how consumers act and react / consumer behavior. how consumers really shop 12 seconds at a product...

How Consumers Act and React / Consumer Behavior

How Consumers Act and React / Consumer Behavior How consumers really shop

12 seconds at a product category 85% picked up only one brand within a category 90% only picked up one size 58% paid attention to the price point of purchase / in-store displays signal special price

Consumer Decision Making (John Howard) Problem recognition Information search Alternative evaluation Purchase Post-purchase outcome / evaluation

How Consumers Act and React / Consumer Behavior Influences on Consumer Behavior

Surroundings: Advertising, sales promotion, friends, family, salespeople, store, price, past experience, etc.

Outside Influences Culture:

Nestle Cup of Noodles in France example - Convenience McDonald’s German Drive Thru

Opinion Leaders

Internal Influences: within the individual. Learning style, memory, modeling.


Maslow’s Hierarchy of Needs

Self Actualization

Esteem

Belongingness and Love

Safety

Physiological Needs

Place: Evian, Volvo, Just My Size pantyhose, Red Bull


Consumer Behavior: understanding the psychology of what is going on in the consumer’s head.

Consumer Research: Step One: define your question!

Otherwise you are simply going fishing and this ocean is too big.

Step Two: What kind of research do you need? Quantitative Qualitative Secondary Primary

Consumer Research Use Secondary Sources

Company Records Annual Reports, customer profiles, public relations files,

technical reports (what brand is 99 44/100% pure?) Trade Associations Libraries Sources of statistical Information (Government publishing

offices responsible for Census, etc.) Company Stock Reports Market Guides

MediaMark Research (MRI) demographic & psychographic info on light, medium and heavy users of products.

Simmons (SMRB) similar to MRI Survey of Buying Power: geographic breakdown of

demographic splits of the US population Computer based databases (e.g. InfoTrac) Web sites: (e.g. Hoover’s online)

Consumer Research

Primary Research Observation Focus Groups One - on - Ones Survey Psychographic research firms

Consumer Behavior Culture: a distinctive way of life of a group of people –

their complete design for living. Typical American Cultural Traits:

Belief in the sovereignty of all people Equality for all Individualism “Worship” of schooling Love of size / bigness Adaptability / open to change Optimism Humanitarianism Mobility / “restlessness” Practicality Emphasis on making money Self-protection and the sanctity of life.

Consumer Behavior Does America have

a class structure?

Consumer Behavior

A rich man is not just a poor man with more money. He has different ideals, different personality forces, different church membership and different notions of right and wrong all stemming from social class differentials.

Pierre Martineau Motivation in Advertising

Consumer Behavior America’s Class System:

Upper-upper Class: (0.5%) locally prominent families, 2-3rd generation wealth, living graciously, upholding the family name, reflecting the excellence of one’s own breeding and displaying a sense of community responsibility.

Consumer Behavior Upper-upper Class: (0.5%) #21, Newhouse, Donald Edward

73 , inherited and growing Source: Media/Entertainment, publishing

Net Worth: $7.7 billion - Hometown: Somerset County , NJ

Marital Status: married , 3 children

Undergraduate: Syracuse University, Drop Out With brother Samuel Irving Jr., two sons of Sam Newhouse, who took over failing Staten Island Advance 1922 and built what became the nation's largest newspaper chain. Sons inherited Advance Publications after father's death in 1979. Donald runs newspapers (Cleveland Plain Dealer, Newark's Star-Ledger), Si oversees glamorous Conde Nast magazine division (Vogue, Vanity Fair, the New Yorker). Also owns Sunday newspaper insert Parade, Fairchild Publications (Women's Wear Daily).

Consumer Behavior Lower Upper Class: (1.5%)

newly rich (nouveau riche). Newly arrived and never quite accepted wealthy. Each city’s executive

elite, founder’s of large businesses and newly well to do Doctors, Lawyers.

Their goals are a combination of gracious living and drive for success.

FYI: There are 2.2MM millionaires in the US (> 1%).

Consumer Behavior Upper Middle

Class: (10%) Moderately successful. Owners of medium sized

businesses, management level executives and young people (25-30) that are “expected” to reach management level.

Goal is career success, tend to reflect that success in home décor, social & cultural participation.

They “want” to be part of the upper classes which is defined by greater net worth.

Consumer Behavior Lower Middle Class:

(30 – 35%). Small business owners & highly paid blue collar workers. Major goal is

“respectability” and being accepted.

Live in neatly furnished well maintained modest homes more or less on the “right side of town.”

Save for college education for their children.

Consumer Behavior Upper Lower Class:

(40%) Semi-skilled production-line workers and retail workers. Goal is enjoying life

and living well day to day.

They strive to be “up with the times,” fashionable with the goal of living more comfortably.

Consumer Behavior Lower – lower Class:

(15-20%) unskilled workers, unassimilated ethnic groups & the sporadically employed. They have only 7-8%

of the total purchasing power.

Apathetic, fatalistic, get their “kicks” while they can.

Consumer Behavior Upper-Upper Class: Consume little, belongings are

inherited. Lower-Upper/Upper Middle: all possessions are

new. Foreign cars, sailboats, prestige through acquisitions. Good schools, “the right” summer camps for the kids, music lessons, etc. Purchase more than any other single group.

Lower Middle: price shopping, tend not to “want to move” social groups so if they have extra money, they buy a better house in the same neighborhood, better clothes, etc.

Lower classes: future is uncertain so they buy heavily on impulse. Like to watch TV and go to the movies, not really “readers.” Credit!

Consumer Behavior Family Life Cycle:

1. Bachelor stage: young single, no children2. Newly married couple: young, no children3. Full Nest 1: young married couple with

youngest child under 64. Full Nest 2: young married couples with

youngest child over the age of 65. Full Nest 3: older married couples with

dependent children6. Empty Nest: older married couples with no

children living with them.7. Solitary Survivors: Older single people.

Consumer Research ACV: All Commodity Volume

A measurement of distribution in relation to sales. gives the total amount of sales in a given category. Example: a brand is said to have an 80% ACV if it is available

for sale in stores which make up 80% of the category sales. If Pantene has a 90% ACV, it means it is available in stores

where 90% of all shampoo products are sold; not 90% of stores.

Consumer Research CDI: Category Development Index

Way of comparing a local or regional sale of a product category vs. national (which is always 100)

Percentage of total sales that occur in each geographic region presented as an index. Example: BBQ sauce may have a 200 CDI in Texas which

means Texans consume twice as much BBQ sauce as the average American.

The higher the CDI, the stronger the category in that particular region. The lower the CDI the weaker the sales in that region.

Consumer Research BDI: Brand Development Index

The comparison of brand sales indexed against total product sales calculated on a geographic or other basis.

Let’s you know how strong your sales are in a particular region vs. average sales in the US (index 100) Example: Pantene is the largest shampoo in the US and has

a 125 BDI in Chicago. This means that Chicago consumers use 25% more Pantene than the average American.

Consumer Research Understanding how ACV, CDI and BDI are actually

used. ACV: marketers generally want a high ACV to guarantee their

product is available in the places where consumers normally buy the category. New product introduction usually require a certain ACV level before they will begin promotional spending (why spend before consumers can find the product to buy?)

CDI: Many product categories are highly regional (e.g. sunscreen) and marketers will want to guarantee they are promoting their products in markets with the best potential.

BDI: Brands can develop regionally as well (e.g. NYC is a Coke town, LA is a Pepsi town). So not only is it important to promote your product in a market with strong category potential, but you then add your own brand potential on top of that.

Consumer Research The Tricky Questions:

Will your product likely be more successful in a city with a CDI of 200 or a city with a CDI of 85?

Should you spend money supporting your brand in a market with a 200 BDI or a market with an 85 BDI?

Where would you rather spend your ad dollars? Columbus, Ohio CDI 200 BDI 50 Indianapolis, IN CDI 50 BDI 200

Consumer Research Mistakes made in

interpreting the data Going overboard

with research. Chrysler “K-Car”

Consumer Research Asking the wrong questions.

New Coke 1985

Consumer Research Believing everything people tell you.

People saying the “right thing.” Following every trend: Healthy Jell-O! Getting the answer you want to hear.

Dissecting the Creative Brief

The most important part of your plan

The Creative before the Creative

Strategy: “What” you plan to accomplish

Execution: “How” you plan to accomplish your strategy.

Purpose of a Creative Brief?

1. To guide the work

1. A Creative brief defines “what” needs to be created; it doe not tell the reader “how” to do it.

2. To inspire great work.

The Creative before the Creative Some good industry thinking

Strategy: a carefully designed plan to murder the competition Any premise lacking a killer instinct is not a strategy Any premise that doesn’t cry a consumer need is not a strategy Any premise that addresses the entire world is not a strategy

O’Toole: three most important things: competition, target audience, what do you want them to know or feel?

DDB Needham’s: What basic human need does your strategy hit (need to be popular, feel attractive, feel wanted, obtain material things, safety, enjoy life, create a happy family situation, etc.

McCann; write the strategy as the target would write the strategy


1. What do we want the advertising to do?

2. Who is our target?

3. What do they currently think?

4. What would we like them to think?

5. What is the single most compelling promise we can make them?

6. How do we make it believable?

7. Is there anything else worth considering that may help us get to great creative work?

8. Are there any executional mandatories?

What do we want the advertising to do?

What is the specific job of the advertising?

Communication Objective: What do you want to accomplish as a result of running this advertising?

This is NOT a list of marketing objectives (e.g. increase sales +15%), or a media objective (e.g. create awareness) but the role advertising should play in helping you reach your marketing objectives.

Relationship Between Marketing, Advertising and Media Objectives

Marketing Objective: generally defined as a sales / success objective

Advertising Objective: the communication objective that will help you to

reach your marketing objective.

Media Objective: That which you must do in paid and unpaid media in order to meet your marketing objective.

Dissecting the Creative Brief Who is our target? What is a woman 18-49?

Describe a single person. Your goal is to have your team say “I know this

person!” Go beyond name and basic demographics /

psychographics help your team understand who she is (or he), how they think, what they think of your category / brand currently, what motivates them, what you believe will make them change their mind, etc.

If your target has specific opinions about the competition, include that insofar as it gives insight to what is needed to change his/her mind.

Dissecting the Creative Brief What do they currently think?

What does the target currently think about the category, the product, the cause being advertised?

What would we like them to think? What do we need them to think in order to do what we want them to

do?

What is the single most compelling promise we can make them? This is a single idea you want your advertising to communicate which

you believe will help your target to change his/her mind about your product and choose it over your competition.

How do we make it believable? A clear, often rational fact which proves your promise to be true.

Creative Brief: example

1. What do we want the advertising to do?

2. Who is our target?

3. What do they currently think?

4. What would we like them to think?

5. What is the single most compelling promise we can make them?

6. How do we make it believable?

7. Is there anything else worth considering that may help us get to great creative work?

8. Are there any executional mandatories?


Types of Claims Generic Superiority: “no one does a better job” Preemptive Claim: not unique, but unclaimed by the

competition: e.g.: Mountain grown coffee. Unique Selling Proposition: true competitive advantage. Brand Image: superiority through image portrayed e.g.

Nieman Marcus Positioning: using your claim as your positioning e.g.

“Engineered like no other car in the world,” “the ultimate driving machine.”

Resonance: attaching your brand to fundamental human experiences (e.g. birthday, patriotism, marriage, love, etc.)


Is there anything else worth considering that may help us get to great creative work? Only if there really is some additional fact, story, item

which will help “inspire” great work.

Are there any executional mandatories? Often used to keep commercials within a certain

“predetermined” campaign. Again, if there are none, leave it blank!


What is a Big Idea? More than a selling proposition, more

than a positioning, becomes a rallying cry for the brand E.g. “Think Different” for Apple, “The

relentless pursuit of perfection” for Lexus, Just do it! for Nike.

What is a Consumer Insight?

More than research, more than observation

the ability to see clearly and intuitively into the nature of a complex person, situation, or subject


James Webb Young’s Technique for Producing Ideas Immersion Digestion Incubation Illumination Reality Testing

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