sweeping, mopping isles, stocking shelves

to sounds outside the store- cars honking, tyres screeching, children shoung, car doorsslamming, planes passing

Yet she manages to select the items she needs, pay for them and leave, all within arelavely brief me, without losing her sanity or personal orientaon to the world around

her.

This is because she exercises selecvity in percepon.Important Selecve Percepon Concepts

Selecve exposure Selecve aenon Selecve distoron Selecve retenon Perceptual defense

Selecve exposure Consumers acvely seek out messages they nd pleasant, necessary or with which they

are sympathec, and acvely avoid painful or threatening ones.

Thus heavy smokers avoid arcles that link cigaree smoking to cancer. Consumers also selecvely expose themselves to ads that reassure them of the wisdom of

their purchase decisions

Selecve aenon: People are exposed to a tremendous amount of daily smuli. Because a person cannot possibly aend to all of these, most smuli will be screened out

a process called selecve aenon.

Selecve aenon means that marketers have to work very hard to aract consumersnoce.

The real challenge is to explain which smuli people will noce. Here are some ndings: 1. people are more likely to noce smuli that relate to a current need. A person who is movated to buy a computer will noce computer ads; he will probably

not noce radio ads.

2. People are more likely to noce smuli that they ancipate.


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You are more likely to noce computers than radios in a computer shop because you donot expect the shop to carry radios.

3. people are more likely to noce smuli whose deviaons are large in relaon to thenormal size of the smuli.

You are more likely to noce an ad oering $100 o the price of a computer than oneoering $5 o.

SELECTIVE DISTORTION Selecve distoron is the tendency to twist informaon into personal meanings and

interpret informaon in a way that will t our preconcepons.

Preconceive: form an idea, or opinion beforehand. Preconcepon: A preconceived idea. Unfortunately there is not much marketers can do about selecve distoron. Selecve Retenon Because of selecve retenon people are likely to remember good points menoned about

a product they like and forget good points menoned about compeng goods.

People will forget much that they learn but will tend to retain informaon that supportstheir atudes and beliefs.

This explains why marketers use drama and repeon in sending messages to their targetmarket.

Perceptual organizaon People do not experience the numerous smuli they select from the environment as

separate and discreet sensaons, rather they tend to organize them and perceive them as

unied wholes.

Three of the most basic principles of perceptual organizaon were developed by theGestalt school of psychology and they are:

o Figure and groundo Groupingo Closure People have a tendency to organize their percepons into gure and ground relaonships. Adversers have to plan their adversements carefully to make sure that the smulus that

they want noted is seen as gure and not as ground.

Grouping:individuals tend to group smuli so that they form a unied picture orimpression.

e.g an ad for coee may show a young man and woman sipping coee, in a beaufullyappointed room, before a blazing hearth.


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the grouping of smuli by proximity leads the consumer to associate the drinking of coeewith romance, ne living, and winter warmth.

Grouping can be used advantageously by marketers to imply certain desired meanings inconnecon with their products.

Individuals have a need for closure. If the paern of smuli to which they are exposed is incomplete, they tend to consciously

or subconsciously ll in the missing pieces.

The need for closure has some interesng implicaons for marketers. The presentaon of an incomplete ad message begs for compleon by consumers. The very act of compleon serves to involve them more deeply in the message itself. Perceptual interpretaon When people perceive something, they make eorts to interpret it. The interpretaon of smuli is also uniquely individual since it is based on what individuals

expect to see in light of their previous experiences and their interests at the me of

percepon.

Once a smulus is sensed, the problem becomes one of idenfying so that we knowwhat it is. This acvity is termed perceptual categorizaon.

Why are marketers interested in understanding consumer percepon? 1. it is important to note that all markeng smuli(the markeng mix) exist only in the

external world and they must be perceived by consumers to have any impact at all.

Thus an understanding of sensory processes, the rst step in percepon, is an importantissue for marketers.

2. for marketers, understanding how consumers selecvity operators work oers guidancefor designing ads that break through the cluer to gain aenon. (packages and displays

that aract aenon)eye level is buy level

queson

How does sensory adaptaon aect adversing comprehension? How can marketersovercome sensory adaptaon and increase the likelihood that consumers will noce their

ads?

queson

Describe how manufacturers of chocolate bars can apply their knowledge of dierenalthreshold to packages and prices during periods of:

Rising ingredient costs Increasing compeon

Heightened consumer awareness regarding nutrion.

queson


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Discuss the dierence between the absolute threshold and the dierenal threshold.queson

Dene the following terms: Absolute threshold Closure Grouping J.N.D Sensory adaptaon

consumer

atudes

people have atudes toward almost everything; Religion Polics Clothes food music etc. Atudes put people in a frame of mind of liking or disliking an object. An atude is a persons favorable or unfavorable evaluaons, emoonal feelings, and

acon tendencies toward some object or idea.

Posive/favorable atudes predispose consumers to react favorably to adversedproducts.

Negave or unfavorable atudes may lead to consumers avoiding own-label productsbecause they are thought to be inferior.

A persons atudes sele into a consistent paern, atudes are very dicult to change. Thus a company would be well advised to t its product into exisng atudes rather than

try to change peoples atudes

consumer

personality

Each person has personality characteriscs that inuence his or her buying behavior. By personality is meant a persons disncve qualies (a strong personality ) Paerns of behavior and ways of thinking that determine a persons response to smuli

surrounding him.

All the ways in which one individual can dier from another.


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Personality is oen described in terms of such traits as self condence, dominance,autonomy, sociability, defensiveness etc.

traits: characteriscs Personality is shaped by inborn potenal, unique experiences, and by cultural and social

inuences.

Personality can be useful in analyzing consumer brand choices. The idea is that brands also have personalies, and consumers are likely to choose brands whose personalies match their own. Brand personality is the specic mix of human traits that may be aributable to a

parcular brand.

Jennifer Aaker conducted research into brand personalies and idened the followingtraits:

1. sincerity: Down-to-earth, honest, wholesome, and cheerful 2. excitement: Daring, Spirited Up-to-date 3. competence: Reliable, Intelligent, and successful 4. sophiscaon: Upper-class, charming 5. ruggedness: outdoor tough She went on to analyze some well known brands and found out that a number of them

tended to be strong on one parcular trait:


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Levis with ruggedness MTV with excitement CNN with competence Campbells with sincerity. The implicaon is that these brands will aract persons who are high on the same

personality traits.

Marketers aempt to develop brand personalies that will aract consumers with thesame self-concept.

A persons actual self-concept(how she views herself)may dier from her ideal self-concept(how she would like to view herself) and from her others-self-concept(how she

thinks others see her.)

queson

In which circumstances and for which products and services do you think a consumers selfconcept is likely to aect his or her purchasing behavior?

queson

In line with Jennifer Aakers thinking that brands have personalies, ascribe adjecves todescribe the personality of any four popular brands of your choice.

Consumer learning

When people act, they learn. Learning involves changes in an individuals behavior arising from experience. Most human behavior is learned. Suppose you buy an hp computer. If your experience is rewarding, your response to computers will be posively reinforced. Later on, when you want to buy a printer, you may assume that because HP makes good

computers, HP also makes good printers.

When this happens, it means you have generalized your response to similar smuli. This tendency is referred to as discriminaon. It means that the person has learnt to

recognize the dierences in sets of similar smuli and can adjust responses accordingly.

Learning theory teaches marketers that they can build up demand for a product if theydevelop posive reinforcement in the customer.

ANALYSING ORGANIZATIONAL BUYING BEHAVIOUR.

ANALYSING ORGANIZATIONAL BUYING BEHAVIOUR

Business organizaons do not only sell, they also buy What do they buy?


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vast quanes of raw materials, manufactured parts, installaons, accessories, suppliesand services.

Organizaonal buyers do not buy goods and services for personal consumpon or ulity. They buy goods and services to make money, to reduce costs, or to sasfy a social or legal

obligaon.

Commonly, there are three types of organizaonal markets.MARKETS

Industrial markets- Consists of all individuals and organizaons that acquire goodsand services to use in the producon of other products or services that are sold,

rented, or supplied to others.

Reseller markets- Government markets

The major industries making up the industrial market are:

Agriculture,

Forestry

Fisheries

Mining

Manufacturing,

Construcon,

Transportaon Communicaon Public ulies Banking, Finance Insurance and Services.

Contrast Between Industrial And Consumer Markets

Fewer buyers The industrial marketer normally deals with far fewer buyers than does the consumer

market.

Larger buyers A few large buyers do most of the purchasing. Close supplier- customer relaonship Because of the smaller customer base and the importance and power of the larger

customers over suppliers, close relaonship between customers and sellers in industrial

markets.

Derived demand The demand for industrial goods is derived from the demand for consumer goods. Inelasc demand


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The total demand for many industrial goods and services is not much aected by pricechanges.

Professional purchasing Industrial goods are purchased by professionally trained purchasing agents, who spend

their work lives learning how to buy beer.

Several buying inuences More people typically inuence business buying decisions than consumer buying

decisions.

Who parcipates in the industrial buying process?

Users: are those who will use the product or service. In many cases, the users iniate thebuying proposal and help dene the product specicaons.

Inuencers: are persons who inuence the buying decision. They oen help dene specicaons, and technical personnel are parcularly important as

inuencers.

Deciders: are persons who decide on product requirements and/or suppliers. Approvers : are persons who authorize the proposed acons of deciders or buyers. Buyers: are persons with formal authority for selecng the supplier and arranging the terms

of purchase.

They play a major role in selecng vendors.How do industrial buyers make their buying decisions?

1. PROBLEM RECOGNITION-The buying process begins when someone in the company recognizes a

problem or need that can be met by acquiring a good or service.

2. GENERAL NEED DESCRIPTION - The buying organizaon next analyses product value.

Some of the quesons asked in product- value analysis are:

Does the use of the item contribute value? Is its cost proporonate to its usefulness? Does it need all its features? Is there anything beer for its intended use? Will another dependable supplier provide it for less?

3. SUPPLIER SEARCH -The buyer now tries to idenfy the most appropriate vendors.

4.PROPOSAL SOLICITATION -The buyer will now invite qualied suppliers to submit proposals.

5. SUPPLIER SELECTION-In this stage, the members of the buying center will review the proposals

and move toward supplier selecon.They will consider not only the suppliers technical competence

but also their ability to deliver on me and provide necessary services.


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THE RESELLER MARKET

Consists of all the individuals and organizaons that acquire goods for the purpose of reselling them

or renng them to others at a prot.

Resellers purchase goods for resale and goods and services for conducng their operaons.

Resellers handle a vast variety of products for resale except those that producers sell directly to nal

customers, such as heavy or complex machinery, customized products or products sold on a door to

door basis.

WHO PARTICIPATES IN THE RESELLER BUYING PROCESS?

Buying is carried out in dierent ways by department stores, supermarkets, drug wholesalers and

dierences can be found within each reseller type.

But the boom line is that the buying process is handled by specialist buyers or merchandise

managers.

The buyers are aided by assistant buyers.

The buyers are aided by assistant buyers.

Reseller Buying Decision Making

For new items, resellers use roughly the same buying process described for the industrialbuyer.

For standard items, reseller simply reorder goods when the inventory gets low. The orders are placed with the same suppliers as long as their terms, goods and services are

sasfactory.

The Government Market

The government market consists of governmental units that purchase or rent goods for carrying out

the main funcons of government.

Government agencies buy an amazing range of products and services.

They buy weaponry, aircra, vehicles, chalk boards, furniture, toiletries, clothing, fuel, tools,

equipment, staonery, buses, lorries, houses, drugs, etc

Who Parcipates In Government Buying Process?

Many government agencies control a substanal percentage of their own buying.

The responsibility is shared, with some procurement acvies centralized and others decentralized.

Government has specialist buyers who handle all paperwork and follow laid down procedures of

procurement.

How Do Government Buyers Make Their Buying Decisions?

Government follows almost the same system done by industrial buyers.


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However, government buying pracces are complex. Suppliers complain about excessive paperwork,

bureaucracy, needless regulaons, emphasis on low bid prices, decision making delays.

Consumer Behaviour Models

A model is a simplied representaon of reality. One basic funcon of Consumer Behavior Models is that: they describe in a simplied form

the market characteriscs aecng purchase of certain types of goods or services.

Qualies of an eecve model

1. Relevance: In order to be useful, an eecve model should be relevant. It must be asclosely linked as possible to real markeng situaons.

2. comprehensibility: Decision makers cannot use models which are vague and poorlyconstructed.

The Black Box Model

The Black Box Model

The Black Box Model shows the interacon of smuli, consumer characteriscs, decision process and

consumer responses

The markeng smuli are planned and processed by companies, whereas the environmental

smulus are given by social factors, based on the economical, polical and cultural circumstances of

a society.

The Buyers Black Box contains the buyer characteriscs and the decision process which determines

the buyers response.

The Black Box Model

Queson

With the assistance of a consumer behavior model, clearly explain what Consumer Behavioris all about.

Integrated Markeng Communicaons

Consumers are increasingly aware of their power in the market place. They can no longer be treated in an oand manner by companies seeking theirpatronage. Businesses now operate in a far more crical climate today than in past years. Integrated markeng communicaons is a way of looking at the whole markeng process

from the viewpoint of the consumer.

The markeng communicaons mix consist of ve major modes of communicaon:

Adversing Sales promoon Public relaons and publicity


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Personal selling Direct and interacve markeng

Steps in developing eecve communicaons

1. Idenfy the target audience-

The target audience is a crical inuence on the communicatorsdecisions on what to say, how to say it, when to say it, where to say it and to whom to say it. The

communicator should have a clear target audience in mind.

2. Determine the communicaon objecves - What does the marketer want to put into the

consumers mind? Does he want to change the consumers atude, or get the consumer to act?

3.Design the message - The marketer should develop an eecve message. Ideally the message

should gain Aenon, hold Interest, arouse Desire, and elicit Acon(AIDA Model)

4. Select the communicaon channel-The communicator must select ecient channels to carry the

message.

5. Establish the total markeng communicaons.

How do Companies decide on the promoon budget?

There are four common methods:

Aordable method Percentage of sales method Compeve parity method Objecve and task method

Deciding On The Markeng Communicaons Mix

why study consumer behavior

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