Lecture 3 consumer behavior


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Lecture 3 consumer behavior

  1. 1. Post Graduate Diploma in PR & Exhibitions Management Marketing Public Relations and Audience Lecture 3 Understanding Audience BehaviorDeveloped and Presented byRoy Ying, Msc., BSG, B.Comm., MHKIoDNote: Pictures used in this power point fileis for academic Purpose only 1
  2. 2. Table of Contents• Understanding consumer behavior• Consumer research• Changing consumer behavior 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. • Decision Making 5-step Process Source: Adopted from Kotler (1997), Schiffman and Kanuk (1997), and Solomon (1996)• Consumer Sieve 5
  6. 6. Need = Problem• Kotler (1997) equates consumers as problem solvers• Problem Recognition occurs when theres a difference between ones desired state and actual state that is sufficient to activate the decision process.• The Desired State is the way a person would like for a need to be met.• The Actual State is the way a need is being met/unmet at a particular point in time. 6
  7. 7. What are the needs? 7
  8. 8. What are the needs? 8
  9. 9. What are the needs? 9
  10. 10. Information Search• Traditional wisdom would suggest… Memory Media Referral 10
  11. 11. Information Search• For the younger generation, it’s more likely that they will… Social Media Search Engine 11
  12. 12. Evaluation of Alternatives • What criteria do consumers use? Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own. Consumers May Make Buying Decisions Only After Consulting Others.Marketers Must Study Buyers to Find OutHow They Evaluate Alternatives 12
  13. 13. Evaluation of Alternatives• Means End Chain - a way to describe how a product interacts with the consumer. It can be categorized in three different areas: 13
  14. 14. Means End Chain 14
  15. 15. Means End Chain 15
  16. 16. Means End Chain 16
  17. 17. Purchase Decision• What’s important for the buyer? 17
  18. 18. Purchase Decision• Culture 18
  19. 19. Purchase Decision• Social Class 19
  20. 20. Purchase Decision• Primary Reference • Membership Reference• Formal Reference 20
  21. 21. Purchase Decision• Self image 21
  22. 22. Purchase Decision• Situational factors 22
  23. 23. Purchase Decision (or not) 23
  24. 24. Post Purchase EvaluationPurpose is to help you get word of mouth:• Confirm they have made the right choice• Give them something to share or “brag”• Re-use value• Interactive information 24
  25. 25. Application• Marketing strategy 25
  26. 26. Table of Content• Understanding consumer behavior• Consumer research• Changing consumer behavior 26
  27. 27. 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. 27
  28. 28. Online Surveys - Drawbacks• Data quality is always under scrutiny.• It’s impossible 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. 28
  29. 29. Problem with Affiliate Marketing 29
  30. 30. Focus group• Let’s see another example 30
  31. 31. 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. 31
  32. 32. 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. 32
  33. 33. 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. 33
  34. 34. 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. 34
  35. 35. Research Tool – Observation• Or just watching how consumers do their shopping… 35
  36. 36. 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. 36
  37. 37. Application• Public Policy Decisions 37
  38. 38. Application• Predicting trend 38
  39. 39. Individual AssignmentAssignment Policies1. Only English assignment is accepted.2. All works must be original and plagiarism is regarded as fail;3. Provide all sources of information cited;4. Assignments must meet course tutor’s requirements;5. Students should bear the responsibility if real company data are cited; otherwise company name can be concealed;6. Assignments will be marked by course tutor and may be reviewed by7. overseas examiners and members of the Board of Examination. The school guarantees information of individual assignment will not be disclosed to the general public. 39
  40. 40. Individual AssignmentPart A: Description of the organizationand background information• This should be as short as possible. It merely describes the organization, and possibly its context, so that the examiners understand the organization and the nature of its business.• It is not included in the word-count and receives no marks. 40
  41. 41. Individual AssignmentPart B: Analysis of Organization PublicRelation Issues and ChallengesThis should contain:• Organization’s mission, vision and values• Business objectives and marketing communications strategies• Situation analysis (at least a SWOT analysis) on the issues and communication challenges/opportunities faced by the organization and the target public• World count for Part B + C should be 1,000 – 3,000 41
  42. 42. Individual AssignmentPart C: Proposing a Marketing PublicRelations Campaign (12 months period)The section should include:1. Define your target group of customers (i.e., end users and intermediaries)2. Produce an analysis of their purchasing and media consumption behavior3. Identify of MPR objectives, including intended brand personality and brand experience, which are derived from the overall business objectives and marketing strategies 42
  43. 43. Individual Assignment4. Develop core messages to be disseminated through various programs of the communications campaign which should build credibility, trust or long term relationship with customers5. Propose a series of activities in achieving the MPR objectives. Among the list of activities, one of them should be derived from the content of the Entertainment, Sports and Sponsorship module, one of them should be related to customer engagement activities, and one should focus on media-related activities 43
  44. 44. Individual Assignment6. A timeline indicating the schedule of activities for all types of programs of the communications campaign7. An estimated budget and related resources for each program/activity with detailed breakdown as much as possible8. The mechanism to measure/evaluate the effectiveness of each program of the campaign with a view to achieve the pre-determined MPR objectives based on the organization’s marketing communications strategies, which in turn should make up the overall business objectives. 44