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MKT3050 – Consumer BehaviorWeek 1 – March 18, 2013

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Objectives

• This week we’ll focus on identifying and analyzing the role and importance of consumer behavior in the marketing process. – We’ll answer the questions:

• What is Consumer Behavior?• Why do we care?

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Consumer Behavior - What is it?

Human Thought

and Action

Human Thought

and Action

Field of Study

Field of Study

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Consumer Behavior

• The formal study began in 1930’s

• An ‘applied’ science• Framework reflects:

– Psychology– Economics– Sociology– Anthropology

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Study of Consumer BehaviorTimeline

• 1750-1850 – Consumers have limited options– Wholesalers and distributors decide what people will have

available to buy• 1850-WWII

– Manufacturers build based on what they can make• Economic concepts of supply / demand applied to

consumer behavior– Product options proliferate

• Manufacturers begin using psychology to influence purchase by drilling benefits into consumers• http://www.youtube.com/watch?v=C_HN_3ulO9M&featur

e=related• http://www.youtube.com/watch?v=Is3icfcbmbs

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Study of Consumer BehaviorTimeline

• Post WWII – 2000– Retailers gain power

• Only carry items that sell – begin to affect manufacturing decisions

– Marketers gain influence • Advertising, media, incentives, promotions increase as

choices expand, retail options explode and manufacturers / retailers chase fewer customers

– More sophisticated research is used to assess motivations, predict behavior and understand emotional connections

– http://www.youtube.com/watch?v=FnPEfND0wIM

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Study of Consumer BehaviorTimeline

• Today– Customer-centric demand chain

• Shoppers determine success and available alternatives based on needs / wants / problems

• Marketers work to understand how consumers make purchase decisions

• And organizations focus resources on serving and delighting profitable customers

• Emerging– Shopper Insights

• Understand the shopping experience including shopper need states, shopping occasions, shopper behavior in-store, drivers behind the purchase decision at the shelf and reaction patterns to particular in-store stimuli

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Consumer Behavior as Human Behavior

• Realized needs• Activities• Address

Consumer behavior is the set of value seeking activities that take place as people go about addressing realized needs.

Consumer behavior is the set of value seeking activities that take place as people go about addressing realized needs.

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Exhibit 1.1The Basic Consumption Process

©ANTOINE ANTONIOL/BLOOMBERG VIA GETTY IMAGES

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Making Decisions

Internal factorsHow you learn

Your perceptionYour memory

How you organize informationAttitudes

Your motivationPersonal values

PersonalityLifestyle

Emotional expressiveness

External factorsYour culture and cultural valuesYour reference groupsPeer influenceSocial classFamily influence

Situation - atmosphere - timing - conditions

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Consumer Behavior – Why do we care?

– Who buys?– Why do they buy?– What attributes (benefits) are they

buying?– Who is my competition?– How can I establish connections with

customers?

Input to business/marketing strategyInput to business/marketing strategy

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Consumer Behavior:Input to Business Strategy

• The extent of use of consumer behavior by an organization depends on the orientation of the firm:

• Undifferentiated product– Production oriented

» Focus is on making the product efficiently with minimal cost

• Differentiated product– Market oriented

» Can make multiple products for multiple segments– Niche market

» Consumer orientation (or production) with single product

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Exhibit 1.4Different Ways of Doing Business

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Consumer Behavior – Why do we care?

– What and how we buy determines the society in which we live.• Make better marketing campaigns• Boost the economic health of companies• Improve the economic health of nations

– When government creates laws to manage the way we buy and consume, consumer behavior is involved.• Affect public policies

Force that shapes societyForce that shapes society

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Consumer Behavior – Why do we care?

– Help consumers make better decisions– Help ourselves make better decisions

• Manage budget / spending• Understand (and limit) emotional purchasing• Know where to get resolution when dissatisfied• Understand (and avoid) negative peer pressure /

societal influences• Consider environmental impact of behaviors

Input to making responsible decisions as a consumerInput to making responsible decisions as a consumer

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Consumer Behavior – How do we study it?There is no ONE right approach

• Inner meanings• Motivations

Interpretive Research

Interpretive Research

Quantitative Research

Quantitative Research

• Large scale studies that are structured

and deliver numerical /

projectable results

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Exhibit 1.5 Comparing Quantitative and Qualitative Research

Source: Zikmund, W.G. and B.J. Babin (2007), Exploring Marketing Research, Thompson South-Western: Mason, Ohio.

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Consumer Behavior – Why is it dynamic?

• Move to a global society demands understanding of many cultures

• Technological changes affect how consumers look for value – and how marketers deliver it

• Changing methods of communication for consumers affects behavior

• Demographics – age, gender, family size, ethnicity, education – continue to change

• As the economy changes, so does consumer behavior

©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

A B C D E

A= Innovators (2.5%) – adventurersB= Early Adopters (13.5%) -- leadersC= Early Majority (34%) -- deliberateD= Late Majority (34%) – skepticalE= Laggards (16%) – fear of debthttp://www.youtube.com/watch?v=6WS-NtVKwDk

How do you respond to new products / services?