Consumer Behaviour Part1: The Consumer in Context

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Preparation for the Consumer Behaviour exam at Edinburgh Business School. Content extracted from the ‘Consumer Behaviour’ text book by David A. Statt. All pictures used for educational purposes only. No copyright infringement intended.

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Consumer Behaviour Part1: The Consumer in Context

  1. 1. Consumer Behaviour Part I: The Consumer in Context Preparation for the Consumer Behaviour exam at Edinburgh Business School Content extracted from the ‘Consumer Behaviour’ text book by David A. Statt All pictures used for educational purposes only. No copyright infringement intended.
  2. 2. PART I The Consumer in Context Module 1: People as Consumers Module 2: Market Segmentation Module 3: New Products and Innovations
  3. 3. ...and we are all consumers.
  4. 4. Module 1: People as Consumers Studying people as consumers Positivist approach Focuses on predicting what the consumer will do under certain specified conditions. Uses scientific research. Reductionist approach All human behavior can be reduced to consumerism. Interpretivist approach People are not always rational. Reality is an individual’s subjective experience. Cause and effect can’t be isolated.
  5. 5. Consumer Customer Usually implies aA person who purchases relationship over timegoods and services for between the buyer and apersonal use particular brand or retail outlet.
  6. 6. Consumer Behaviour is... ...the emotional, mental and physical activities that people engage in when selecting,purchasing using, and disposing of products and services so as to satisfy needs and desires.
  7. 7. Buying  is  not  just  a  necessary  activity  but  an   attractive  and  highly   approved  way  of   behaving.
  8. 8. At the heart of the trading nexus is the act of exchange between producer and consumer for their mutual benefit.
  9. 9. “Consumption is the sole endand purpose of all production.” Adam Smith
  10. 10. The Production Orientation “You can have any color you want, as long as its black.” Henry Ford
  11. 11. The Marketing Concept shift from selling what you can make to making what you can sell!
  12. 12. ‘to create a customer’ A business has only two important functions, marketing and innovation. Peter Drucker
  13. 13. Module 2: Market Segmentation cheapest brand, top-of-the-range aimed at young intended as intermediate stages for the customer first-time buyers on life’s automotive journey who has made it
  14. 14. 3 marketing conditions to be met for segmentation to work identity access size
  15. 15. Most important forms of market segmentation:geographic psychological benefit demographic usage
  16. 16. geographic Micromarketing Same location ≈ same needs, wants, preferences Cultural effects differ; Climatic conditions
  17. 17. geographic Campbell’s soups Micromarketing: America devided in 22 markets
  18. 18. geographic Localization: Most consumer buying behaviour is local Local newspaper, radio, TV, websites, in-store and POS-ads, etc.
  19. 19. demographic statistically categorizing a population by sex income age education occupation social class family size religion
  20. 20. demographic 1. age
  21. 21. demographic 2. sex
  22. 22. demographic 3. socio-economic status (SES) income education occupation
  23. 23. demographic 4. geodemographic
  24. 24. demographic 5. psychological aka lifestyle activities interests opinions
  25. 25. demographic American market divided into 10 segments with 5 female segments Thelma Traditionalists 25% Candice Chic suburbanite 20% Mildred Militant mother 20% Contented housewife 18% Eleanor Elegant socialite 17%
  26. 26. demographic 6. segmentation by usage The market is usually divided into USER and NON-USER.
  27. 27. demographic 7. segmentation by benefits Find out what people want and provide it for them.
  28. 28. Module 3: New Products and Innovations New products have to be sold more and more, therefore, to existing customers.
  29. 29. Module 3: New Products and Innovations Competitive advantage derives from the encouragement of idea power. - Rosabeth Moss Kanter
  30. 30. Module 3: New Products and Innovations Innovation is not a luxury but a universal necessity.
  31. 31. Total Product Concept
  32. 32. The Product Life-Cycle
  33. 33. The Effects of Personal Influence Personal characteristics of PRODUCT CHAMPIONS energy passion idealism unwillingness to pragmatism allow set back cunning
  34. 34. The Effects of Personal Influence There are opinion leaders only if others are willing to follow.
  35. 35. Diffusion of New Products & Innovations definition: the process by which an innovation ... is communicated through certain channels over time among the members of a social system.
  36. 36. Diffusion of New Products & Innovations 2012 Modifications to existing 1964 products, new models and flavors. continuous innovation
  37. 37. Diffusion of New Products & Innovations Requires more change in consumer behavior dynamically continuous innovation
  38. 38. Diffusion of New Products & Innovations Requires a new form of consumer behaviordiscontinuous innovation
  39. 39. Diffusion of New Products & Innovations Three main types of innovation: 1. continuous 2. dynamically continuous 3. discontinuous
  40. 40. 5 product characteristics that determine consumer response: compatibility Complexity Trialability Observability
  41. 41. Relative Advantage improvement over existing products?
  42. 42. Compatibility deals with the issue of how well the innovation fits with the potential consumer’s existing values, attitudes, interests and behaviour
  43. 43. Complexity The easier it looks to use the more likely will people be to try it.
  44. 44. Trialabilitysimple difficult
  45. 45. Observability how easily the benefits of the innovation can be conveyed
  46. 46. Adoption of New Products and Innovations
  47. 47. PART II The Individual PerspectiveNext Modules:4) Perception 5) Personality 6) Learning, Memory & Thinking 7) Motivation

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