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  1. 1. Starbucks <ul><li>Why are consumers willing to pay $2.00 for a cup of coffee? </li></ul><ul><li>Who are Starbucks’ target markets? </li></ul><ul><li>What is the marketing </li></ul><ul><li>communication message </li></ul><ul><li>Starbucks wants to convey? </li></ul><ul><li>Why has Starbucks </li></ul><ul><li>been successful? </li></ul>3- Discussion Slide
  2. 2. Chapter Overview <ul><li>Consumer purchase process </li></ul><ul><li>Consumer buying environment </li></ul><ul><li>Traditional factors affecting consumer buying </li></ul><ul><li>Recent trends in consumer behavior </li></ul><ul><li>Perception and its marketing implications </li></ul>3- Discussion Slide Analyzing Consumer Markets and Segmentation/Targeting/Positioning
  3. 3. 3-
  4. 4. Information Search <ul><li>Internal search </li></ul><ul><li>Evoked set </li></ul><ul><li>External search </li></ul>3-
  5. 5. External Search <ul><li>Ability to search </li></ul><ul><li>Motivation </li></ul><ul><ul><li>Level of involvement </li></ul></ul><ul><ul><li>Need for cognition </li></ul></ul><ul><ul><li>Shopping enthusiasm </li></ul></ul><ul><li>Perceived cost </li></ul><ul><li>Perceived benefit </li></ul>3-
  6. 6. Attitude <ul><li>Affective </li></ul><ul><li>Cognitive </li></ul><ul><li>Conative </li></ul>3-
  7. 7. Attitude Sequence <ul><li>Cognitive  Affective  Conative </li></ul><ul><li>Affective  Conative  Cognitive </li></ul><ul><li>Conative  Cognitive  Affective </li></ul>3-
  8. 8. 3- What emotion does this Pamper Wipes advertisement solicit? Which attitude sequence would be the most likely for this product? “ Some things can be rough.” “ Her wipe shouldn’t be one of them.”
  9. 9. Personal Values <ul><li>Comfortable life </li></ul><ul><li>Equality </li></ul><ul><li>Excitement </li></ul><ul><li>Freedom </li></ul><ul><li>Fun, exciting life </li></ul><ul><li>Happiness </li></ul><ul><li>Inner peace </li></ul><ul><li>Mature love </li></ul><ul><li>Personal accomplishment </li></ul><ul><li>Pleasure </li></ul><ul><li>Security </li></ul><ul><li>Self-fulfillment </li></ul><ul><li>Social acceptance </li></ul>3-
  10. 10. 3- Which personal values does this Aetna ad target?
  11. 11. Information Processing <ul><li>Elaboration Likelihood Model (ELM): People take time to consider messages to make rational decisions. </li></ul><ul><ul><li>Central route: Giving high degree of attention to core elements. “We do chicken right!”. </li></ul></ul><ul><ul><li>Peripheral route: Giving less attention on core elements, but high attention on other cues such as music and background pictures. </li></ul></ul><ul><li>Hedonic, Experiential Model (HEM): The tendency to maximize pleasure while minimizing pain. Paying attention to elements of the message related to emotions and feelings that maximize pleasure. </li></ul><ul><ul><li>Central route: “Malaysia, truly Asia” </li></ul></ul><ul><ul><li>Peripheral route: Pictures at the background and music. </li></ul></ul><ul><li>Route depends on </li></ul><ul><ul><li>Motivation: Importance of product and cost. </li></ul></ul><ul><ul><li>Ability: Desire to use cognitive skills. </li></ul></ul>3-
  12. 12. 3-
  13. 13. Principles concerning processing of information and cognitive mapping. <ul><li>Cognitive mapping enhances movement of messages from short-term memory to long-term memory. </li></ul><ul><li>Repetition is necessary to establish new linkages. </li></ul><ul><li>Difficult to modify or create new linkages. </li></ul>3-
  14. 14. Evaluation of Alternatives <ul><li>Evoked set method </li></ul><ul><ul><li>Evoked set: Consists of brands people consider in a purchasing situation. “Shampoo”. </li></ul></ul><ul><ul><li>Inept set: Consists of brands not considered because of negative feelings (bad experience). </li></ul></ul><ul><ul><li>Inert set: Consists of brands people aware of but have neither positive nor negative attitudes. </li></ul></ul><ul><li>Multi-attribute approach: Examining sets of attributes across sets of products or brands. “Computers”. </li></ul><ul><li>Affect referral: Choosing the brand we like without evaluating alternatives. Milk, soft drinks, chocolate. </li></ul>3-
  15. 15. 3- <ul><li>How important is it for each of the following brands to be a part of a consumer’s evoked set? </li></ul><ul><li>Panadol (pain medicine) </li></ul><ul><li>Head & Shoulders (shampoo) </li></ul><ul><li>Black & Decker (power tools) </li></ul><ul><li>Hall’s (cough drops) </li></ul><ul><li>American Hospital </li></ul>Discussion Slide
  16. 16. 3- Housing 22.7% 19.1% 25.0% Food 13.8% 13.6% 13.0% Transportation 11.6% 17.8% 16.0% Household expenses 11.1% 14.5% 11.0% Entertainment 9.3% 8.5% 4.5% Health care 5.1% 5.1% 5.0% Savings 4.7% 4.9% 10.0% Clothing 3.4% 5.4% 5.0% Education, child care 3.4% 2.1% 4.5% How Consumers Spend their Money Spending Category Survey Results Actual Expenditure Experts 1 st Column : What consumers said they spent in each category. 2 nd Column : What consumers actually spent in each category. 3 rd Column : What financial planners said consumer should spend in each category Source: James E. Reynolds, “An Exclusive Poll Shows We Spend Far More Than We Say and Save Far Less,” Money , October 1997, Vol. 26, No. 10, pp. 215-218.
  17. 17. Alternative Purchase Decisions <ul><li>Temporary change in consumer’s situation. </li></ul><ul><li>Short on money or time. </li></ul><ul><li>Desire for variety. Soft drinks with different ingredients. </li></ul><ul><li>Impulse purchase. Especially on low-priced items. Pen, pencils, batteries, small toys, etc. </li></ul><ul><li>Marketing communication material. </li></ul><ul><li>Influence of friend or relative. </li></ul>3-
  18. 18. 3- <ul><li>How likely is each of the following marketing material to alter your purchase decision for food items? </li></ul><ul><li>An advertisement </li></ul><ul><li>A coupon </li></ul><ul><li>A sweepstake or contest offer </li></ul><ul><li>A price-off offer </li></ul><ul><li>An in-store display </li></ul><ul><li>The food package </li></ul><ul><li>A in-store sample </li></ul><ul><li>A billboard </li></ul>Discussion Slide
  19. 19. Post purchase Evaluation <ul><li>Evaluation of product performance. </li></ul><ul><li>Cognitive dissonance. Doubt about purchase, especially on socially visible purchasing experience or products such as cars, computers, cloths, etc. </li></ul><ul><li>Impacts future purchases. </li></ul><ul><li>Impacts word-of-mouth communications. </li></ul>3-
  20. 20. Traditional factors affecting consumer purchasing behaviors <ul><li>Demographics (age, gender, income, etc.) </li></ul><ul><li>Home environment </li></ul><ul><li>Family life cycle </li></ul><ul><li>Life changing events </li></ul><ul><li>Cultural environment </li></ul><ul><li>Social environment </li></ul>3-
  21. 21. 3- What makes this advertisement appealing to teenagers? Is it an effective ad design? Discussion Slide
  22. 22. Family Life Cycle <ul><li>Single </li></ul><ul><li>Newlyweds </li></ul><ul><li>First families </li></ul><ul><ul><li>Divorce and mixed families </li></ul></ul><ul><li>Full nest </li></ul><ul><li>Empty nest </li></ul><ul><li>Remaining partner </li></ul>3-
  23. 23. 3- An advertisement directed to first families and the arrival of a new baby.
  24. 24. Common Reasons Purchases Are Made <ul><li>Products/services provide utility </li></ul><ul><li>To satisfy physical needs </li></ul><ul><li>To satisfy psychological needs </li></ul><ul><li>To satisfy social needs </li></ul><ul><li>To satisfy emotional needs </li></ul><ul><li>To satisfy epistemic needs </li></ul>3-
  25. 25. Recent Trends Affecting Consumer Buying Behavior <ul><li>Changes in cultural values and attitudes </li></ul><ul><li>Time pressure and busy lifestyle </li></ul><ul><li>Indulgences and pleasure binges: Occasional purchases for self-rewarding such as expensive dinner. </li></ul><ul><li>Desire for excitement, fantasy: Theme parks, virtual playrooms, etc. </li></ul><ul><li>Emphasis on health: Health-tourism. </li></ul><ul><li>Clanning: Social needs such as occasionally visit friends, going movie theater with friends. </li></ul>3-
  26. 26. Perception <ul><li>The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. </li></ul>3-
  27. 27. Elements of Perception <ul><li>Sensation </li></ul><ul><li>The absolute threshold </li></ul><ul><li>The differential threshold </li></ul><ul><li>Subliminal perception </li></ul>3-
  28. 28. Sensory Receptors <ul><li>The human organs (eyes, ears, nose, mouth, skin) that receive sensory inputs. </li></ul>3-
  29. 29. Absolute Threshold <ul><li>The lowest level at which an individual can experience a sensation. </li></ul>3-
  30. 30. Sensory Adaptation <ul><li>“ Getting used to” certain sensations; becoming accommodated to a certain level of stimulation. </li></ul>3-
  31. 31. Differential Threshold <ul><li>The minimal difference that can be detected between two stimuli. Also known as the j.n.d. ( just noticeable difference ). </li></ul>3-
  32. 32. Weber’s Law <ul><li>A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e., the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different). </li></ul>3-
  33. 33. Marketing Applications of the JND <ul><li>Need to determine the relevant j.n.d. for their products </li></ul><ul><ul><li>so that negative changes are not readily discernible to the public </li></ul></ul><ul><ul><li>so that product improvements are very apparent to consumers </li></ul></ul>3-
  34. 34. Subliminal Perception <ul><li>Perception of very weak or rapid stimuli received below the level of conscious awareness. </li></ul>3-
  35. 35. Is Subliminal Persuasion Effective? <ul><li>Extensive research has shown no evidence that subliminal advertising can cause behavior changes </li></ul><ul><li>Some evidence that subliminal stimuli may influence affective reactions </li></ul>3-