Consumer Behavior


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Consumer Behavior

  1. 1. MAR 4333-521 Promotion Management Fall 2003— Sarasota September 20, 2003 Perspectives of Consumer Behavior Rich Gonzalez University of South Florida
  2. 2. URLs (used today) <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>
  3. 3. September 20, 2003--Agenda <ul><li>Quiz # 2 </li></ul><ul><li>Consumer Behavior </li></ul><ul><li>For September 27 </li></ul>
  4. 4. For Today: September 20 <ul><li>Chapter 4- Perspectives on Consumer Behavior </li></ul><ul><li>“ Diageo Effort to Revamp Smirnoff Reflects 'Superpremium' Successes,”Deborah Ball, WSJ, September 5, 2003 </li></ul>
  5. 5. For September 27 <ul><li>Chapter 5- The Communications Process </li></ul><ul><li>“RIAA Takes Off Gloves In Mounting Its Fight Against Music Thieves ,”Lee Gomes, WSJ, September 15, 2003 </li></ul>
  6. 6. Last Time <ul><li>National Assoc. Realtors—Benefits, Consistency </li></ul><ul><li>Gateway--Inconsistency </li></ul><ul><li>Examples of IMC In Ads—New Balance—”Fit” </li></ul><ul><li>Example of Broad Objective—Ford </li></ul><ul><li>Advertising & Media Biz Structure </li></ul>
  7. 7. Marketing Communication Requirements <ul><li>1. Clearly Positioned </li></ul><ul><li>2. Directed to a Target Market </li></ul><ul><li>3. Created to Achieve Objective </li></ul><ul><li>4. Accomplishes Objective Within Budget Constraint </li></ul>Shimp 2003
  8. 8. Ford Brands <ul><li>Jaguar </li></ul><ul><li>Ford </li></ul><ul><li>Lincoln </li></ul><ul><li>Mercury </li></ul><ul><li>Mazda </li></ul><ul><li>Volvo </li></ul><ul><li>Aston-Martin </li></ul>
  9. 9. Gateway <ul><li>9/09/03-- Gateway Inc. …eliminating about 850 jobs … at the Sioux Falls, S.D., plant and an additional 100 workers will be laid off from North Sioux City, S.D. …in Kansas City, Kan. </li></ul><ul><li>In addition to those 850 … will close its Hampton, Va., plant and lay off 450 … …save the company as much as $130 million a year… </li></ul><ul><li>… cumulative losses of $1.73 billion since the fourth quarter of 2000. </li></ul>
  10. 10. Diageo <ul><li>Biggest Vodka Brand? </li></ul><ul><li>What Does James Bond Drink? </li></ul><ul><li>32% Market Share 6.8 Million Cases (2002) Up 8% in Volume #2 Competitor Behind By 2 Million Cases </li></ul><ul><li>Worldwide Market Leader Since 1970s </li></ul>
  11. 11. Diageo Assignment <ul><li>Why is Smirnoff in trouble? </li></ul><ul><li>What is Diageo doing about it? List some promotional activities </li></ul><ul><li>Your opinion on efficacy </li></ul><ul><li>We’ll open the class on 9/20 discussing this. </li></ul>
  12. 12. Diageo--Smirnoff <ul><li>Smirnoff is in trouble because: </li></ul><ul><li>Share is down to 32% (-36%) </li></ul><ul><li>Superpremiums: BIG Success </li></ul><ul><li>Marketing Wasn’t Effective Enough </li></ul><ul><li>James Bond Dropped Them </li></ul><ul><li>Relied On “Older” Customers Didn’t Get Younger Ones </li></ul>Class Discussion
  13. 13. Competitors?
  14. 14. Diageo--Smirnoff <ul><li>Diageo is doing: </li></ul><ul><li>Parties with bartenders, salespeople, waitstaff </li></ul><ul><li>Teaching specialty drinks </li></ul><ul><li>Pitching “Neat” </li></ul><ul><li>Changing Packaging </li></ul><ul><li>New Commercials (J.Walter Thompson) </li></ul><ul><li>Sponsoring Music Events </li></ul><ul><li>Contest Forcing Participation/Consumption </li></ul>Class Discussion
  15. 15. Diageo--Smirnoff <ul><li>Diageo will (will not) be effective: </li></ul><ul><li>Courting bartenders is a smart move </li></ul><ul><li>Changing Package Is Risky </li></ul><ul><li>Diageo Knows They Need to Change Marketing </li></ul><ul><li>If commercials use “real people,” will be effective </li></ul><ul><li>Must innovate to offset the long term trend toward less per capita consump. </li></ul>Class Discussion
  16. 16. Quiz 2 Q1 <ul><li>1. The consumer decision process, consisting of several stages, begins with the problem recognition stage, then: </li></ul><ul><li>A) terminates if the interpersonal determinants do not last. </li></ul><ul><li>B) continues on to search and evaluation of alternatives stages. </li></ul><ul><li>C) frequently gets cut short due to consumer attitudes. </li></ul><ul><li>D) the next stage is purchase. </li></ul><ul><li>E) proceeds to the search stage, then immediately to purchase. </li></ul>B: Chap 4 105
  17. 17. Quiz 2 Q2 <ul><li>2. Attitudes are learned predispositions to respond to an object. Consumer attitudes are important to marketers because they represent positive or negative feelings ________ </li></ul><ul><li>A) and desires. </li></ul><ul><li>B) and discretionary income. </li></ul><ul><li>C) and neutrality. </li></ul><ul><li>D) which cannot be changed. </li></ul><ul><li>E) and behavioral tendencies.   </li></ul>E: Chap 4 p 117
  18. 18. Quiz 2 Q3 <ul><li>3. When consumers engage in information search, they often start with </li></ul><ul><li>A) external search. </li></ul><ul><li>B) sensation search. </li></ul><ul><li>C) TV commercials. </li></ul><ul><li>D) internal search. </li></ul><ul><li>E) cognitive dissonance. </li></ul>D: Chap 4 p 112
  19. 19. Quiz 2 Q4 <ul><li>4. A(n) _____________ is a group whose perspectives or values are being used by an individual as the basis for his or her judgments, opinions, and actions . </li></ul><ul><li>A) decision team </li></ul><ul><li>B) reference group </li></ul><ul><li>C) purchasing agent </li></ul><ul><li>D) lead example </li></ul><ul><li>E) income group </li></ul>B: Ch 4 p 129
  20. 20. Quiz 2 Q5 <ul><li>5. The various brands identified as purchase options to be considered </li></ul><ul><li>during the alternative evaluation process is the consumer’s __________ </li></ul>Evoked Set Ch. 4, P116
  21. 21. Brand Equity <ul><li>Awareness </li></ul><ul><li>Loyalty </li></ul><ul><li>Quality </li></ul><ul><li>Associations </li></ul>
  22. 22. Promotional Mix <ul><li>Advertising </li></ul><ul><li>Direct Marketing </li></ul><ul><li>Interactive/Internet Marketing </li></ul><ul><li>Sales Promotion </li></ul><ul><li>Public Relations </li></ul><ul><li>Personal Selling </li></ul>
  23. 23. Consumer Behavior <ul><li>The process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and wants. </li></ul>
  24. 24. It Would Be Logical <ul><li>Are consumers and buyers like Mr. Spock? </li></ul>
  25. 25. The Consumer Decision Process Problem Recognition Information Search Alternative Evaluation Purchase Decision Postpurchase Evaluation
  26. 26. An Integrated Model of the Consumer Decision Process Problem Recognition Search Alternative Evaluation Purchase Purchase Evaluation Purchase Act <ul><li>Interpersonal Determinants </li></ul><ul><li>Cultural Influences </li></ul><ul><li>Social Influences </li></ul><ul><li>Family Influences </li></ul><ul><li>Personal Determinants </li></ul><ul><li>Needs and Motives </li></ul><ul><li>Perception </li></ul><ul><li>Attitudes </li></ul><ul><li>Learning </li></ul><ul><li>Self-Concept </li></ul>Feedback
  27. 27. Consumer Decision Process and Relevant Internal Psychological Processes Problem Recognition Information Search Alternative Evaluation Purchase Decision Postpurchase Evaluation Motivation Perception Attitude Formation Integration Learning Decision Process Stages Psychological Processes
  28. 28. Sources of Problem Recognition <ul><li>Out of stock </li></ul><ul><li>Dissatisfaction </li></ul><ul><li>New needs or wants </li></ul><ul><li>Related product purchase </li></ul><ul><li>Market-induced recognition </li></ul><ul><li>New products </li></ul>
  29. 29. Floppy Disk <ul><li>Benefits </li></ul><ul><li>Costs </li></ul><ul><li>Deficiencies </li></ul>
  30. 30. New Product <ul><li>Flash Drive (Thumb Drive) </li></ul><ul><li> </li></ul>
  31. 31. Maslow’s Hierarchy of Needs Physiological needs (hunger, thirst) Safety needs (security, protection) Social needs (sense of belonging, love) Esteem needs (self-esteem, recognition, status) Self-actualization needs (self-development, realization)
  32. 32. Pampers appeals to needs for love and belonging in this ad
  33. 33. Las Vegas Convention & Visitor’s Bureau <ul><li>View 4 Commercials </li></ul><ul><li>What is the Objective? </li></ul><ul><li>Good Taste or Bad Taste? </li></ul>
  34. 34. Las Vegas Convention & Visitor’s Bureau <ul><li>Objective(s) </li></ul><ul><li>Go to Vegas </li></ul><ul><li>Go to Vegas and be BAD </li></ul><ul><li>Lose your inhibitions </li></ul><ul><li>Message: You won’t pay for your actions </li></ul>Class Discussion
  35. 35. Las Vegas Convention & Visitor’s Bureau <ul><li>Comments </li></ul><ul><li>Might offend some people </li></ul><ul><li>A little risque </li></ul><ul><li>Inconsistent with family positioning </li></ul><ul><li>No mention of gambling </li></ul><ul><li>YOUR mental image of what it is that “stays here” </li></ul>Class Discussion
  36. 36. Probing the Minds of Consumers Psychoanalytic Theory & Motivation Research <ul><li>In-Depth Interviews </li></ul><ul><ul><li>The consumer talks freely in an unstructured interview to obtain insights into his or her motives, ideas or opinions. </li></ul></ul><ul><li>Projective Techniques </li></ul><ul><ul><li>Methods allowing consumers to project values, motives, attitudes or needs on some external object. </li></ul></ul><ul><li>Association Tests </li></ul><ul><ul><li>Consumers respond with the first thing that comes to mind when presented with some verbal or pictorial stimulus. </li></ul></ul><ul><li>Focus Groups </li></ul><ul><ul><li>A group of consumers with similar backgrounds or interests discuss a product, idea or issue. </li></ul></ul>
  37. 37. Information Search <ul><li>Internal Search – information stored in memory </li></ul><ul><li>External Search – actively seeking information </li></ul><ul><li>from various sources </li></ul><ul><li>Personal sources </li></ul><ul><ul><li>Friends, relatives, co-workers </li></ul></ul><ul><li>Market-controlled sources </li></ul><ul><ul><li>Ads, salespeople, in-store displays </li></ul></ul><ul><li>Public sources </li></ul><ul><ul><li>Print articles, news reports </li></ul></ul><ul><li>Personal experience </li></ul><ul><ul><li>Handling, examining, testing, using </li></ul></ul>
  38. 38. Perception <ul><li>Stages in the perception process: </li></ul><ul><li>Sensation </li></ul><ul><li>Attending to information </li></ul><ul><li>Interpreting information </li></ul><ul><li>Responding to information </li></ul>The process by which an individual receives, selects, organizes and interprets information
  39. 39. The Selective Perception Process Selective Retention Selective Comprehension Selective Attention Selective Exposure
  40. 40. Evaluation of Alternatives Brand B Brand E Brand I Brand M Brand F All available brands Brand A Brand B Brand C Brand D Brand E Brand F Brand G Brand H Brand I Brand J Brand K Brand L Brand M Brand N Brand O Evoked Set of Brands
  41. 41. Toothpaste <ul><li>Crest </li></ul><ul><li>Colgate </li></ul><ul><li>Aim </li></ul><ul><li>Pepsodent </li></ul><ul><li>Mentadent </li></ul><ul><li>Close-Up </li></ul><ul><li>Aquafresh </li></ul><ul><li>Rembrandt </li></ul><ul><li>Sensodyne </li></ul><ul><li>Arm & Hammer </li></ul><ul><li>UltraBrite </li></ul>
  42. 42. Evaluative Criteria <ul><li>Criteria - Dimensions or attributes of a product or service used to compare various alternatives </li></ul><ul><ul><li>Objective criteria - price, warranty, color, size </li></ul></ul><ul><ul><li>Subjective criteria - style, appearance, image </li></ul></ul><ul><ul><li>Consequences – outcomes that result from using a product or service </li></ul></ul><ul><li>Functional consequences – concrete and tangible </li></ul><ul><li>Pyschosocial consequences – abstract, intangible </li></ul>
  43. 43. This ad focuses on the favorable consequences of using Top Flite golf balls
  44. 44. Consumer Attitudes <ul><li>Learned predispositions to respond toward an object—an individual’s overall feelings toward or evaluation of an object. </li></ul><ul><li>Consumers may hold attitudes toward: </li></ul><ul><li>Individuals </li></ul><ul><li>Brands </li></ul><ul><li>Companies </li></ul><ul><li>Organizations </li></ul><ul><li>Product categories </li></ul><ul><li>Retailers </li></ul><ul><li>Advertisements </li></ul><ul><li>Media </li></ul>
  45. 45. Multiattribute Attitude Model <ul><li>Attitudes are a function of : </li></ul><ul><li>A = Σ B i X E i </li></ul><ul><li>A = Attitude </li></ul><ul><li>B i = Beliefs about brands performance on attribute i </li></ul><ul><li>E i = Importance attached to attribute i </li></ul><ul><li>N = Number of salient attributes considered by consumer </li></ul>
  46. 46. Ways to Influence or Change Attitudes <ul><li>Increase or change the strength or belief rating of a brand on an important attribute </li></ul><ul><li>Change consumers’ perceptions of the importance or value of an attribute </li></ul><ul><li>Add a new attribute to the attitude formation process </li></ul><ul><li>Change perceptions of belief ratings for a competing brand </li></ul>
  47. 47. Integration Processes and Decision Rules <ul><li>Types of decision rules: </li></ul><ul><li>Heuristics – simple rule of thumb rules that are easy to use and apply </li></ul><ul><ul><li>Buy least expensive brand </li></ul></ul><ul><ul><li>Buy brand on sale or for which I have a coupon </li></ul></ul><ul><li>Affect referral rule – make decision on basis of overall affective impression or feelings about the brand </li></ul><ul><li>Compensatory rules – evaluate the strengths and weaknesses of each brand </li></ul>Integration processes are the way product knowledge, meaning, and beliefs are combined to evaluate alternatives
  48. 48. Market leaders such as Budweiser appeal to consumer affect in their advertising
  49. 49. St. Elizabeth Health Center <ul><li>Objective: Increase Preference Reach Consumer On Emotional Level </li></ul><ul><li>View 2 Commercials </li></ul><ul><li>1. Heart Surgery--Rational </li></ul><ul><li>2. Traumatic Potential—Emotional </li></ul>
  50. 50. St. Elizabeth Health Center <ul><li>Consistent? </li></ul><ul><li>Contrast? </li></ul><ul><li>Effective? </li></ul>Class Discussion
  51. 51. Consumer Learning Processes <ul><li>Cognitive Learning </li></ul><ul><ul><li>Consumers learn through information processing and problem solving </li></ul></ul><ul><li>Behavioral Learning </li></ul><ul><ul><li>Learning via association (classical conditioning) </li></ul></ul><ul><ul><li>Learning via reinforcement (instrumental cond.) </li></ul></ul><ul><li>Modeling Processes </li></ul><ul><ul><li>Based on observation of outcomes and consequences experienced by others </li></ul></ul>
  52. 52. Cognitive Learning Process Goal Goal achievement Insight Purposive behavior
  53. 53. Classical Conditioning Process Association develops through contiguity and repetition Unconditioned stimulus (waterfall) Conditioned stimulus (Brita water filtration pitcher) Unconditioned response (freshness, purity) Conditioned response (freshness, purity)
  54. 54. This Brita ad uses classical conditioning
  55. 55. Instrumental Conditioning Process Behavior (consumer uses product or service) Increase or decrease in probability of repeat behavior (purchase) Positive or negative consequences occur (reward or punishment)
  56. 56. External Influences Subculture Culture Social class Reference groups Situations
  57. 57. The Hispanic subculture is a very important market in many parts of the U.S.
  58. 58. Variations in Consumer Decision Making <ul><li>Types of Decision Processes: </li></ul><ul><li>Extended Problem Solving </li></ul><ul><li>Limited Problem Solving </li></ul><ul><li>Routine Response Behavior </li></ul>
  59. 59. Cholesterol-Free Half & Half <ul><li>Objective: Introduce New Product </li></ul><ul><li>View 2 Commercials </li></ul><ul><li>1. Rational Appeal </li></ul><ul><li>2. Emotional Appeal </li></ul>
  60. 60. Cholesterol-Free Half & Half <ul><li>Do customers consider cholesterol content in food product purchase decisions? </li></ul><ul><li>Effective? </li></ul>Class Discussion
  61. 61. End