mm consumer mkt & org mkt

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What is Consumer Behavior?

• The processes involved when consumers selectselect, purchasepurchase, useuse, and/or disposedispose of products to satisfy needs and desires

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What Influences Consumer Behavior?

3 Factors Influence Consumer Behavior

• Cultural Cultural

• Social Social

• PersonalPersonal

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What Influences Consumer Behavior?

Cultural FactorsCultural Factors

CULTURAL FACTORSCULTURAL FACTORS

• The accumulation of shared meanings, rituals, norms, and traditions among members

- Culture is mainly about “life values”

• US values:

i. achievement & success

ii. activities

iii. individualistic

iv. fitness & health

Culture is dynamic

Subcultures

Provide more specific identification and socialization for their members

- religions subculture,

ethnic subculture,

geographic subculture,

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Disneyland Hotel

Hong Kong

• Does not have a

4th floor

• WHY?

• “4” sounds like

“death” in

Cantonese

SubculturesSubcultures Why subcultures important to

marketers?

Among Among others:others:

RitualsRituals

MythsMyths

RitualRitual

A type of symbolic activity consisting of

a series of steps occurring in a fixed sequence and repeated over time

- wedding

- religion celebrations

- death

- birthday

- Valentine’s day, mother’s day

- graduation

Why rituals are important to marketing?

Rituals tend to be replete with ritual artifacts (products and services)

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Myths• A story containing

symbolic elements that represent the shared emotions/ideals of a culture– Outcome serves

as moral guide for people

MythsMyths

How myths being applied in marketing?

- Through advertisements – relating the product with the intended value where the relationship between the two is already understood.

- Perodua Kancil….

”a smart choice – just like you are”

Garuda Airlines

The Goldern Arch of McDonald’s

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What Influences Consumer Behavior?

Social FactorsSocial

Factors

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Social Class

A person’s social class impacts what he/she does with money and on how consumption choices reflect one’s place in society– Products as status

symbols

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Upper uppersLower uppersUpper middlesMiddle class

Working classUpper lowersLower lowers

Social ClassesSocial Classes

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Social ClassSocial Class• “Haves” vs. “have-nots”• Where we occupy in the

social structure determines how much we spend and how we spend it

• Social class is determined by:

income, family background, income, family background, and occupationand occupation

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Conspicuous Consumption

• People’s desire to provide prominent visible evidence of their :

ability to afford ability to afford luxury goodsluxury goods

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The Trophy Wife

• Beautiful and young lady married to a very rich man who is very much older than she is

• Wives of wealthy husbands as “walking billboards”

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What Influences Consumer Behavior?

Personal Factors

Personal Factors

Personal

Factors

• Personality

• Lifestyle

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Personality

• A person’s unique psychological makeup and how it consistently influences the way a person responds to his/her environment

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Brand Personality• Set of traits people

attribute to a product as if it were a person

• Brand equity

Marketers create “brand personality” to be matched with their target market.

Levi’s: ruggedness

Ladylike: feminine

Polo: politeness

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Brand Personality

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Brand Personality

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Brand Personality

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Brand Personality

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Brand Personality

LIFESTYLEA lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions.

- achievement-oriented

- materialistic

- familyman

- outgoing

Marketers search for relationships between their products and lifestyle groups.

The handling and performance of a sport car, with the

comfort and space of a sedan

For Urban adventures, the sporty and agile RAV4 will be

Able to take you anywhere your wanderlust leads you.

Innova:

Spacious and luxurious appointed, the Innova offers

unparalleled comfort for the entire family.

Avanza:

Versatile, stylish and specious, the Avanza is also surprisingly affordable

The rockers enjoyed Rock and Roll, and their style consisted of jeans, boots and leather jackets. They wore black leather and studs, had anti-authority beliefs, and projected an easy rider nomadic romanticism. The Rockers lived for the present, with a scruffy, masculine, ‘bad boy’ image.

The rockers were essentially from the working class and despised any fashion. They each had the same hairstyle, shaggy with a bit of slick to it. Highway cafes are the hangout of the Rockers for the greasy foods and jukeboxes. Riding motorcycles was of the upmost importance, so they kept away from drugs and alcohol. The motorcycles were also modified or "souped up" in order to be in top racing form. Every Rocker had a ‘Triumph’ or a ‘Norton’, a brand of motorcycle.

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What Influences Consumer Behavior?

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PerceptionPerception• Adding meaning to raw sensations

Figure 2.1

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Sensory Thresholds

ABSOLUTE THRESHOLDThe minimum amount of stimulation that can be detected on a sensory channel

DIFFERENTIAL THRESHOLDThe ability of a sensory system to detect changes or differences between 2 stimuli.

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Many ads use hidden messages.Can you find the hidden message in this company logo?

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Decision-MakingProcess

Decision-MakingProcess

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Decision-making ProcessProblem Recognition

Information Search

Evaluation of Alternatives

Product Choice

Outcomes

Richard realizes that he dislikes his B&W TV

Richard surfs Web to learn about TVs

Richard chooses a TV with an appealing feature

Richard compares models on reputation and features

Richard brings home and enjoys his TVFigure 9.1 (Abridged)

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Figure 6.5 Successive Sets Involved in Consumer Decision Making

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Decision Rules

• Compensatory

• Noncompensatory: shortcuts via basic standards– Lexicographic rule– Conjunctive rule

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COMPENSATORY RULE:Expectancy-Value Model

• Consumer evaluates product• Combine brand beliefs - importance

• Weights attached to each attribute

• Allow “balance-out”

Total perceived valueTotal perceived value

= (weights x beliefs) of all attributes= (weights x beliefs) of all attributes

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ATTRIBUTE

MEMORYCAPACITY

GRAPHICSCAPABILITY

SIZE &WEIGHT

PRICE

PEMBERAT 0.4 0.3 0.2 0.1

IBM 8 9 6 9

APPLE 7 7 7 7

DELL 10 4 3 2

TOSHIBA 5 3 8 5

Each attributes is rated from 0 to 10, where 10 represents the highest level on that attribute. Minimum acceptable cutoff level for each attribute = 7

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IBM = 0.4(8) + 0.3(9) + 0.2(6) + 0.1(9) = 8.0

APPLE = 0.4(7) + 0.3(7) + 0.2(8) + 0.1(7) = 7.2

DELL = 0.4(10) + 0.3(4) + 0.2(3) + 0.1(2) = 6.0

TOSHIBA = 0.4(5) + 0.3(3) + 0.2(8) + 0.1(5) = 5.0

Brand chosen =

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IBM = 0.4(8) + 0.3(9) + 0.2(6) + 0.1(9) = 8.0

APPLE = 0.4(7) + 0.3(7) + 0.2(8) + 0.1(7) = 7.2

DELL = 0.4(10) + 0.3(4) + 0.2(3) + 0.1(2) = 6.0

TOSHIBA = 0.4(5) + 0.3(3) + 0.2(8) + 0.1(5) = 5.0

Brand chosen = IBM - Highest score of 8.0

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NON-COMPENSATORY MODELS OF

CONSUMER CHOICE

• Positive & negative attributes may not net

out

• Attributes evaluated in isolation

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Lexicographic heuristic: Best brand on perceived most important attribute Brand Chosen = ??

ATTRIBUTE

MEMORYCAPACITY

GRAPHICSCAPABILITY

SIZE &WEIGHT

PRICE

PEMBERAT 0.4 0.3 0.2 0.1

IBM 8 9 6 9

APPLE 7 7 7 7

DELL 10 4 3 2

TOSHIBA 5 3 8 5

Each attributes is rated from 0 to 10, where 10 represents the highest level on that attribute. Minimum acceptable cutoff level for each attribute = 7

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Lexicographic heuristic: Best brand on perceived most important attribute Brand Chosen = DellDell

ATTRIBUTE

MEMORYCAPACITY

GRAPHICSCAPABILITY

SIZE &WEIGHT

PRICE

PEMBERAT 0.4 0.3 0.2 0.1

IBM 8 9 6 9

APPLE 7 7 7 7

DELL 10 4 3 2

TOSHIBA 5 3 8 5

Each attributes is rated from 0 to 10, where 10 represents the highest level on that attribute. Minimum acceptable cutoff level for each attribute = 7

16-53

Conjunctive heuristic: minimum for each attribute - choose brand meets minimum

for all Brand Chosen = ??

ATTRIBUTE

MEMORYCAPACITY

GRAPHICSCAPABILITY

SIZE &WEIGHT

PRICE

PEMBERAT 0.4 0.3 0.2 0.1

IBM 8 9 6 9

APPLE 7 7 7 8

DELL 10 4 3 2

TOSHIBA 5 3 8 5

Each attributes is rated from 0 to 10, where 10 represents the highest level on that attribute. Minimum acceptable cutoff level for each attribute = 7

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Conjunctive heuristic: minimum for each attribute - choose brand meets minimum

for all Brand Chosen = AppleApple

ATTRIBUTE

MEMORYCAPACITY

GRAPHICSCAPABILITY

SIZE &WEIGHT

PRICE

PEMBERAT 0.4 0.3 0.2 0.1

IBM 8 9 6 9

APPLE 7 7 7 8

DELL 10 4 3 2

TOSHIBA 5 3 8 5

Each attributes is rated from 0 to 10, where 10 represents the highest level on that attribute. Minimum acceptable cutoff level for each attribute = 7

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Heuristics: Mental Shortcuts

• Mental rules-of-thumb that lead to a speedy decision– Examples: higher price =

higher quality, buying the same brand your mother bought

• Can lead to bad decisions due to flawed assumptions (especially with unusually named brands)

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Inertia: The Lazy Customer

• Many buy the same brand every time– We buy out of habit because it requires less

effort– Little/no underlying commitment here

• Brand switching frequently occurs (cheaper price, original brand out-of-stock, point-of-purchase displays)

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How Customers Use & Dispose of Products

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Business Market- Organizational Buying Behavior

Business Market- Organizational Buying Behavior

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Organizational vs. Consumer Decision Making

• Organizational buying is different…– Involves many people– Precise, technical specifications

(require a lot of product knowledge)

– Past experience and careful weighing of alternatives (impulse buying is rare)

– Decisions are often risky (to one’s career)

– Substantial dollar volume– More emphasis on personal

selling