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Cb intro wk 1

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Cb intro wk 1

  1. 1. CONSUMER BEHAVIOR & CARE An Introduction Week 1 CB & C 1
  2. 2. Consumer Behavior Consumer Behavior is 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 thatthese processes have on the consumer and society. CB & C 2
  3. 3. • Is the subject of human behavior that is concerned with the decisions and acts of individuals in purchasing and using products.• It describes how consumers make purchase decisions and how they use and dispose of goods and services, and also analyzes the factors that influence purchase decisions.• Involves individuals or groups acquiring, using and disposing of products, services, ideas, or experiences• Includes search for information and actual purchase• Includes an understanding of consumer thoughts, feelings, and actions CB & C 3
  4. 4. Acquisition Consumption Disposal – Receiving – Collecting -Giving – Nurturing - Throwing – Finding away – Inheriting – Cleaning -Recycling – Producing – Preparing -Depleting – Purchasing – Displaying – Storing – Wearing – Sharing CB & C 4
  5. 5. CONTRIBUTING DISCIPLINES TOAnthropology CB• The study of people within and across cultures• Emphasis on cross-cultural differences• Questioning of assumptions within own cultureSociology• Cultural and interpersonal influences on consumption e.g., – Diffusion of innovation – Popular culture
  6. 6. Psychology• Study of human thinking and behavior• Some issues – Personality – Personal development – Cognition (thinking), perception – Attention and its limitations – “Learning”—e.g., acquired tastes CB & C 6
  7. 7. Economics• Basic economic issues – Supply and demand – Rational decision making – Perfect information• Emphasis on predicting behavior• Complications in real life• Behavioral economics—e.g., “mental accounting”History & Geography• Origins of behavior, perspectives, and traditions• Impact of geography on individuals – Isolation – Language development – Climate• Geographic determinism CB & C 7
  8. 8. Applications of Consumer Behavior• Marketing Strategy• Regulatory (Public) Policy• Social Marketing• Personal Consumer Skills CB & C 8
  9. 9. Types of Consumers• Individuals/ Groups• Organisations (Industrial consumers) CB & C 9
  10. 10. Buying RolesConsumer Purchases Industrial Purchases• Initiator • Initiator• Influencer • Influencer• Decider • Decider• Buyer • Buyer• User • User • Gatekeeper
  11. 11. Consumer buying rolesInitiator- Family member who initiates thinking about buying products (gatekeeper)- Family member who initiates information gatheringInfluencer- Family member whose opinion is sought about purchases- Provides information about brands and evaluative criteria CB & C 11
  12. 12. Decider- Family member who has financial authority and/or power to purchase the productBuyer- Family member who acts as the purchasing agent- Performs the logistics (going to the store, writing the check, etc.) of the purchaseUser-Family member who actually uses or consumes the product CB & C 12
  13. 13. Organisational buying roles• Initiator; people who identify the need for a product or service• Influencer; people with expertise who may help determine specifications• Decider; people with the authority to select or approve a supplier• Buyer; buys it (processes the paperwork)• User; actually uses it• Gatekeeper; influences the flow of information about the decision CB & C 13
  14. 14. Needs and WantsNeeds  Unsatisfactory conditions of the consumer that lead him or her to actions that will make the conditions betterWants  Desires to obtain more satisfaction than is absolutely necessary to improve unsatisfactory conditions
  15. 15. Determination of NeedsNeeds are determined by the following ;1.Individual person2.Environment CB & C 15
  16. 16. The Individual3 Physical characteristics of the individual personGenetics; Heredity and chemical/biological characteristicsof organisms Habits and needs vary with gene typesBiogenics; Biological characteristics that people possess atbirth (gender, race, age, etc.)For example, older people have different needsPsychogenics; Individual states and traits induced by aperson’s brain functioningMoods, emotions, perceptions, experiences
  17. 17. Environment3 Physical characteristics of the environmentClimate; Conditions that affect consumers’ need forfood, clothing, shelterTemperature, altitude, rainfall etc.Topography; Physical condition of the location onearth, spatial profile, and presence of bodies of waterPeople in the mountains may need warm jackets,people near water may need boatsEcology; concerned with environmental influences ofhumans Quality of air, food chain, etc.
  18. 18. Types of needsPhysiological; The fundamentals of survival, including hunger, thirst, and other bodily needs.Safety; Concern over physical survival and safety.Affiliation and Belongingness; A need to be accepted by others, to be an important person to them.Achievement; A basic desire for success in meeting personal goals CB & C 18
  19. 19. Power; A desire to gain control over one’s destiny as well as that of othersSelf-expression; The need to develop freedom in self-expression and to be perceived by others as significantCognition; The desire to self-actualize through knowing, constructing a value systemVariety Seeking; Maintenance of a preferred level of physiological arousal and stimulationAttribution; Estimation or attribution of the causality of events and actions CB & C 19
  20. 20. Determination of WantsWants are determined based on the following ;1.Personal context2.Environment al context CB & C 20
  21. 21. Personal contextPersonal worth Financial resources available to consumersIncome assets, inheritance, borrowing power, etc.Social class classifications (capitalist, middle class, workingpoor, etc.)Institutional relationshipsGroups and organizations to which a person belongsInstitutional context includes workplace, religious andeducational institutions, family and friends, and peer groupsCultural surroundings Culture’s influence on consumers Some cultures value age, some value youth, some valuepossessions, some value the inner self, etc.
  22. 22. Environmental contextEconomyEconomic development and business cycles in a nation’seconomy Economic level of a nation, inflation, unemployment rate,income growth, etc.TechnologyMan-made inventions and devices used to sustain, facilitate orenhance human life and activities Energy, telecommunications, education, etc.Public policyGovernmental laws and regulations that control humanbehavior Business practices like product safety, pricing, etc. are
  23. 23. Why Study Consumer Behavior?1. To stay in business by attracting and retaining customers2. To benefit from understanding consumer problems3. To establish competitive advantage
  24. 24. The Dark Side of Consumer BehaviorCompulsive Consumption Addictive Consumption>Behavior is Not Done by Choice>Gratification is Short-Lived > Gambling>Strong Feelings of Regret or GuiltAfterwards Illegal Activities Consumed Consumers > Consumer Theft (Shrinkage) > People Who Are Exploited for >Anti-consumption Commercial Gain in the – Culture Jamming Marketplace. – Cultural Resistance
  25. 25. CB & MARKETING STRATEGY CB & C 25
  26. 26. Marketing strategy• A set of stimuli placed in consumers’ environments designed to influence their affect, cognition, and behavior.• Marketing strategies should be designed not only to influence consumers but also to be influenced by them. CB & C 26
  27. 27. Consumers’ Impact on Marketing Strategy• Understanding consumer behavior is good business. – Firms exist to satisfy consumers’ needs, so – Firms must understand consumers needs to satisfy them.• The process of marketing segmentation: – Identifies groups of consumers who are similar to one another in one or more ways, and – Devises marketing strategies that appeal to one or more of these groups.
  28. 28. Market Segmentation Bases• Demographic• Geographic• Geo-Demographic• Benefit• Usage• Lifestyle
  29. 29. Advantages Market Segmentation1. Specific definition of the market2. Satisfaction of consumer needs3. Meeting changing market demands4. Assessment of competitive strengths and weaknesses5. Efficient allocation of marketing resources6. Precise setting of marketing objectives
  30. 30. Applications of Benefit Segmentation• Positioning• Repositioning• Competitive positioning• New market opportunities/niches• Positioning of multiple brands
  31. 31. Usage Segmentation• Rate of Usage• Brand Loyalty• Usage Situation
  32. 32. Lifestyle Segmentation Psychographics• Activities• Interests• Opinions• Demographics• Values & Lifestyles (VALS I and II) – Maslow’s Hierarchy of Needs
  33. 33. CB & MARKETINGMANAGEMENT PHILOSOPHIES CB & C 33
  34. 34. Philosophies/ Concepts1. Production Concept2. Product Concept3. Selling Concept4. Marketing Concept5. Societal Marketing Concept – Green Marketing – Cause-Related Marketing – De-Marketing
  35. 35. Production Concept• Focuses on production• Assumes that consumers are interested primarily in availability of the product at low pricesView of consumers: – They will buy as long as the product is available and affordable.Focus on production justified: – Demand higher than supply – Non-competitive product cost – Intensive distribution – Market expansion
  36. 36. Product Concept• Focuses on the product• Assumes that consumers will buy the product that offers them the highest quality, the best performance and most features.View of consumers – We have to have the best quality and the most features and they will buy. Justification - Quality improvement - Addition features However;• Consumers might not care about quality• Consumers might not be willing to pay for the best quality• Consumers might not be able to discern quality difference• Consumers might prefer simplicity
  37. 37. Selling Concept• Focuses on selling• Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so.View of consumers – We have to sell to them or else they won’t buy.Focus on selling justified – Introductory stages of product life cycle – Unsought goods However; - Lack of concern for customer needs and satisfaction
  38. 38. Marketing Concept• Focuses on marketing – Creating mutually rewarding exchange relationships – Consumer needs and wants have priority• Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than competition.View of consumers – They will buy if you fulfill their needs better than the competition. Justification - Profits through customer satisfaction.
  39. 39. Societal Marketing Concept• Same as Marketing Concept plus an added concern for the well-being of society- Green marketing- Cause marketing
  40. 40. PURCHASE DECISION MODEL CB & C 40
  41. 41. Purchase decision model• Refer to word doc. CB & C 41
  42. 42. As consumers use a product or service, particularly during trial purchase they evaluate its performance in relation to their own expectations.There are 3 possible outcomes where;1. Actual performance matches expectations leading to a NEUTRAL feeling2. Performance of the product exceeds expectations causing what is known as positive confirmation of expectations i.e. SATISFACTION3. Performance is below expectations causing a negative confirmation of expectations leading to DISSATISFACTION. CB & C 42
  43. 43. SATISFACTIONA state of satisfaction will lead to; Brand loyalty Profitability of the company Increased sales for the marketer Increased customers- word of mouth Repeat purchases CB & C 43
  44. 44. DISSATISFACTIONA state of dissatisfaction will lead to; Brand switch Loss of sales for the marketer Loss of customers Customer complaints CB & C 44
  45. 45. Consumer Research CB & C 45
  46. 46. • Self study CB & C 46

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