Consumer Beh Outline

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R AFFLES E DUCATION G ROUP Kuala Lumpur w Petaling Jaya w Penang w Singapore w Jakarta w Bangkok w Beijing w London w New-York O LYMPIA B USINESS S CHOOL School of Business and Marketing ADVANCED DIPLOMA IN MARKETING F ILO -T EXT Consumer Behavior October, 1998

Transcript of Consumer Beh Outline

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RAFFLES EDUCATION GROUPKuala Lumpur w Petaling Jaya w Penang w Singapore w Jakarta w

Bangkok w Beijing w London w New-York

OLYMPIA BUSINESS SCHOOL

School of Business and Marketing

ADVANCED DIPLOMA IN MARKETING

FILO-TEXT

Consumer Behavior

October, 1998

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Table of Contents

INTRODUCTION.......................................................................................................................................... 3

HOW TO USE THE FILO-TEXT?............................................................................................................... 4

ASSESSMENT............................................................................................................................................... 5

INDIVIDUAL ASSIGNMENT ............................................................................................................................ 5MID-TERM ASSESSMENT .............................................................................................................................. 5GROUP PROJECT ........................................................................................................................................... 5FINAL EXAMINATION.................................................................................................................................... 6

ATTENDANCE.............................................................................................................................................. 6

FEES............................................................................................................................................................... 7

CONTACT-TIME.......................................................................................................................................... 7

FULL-TIME ................................................................................................................................................... 7PART-TIME................................................................................................................................................... 7

THE ACADEMIC PLANNER....................................................................................................................... 8

WEEK 1 ......................................................................................................................................................... 9

WEEK 2 ....................................................................................................................................................... 11

WEEK 3 ....................................................................................................................................................... 13

WEEK 4 ....................................................................................................................................................... 15

WEEK 5 ....................................................................................................................................................... 17

WEEK 6 ....................................................................................................................................................... 19

WEEK 7 ....................................................................................................................................................... 21

WEEK 8 ....................................................................................................................................................... 23

WEEK 9 ....................................................................................................................................................... 24

WEEK 10 ..................................................................................................................................................... 26

WEEK 11 ..................................................................................................................................................... 28

WEEK 12 ..................................................................................................................................................... 31

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INTRODUCTION

The study of Consumer Behavior is the study of how individuals make decisions to spendtheir available resources (time, money, and effort) on consumption-related items. It includesthe study of what they buy, why they but it, when they buy it, where they buy it, how oftenthey buy it, and how often they use it. Take the simple product toothpaste. Consumerresearchers want to know what types of toothpaste consumers buy (gel, regular, striped, in atube, with a pump); what brand (national brand, private brand, generic brand); why they buyit (to prevent cavities, to remove stains, to brighten or whiten teeth, to use as a mouthwash, toattract romance); where they buy it (supermarket, drugstore, convenience store); how oftenthey use it (when they wake up, after each meal, when they go to bed, or any combinationthereof); and how often they buy it (weekly, biweekly, monthly).

Although this subject on how and why consumers make decisions to buy goods and services,consumer behavior research goes far beyond these facets of consumer behavior andencompasses all of the behaviors that consumers display in searching for, purchasing using,evaluating, and disposing of products and services that they key expect will satisfy theirneeds. For example, a couple may experience dissatisfaction with their choice of anautomobile, perhaps because of continuing service problems. They may communicate theirdissatisfaction to friends and, in turn, influence their friends’ future automobile purchases.They may vow never to buy the same make or model again, limiting their own futureselection decisions. Each of these possible consequences of consumer postpurchasedissatisfaction has significant ramifications for automobile marketers, who have to buildpostpurchase strategies into their promotional campaigns.

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HOW TO USE THE FILO-TEXT?

The Filo-text is a tool providing you guidance for this subject. It provides you a generalinformation on the following:

• Assessment

• Attendance

• Fees

• Contact time

• The academic planner

For every week, it then provides you with the following information:

• The topic

• The objective(s) of the lecture

• The textbook and the chapter(s) and page(s) related to the given topic

• The other reference books available to you in the library.

• Additional reference material for your own research

• The objective(s) of the tutorial

• Questions to prepare for discussion during the tutorial

• Question for your personal research

Use the Filo-Text to prepare yourself prior to the lecture, between the lecture and the tutorialand after the tutorial

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ASSESSMENT

Student assessment will be evaluated based on the following breakdown:

1. Individual Assignment 15%

2. Mid-Term Examination 15%

3. Group Project 20%

4. Final Examination 50%

Total 100%

INDIVIDUAL ASSIGNMENT

You will receive an individual assignment on week 2, which has be handed up on week 6.The marked assignment will be returned on week 8.

The assignment will be based on topics covered between weeks 1 and 4 and includes drillingand vocabulary exercises.

Failure to submit this assignment will result in an automatic failure in this assignment.

MID-TERM ASSESSMENT

A mid-term assessment will be held on week 8 and will be based on topics covered up toweek 6. Absence without a valid reason will result in an automatic failure of the examination.

GROUP PROJECT

A Group Project will be assigned to the students on the week 3. The team will be comprise 5students.

The report of the group project will have to be submitted to the subject lecturer by no laterthan week 10 and will be presented on week 11. No late submission will be entertained andwould automatically result in no marks awarded.

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FINAL EXAMINATION

The final examination will be conducted on week 13 or week 14 and the paper is 3 hours.Registration for the examination is open from week 6 and closes on week 9. Make sure youregister on time. Any registrations made on week 10 and 11 will be subject to penaltycharges. No late registrations will be entertained after week 11.

The format of the examination is as follows:

• Section A – Short Essay Questions (5) Answer All 5*4 = 20 Points

• Section B – Essay Questions. Answer 4 out of 6 4*20 = 80 Points

___________________________________________________________________________

• Total 100 Points

ATTENDANCE

Attendance for both the lecture and the tutorial is compulsory and absenteeism should becovered with medical certificate or written letter by the parent/guardian. Failure to providesuch a document for absenteeism will be viewed as truancy by the student.

A minimum attendance of 80% is essential to justify attendance for any examination.Punctuality is equally important. The lecturer is entitled to refuse entry into the classroom toany student who is late.

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FEES

The registration fee is to be paid upon enrolment. The course fee may be settled either in full,by per semester or by instalments. Payment in full must be settled before the first lecturewhile payment by the semester is payable on the first day of each semester. Payment bymonthly instalment is due on the first day of class of each month.

Any difficulty experienced in the settlement of the fees must be communicated to the(Deputy) Principal. Failure to meet the (Deputy) Principal can result in the student beingbarred from attending class.

CONTACT-TIME

FULL-TIME

The duration of each class is 12 weeks and contact time is 1½ hours of lecture with 1½ hoursof tutorials per week.

PART-TIME

The duration of each class is 12 weeks and contact time is 1½ hours of lectures per week.

For successful results an additional 4 hours is recommended for personal studies, eitherindividually or in a group.

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THE ACADEMIC PLANNER

Week Date Topic

1 The Diversity of Consumer Behavior

2 Market Segmentation

3 Consumer Needs and Motivation & Personality andConsumer Behavior

4 Consumer Perception & Learning and Consumer Involvement

5 The Nature of Consumer Attitudes & Communication andPersuasion

6 Group Dynamics and Consumer Reference Groups and theFamily

7 Social Class and Consumer Behavior

8 Mid -Term Exam

9 The Influence the Culture and Cross-Culture on ConsumerBehavior

10 Personal Influence and the Opinion Leadership Process

11 The Diffusion of Innovation

12 Consumer Decision Making – Choosing and Consuming

Final Examination

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WEEK 1

Lecture Topic: The Diversity of Consumer Behavior

Lecture Objective: *The Study of Consumer Behavior

*Why we study Consumer Behavior

*Why the field of Consumer Behavior developed

*Ethics in Marketing

*The Consumer Movement

*Ethics and Corporate Environment

Textbook:

Chapter(s) Pages

Consumer Behavior – Leon G. Schiffman & Leslie L.Kanuk. Sixth Edition

1 1 - 20

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas For Applications During Tutorials:

1. In the 1920s, Henry Ford remarked that his customers could have any colour car theywanted, as long as it was black. Could the president of Ford Motor Company make thesame statement today? In your answer, discuss the changes in marketing philosophythat have occurred since the 1920s.

2. How can the study of consumer behavior assist marketers in segmenting markets andpositioning products?

3. You are the brand manager of new line of biodegradable diapers that includes separateversions for boys and girls. Describe how an understanding of consumer behavior isuseful to you in term of: (a) market segmentation strategy, (b) new productintroduction, (c) product life-cycle strategy, and (d) societal issues.

4. The upper-lower and lower-lower social classes together constitute more than half theUnited States population. Is it ethical for marketers and the mass media to promoteproducts that most members of the lower classes cannot afford? Explain your answer.

5. Describe the interrelationship between the consumer behavior discipline and themarketing concept.

QUESTIONS AVAILABLE FOR SELF ASSESSMENT

1. Explain the difference(s) between personal and organizational consumers. Discuss thedifference involved in marketing fax machines to personal consumers and toorganizational consumers.

2. Select a product you bought that has features you never used. Which one of the businessorientations discussed in the text may have guided that development of this product?

3. Find an advertisement for a new product. Identify the psychological, sociological, andcultural factors that may influence consumers’ decisions regarding the purchase of thisproduct. In your opinion, will this product, succeed of fail in the marketplace? Explainyour answer.

4. Give an example of what you believe to be an unethical marketing practice. How canthis practice be stopped through government regulation? Can the industry stop thispractice? If so, how?

5. Select a product, brand, or service that you bought or used because it was particularlysuitable for your needs. Would you say that the development of this product or serviceswas guided by the marketing concept? If so, how?

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WEEK 2

Lecture Topic: Market Segmentation

Lecture Objectives: *What is market segmentation?

*Who uses market segmentation?

*How market segmentation operates?

*Bases for segmentation

*Criteria for effective targeting of market segmentation

*Implementing segmentation strategies

Textbook:

Chapter(s) Pages

Consumer Behavior – Leon G. Schiffman & Leslie L.Kanuk. Sixth Edition

3 48 - 77

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Area For Applications During Tutorials

1. What is market segmentation? How is the practice of market segmentation related tomarketing concept?

2. Discuss the advantages and disadvantages of using demographics as a basis forsegmentation. Can demographics and psychographics be used together to segmentmarkets? Illustrate your answer with a specific example.

3. Some marketers consider benefit segmentation as the segmentation approach mostconsistent with the marketing concept. Do you agree or disagree with this view?

4. For each of the following products, identify the segmentation based that you considerbest for targeting consumers: (a) coffee, (b) soups, (c) home exercise equipment, (d)portable telephones, and (e) nonfat frozen yogurt. Explain your choices.

5. Apply the criteria for effective segmentation to marketing product of your choice tocollege students.

QUESTIONS AVAILABLE FOR SELF ASSESSMENT

1. Are market segmentation, targeting, and positioning interrelated? Illustrate how thesethree concepts can be used to develop a marketing strategy for a product of your choice.

2. Under which circumstances and for what types of products should a marketer segmentthe market on the basis of: (a) awareness status, (b) brand loyalty, or (c) use situation?

3. Club Med is a prominent company in the vacation and travel industry .Describe howthe company can use demographics and psychographics to identify TV shows andmagazines in which to place its advertisements.

4. Does your lifestyle differ significantly from your parents lifestyle? If so, how are thetwo lifestyles different? What factors cause these differences?

5. Do you anticipate any major changes in your lifestyle in the next 5 years? If so, intowhich VALS 2 segment are you likely to belong five years from now? Explain.

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WEEK 3

Lecture Topic: Consumer Needs and Motivation & Personality

And Consumer Behaviour

Lecture Objective: *What is motivation?

*The dynamic nature of motivation

*Types and systems of needs

*What is personality?

*Personality and understanding consumer diversity

Textbook:

Chapter(s) Pages

Consumer Behaviour – Leon G. Schiffman & Leslie L.Kanuk. Sixth Edition 4 - 5 83 -141

Reference Books:

Consumer Behaviour by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. (a)“Marketers don’t create needs; needs preexist marketers.” Discuss this statement.

(b) Can marketing efforts change consumers’ needs? Why or why not?

2. Why are consumers’ needs and goals constantly changing? What factors influence theformation of new goals?

3. Consumers have both innate and acquired needs. Gibe examples of each kind of need andshow how the same purchase can save to fulfill either or both kinds of needs.

4. Most human needs are dormant much of the time. what factors cause their arousal? Giveexamples of ads for personal care products that are designed to arouse latent consumerneeds.

5. (a) what is motivational research?

(b) what are its strengths and weaknesses?

(c) How did Dr. Ernest Dichter apply Freudian theory to consumer behavior?

(d) How was motivational research used in the 1950s?

(e) how do marketers use the technique today?

Questions available for self-assessment

1. Describe personality trait theory. Give five examples of how personality traits can be usedin consumer research

2. How can a marketer of cameras use the research findings that the target market consistsprimarily of inner-directed or other-directed consumers? Of consumers who are high (orlow) on innovativeness

3. Is their likely to be a difference in personality traits between individuals who readilypurchase foreign-made products and those who prefer to American-made products? Howcan marketers use the consumer ethnocentrism scale to segment consumers?

4. A marketer of health foods is attempting to segment his or her market on the basis of self-image. Describe the four types of consumer self-image and discuss which one(s) wouldbe effective for the stated people.

5. contrast the major characteristics of the following personality theories. (a) Freudiantheory, (b) Jungian theory, (c) Neo-Freudian theory, and (d) trait theory. In your answer,illustrate how each theory is applied to the understanding of consumer behavior.

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WEEK 4

Lecture Topic: Consumer perception & Learning and Consumer Involvement

Lecture Objective: What is perception?

The dynamics of perception

Consumer imagery

What is learning?

Behavioural learning theories

Cognitive learning theory

Brand loyalty

Textbook:

Chapter(s) Pages

Consumer Behavior- Leon g. Schiffman &Leslie L. Kanuk. Sixth Edition

7 194-228

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. How does sensory adaptation affect advertising effectiveness? How can marketersovercome sensory adaptations?

2. Describe how manufactures of chocolate bars can apply their knowledge of differentialthreshold to packages and prices during periods of: (a) rising ingredient costs, (b)increasing competition, and (c) consumer nutrition concerns.

3. Does subliminal advertising work? Support your view.

4. How is perceptual mapping used in consumers research? Why are marketers sometimesforced to reception their products or services? Illustrate your answer with examples.

5. Why is it more difficult for consumers to evaluate the quality of services than thequality of products?

Questions available for self assessment

1. (a) Define the following memory structures: sensory store, working memory, and long-term store. Apply each of these concepts to the development of an advertisingstrategy.

(b) How does information overload affect the consumer’s ability to comprehend an adand store it in his or her memory?

2. Discuss the differences between low-and involvement media. How would you apply theknowledge of hemispheral lateralization to the design of TV commercials and printadvertisements?

3. (a) How can the principals of classical conditioning theory and neo-pavlovian theory beapplied to the development of marketing strategies?

(b) How is the classical conditioning concepts of repetition applied to advertising?

4. (a) A cereal marketer is trying to use the concept of high- and low- involvement to targetmarket segments. How should the marketer measure consumers’ level of involvementwith cereal?

(b) Can social judgement theory be used to market cereal more effectively? Explain youranswer.

5. (a) How can a marketer distinguish between real and spurious brand loyal buyers? Is itimportant for marketers to measure and understand the differences between the twogroup? Why or why not?

(b) Describe the marketing errors in advertising, pricing, and in-store promotions thatmight occur of a marketer fails to distinguish between the two groups.

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WEEK 5

Lecture Topic: The Nature of Consumer Attitudes & Communication andPersuasion

Lecture Objective:

• What are attitudes?

• Structural models of attitudes

• Components of communication

• The communication process

• Designing persuasive communication

Textbook:

Chapter (s) Pages

Consumer Behaviour – Leon G.Schiffman & LeslieL. Kanuk. Sixth Edition

8 & 10 234 – 255

280 – 313

Reference Books:

Consumer Behaviour by Chirs Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. Explain how situational factors are likely to influence the degree of consistency betweenattitudes and behavior.

2. Because attitudes are learned predispositions to respond, why don’t marketers andconsumer researches just measure purchase behaviour and forget attitudes?

3. Explain a person’s attitude toward visiting Disney World in terms of the tricomponentattitude model.

4. Multi attribute models examine attitudes in terms of selected product attributes. What arethe attributes on which you would like to evaluate your lecturer at the end of thesemester? On which attributes would you evaluate this filotext?

5. Should a marketer of luxury cars use the attitude-toward-object model, the attitude-toward-behavior model, or the theory-of-reasoned-action model in assessing consumers’attitudes toward the company’s cars? Explain your answer.

QUESTIONS AVAILABLE FOR SELF ASSESSMENT

1. Explain the differences between feedback from interpersonal communications andfeedback from impersonal communications. How can the marketer obtain and use eachkind of feedback.

2. List and discuss the effects of psychological barriers on the communications process.How can a marketer overcome the communications barriers known as “noise”?

3. a). What factors influence the perceived credibility of an informal communicationssource? List and discuss factors that determine the credibility of formalcommunications sources of product information.

b). What are the implication of the sleeper effect for selection of spokespersons and thescheduling of advertising messages?

4. Explain the difference(s) between direct mail and direct marketing. Discuss the reasonsfor the continued growth of direct marketing and the objectives of direct marketing.

5. a). Should marketers use more body copy that artwork in print ads?

b). For what kinds of audiences would you considers using comparative advertising?Why?

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WEEK 6

Lecture Topic: Group Dynamic and consumer Reference Groups & The Family

Lecture Objective:

• What is a group?

• Reference group

• Applications of the reference group

• Functions of the family

• Family decision making

• Family life cycle

Textbook:

Chapter(s) Pages

Consumer Behaviour – Leon G. Schiffman & LeslieL.Kanuk. Sixth Edition

11 & 12 320 – 342

346 - 371

Reference Books:

Consumer Behaaviour by Chirs Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. Describe one group that serves as an aspirational group for you and another that serves asan avoidance group. In what ways have they influenced your consumption patterns?

2. When is using an aspirational group likely to be a more effective advertising strategy thana contractual group?

3. Virtually all group develop norms and codes of behavior. Identify five norms that guidethe behavior of students and lecturers in your college. Are your fellow students anormative or comparative reference group for you? Explain.

4. What reference group factors are likely to influence a smoker’s decision as to whether ornot to use a nicotine patch in the quest to quit smoking?

5. Many celebrities who are considered to be persuasive role models often appear in TVbeer commercials. Does the use of such celebrities in beer advertising constitute anunethical marketing practice? Discuss.

QUESTIONS AVAILABLE FOR SELF ASSESSMENT

1. Some consumer behavior researchers maintain that the family, rather than the individual,should be the unit of analysis in consumer behavior. What are the advantages anddisadvantages of using the family as the unit of analysis?

2. How does the family influence the consumer socialization of children? What role doestelevision advertising play in consumer socialization?

3. Which of the five stages of the traditional family life cycle constitute thee most lucrativesegment(s) for the following products and services: (a). telephone party line, (b). a ClubMed vacation, (c). Domino’s pizza, (d). compact disc players, (e). mutual funds, and (f).motor homes? Explain your answers.

4. In purchasing a new television set, how would you expect the following factors toinfluence the dynamics of husband-wife decision making: (a). The features of theproduct; (b). the family’s role structure orientation; and (c). the stage of the decision-making process. How would you use the assessments you listed above in advertising anew model TV set?

5. a). Describe the role of young children in the family consumption process.

b). What role do teenagers play in family decision making?

c). What is the marketing significance of the increase in the number of latchkey kids andtheir distinctive lifestyle?

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WEEK 7

Lecture Topic: Social Class and Consumer Behavior

Lecture Objective:

• What is social class?

• Measurement of social class

• Lifestyle profiles of social class

• Social class mobility

• Selected consumer behavior applications of social class

Textbook:

Chapter (s) Pages

Consumer Behavior – Leon G. Schiffman & LeslieL. Kanuk. Sixth Edition

13 376-402

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Resemary Philips & Craig Simmons

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Areas for applications during tutorials

1. Marketing researchers generally use the objective method to measure social class, ratherthan the subjective or reputational method. Why is the objective method preferred byresearches?

2. Under what circumstances would you expect income to be a better predictor of consumerbehavior than a composite measure of social class (e.g., based on income, education andoccupation)? When would you expect the composite social-class measure to be superior?

3. Describe the correlation between social status (or prestige) and income. Which is a moreuseful segmentation variable? Discuss.

4. Which status-related variable, occupation, education or income, is the most appropriatesegmentation base for: (a) expensive vacations, (b) opera subscriptions, (c) Peoplemagazine subscriptions, (d) fat-free foods, (e) personal computers, (f) pocket-size cellulartelephones, and (g) health clubs?

5. Consider the Rolex watch, which has a retail range starting at about $2000 for a stainless-steel model to thousands of dollars for a solid-gold model. How might the Rolexcompany use geodemographic clustering in its marketing efforts?

Questions available for self assessment

1. How would you use the research evidence on affluent households to segment the marketfor: (a) home exercise equipment, (b) vacations, and (c) banking services?

2. How can a marketer use knowledge of consumer behavior to develop financial servicesfor affluent consumers? For “downscale” consumers?

3. You are the owner of two furniture stores, one catering to upper-middle-class consumersand the other to lower-class consumer. How do social-class differences influence eachstore’s: (a) product lines and styles, (b) advertising media selection, (c) the copy andcommunications style used in the ads, and (d) payment policies?

4. Select two households featured in two different TV series or sitcoms. Classify eachhousehold into one of the social classes discussed in the text and analyze its lifestyle andconsumption behavior.

5. Prepare an Index of Stated Characteristics of your relatives and compute their social class.

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WEEK 8

MID-TERM EXAM

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WEEK 9

Lecture Topic: The Influence of Culture and Cross-culture on ConsumerBehavior

Lecture Objective: *What is culture?

*Characteristics of culture

*The measurement of culture

*Cross-culture consumer analysis

*Cross-culture psychographics segmentation

Textbook:

Chapter(s) Pages

Consumer Behavior – Leon G. Schiffman &Leslie L. Kanuk. Sixth Edition

14 &16 406-436

472-493

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. Distinguish between beliefs, values, and customers. Illustrate how the clothing a personwears at different times or for different occasions is influenced by customs.

2. A manufacturer of fat-free granola bars is considering targeting school-age children bypositioning its product as a healthy, nutritious snack food. How can an understanding ofthe three forms of cultural learning be used in developing an effective strategy to targetthe intended market?

3. The Citrus Growers of America is planning a promotional campaign to encourage thedrinking of orange and grapefruit juice in situations in which many consumers normallyconsumer soft drinks. Using the Rokeach Value Survey Instrument, identify relevantcultural, consumption-specific, and product-specific values for citrus juices as analternative to soft drinks. What are the implications of these values for an advertisingcampaign designed to increase the consumption of citrus juices?

4. Describe how a marketer can use some of the social trends to position a microwave oven.

5. For each of the products and activities listed below:

a) Identify the core values most relevant to their purchase and use.

b) Determine whether these values encourage or discourage use or ownership.

c) Determine whether these core values are shifting and, if so, in what direction. Theproducts and activities are:

I. Compact disc playersII. Telephone answering machines

III. Toothpaste

IV. Diet soft drinks

V. Foreign travel

Questions available for self assessment

1. With all the problems facing companies that go global, why are so many companieschoosing to expand internationally? What are the advantage of expanding beyond thedomestic market?

2. What is cross-cultural consumer analysis? How can multinational company use cross-cultural research to design each factor in its marketing mix? Illustrate your answer withexamples.

3. What are the advantages and disadvantages of global promotional strategies?

4. Should Head & Shoulders shampoo be sold worldwide with the same formulation? In thesame package? With the same advertising theme? Explain your answer.

5. What advice would you give to an American retailer who wants to sell women’s clothingin Japan?

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WEEK 10

Lecture Topic: Personal Influence and the Opinion Leadership Process

Lecture objective: * What is opinion leadership?

* Dynamic of the opinion leadership

* Frequency and overlap of opinion leadership

* The situational and environment of opinion leadership

* Opinion leadership and the firms promotional strategy

Textbook:

Chapter(s) Pages

Consumer Behavior – Leon G. Schiffman &Leslie L. Kanuk. Sixth Edition

17 500 - 525

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. Why is an opinion leader a more credible source of product information than anadvertisement for the same product?

2. Are they any circumstances in which information from advertisements is likely to bemore influential than word-of-mouth?

3. Why would a consumer who has just purchased an expensive fax machine for homeuse attempt to influence the purchase behavior of others?

4. Is an opinion leader for 35-mm cameras likely to be an opinion leader for Spandexclothing? Discuss.

5. The two step flow of communication theory has been modified to portray moreaccurately the flow of information. Briefly describe this modification and explain itsrelevance to the marketing strategist.

Questions available for self assessment

1. How can marketers combat negative word-of-mouth?

2. Find ads that simulate and ads that stimulate opinion leadership and present them inclass.

3. Can you think of negative rumors that you have heard recently about a company or aproduct? If so, present them in class.

4. Describe two situations in which you served as an opinion leader and two situations inwhich you sought consumption-related advice/information from an opinion leader.Indicate your relationship to the persons with whom you interacted. Are thecircumstances during which you engaged in word-of-mouth communicationsconsistent with those in the text’s material? Explain.

5. For each of the following products and services, indicate who you would go to forinformation and advice: (1) the latest fashion in clothes, (2) banking, (3) air travel, (4)the “hottest” night clubs, (5) vacation destinations, and (6) personal copiers. for eachsituation, indicate the person’s relationship to you and your reasons for selecting himor her as the source of information and advice.

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WEEK 11

Lecture Topic: The Diffusion of Innovations

Lecture Objective: * The diffusion process

* The adoption process

* A profile of the consumer innovator

Textbook:

Chapter(s) Pages

Consumer Behavior – Leon G. Schiffman &Leslie L. Kanuk. Sixth Edition

18 528 - 554

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. What are the essential difference between firm-product-, market-, and consumer-orienteddefinitions of a new products? Which definition do you feel is most suitable for themarketers of a Caller ID telephone service that displays the caller’s telephone number onthe phone of the person being called? Explain your answer.

2. Would you classify each of the following as a continuous innovation, a dynamicallycontinuous innovation, or a discontinuous innovation? Explain your answer.

a) Sony’s Video Walkman (a portable TV and VCR)

b) A PC fax/modem that enables the users to send and receive faxes directly from apersonal computer

c) A pocket-size cellular telephone

3. Select three of the products listed in Question 2 and describe the diffusion pattern thatyou except each product to have. Justify your answer.

4. Describe how manufacturer might use knowledge of the following product characteristicsto spend up the acceptance of pocket-sized cellular telephones:

(a) Relative advantage

(b) Compatibility

(c) Complexity

5. Toshiba has introduced a new laptop computer that weighs seven pounds, has a colorscreen, and a powerful processor, into which a full-sized desktop screen and keyboard canbe easily plugged. How can the company use the diffusion-of-innovations framework todevelop promotional, pricing, and distribution strategies targeted to:

a) Innovators

b) Early adopters

c) Early majority

d) Late majority

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Olympia Business School Consumer Behavior

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Questions available for self assessment

1. Is the curve which describes the sequence and proportion of adopter categories among thepopulation similar in shape to the products life cycle curve? Explain your answer. Howwould you use both curve to develop a marketing strategy?

2. Compare and contrast the adoption and diffusion processes. Discuss each process in termsof the market acceptance of fax machines.

3. Sony is introducing a 60-inch TV with a built-in VCR, a picture-in-picture feature, and afeature that allows the viewer to simultaneously view frozen frames of the last signalsreceived from twelve channels.(a) What recommendations would you make to Sony regarding the initial target marketfor the new TV model?(b) How would you identify the innovators for this product?

4. Identify a product, service, or style that recently was adopted by you and/or some of yourfriends. Identify what type of innovation it is and describe its diffusion process up to thispoint in time. What are the characteristics of people who adopted it first? what types ofpeople did not adopt it? What features of the product, service, or style are likely todetermine its eventual success or failure?

5. With the advancement of digital technology, some companies plan to introduceinteractive TV systems that will allow viewer to select films from “video libraries” andview them on demand. Among people you know, identify two who are likely to be theinnovators for such a new service and construct consumer profiles using thecharacteristics of consumer innovators.

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WEEK 12

Lecture Topic: Consumer Decision Making-Choosing and Consuming

Lecture Objective: *What is a decision?

*Levels of consumer decision making

*A model of consumer decision making

*Beyond the decision-consuming and possessing

*Relationship marketing

Textbook:

Chapter(s) Pages

Consumer Behavior – Leon G. Schiffman &Leslie L. Kanuk. Sixth Edition

19 558 - 593

Reference Books:

Consumer Behavior by Chris Rice

Understanding Customers by Rosemary Philips & Craig Simmons

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Areas for application during tutorials

1. Compare and contrast the economic, passive, cognitive, and emotional models ofconsumer decision making.

2. What kinds of marketing and sociocultural inputs would influence the purchase of (a) aTV with a built-in VCR, (b) a concentrated liquid laundry detergent, and (c) fat –free ice-cream? Explain your answer.

3. Identify three different products that you believe require a reasonably intensiveprepurchase search by a consumer.

4. For each of the products that you listed, identify the perceived risks that a consumer islikely to experience before a purchase. Discuss how the marketers of these products canreduce perceived risks.

5. How can a marketers of very light, very powerful laptop computers use its knowledge ofcustomers expectations in deigning a marketing strategy?

Questions available for self assessment

1. How do consumers reduce postpurchase dissonance? How can marketers provide positivereinforcement to consumers after the purchase to reduce their dissonance?

2. The Gillette Company, Which produces the highly successful Sensor shaving blade, hasrecently introduced a clear gel antiperspirant and deodorant for men. Identify theperceived risks associated with the purchase of this new product and outline a strategydesigned or reduce these perceived risks during the product’s introduction.

3. Albert Einstein once wrote that “the whole of science is nothing more than a refinementof everyday thinking. “ Do you think that this quote applies to the development of theconsumer decision-making model?

4. Describe the need recognition process that look place before you purchased your last canof soft drink. How did it pair of sneakers? What role, if any, did advertising play in yourneed recognition?

5. Select a newspaper or magazines advertisement that attempts: (a) to provide the customerwith a decision or (b) to reduce the perceived risks(s) associated with a purchase.Evaluate the effectiveness of the ad you selected.