DA010 - Professional Diploma in Public Relations - COMM6026EPMarketing Public Relations: Principles and           Practice...
THE PSYCHOLOGY OF           MARKETING• The psychology of how consumers think, feel,  reason, and select between different ...
DefinitionConsumer Behavior• The study of individuals, groups, or  organizations, and the processes they use  to select, s...
Let’s look at an example• How marketers use consumer psychology  to increase sales…..                                     ...
How marketers use research?• Again, it boils down to the 4 Ps:  – Product development  – Pricing strategy  – (Place) Distr...
Research Tool - Surveys• Surveys are useful for getting a great deal of specific  information.• Surveys can contain open-e...
Research Tool - Surveys• Surveys come in several different forms. Mail  surveys are relatively inexpensive, but response  ...
8
Online Surveys - Benefits• The use of “conditional branching” which  allows the computer to skip directly to the  appropri...
Online Surveys - Drawbacks• Data quality is always under scrutiny.• It’sImpossible to get respondents to read  the questio...
Focus group• Let’s see another example                              11
Research Tool – Focus Group• Focus groups are useful when the marketer  wants to launch a new product or modify an  existi...
Research Tool – Focus Group• By not mentioning the product up front, we  avoid biasing the participants into thinking  onl...
Research Tool – Focus Group• Represent small sample sizes. Because of the  cost of running focus groups, only a few groups...
15
Research Tool – Interviews• Personal interviews involve in-depth questioning  of an individual about his or her interest i...
Research Tool – Observation• Or just watching how consumers do their  shopping…                                           ...
Research Tool – Scanner Data• Most retail outlets use scanner or even  RFID sales / inventory system. Some  shopping malls...
Class Discussion•   In a focus group, please generate    insights from participants on how    McDonald’s can improve their...
Application• Marketing strategy                            20
Application• Public Policy decisions                            21
Application• Predicting trend                            22
Class Discussion• Suppose you were to resurrect the good  old Pepsi challenge…  – Where would you pick your participants? ...
Factors in consumer decision•   Culture•   Group Influences•   Perception•   Learning and memories•   Attitude            ...
Culture• Definition: the complex whole which  includes knowledge, belief, art, morals,  custom, and any other capabilities...
Cultural Characteristics1. Culture is comprehensive. This means that all   parts must fit together in some logical fashion...
Examples• In many parts of the world, the right hand is for eating,  drinking, and accepting anything. The left hand is us...
Group Influences• Reference groups come with various degrees of  influence.• Primary reference groups come with a great  d...
Perception• Our perception is an approximation of  reality.• Factors in perception  – Exposure  – Stimuli  – Attention  – ...
Learning and memories• Learning involves "a change in the content  or organization of long term memory  and/or behavior." ...
Operant conditioning                       31
Positive / Punishment• In positive reinforcement, an individual does  something and is rewarded. He or she is then  more l...
Schedules of reinforcementExamples:• Fixed interval: The consumer is given a free dessert on  every Tuesday when he or she...
Attitude• Consumer attitudes are a composite of a  consumer’s (1) beliefs about, (2) feelings  about, (3) and behavioral i...
Attitude• Changing attitudes is generally very  difficult, particularly when consumers  suspect that the marketer has a se...
Attitude Changing strategies• One strategy uses the approach of  classical conditioning try to “pair” the  product with a ...
Attitude Changing strategies• How to change buying behavior?                                   37
Attitude Changing strategies• Which message is clearer?                                 38
Attitude Changing strategies• Changing behavior  – Offer discount  – Temporary exhibit space  – Promotional activities  – ...
Attitude Changing strategies• Changing existing believes  – Although attempting to change beliefs is the    obvious way to...
Attitude Changing strategies• Change the importance of beliefs.  – It may be possible to strengthen beliefs that    favor ...
Attitude Changing strategies• Advertisements use this all the time.                                          42
Attitude Changing strategies• Add beliefs.  – Consumers are less likely to resist the    addition of beliefs so long as th...
Attitude Changing strategies• Advertisers are good at creating ways for  consumers to use their products.                 ...
Attitude Changing strategies•    Change ideal.    – It usually difficult, and very risky, to attempt      to change ideals...
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COMM6026 Lecture 3 - consumer psychology

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COMM6026 Lecture 3 - consumer psychology

  1. 1. DA010 - Professional Diploma in Public Relations - COMM6026EPMarketing Public Relations: Principles and Practice (2012/01) Lecture 3 Consumer PsychologyDeveloped and Presented byRoy Ying, Msc., B.Comm.Note: Pictures used in this power point fileis for academic Purpose only 1
  2. 2. THE PSYCHOLOGY OF MARKETING• The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products, and retailers);• The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);• The behavior of consumers while shopping or making other marketing decisions;• How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. 2
  3. 3. DefinitionConsumer Behavior• The study of individuals, groups, or organizations, and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs, and the impacts that these processes have on the consumer and society. 3
  4. 4. Let’s look at an example• How marketers use consumer psychology to increase sales….. 4
  5. 5. How marketers use research?• Again, it boils down to the 4 Ps: – Product development – Pricing strategy – (Place) Distribution network, channels, packaging and product display – Promotional mix, image communications and sales activities 5
  6. 6. Research Tool - Surveys• Surveys are useful for getting a great deal of specific information.• Surveys can contain open-ended questions (e.g., “In which city and state were you born? ____________”) or closed-ended, where the respondent is asked to select answers from a brief list (e.g., “__Male ___ Female.”)• Open ended questions have the advantage that the respondent is not limited to the options listed, and that the respondent is not being influenced by seeing a list of responses. However, open-ended questions are often skipped by respondents, and coding them can be quite a challenge. 6
  7. 7. Research Tool - Surveys• Surveys come in several different forms. Mail surveys are relatively inexpensive, but response rates are typically quite low.• Phone-surveys get somewhat higher response rates, but not many questions can be asked because many answer options have to be repeated and few people are willing to stay on the phone for more than five minutes.• Mall intercepts are a convenient way to reach consumers, but respondents may be reluctant to discuss anything sensitive face-to-face with an interviewer. 7
  8. 8. 8
  9. 9. Online Surveys - Benefits• The use of “conditional branching” which allows the computer to skip directly to the appropriate question.• With the right database, it can be inexpensive with potential scale across different countries.• It captures the respondent’s submission page visit log including timing and location. 9
  10. 10. Online Surveys - Drawbacks• Data quality is always under scrutiny.• It’sImpossible to get respondents to read the questions carefully.• The emergence of affiliate marketing generated additional unqualified data.• It cannot be too long so there is a limit to the amount of data can be captured. 10
  11. 11. Focus group• Let’s see another example 11
  12. 12. Research Tool – Focus Group• Focus groups are useful when the marketer wants to launch a new product or modify an existing one.• A focus group usually involves having some 8- 12 people come together in a room to discuss their consumption preferences and experiences.• The group is usually led by a moderator, who will start out talking broadly about topics related broadly to the product without mentioning the product itself. 12
  13. 13. Research Tool – Focus Group• By not mentioning the product up front, we avoid biasing the participants into thinking only in terms of the specific product brought out.• Thus, instead of having consumers think primarily in terms of what might be good or bad about the product, we can ask them to discuss more broadly the ultimate benefits they really seek. 13
  14. 14. Research Tool – Focus Group• Represent small sample sizes. Because of the cost of running focus groups, only a few groups can be run. Focus groups cannot give us a good idea of: – What proportion of the population is likely to buy the product. – What price consumers are willing to pay. – The groups are inherently social. This means that: • Consumers will often say things that may make them look good even if that is not true. • Consumers may be reluctant to speak about embarrassing issues. 14
  15. 15. 15
  16. 16. Research Tool – Interviews• Personal interviews involve in-depth questioning of an individual about his or her interest in or experiences with a product.• The benefit here is that we can get really into some depth (when the respondent says something interesting, we can ask him or her to elaborate), but this method of research is costly and can be extremely vulnerable to interviewer bias. 16
  17. 17. Research Tool – Observation• Or just watching how consumers do their shopping… 17
  18. 18. Research Tool – Scanner Data• Most retail outlets use scanner or even RFID sales / inventory system. Some shopping malls even require tenants to report sales figure on a daily basis.• It is a very powerful tool as it measures the consumer’s actual purchasing pattern.• The trouble is that these data are often proprietary 3rd party private information that marketers have no access to. 18
  19. 19. Class Discussion• In a focus group, please generate insights from participants on how McDonald’s can improve their menu.• Answers should include demographics of your group, frequency of fast food consumption and at least 5 improvement suggestions on the menu. 19
  20. 20. Application• Marketing strategy 20
  21. 21. Application• Public Policy decisions 21
  22. 22. Application• Predicting trend 22
  23. 23. Class Discussion• Suppose you were to resurrect the good old Pepsi challenge… – Where would you pick your participants? – How would you promote this? 23
  24. 24. Factors in consumer decision• Culture• Group Influences• Perception• Learning and memories• Attitude 24
  25. 25. Culture• Definition: the complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by any person as a member of society.• Culture is part of the external influences that impact the consumer. 25
  26. 26. Cultural Characteristics1. Culture is comprehensive. This means that all parts must fit together in some logical fashion.2. Culture is learned rather than being something we are born with.3. Culture is manifested within boundaries of acceptable behavior.4. Conscious awareness of cultural standards is limited.5. Cultures fall somewhere on a continuum between static and dynamic depending on how quickly they accept change. 26
  27. 27. Examples• In many parts of the world, the right hand is for eating, drinking, and accepting anything. The left hand is used only for bodily functions and is “unclean”.• Evening social events usually start late (9 or 10pm) in South America.• Thais and Malaysians do not want to be touched on their heads.• In Arab world, Islam dominates every part of life. Wives are not introduced and do not shake hands.• Cows are sacred animals to Hindus….same goes for no pork for Arabs.• Don’t give flowers to Africans as gifts - this means condolences. 27
  28. 28. Group Influences• Reference groups come with various degrees of influence.• Primary reference groups come with a great deal of influence—e.g., members of a fraternity/sorority.• Secondary reference groups tend to have somewhat less influence—e.g., members of a boating club that one encounters only during week-ends are likely to have their influence limited to consumption during that time period. 28
  29. 29. Perception• Our perception is an approximation of reality.• Factors in perception – Exposure – Stimuli – Attention – Interpretation – Relevance 29
  30. 30. Learning and memories• Learning involves "a change in the content or organization of long term memory and/or behavior." The first part of the definition focuses on what we know (and can thus put to use) while the second focuses on concrete behavior. 30
  31. 31. Operant conditioning 31
  32. 32. Positive / Punishment• In positive reinforcement, an individual does something and is rewarded. He or she is then more likely to repeat the behavior.• Punishment is the opposite. You eat what looks like a piece of candy (behavior), only to discover that it is a piece of soap with a foul taste (consequences), and subsequently you are less likely to eat anything that looks remotely like that thing ever again (changed behavior). 32
  33. 33. Schedules of reinforcementExamples:• Fixed interval: The consumer is given a free dessert on every Tuesday when he or she eats in a particular restaurant.• Fixed ratio: Behavior is rewarded (or punished) on every nth occasion that it is performed. (E.g., every tenth time a frequent shopper card is presented, a free product is provided).• Variable ratio: Every time an action is performed, there is a certain percentage chance that a reward will be given. For example, every time the consumer enters the store, he or she is given a lottery ticket with a 10% chance of winning. 33
  34. 34. Attitude• Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and behavioral intentions toward some object 34
  35. 35. Attitude• Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer has a self- serving agenda in bringing about this change (e.g., to get the consumer to buy more or to switch brands).• But we can try changing other elements in the consumer’s attitude 35
  36. 36. Attitude Changing strategies• One strategy uses the approach of classical conditioning try to “pair” the product with a liked stimulus. DO YOU LIKE THE INSURANCE, OR THE SNOOPY? 36
  37. 37. Attitude Changing strategies• How to change buying behavior? 37
  38. 38. Attitude Changing strategies• Which message is clearer? 38
  39. 39. Attitude Changing strategies• Changing behavior – Offer discount – Temporary exhibit space – Promotional activities – Limited edition souvenirs• Not a sustainable solution as these are short term measures. 39
  40. 40. Attitude Changing strategies• Changing existing believes – Although attempting to change beliefs is the obvious way to attempt attitude change, particularly when consumers hold unfavorable or inaccurate ones, this is often difficult to achieve because consumers tend to resist. So don’t bother. 40
  41. 41. Attitude Changing strategies• Change the importance of beliefs. – It may be possible to strengthen beliefs that favor us--e.g., a vitamin supplement manufacturer may advertise that it is extremely important for women to replace iron lost through menstruation. Most consumers already agree with this, but the belief can be made stronger. 41
  42. 42. Attitude Changing strategies• Advertisements use this all the time. 42
  43. 43. Attitude Changing strategies• Add beliefs. – Consumers are less likely to resist the addition of beliefs so long as they do not conflict with existing beliefs. Thus, the beef industry has added beliefs that beef (1) is convenient and (2) can be used to make a number of creative dishes. Vitamin manufacturers attempt to add the belief that stress causes vitamin depletion, which sounds quite plausible to most people. 43
  44. 44. Attitude Changing strategies• Advertisers are good at creating ways for consumers to use their products. 44
  45. 45. Attitude Changing strategies• Change ideal. – It usually difficult, and very risky, to attempt to change ideals, and only few firms succeed. For example, green used to be a unfavourable colour for cars, but with the introduction of hybrid cars and electric cars, green is now becoming more popular. 45

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