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Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
Mkt3050 – consumer behavior week 1 march 18, 2013
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Mkt3050 – consumer behavior week 1 march 18, 2013

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  • Welcome to Week 1 of Consumer Behavior, Marketing 3050. This slideshare presentation will cover topics from Chapters 1 and 2 of the text, along with some additional information that expands on the text and addresses course objectives
  • Our objective this week examines the role and importance of consumer behavior in the marketing process. More specifically, we’ll answer the questions: What is Consumer Behavior? And importantly, why do we care?
  • Consumer behavior can be thought of in 2 contexts. The first we’ll cover is the field of study – as scientists and marketers develop approaches for measuring and understanding consumers. We’ll talk about the second context also – all the thoughts and actions that drive our behavior as consumers.
  • The study of consumer behavior began in the 1930s. This graph is pulled from Google news archives – it shows the frequency of citations about consumer behavior have increased from about 40 between 1930 and 1940 to more than 2000 in 2011. Consumer behavior is an applied science, meaning it pulls insights from several disciplines including psychology, economics, sociology and anthropology – all pure sciences with elements about behavior that marketers have borrowed as they try to understand consumer behavior.
  • The study of consumer behavior has evolved, keeping pace with changes in how goods and services are delivered to the marketplace. In the 18th century, consumers had very limited options. If you went to the general store, you may have had less than 10 options for cloth to use to make a new shirt. There may have been only be 1 style of blue jeans. Food products were limited, too, as the owner of the general store decided what they would carry.In the 19th and early 20th centuries, manufacturing processes improved with the industrial revolution. Economics began to factor into manufacturing decisions…. If demand was there, and manufacturing capability was there, then the product was available. As manufacturing capabilities increased, so did the number of options available for consumers. Now manufacturers turned to psychology to help with marketing… focusing on ‘drilling’ benefits into consumers so their product would ‘stand out’. Here’s a commercial that illustrates this idea… see if you can identify the benefits of the product….Hopefully you picked up on the brand – Maxwell House – and the key benefits…. Tastes as good as it smells. Now you say to yourself – ‘wow, that was really annoying’ I’m glad advertising is better now. Well for those of you who watch late night TV, you may agree that pushing benefits is still in play. Watch this commercial.
  • As we entered the 21st century, retailers began gaining more power… Kroger, Home Depot, Walmart – only carry the items that will sell – so manufacturing decisions can’t be based on the idea that ‘you’ll buy what I’ve got’. Marketers are also becoming more critical – to help manufacturers chase fewer customers. We’ve seen consumer research become more sophisticated – focusing on motivations, emotions, and predicting behavior. Here’s another commercial for Maxwell House coffee… see if you can identify the emotional connections the marketers are trying to establish.Did you pick up that Maxwell House is now something special?
  • Today, marketers are focused on shoppers – how they make decisions – and successful organizations, like Amazon, develop business plans and organize resources to make sure customers stay happy.The study of ‘shoppers’ is the latest development in the area of consumer behavior… we’re trying to understand needs, shopping occasions, in-store behavior, purchase drivers, and reaction to in-store efforts…. That’s an overview of the field of study of Consumer Behavior… let’s focus now on the human thought and action context.
  • The textbook definition describes consumer behavior as people looking for VALUE…. But they first must identify their need, then engage in activities that address those needs…. We’ll explore those ideas over the next few weeks.
  • This graph shows the basic consumption process…. Consumers must recognize a need… that then becomes a ‘want’ that they are willing to make an exchange for… an exchange that involves costs (like time and money) and benefits (need satisfaction). The consumer reaction to that exchange – either satisfaction or disappointment – leads the consumer to determine if the process delivered value (made them happy!). If value is low, then the process likely begins again.
  • The decision process supporting consumption is influenced by internal and external factors. We’ll examine these, too, over the next few weeks. Internal factors shown here define how you recognize needs and wants – and how you go about addressing those wants. But external factors – like your family, your culture – even the season and time you have to shop – also come into play as you try to find value that satisfies your needs.
  • So why is Consumer Behavior important? Well, it’s a key input into successful business and marketing strategies… answering questions like those shown here. Who buys, why they buy, how can I establish connections – all are important elements that drive manufacturing decisions AND the messages communicated to consumers.
  • The extent to which consumer behavior affects an organization depends on the company’s orientation…. There are some companies that have a production orientation – they just want to make products with minimal cost – and the products are undifferentiated – they are all the same. Some companies DO offer different products – there are those who are focused on markets – reaching multiple segments with multiple products. And there are those who make a single product and focus on a niche or single market.
  • This graphic illustrates the different marketing approaches. Let’s look at some examples.
  • So of these 3 examples, which is the market-driven company? Did you guess Converse? ….lots of shoes for different markets… And what about the apples? … the farmer is focused on production of a single product. The third example is a device you can place in your vehicle that sounds an alarm if your vehicle drifts…. This would likely be a niche product – maybe for those who work the night shift or drive long distances?....
  • Consumer behavior is also important because it affects society… what and how we buy determines how we live. Better marketing – focusing on delivering good products that meet needs – will boost the economic performance of companies… having successful companies means the country will have a stronger economy. Think about how the economies of underdeveloped countries perform – vs those where business / industry prosper.Government is also affected by consumer behavior – look for a discussion board about this idea in the Week 1 class folder.
  • Finally, understanding consumer behavior is important because we can help people make better decisions AND we can help OURSELVES make better decisions.
  • So how do we study consumer behavior? There are several approaches…. There’s interpretive – or qualitative research – the focuses on internal motivations. And there are large scale, or quantitative studies – focused on interviews with many people so we can look for ‘big picture’ ideas.
  • This chart shows the differences between qualitative and quantitative research. We won’t spend much time here – MKT 4230 – Marketing Research – examines these approaches in more detail.
  • Consumer behavior is very dynamic -- meaning it changes over time – and so we as marketers, need to keep track of changes so we can react. What causes behavior to change? Well, we have a global society now – so we need to understand cultures – technology has had a HUGE impact on how consumers get information – so we need to harness it. The demographics of our society continue to change – and we need to make sure our products meet changing needs – and finally, the economy has changed – pretty dramatically over the last few years – and we’ve seen consumer behavior change with it – less spending with credit cards, less shopping overall – more cautiousness about getting married / having children /buying homes.This concludes the video lecture … if you have questions about the content covered here, you can e-mail me or add a question to the “Virtual Office” blog. Now please head to the Discussion Board – and participate in the discussion about consumer behavior and government… and the discussion of the articles you found in the Wall Street Journal.
  • Transcript

    • 1. MKT3050 – Consumer Behavior Week 1 – March 19, 2012©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.
    • 2. Objectives • At the end of this week, you’ll be able to identify and analyze the role and importance of consumer behavior in the marketing process. – We’ll answer the questions: • What is Consumer Behavior? • Why do we care? 2©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.
    • 3. Consumer Behavior - What is it? Field of Study Human Thought and Action 3©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.
    • 4. Consumer Behavior • The formal study began in 1930’s • An ‘applied’ science • Framework reflects: – Psychology – Economics – Sociology – Anthropology 4©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.
    • 5. Study of Consumer Behavior Timeline • 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 5©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.
    • 6. Study of Consumer Behavior Timeline • 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=y3HLX0Ky3jU 6©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.
    • 7. Study of Consumer Behavior Timeline • 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©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, to particular in-store in part. and reaction patterns or posted to a publicly accessible website, in whole or stimuli 7
    • 8. Consumer Behavior as Human Behavior Consumer behavior is the set of value seeking activities that take place as people go about addressing realized needs. • Realized needs • Activities • Address 8©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.
    • 9. Exhibit 1.1 The Basic Consumption Process ©ANTOINE ANTONIOL/BLOOMBERG VIA GETTY IMAGES 9©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.
    • 10. Making Decisions Internal factors External factors How you learn Your culture and cultural values Your perception Your reference groups Your memory Peer influenceHow you organize information Social class Attitudes Family influence Your motivation Situation Personal values - atmosphere Personality - timing Lifestyle - conditions Emotional expressiveness 10©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.
    • 11. Consumer Behavior – Why do we care? Input to business/marketing strategy – Who buys? – Why do they buy? – What attributes (benefits) are they buying? – Who is my competition? – How can I establish connections with customers? 11©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.
    • 12. 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 12©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.
    • 13. Exhibit 1.4 Different Ways of Doing Business 13©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.
    • 14. 14©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.
    • 15. Consumer Behavior – Why do we care? Force that shapes society – 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 15©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.
    • 16. Consumer Behavior – Why do we care? Input to making responsible decisions as a consumer – 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 16©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.
    • 17. Consumer Behavior – How do we study it? There is no ONE right approach Interpretive • Inner meanings Research • Motivations • Large scale studies Quantitative that are structured Research and deliver numerical / projectable results 17©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.
    • 18. 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.
    • 19. 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 19©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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