2Consumer Behaviour and Target Audience Decisions

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Chapter Objectives

• To understand the role consumer behaviour plays in the development and implementation of advertising and promotional programs.

• To understand the consumer decision-making process and how it varies for different types of purchases.

• To understand various internal psychological processes, their influence on consumer decision making, and implications for advertising and promotion.

• To understand the similarities and differences of target market and target audience.

• To understand the various options for making a target audience decision for marketing communications.

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Consumer Behaviour

• Processes and activities which people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services to satisfy needs and desires.

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A Basic Model of Consumer Decision Making

Figure 2-1

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Consumer Decision Making

Information Search Perception

Postpurchase Evaluation Learning

Purchase Decision Integration

Alternative Evaluation Attitude Formation

Need Recognition Motivation

Purchase Decision Integration

Decision StageDecision Stage Psychological ProcessPsychological Process

Alternative Evaluation Attitude Formation

Information Search Perception

Need Recognition Motivation

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Consumer Decision Making

Need Recognition Motivation

Decision StageDecision Stage Psychological ProcessPsychological Process

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Sources of Need Recognition

Out of StockOut of Stock DissatisfactionDissatisfaction New Needsor Wants

New Needsor Wants

Related ProductPurchase

Related ProductPurchase

Market-InducedRecognition

Market-InducedRecognition

NewProducts

NewProducts

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Hierarchy of Human Needs: Love, Nurturance, Belonging

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Sexy Ads Get Noticed

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Consumer Decision Making

Information Search Perception

Need Recognition Motivation

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Decision StageDecision Stage Psychological ProcessPsychological Process

Need Recognition Motivation

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Information Search

Information Search

Information Search

Internal Search Internal Search External SearchExternal Search

•Undertaken if internal search does not yield enough information.

•Undertaken if internal search does not yield enough information.

•Scan memory to recall experiences and knowledge about past purchase alternatives.

•Scan memory to recall experiences and knowledge about past purchase alternatives.

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External Sources of Information

PersonalSources

MarketSourcesPublicSources

PersonalExperience

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Perception

• The process by which an individual receives, attends to, interprets, and stores information to create a meaningful picture of the world.

• Marketers can formulate communication strategies based upon how consumers acquire and use information from external sources.

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The Selective Perception Process

Selective RetentionSelective Retention

Selective ComprehensionSelective Comprehension

Selective AttentionSelective Attention

Selective ExposureSelective Exposure

Selective ComprehensionSelective Comprehension

Selective AttentionSelective Attention

Selective ExposureSelective Exposure

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Selective Exposure

• Occurs as consumers choose whether or not to make themselves available to information.– TV viewers may change channels or

leave the room during commercial breaks.

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Selective Attention

• Occurs when consumer chooses to focus on certain stimuli while excluding others.

• For example, combining colour with black and white grabs attention.

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Selective Comprehension

• Consumers may interpret information based on their own attitudes, beliefs, motives, and experiences.

• An ad disparaging a consumer’s favourite product may be interpreted as biased or untruthful.

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Selective Retention

• Consumers do not remember all the information they see, hear, or read – even after attending and comprehending it.

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Advertisers Attempt to Help Consumers Retain Information

• Mnemonics (symbols, rhymes, associations, and images) can assist in consumers’ learning and memory processes.

• Example: A telephone number spelling out the company’s name.

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Consumer Decision Making

Information Search Perception

Alternative Evaluation Attitude Formation

Need Recognition Motivation

Decision StageDecision Stage Psychological ProcessPsychological Process

Information Search Perception

Need Recognition Motivation

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Attitude Formation is Based on Evaluation of Alternatives

All 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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Consumers Must Evaluate Their Brand Choices

ObjectiveObjective

Evaluative CriteriaEvaluative Criteria

PriceWarrantyService

PriceWarrantyService

StyleAppearance

Image

StyleAppearance

Image

SubjectiveSubjective

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Evaluative Criteria

Evaluative Criteria

Evaluative Criteria

Consumer View

•Product or service viewed in terms of its consequences.

Consumer View

•Product or service viewed in terms of its consequences.

Marketer View

•Products are viewed as bundles of attributes.

Marketer View

•Products are viewed as bundles of attributes.

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Different Perspectives: The Consumer’s View

Product Is Seen As Product Is Seen As A Set of OutcomesA Set of Outcomes

FunctionalFunctionalFunctional Consequences

Functional Consequences

How does it cutthe taller grass?

How close can Iget to the shrubs?

Will the neighborsbe impressed with

my lawn?

Is it going to be asfun to use later this

summer?

Will I enjoy havingmore time for golf?

Will it pull that

little trailer I saw at the

store?

Psychosocial ConsequencesPsychosocial

Consequences

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Attitude

• “Attitudes are learned predispositions to respond to an object.”– Gordon Allport

• A summary construct representing an individual’s overall feelings toward an object or its evaluation.

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Consumer Attitudes Focus on Objects

IndividualsIndividuals ProductsProducts

BrandsBrands

CompaniesCompanies

OrganizationsOrganizationsRetailersRetailers

MediaMediaMediaMedia

RetailersRetailers OrganizationsOrganizations

CompaniesCompanies

BrandsBrands

ProductsProductsIndividualsIndividuals

AdsAds

Attitudes Toward: Attitudes Toward:

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Advertising, Promotion, and Attitudes

• Advertising and promotion are used to create favourable attitudes, and/or change negative attitudes.

• Here, the ad attempts to change attitudes by highlighting added attributes.

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Consumer Decision Making

Information Search Perception

Purchase Decision Integration

Alternative Evaluation Attitude Formation

Need Recognition Motivation

Decision StageDecision Stage Psychological ProcessPsychological Process

Alternative Evaluation Attitude Formation

Information Search Perception

Need Recognition Motivation

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Purchase Decision

• At some point in the buying process, the consumer makes a purchase decision.– Consumer stops searching for and

evaluating alternative brands in the evoked set.

• The purchase decision starts with a purchase intention.– Predisposition to buy a certain brand.

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Purchase Decision

• The purchase decision is not the actual purchase. – Consumer must implement decision and

make purchase.– Additional decisions may be needed.– Time delay often exists between making

a purchase decision and purchase itself.– The time delay affects the marketing

strategy, and depends on:• Type of purchase to be made• Risk involved in purchase

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Brand Loyalty May Affect Purchase Decision

• Consumers may have a preference for a certain brand, which will result in its repeated purchase.

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Integration Processes

• The ways in which product knowledge, meanings, and beliefs are combined to evaluate two or more alternatives.

• Analysis of the integration process focuses on the different types of integration rules or strategies used by consumers to decide among purchase alternatives.

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Types of Integration Strategies

Integration StrategiesIntegration Strategies

Formal Decision Rules

•Require examination and comparison of alternatives on specific attributes.

Formal Decision Rules

•Require examination and comparison of alternatives on specific attributes.

Simplified Decision Rules or Heuristics

•Easy to use and adapt to environmental situations.

•Price- or promotion-based

Simplified Decision Rules or Heuristics

•Easy to use and adapt to environmental situations.

•Price- or promotion-based

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Consumer Decision Making

Information Search Perception

Postpurchase Evaluation Learning

Purchase Decision Integration

Alternative Evaluation Attitude Formation

Need Recognition Motivation

Purchase Decision Integration

Decision StageDecision Stage Psychological ProcessPsychological Process

Alternative Evaluation Attitude Formation

Information Search Perception

Need Recognition Motivation

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Postpurchase Evaluation

• After purchase, consumer assesses the level of performance of product or service.

• Provides feedback from actual use of product to influence the likelihood of future purchases.

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Satisfaction

• “A judgment that consumers make with respect to the pleasurable level of consumption-related fulfillment.”

• Cognitive dissonance:– A feeling of psychological tension or

postpurchase doubt a consumer experiences after making a difficult purchase choice.

– More likely to occur when consumer has to choose between two close alternatives.

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Variations in Consumer Decision Making

Types of Decision Making

Types of Decision Making

Extended Problem Solving

Extended Problem Solving

Limited Problem Solving

Limited Problem Solving

Routine Problem Solving

Routine Problem Solving

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Variations in Consumer Decision Making

Group Decision Making• Group situations constitute many purchase

decisions.• Reference group

– “A group whose presumed perspectives or values are used by an individual as the basis for his or her judgments, opinions, and actions.”

– Used to guide consumers’ purchase decisions even when the group is not present.

– Marketers use aspirational or dissociative reference group influences in developing ads and promotional strategies.

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Variations in Consumer Decision Making

Group Decision MakingFigure 2-4

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Target Audience Decision

• Consumer understanding is the key to the success of any IMC plan, program, or ad.

• The goal of an IMC plan, program or ad is to influence the behaviour of a target audience.

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Marketing and Promotions Process Model

Figure 2-5

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Target Market Process

Select Market To TargetSelect Market To Target

Determine Market SegmentationDetermine Market Segmentation

Identify Markets With Unfulfilled NeedsIdentify Markets With Unfulfilled Needs

Determine Market SegmentationDetermine Market Segmentation

Identify Markets With Unfulfilled NeedsIdentify Markets With Unfulfilled Needs

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Target Market and Target Audience

• Target market– The group of consumers toward which

an overall marketing program is directed.

• Target audience– A group of consumers within the target

market for which the advertising campaign, for example, is directed.

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Target Market Process

Identify Markets With Unfulfilled NeedsIdentify Markets With Unfulfilled Needs

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Market Segmentation

• Marketer identifies a target market by:– Identifying the specific needs of groups

of people, or segments– Selects one or more segments as a

target– Develops marketing programs directed

to each.

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Beer is Beer? Not really!

Popular Imports Specialties Premium Light

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A Product for Every Segment

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A Package is More Than a Container

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The Marketing Segmentation Process

Take Marketing Actions To Reach Target Segments.Take Marketing Actions To Reach Target Segments.

Select the Product Segments Toward Which the Firm Directs Its Marketing Actions.

Select the Product Segments Toward Which the Firm Directs Its Marketing Actions.

Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions.

Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions.

Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization.

Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization.

Find Ways To Group Consumers According To Their Needs.

Find Ways To Group Consumers According To Their Needs.

Select the Product Segments Toward Which the Firm Directs Its Marketing Actions.

Select the Product Segments Toward Which the Firm Directs Its Marketing Actions.

Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions.

Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions.

Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization.

Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization.

Find Ways To Group Consumers According To Their Needs.

Find Ways To Group Consumers According To Their Needs.

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Bases for Segmentation

behaviourbehaviour

BenefitsBenefits

OutletsOutlets

BenefitsBenefits

OutletsOutletsBehaviourBehaviour

PsychographicPsychographic

GeographicGeographic

DemographicDemographicPsychographicPsychographic DemographicDemographic

GeographicGeographic

CustomerCharacteristics

CustomerCharacteristics

SocioeconomicSocioeconomic

BuyingSituationBuying

Situation

UsageUsage

SocioeconomicSocioeconomic

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Psychographic Segmentation

• Dividing the market on the basis of lifestyle, personality, culture, and social class.

• Criteria include:– Lifestyle

• VALS• VALS 2

– Personality– Culture – Social class

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Marketing to a Lifestyle

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Abercrombie & Fitch Targets Echo Boomers

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Benefit Segmentation

• The grouping of consumers on the basis of attributes sought in a product.

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Behaviouristic Segmentation

• Grouping customers according to their usage, loyalties, or buying responses to a product. – Product or brand usage. – Degree of use. – Brand loyalty.

• Can be used in combination with demographic and/or psychographic criteria to develop profiles of market segments.

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Target Audience Options: Rossiter and Percy Perspective

Brand Loyal Customers

Brand Loyal Customers

Non-Customers

Non-Customers

Favourable Brand

Switchers

Favourable Brand

Switchers

Regularly buy the firm’s product.

Buy focal brand but also buy others.

New category users

Other brand switchers

Other brand loyals

Customers not purchasing within a product category.

Not consistently purchasing focal brand.

Loyal to another brand.