Consumer behavior notes

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Consumer Behavior

description

details of consumer behavior

Transcript of Consumer behavior notes

Page 1: Consumer behavior notes

Consumer Behavior

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Model of Buyer Behavior

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Factors Influencing Consumer Behavior

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• Culture is often the most powerful cause of a person's needs, wants and behavior.

• Characteristics of Culture– Culture is learned. – Certain aspects of culture never change.– Cultural shifts create opportunities.– Subcultures can be of even greater interest to

marketers than cultures.

Culture

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Marketing to Subcultures

Procter & Gamble targets Hispanics using print and TV and has developed special Spanish versions of some brands.

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• Society’s relatively permanent and ordered divisions

• Social Class Members share similar values, interests, and purchase behaviors

• Indentify by: income, occupation, education, wealth, and other variables

• Opportunity: “Social Mobility” products

Social Class

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The Major American Social Classes

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• Groups:– Reference Groups– Aspirational Groups– Dissociative Groups

• Opinion Leaders• Family• Roles and Status

Social Factors

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Toyota caters to family buying influences.

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• Age and Life-Cycle Stage– Tastes and preferences change over time.

• Occupation– Occupation influences the purchase of clothing, cars, memberships, etc.

• Economic Situation– Income-sensitive goods– Counter-cyclical goods

Personal Factors

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Personal Factors

• Lifestyle:– Pattern of living (AIO)

• Activities• Interests• Opinions.

• VALS:– Classifies consumers with

respect to motivation and resources.• Predicts purchase behavior

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• Personality– One Definition: Unique psychological characteristics that lead to relatively consistent and lasting

responses to one’s environment.

• Freudian Theory– Subconscious motivations

• “Big 5” - OCEAN– Openness– Conscientiousness– Extraversion– Agreeableness– Neuroticism

• Brands as expressions of identity

• Ideal Self vs. Actual Self

Personality and Self-Concept

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Maslow’s Hierarchy of Needs

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Perception

Process by which people Process by which people select, organize, and select, organize, and

interpret information to interpret information to form a meaningful picture of form a meaningful picture of

the world.the world.

People can form different perceptionsof the same stimulus.

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Selective Attention

People screen out most stimuli.

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Selective Distortion vs. Retention

• Selective Distortion– Interpreting information in a way that supports what you already

believe.

• Selective Retention– Remembering the good aspects of something you like and forgetting

the bad aspects of something you dislike.

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• One Definition:– A relatively permanent change in behavior due to experience.

• Driven by stimulus-response chains (conditioning).• Strongly influenced by behavioral consequences

(Operant Conditioning)– Behaviors with satisfying results are repeated.– Behaviors with unsatisfying results are avoided.

• Different from deliberation

Learning

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Beliefs and Attitudes

• A belief is a descriptive thought that a person holds about something.

• An attitude is a person’s consistently favorable or unfavorable feelings, evaluations, and tendencies toward an object or idea.

• Both have lots of staying power.– Emotional precedents– Advertising tries to modify beliefs and

attitudes.

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The Buyer Decision Process

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Need Recognition

Buyers recognize a Buyers recognize a need or problem as need or problem as a result of internal a result of internal or external stimuli.or external stimuli.

Marketing communications often stimulate need recognition.

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Hungry yet?

Triggering Need Recognition

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Information Search

• High vs. Low Involvement Purchases

• Cost vs. Benefit Model• “Big-Ticket” Anomolies• Cognitive Economy

edmunds.com

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Information Sources

– Personal• Family, friends, neighbors,

and casual or work acquaintances

– Commercial• Advertising, salespeople,

dealers, Web sites, packaging, and displays

– Public• Mass media articles or news

programs, Internet searches, consumer rating organizations

– Experiential• Using, handling, examining or

sampling the product

Which source is most influential?

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• ELM: Central vs. Peripheral Route processing

• Some Types of Evaluation Calculus:– Compensatory vs. Non-compensatory– Weighted Tally Processes– Elimination-by-aspects– Lexicographic– “Checkbox Choice”– Affect Referral

Evaluation of Alternatives

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Weighted Tally Process Example

Assume consumer weighs Memory, Graphics, Size/Weight and Price 30%, 20%, 40%, and 10%, respectively.

Computer A’s score would be: (30% x 10) + (20% x 8) + (40% x 6) + (10% x 4) = 7.4

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Successive Sets

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Purchase Decision

• Intentions to purchase are sometimes interrupted.

• Potential “Interrupters”:– Attitudes & influences of others– Unexpected situational

factors– Buyer’s Remorse– Speed of decision

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Postpurchase Behavior

• Consumer satisfaction/dissatisfaction results from gaps between expectations and perceived performance.

– Performance BELOW Expectations → Disappointment– Performance EQUALS Expectations → Satisfaction– Performance GREATER than Expectations → Delight

– Performance MUCH GREATER than Expectations → Expectation Recalibration

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• Cognitive Dissonance: “Did I make the right purchase? Should I have bought this?”

• Minimize dissonance by:– Offering mechanisms for making complaints

(Customer Service, 800 hotlines, e-mail, etc.)– Being responsive to problems and questions– Advertising (remind consumer why choice made sense)– Minimizing the potential for product misuse (good product

instructions) and “Poke-Yoke”.

Cognitive Dissonance

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Question du Jour

Is this for real?

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1. Awareness2. Interest3. Evaluation4. Trial5. Re-Trial6. Adoption

The Adoption Process

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Not everyone adopts at the same pace.

• Innovators: venturesome, try new ideas at some risk.

• Early adopters: opinion leaders who adopt new ideas early, but carefully.

• Early majority: deliberate adopters, who adopt before the average person.

• Late majority: skeptical, adopt only after the majority of people have tried a product.

• Laggards: last to adopt, tradition bound, and skeptical of change.

Product Adopter Categories

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Adopter Categorization Distribution

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• Relative Advantage– Is the innovation perceived as superior to existing products?

• Compatibility– Does the innovation fit the values, behavior and experience of the

target market?

• Complexity– Is the innovation difficult to understand or use or perceived as such?

• Utility & Cost-Benefit– Can the innovation be used extensively or on a more limited basis?

• Communicability– Can results be easily observed and described to others?

Product Characteristics That Influence the Rate of Adoption

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Question du Jour

Do consumers always know what they really want or need?

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Other Consumer Behavior Models & Theories

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Reactance

• Reactance is an emotional reaction in direct contradiction to rules or regulations that threaten or eliminate specific behavioral freedoms. - Wikipedia

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Variety-Seeking vs. Habit Persistence

• Variety-Seeking– Often driven by need for arousal– Preference-testing utility– Consumers often overestimate their variety needs

• Habit Persistence– Different from “Loyalty”– Typically driven by risk aversion

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Sunk Cost Bias

• Investing more resources in something you previously invested in, solely because you previously invested in it.

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False Consensus Bias

• Not everyone thinks like you, expects what you expect, believes what you believe.

Very dangerous for marketers.

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Decision Heuristics

• Anchoring & Adjustment– Reference Points

• Emotion– Mood Regulation• Elevation• Maintenance

– Affect Evaluation– Effects on Risk Taking

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Prospect Theory

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Mental Accounting

• Consumers…– Segregate gains– Integrate losses– Integrate smaller losses with larger gains– Segregate small gains from large losses

Implications for marketing strategy?

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In-Class Activity – WHY WE BUYChoose a product, product line, brand, or company and answer the following:

• What are the obvious (i.e. more superficial) reasons why consumers buy these products?

• What are the not-so-obvious, more deep-seated reasons/motivations why

consumers buy these products? • What are the obvious (i.e. more superficial) reasons why consumers do not buy

these products? • What are the not-so-obvious, more deep-seated reasons/motivations why

consumers do not buy these products?

• Choose one or more of the above reasons/motivations to buy or not buy and provide an appropriate implication for Marketing strategy.