INTRO TO CONSUMER INTRO TO CONSUMER BEHAVIORBEHAVIOR

Marketing Marketing ConceptConcept

A consumer-oriented philosophy that suggests that

satisfaction of consumer needs provides the focus for

product development and marketing strategy to enable

the firm to meet its own organizational goals.

Consumer Consumer BehaviorBehavior

The behavior that consumers display in searching for,

purchasing, using, evaluating, and disposing of products, services, and ideas.

Specific Questions

• Acquisition / use / disposal of products, services, time, ideas

– Whether?– What?– Why?– How?– When?– Where?– How much?– How often?

Net Takeaway

• 3 types of decisions– acquisition, usage, disposal

• 8 specific questions – whether, what, why, how, when,

where, how much, how often

• 2 types of explanations– psychological, cultural

“Black Box”

The marketing mix

Competing marketing mixes

Social influences (culture, social class, reference groups & family)

ExchangeNo exchangeMore

information sought

StimuliStimuli ResponsesResponses

Firm’s Marketing Efforts1. Product2. Promotion3. Price4. Channels of distribution

Sociocultural Environment1. Family2. Informal sources3. Other noncommercial

sources4. Social class5. Subculture and culture

Output

Process

Input

Ext

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uen

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onsu

mer

Dec

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akin

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B

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Postpurchase Evaluation

Purchase1. Trial2. Repeat purchase

Need Recognition

Prepurchase Search

Evaluation of Alternatives

Psychological Field1. Motivation2. Perception3. Learning4. Personality5. Attitudes

Experience

Figure 1-1A Simple Model of Consumer Decision Making

Net Takeaway• KEY TERMS

– Consumer behavior– Consumer Research– Deontology– Market segmentation– Marketing concept– Marketing ethics– Organizational consumer– Personal consumer– Societal marketing concept– Teleology

– Utilitarianism

CONSUMER RESERCHCONSUMER RESERCH

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The Research ProcessThe Research Process

STEP1: Defining the Problem and Research ObjectivesSTEP1: Defining the Problem and Research Objectives

STEP 2: Developing the Research PlanSTEP 2: Developing the Research Plan

STEP 3: Implementing the Research PlanSTEP 3: Implementing the Research Plan

STEP 4: Interpreting and Reporting the FindingsSTEP 4: Interpreting and Reporting the Findings

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Marketing Research ProcessStep 1. Defining the Problem & Research Objectives

Marketing Research ProcessStep 1. Defining the Problem & Research Objectives

ExploratoryResearch

ExploratoryResearch

DescriptiveResearch

DescriptiveResearch

CausalResearchCausal

Research•Test hypotheses about cause- and-effect relationships.

•Test hypotheses about cause- and-effect relationships.

Gathers preliminary information that will help define the problem

and suggest hypotheses.

Gathers preliminary information that will help define the problem

and suggest hypotheses.

•Describes such things as market potential for a product or attitudes and demographics of consumers

who buy the product.

•Describes such things as market potential for a product or attitudes and demographics of consumers

who buy the product.

Types & Levels of Information Needed

– preliminary information: identify issues

– problem definition– first stage of descriptive or

causal research

– expand understanding of factors

– describe phenomenon– representative sample

– test cause and effect hypothesis

– experimentation

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Secondary Secondary DataData

Data that has been collected for reasons other than the

specific research project at hand.

13

Primary Primary ResearchResearch

Original research undertaken by individual researchers or

organizations to meet specific objectives.

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2 High Level Research Methods2 High Level Research Methods

1. Quantitative ResearchA. Survey

B. Observation

C. Experimental

2. Qualitative ResearchA. Focus Group

B. Projective

C. In-Depth Interview

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Designing Primary Research

• Quantitative studies more likely for collecting descriptive information.

• Qualitative studies may be used to get new ideas.

Quanti Research

Quanti Research

Quali Research

Quali Research

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Data Collection Methods

Observation

Experimentation

Surveys

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ValidityValidity

The degree to which a measurement instrument

accurately reflects what it is designed to measure.

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ReliabilityReliability

The degree to which a measurement instrument is

consistent in what it measures.

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Attitude Scales

• The three most frequently used scales are: – Likert scales: easy for researchers to prepare

and interpret, and simple for consumers to answer.

– Likert scales ask the respondent to check or write the number corresponding to their level of "agreement" or "disagreement" to statements.

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A Classification of Marketing Research Data

Marketing Research Data

Secondary Data

Primary Data

Qualitative Data

Quantitative Data

Descriptive Experimental

Survey Data Observational & Other Data

Experimental Data

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SEGMENTATION, TARGETING, AND

POSITIONING

Consumer Behavior

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STP Segmentation Targeting & Positioning

Market TargetingMarket Targeting

Market PositioningMarket Positioning

Market Segmentation

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• Size, purchasing power, profiles of segments can be measured.

• Segments can be effectively reached and served.

• Segments are large or profitable enough to serve.

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

ActionableActionable

• Segments must respond differently to different marketing mix elements & programs.• Effective programs can be designed to attract and serve the segments.

Market SegmentationRequirements for Effective Segmentation

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Bases for Segmentation• Geographic Segmentation

• Demographic Segmentation

• Psychological Segmentation

• Psychographic Segmentation

• Sociocultural Segmentation

• Use-Related Segmentation

• Usage-Situation Segmentation

• Benefit Segmentation

• Hybrid Segmentation Approaches

Sequential Segmentation

TotalSample16.5%

Males6.7%

Females24.3%

High Schoolor Less3.8%

More ThanHigh School10.2%

Restof U.S.19.5%

NorthCentral40.3%

Over546.5%

54 andUnder21.4%

Medium &Light Users20.0%

Heavy Users48.7%

28.6%

43.0%

12.8%

44.2 %

55.8%

9.1%

3.7%

34.6%

8.4%

15.6%

Percentages in branches represent size of the segment

Percentages in boxes represent market share

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AIOsAIOs

Psychographic variables that focus on activities, interests, and opinions. Also referred to as Lifestyle.

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The VALS TM 2 Framework

ActualizersActualizers

AchieversAchievers ExperiencersExperiencers

MakersMakers

FulfilledsFulfilleds

BelieversBelievers StriversStrivers

StrugglersStrugglers

High resourcesHigh resources

Low resourcesLow resources

Principle

Principle

StatusStatus

Action

ActionOriented

Oriented

OrOriientedented

Oriented

Oriented

Segmentation StrategiesSegmentation Strategies

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Usage-Situation Segmentation

• Segmenting on the basis of special occasions or situations

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Use-Related Segmentation

• Rate of Usage– Heavy vs. Light

• Awareness Status– Aware vs. Unaware

• Brand Loyalty– Brand Loyal vs. Brand Switchers

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Hybrid Segmentation Approaches

• Psychographic-Demographic Profiles• Geodemographic Segmentation• SRI Consulting’s Values and Lifestyle

System (VALSTM)

Maslow’s Hierarchy of Needs

1

2

4

3

5Self-Actualization

(Self-fulfillment, personal enrichment)

Social Needs(affection, friendship, belonging)

Ego Needs(Prestige, status, self esteem)

Safety and Security Needs(Protection, order, stability)

Physiological Needs(Food, water, air, shelter, sex)

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Toothpaste: Example of Market Segments

Life-styleCharacteristics

SegmentName

Price

The SensorySegment

TheSociables

TheWorriers

The IndependentSegment

Men

Heavy users

Brands on sale

High autonomy

Value oriented

Decayprevention

Largefamilies

Heavy users

Crest

High hypo-chondriasis

Conservative

Brightnessof teeth

Teens, youngpeople

Smokers

Macleans, PlusWhite, Ultra Brite

Highsociability

Active

Flavor, productappearance

Children

Users of spearmint flavored toothpaste

Colgate, Stripe

High self-involvement

Hedonistic

PrincipalBenefitSought

DemographicStrengths

Special BehaviorCharacteristics

Brands disprop-ortionately Favored

PersonalityCharacteristics

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Determining the

SEGMENT DIMENSIONS

is not

EASY

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All Potential Dimensions

Qualifying Dimensions

DeterminingDimensions(product type)

DeterminingDimensions(brand type)

Snack Food Market

Health = nutrition

Dieters = calories

Families = fill up

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THINGS TO REMEMBER ABOUT SEGMENTATION

• Segments must exist in the marketplace

• More than one segmentation pattern may exist

• Segments can shift over time

• Targeting one or more segments is more profitable than targeting the entire market

• Segmentation is at the core of a successful marketing strategy

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Step 2. Market TargetingEvaluating Market Segments

• Segment Size and Growth

– Analyze current sales, growth rates and expected profitability for various segments.

• Segment Structural Attractiveness

– Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers.

• Company Objectives and Resources

– Company skills & resources needed to succeed in that segment(s).

– Look for Competitive Advantages.

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TARGETING STRATEGIES

• Undifferentiated marketing

• Differentiated marketing

• Concentrated marketing

• + Countersegmentation

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Marketing Differentiation Strategy

AA Undifferentiated Marketing

BB Concentrated Marketing

CC Differentiated Marketing

Company Marketing MixCompany Marketing Mix All Market

Target Segment 1Target Segment 2Target Segment 3

Target Segment 1Target Segment 2Target Segment 3

Company Marketing MixCompany Marketing Mix

Company Marketing Mix 1Company Marketing Mix 1Company Marketing Mix 2Company Marketing Mix 2Company Marketing Mix 3Company Marketing Mix 3

Marketing strategiesMarketing strategies

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Counter Counter segmentation segmentation StrategyStrategy

A strategy in which a company combines two or more segments into a single segment to be targeted with an individually tailored product or promotion campaign.

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Company ResourcesCompany Resources

Product VariabilityProduct Variability

Product’s Stage in the Life CycleProduct’s Stage in the Life Cycle

Market VariabilityMarket Variability

Competitor’s Marketing StrategiesCompetitor’s Marketing Strategies

Step 2. Market TargetingChoosing a Market-Coverage Strategy

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STEP 3: POSITIONING

Market Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. i.e. Chevy Blazer is “like a rock.”

• Part of the marketing strategy which allows to give the product/service its own identity

• Positioning is a competitive tool• Positioning can be operated at the physical level or at the perceptual

level• A strong position in buyers’ minds gives the product a competitive

advantage

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Step 3. Choosing a Positioning Strategy

Step 1. Identifying Possible Competitive Advantages

Step 2. Selecting the Right Competitive Advantage

Step 3. Communicating and Delivering the Chosen Position

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Step 3. Choosing a Positioning Strategy

• Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.

• Marketers must:– Plan positions to give their products the greatest

advantage in selected target markets,– Design marketing mixes to create these planned

positions.

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Examples of Perceptions

• Coca-Cola = cool, all-American, and real

• Pepsi = young, exciting, and hip

• Dr Pepper = nonconforming, unique, and fun

•  

•  

• Virginia Slims = feminine

• Marlboro = masculine

• Apple = young

• IBM = older

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Identifying Possible Competitive Advantages

• Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value.

• Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage,

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ServicesDifferentiationi.e. Delivery, Installation, Repair Services, Customer Training Services

Product Differentiationi.e. Features, Performance, Style & Design, or Attributes

ImageDifferentiationi.e. Symbols, Atmospheres, Events

Personnel Differentiationi.e. Hiring, Training Better People Than Competitors Do

Identifying Possible Competitive Advantages

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CriteriaFor DeterminingWhich CompetitiveAdvantage

AffordableAffordable SuperiorSuperior

ProfitableProfitable

PreemptivePreemptive

DistinctiveDistinctive

ImportantImportant

CommunicableCommunicable

Choosing the Right CompetitiveAdvantages

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Selecting an Overall Positioning StrategyRalphs: “Pay less for Higher Standards”

MoreforMore

Morefor thesame

More forLess

The samefor less

Less formuchless

Price

More The same LessMore

The Same

Less

Ben

efi

ts

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RepositioningRepositioning

Changing the way a product is perceived by consumers in relation to other brands or product uses.

GTE

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PERCEPTUAL MAPS

• Indicate where a product stands in buyers’ minds relative to its direct and indirect competitors

• Horizontal and vertical axes are perceived relevant dimensions of the product category

• Distances between two brands are perceived competitive distances

• Ideal tool for positioning strategies

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Perceptual Map

Lincoln

Cadillac

Mercedes

Chrysler

Buick

Oldsmobile

Ford

Dodge

PlymouthVW

Toyota

Datsun

Pontiac

Porsche

BMW

#1#1

#4#4

#2#2

Chevrolet

#3#3

#5#5

Has a touch of class * A car I’d be proud to own * Distinctive lookingHas a touch of class * A car I’d be proud to own * Distinctive looking

Very practical * Gives good gas mileage * AffordableVery practical * Gives good gas mileage * Affordable

Con

serv

ati

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Con

serv

ati

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looki n

glo

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pp

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to

Ap

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to

old

er

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er

peop

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Sp

irit

ed

S

pir

ited

p

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perf

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Sp

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Sp

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y look

Fu

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Fu

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Ap

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to

Ap

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to

you

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you

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Marketing strategiesMarketing strategies

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POSITIONING STRATEGIES

• Move brand closer to ideal point

• Move ideal point closer to brand

• Change relevance of dimensions

• Introduce a new brand close to ideal point

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Steps in Market Segmentation, Targeting, and Positioning

Market Segmentation1. Identify bases for segmenting the market2. Develop segment profiles

Market Targeting3. Develop measure of segment attractiveness4. Select target segments

Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment

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Review of Concept Connections

• List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets.

• Explain how companies identify attractive market segments and choose a market-coverage strategy.

• Define the three steps of target marketing: market segmentation, market targeting, and market positioning.

• Discuss how companies can position their products for maximum competitive advantage in the marketplace.

Chapter 4

Consumer Motivation

RationalVersus Emotional Motives

• Some consumer behaviorists distinguish between so-called rational motives and emotional motives.

• Traditional economic sense, which assumes that consumers behave rationally when they carefully consider all alternatives and choose those that give them the greatest utility.

• In a marketing context, the term rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price, or miles per gallon.

RationalVersus Emotional Motives

• Emotional motives imply the selection of goals according to personal or subjective criteria (e.g., pride, fear, affection, status.)

• The assumption underlying this distinction is that subjective or emotional criteria do not maximize utility or satisfaction.

RationalVersus Emotional Motives

• Positivist research– Rationally motivated– Isolate the causes– Can predict, and thus influence, future behavior

• Interpretivists– hedonistic pleasures– consumption behaviors such as fun, fantasy sensuality

– Understanding behaviors in various circumstances.

Need RecognitionNeed Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

Purchase DecisionPurchase Decision

Postpurchase BehaviorPostpurchase Behavior

The Buyer Decision ProcessThe Buyer Decision Process

Arousal of Motives

• Physiological arousal– Bodily needs are rooted in an individual's

physiological condition at that moment– Most physiological cues are involuntary

• Emotional arousal– Thinking or daydreaming results

in the arousal or stimulation of latent needs

Arousal of Motives

• Cognitive arousal• Personal achievement can lead to

a cognitive awareness of needs

• Environmental arousal– Set of needs may be activated by specific cues in

the environment– People living in a complex and highly varied

environment may have more opportunities for need arousal

Philosophies Concerned With Arousal of

Motives• Behaviorist School

– Behavior is response to stimulus– Elements of conscious thoughts are to be ignored– Consumer does not act, but react

• Cognitive School– Behavior is directed at goal achievement– Need to consider needs, attitudes, beliefs, past

experiences, etc. in understanding consumer behavior

++Positive Positive MotivationMotivation

A driving force toward some object or condition.

--Negative Negative MotivationMotivation

A driving force away from some object or condition.

Substitute Substitute GoalGoal

A goal that replaces an individual’s primary goal when the goal cannot be achieved or acquired.

• Although the substitute goal may not be as satisfactory as the primary goal, it may be sufficient to dispel uncomfortable tension.

Defense Defense MechanismMechanism

Methods by which people mentally redefine frustrating situations to protect their self-images and their self-esteem.

Motivational Motivational ResearchResearch

Qualitative research designed to uncover consumers’ subconscious or hidden motivations. The basic premise of motivational research is that consumers are not always aware of, or may not wish to renewal, the basic reasons underlying their actions.

Chapter 5

Personality and Consumer Behavior

What is What is Personality?Personality?

The inner psychological characteristics that both determine and reflect how a person responds to his or her environment.

The Nature of Personality

• Personality reflects individual differences• Personality is consistent and enduring• Personality can change

Theories of Personality

• Freudian theory– Unconscious needs or drives are at the heart of

human motivation

• Neo-Freudian personality theory– Social relationships are fundamental to the

formation and development of personality

• Trait theory– Quantitative approach to personality as a set of

psychological traits (sort of scales)

FreudianFreudianPsychoanalytic Psychoanalytic TheoryTheory

A theory of motivation and personality that postulates that unconscious needs and drives, particularly sexual and other biological drives, are the basis of human motivation and personality.

Neo-Freudian Neo-Freudian Personality Personality TheoryTheory

A school of psychology that stresses the fundamental role of social relationships in the formation and development of personality.

Trait TheoryTrait Theory

A theory of personality that focuses on the measurement of specific psychological characteristics.

Horney’s CAD Theory

• Using the context of child-parent relationships, individuals can be classified into:

– Compliant individuals• moves toward others e.g., one who desires to be loved,

wanted, and appreciated by others

– Aggressive individuals• moves against others (e.g., competes with others).

– Detached individuals• moves away from others (e.g., who desires independence,

self-sufficiency, and freedom from obligations).

Personality and Consumer Diversity

• Some specific consumer traits are of particular interest to marketers:– Consumer Innovativeness– Cognitive Personality Factors– Consumer Materialism, Fixated

Consumption Behavior, and Compulsive Consumption

– Consumer Ethnocentrism

Inner-Inner-Directed Directed ConsumersConsumers

Consumers who tend to rely on their own “inner” values or standards in evaluating new products and are likely to be consumer innovators.

Outer-Outer-Directed Directed ConsumersConsumers

Consumers who tend to look to others for direction on what is “right” and “wrong.” They are less likely to be consumer innovators.

Optimum Optimum Stimulation Stimulation Levels (OSL)Levels (OSL)

A personality trait that measures the level or amount of novelty or complexity that individuals seek in their personal experiences. High OSL consumers tend to accept risky and novel products more readily than low OSL consumers.

Variety-Variety-Novelty Novelty SeekingSeeking

A personality trait similar to OSL, which measures a consumer’s degree to variety seeking

VisualizersVisualizers

Consumers who prefer visual information and products that stress the visual, such as membership in a videotape cassette club.

VerbalizersVerbalizers

Consumers who prefer verbal or written information and products, such as membership in book clubs or audiotape clubs

Consumer Consumer MaterialismMaterialism

A personality-like trait of individuals who regard possessions as particularly essential to their identities and lives.

• The emotional connection between consumers' self-images and their possessions is explained by the concept of the extended self.

Compulsive Compulsive ConsumptionConsumption

Consumers who are compulsive buyers have an addiction; in some respects, they are out of control and their actions may have damaging consequences to them and to those around them.

Consumer Consumer EthnocentrismEthnocentrism

A consumer’s predisposition to accept or reject foreign-made products.

Brand Brand PersonificationPersonification

Specific “personality-type” traits or characteristics ascribed by consumers to different brands.

A Brand Personality Framework

Brand Personality

RuggednessSophisticationCompetenceExcitementSincerity

•Down-to-earth

•Honest•Wholesome•Cheerful

•Daring•Spirited•Imaginative•Up-to-date

•Reliable•Intelligent•Successful

•Upper class•Charming

•Outdoorsy•Tough

RoleRole

A pattern of behavior expected of an individual in a specific social position, such as mother, daughter, teacher, lawyer. One person may have a number of different roles, each of which is relevant in the context of a specific social situation.

Extended SelfExtended Self

Modification or changing of the self by which consumers use self-altering products or services to conform to or take on the appearance of a particular types of person (e.g., a biker, a physician, a lawyer, a college professor).

QUIZ 1

MKT 348 CB

Training

Dr. Franck Vigneron

Q1: Individuals high in the need for cognition would respond to ads that:

A. used celebrity endorsers.B. used color and graphics to grab consumer

attention.C. were heavy in product content and description.D. used images, cartoons, and clip art to explain

the product. Q2: A primary advantage of differentiated

marketing is that it costs less than mass marketing. A. TRUE B. FALSE

Q3: Despite the drawbacks, some see motivational research:

A. valuable because the unconscious mind has a bigger part in our decisions than was earlier thought.

B. as empirically verifiable once the proper quantitative techniques are developed.

C. as consistent with biogenic needs and motivations.

D. as the future of market research as traditional methods become less effective.

 

 

Q4: The semantic differential scale:

A. asks a respondent how strongly he/she agrees or disagrees with a series of statements.

B. asks for a consumer to compare a particular brand against the "ideal" brand.

C. consists of a series of bipolar adjectives at each end of an odd numbered continuum.

D. involves choosing which of a pair of choices (e.g., two brands) a consumer prefers.

Q5: The _____ believes that all consumer behavior is goal oriented.A. affective schoolB. behaviorist schoolC. cognitive schoolD. psychoanalytic school  Q6: An individual's self-image:A. has no impact on the selection and achievement of goals.B. only affects higher order needs, ego and self-actualization.C. directs the individual to choose goals congruent with that image. D. determines what are his/her biogenic needs.

Q7: Needs and goals constantly change because:

A. once fully satisfied new needs must be selected.

B. the surrounding environment remains stable.

C. new needs emerge from the satisfaction of old needs.

D. all of the these.

 

 

Q8: For Maslow _____ needs are lower-level needs.

A. egoistic B. psychogenic

C. inanimate object D. biogenic

 

 

Q9: Psychologists consider psychogenic needs as acquired needs and secondary. A. TRUE B. FALSE

Q10: To reach inner-directed consumers, ads should:

A. feature social acceptance.

B. demonstrate an improvement of life or the environment.

C. stress features and personal benefits.

D. be conceptual in nature.

 

Q11: Some products or services, by their very nature, appeal to consumers who are bored with their everyday life existence and seek something novel or exciting. Research suggests that there is a link between consumer behaviors such as willingness to take risks, try new products, be innovative, seek purchase-related information, and accept new retail facilities, and:

A. high optimum stimulation levels. B. high inner-directedness.

C. low optimum stimulation levels. D. low inner-directedness.

Q12: The largest drawback of motivational research is:A. it does not allow to test new ideas B. about generalizing findings to the total marketC. it limits the research scope D. it does not explain the cues of decisions making. 

Q13: Interpretivists would be interested in:A. consumer response to promotions.B. predicting consumer behavior.C. generalizing their research to specific target markets.D. the meanings consumers place on key symbols in an ad. 

Q14: The emotional connection between consumers' self-images and their possessions is explained by the concept of the:

A. extended self. B. social self-image.C. ideal self-image. D. expected self-image.