COPYRIGHT 2006 Thomson Learning Australia

Consumer behaviour and consumer researchCHAPTER 1

What is consumer behavior?Activities people undertake when obtaining, consuming, and disposing of products and servicesA field of study that focuses on consumer activitiesScope goes beyond just why and how people buy to include consumption analysis

Obtaining

Consuming

Disposing

Consumerinfluences

OrganisationalinfluencesConsumer behavior

Consumer influencesOrganisational influencesCulture EthnicityPersonality FamilyLife-stage ValuesIncome Available resourcesAttitudes OpinionsFeelingsMotivations Past experiencesPeer groupsKnowledgeBrand Product featuresAdvertising Word of mouthPromotions Retail displaysPrice QualityService Store ambianceConvenience Loyalty programsPackaging Product availability

ObtainingConsumingDisposingHow you decide you want to buy

Other products you consider buying

Where you buy

How you pay for product

How you transport product homeHow you use the product

How you store the product in your home

Who uses the product

How much you consume

How product compares with expectations

How you get rid of remaining product

How much you throw away after use

If you resell items yourself or through a consignment store

How you recycle some products

Consumption analysisWhy and how people use products in addition to why and how they buy

The marketing conceptThe process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectivesSatisfaction with an exchange depends on satisfaction with consumption of product and the exchange of money

Why Study Consumer Behavior?Consumer Behavior Determines the Economic Health of a Nation

Why study consumer behaviour?Consumer behavior determines the success of marketing programsMarketing can be used to influence brand choice and purchase, while de-marketing can influence people to stop harmful consumption

The Customer is King:Organisation influenced by consumer needs and wants

Why study consumer behaviour?Organisations that are customer-centric use a total marketing approach to focus their resources on satisfying customers

Marketing is the process of transforming or changing an organisation to have what people will buy

Why study consumer behaviour?Consumer behavior determines everyones economic health:The individuals decisions as a consumer determine their economic health by making more effective consumption decisions while avoiding deceptive practices harmful to themPublic policy leaders and social commentators study consumer behavior to alleviate over-consumption and under-consumption by educating consumers about problems and providing assistance

Consumer behaviour helps to formulate public policy

Understanding consumers issues or problems and developing methods to reach and educate consumersEducating consumers about health

Understanding consumers needs to formulate public policy and predicting behavioral changes that followStudying consumer behaviour helps formulate public policyInterest ratesWarning labelsEconomicsSocial WelfareFamily PlanningGovernment RegulationsGovernment Protection and EducationProtection from Competitive Markets

Personal policy includes how you behave towards others and in buying situations, your values and beliefs, and how you live your life

A persons economic quality of life is determined by personal policy

Consumer behaviour affects personal policy

Evolution of consumer behaviorSupply chain:all the organisations involved in taking a product from inception to final consumption- Manufacturers- Wholesalers- Retailers- Facilitating organisations

Consumers increased influence on business

Evolution of consumer behaviourWholesaler Manufacturer Retailer ConsumerManufacturingOrientationConsumerOrientationSellingOrientationMarketingOrientationUS1750-1850 1850-WWII 1970-2000 2000+

Europe1750-1850 1760-WWII 1970-2000 2000+

Consumers increasing influence

Manufacturing orientationSelling orientationMarketing orientation: - Motivation research - Positivism - PostmodernismConsumer orientationEvolution of consumer behaviour

Consumer orientationBeyond a marketing focus

How all organisations in a demand chain adapt to changing consumer lifestyles and behaviors bringing product design, logistics, manufacturing, and retailing together

Role of consumers in shaping many aspects of life society, government, social programs, health cares, and other areas

Studying consumer behaviour: Consumer research methodsObservation Observing consumer behaviors in different situations such as natural or artificial settingsIn-home observation: examining how and when consumers use and consume products in their householdsShadowing: following and observing consumers in the shopping and consumption processes. Researchers may ask questions about reasons for behaviorsPhysiological methods: techniques borrowed from medicine, psychology and other sciences including cameras to measure eye movement, galvanic skin response, and MRI

Consumer research methodsInterviews and surveysSurveys: efficient method for gathering information from a large sample of consumers by asking questions and recording responses (telephone and Internet surveys, mall intercepts, and mail questionnaires)Focus groups: a group discussion led by a moderator skilled in persuading consumers to thoroughly discuss a topic of interestLongitudinal studies: repeated measures of activities over time to determine changes in opinions, buying, and consumption behaviors

Consumer research methodsExperimentationMeasuring cause-and-effect relationships by manipulating independent variables to determine the effects of changes on dependent variables- Laboratory experiment- Field experimentIndependent variables might include number of advertisements and package designDependent variables might include purchase intent or behavior

Consumer research methodsConsumption research builds on the three primary research methods to examine how people use products and services rather than how they buy themMay use ethnographic tools to under-stand how values and culture influence usage of products and other behaviorsMay identify new uses for existing products or new product to satisfy unmet or changing consumer needs

Understanding how consumers use products

Underlying principles of consumer behaviourThe consumer is sovereignThe consumer is globalConsumers are differentConsumers are alikeConsumers appear different but respond in similar ways to brands

The Underlying Principles of Consumer BehaviorThe Consumer Is SovereignThe Consumer Is GlobalConsumers Are Different; Consumers Are AlikeThe Consumer Has Rights

Consumer Bill of RightsRefer to DOCEP (Department of Consumer and Employment Protection) in Western Australia for information on consumer rights. Remember that consumer rights may vary across countries in the South East Asian region.

Challenges for the futureGathering and interpreting information that organisations need to meet changing needs of consumersDeveloping effective consumer research methods to capture changes in trends and lifestylesUnderstanding consumer behaviour from a broader perspective as an important part of life

****The public policy may be, for example, based on the expected behaviour of consumers during a crisis.*