Consumer Behavior

                         Session 1



Sandra Laporte
Sandra.laporte@hec.ca
Agenda
• Session outline:
  – A little about me, a little about you
  – Evaluations
     • The team project
        – Logistics
        – Example
  – Introduction: What is Consumer Behavior?
     • Course outline
     • Research in consumer behavior


                          2
A Little About Me
• Ph.D. from HEC Paris
• Expertise
  – Consumer Behavior
  – Consumer Decision-Making under Uncertainty:
    Sweepstakes, lotteries
  – The relationship between money and food
  – The impact of regret on consumer behavior
  – The antecedents of donating behavior

• Where to find me?
  – Room 4.507 (Marketing Dept., Red Zone, 4th floor)   3
  – Office hours: By appointment
Course Objectives
• Understand how managers’ decision making benefits
  from a refined understanding of consumers
• Better appreciation for the complexity of consumer
  behavior
   – Understand theoretical principles
   – Develop your analytical skills within the concrete context
     of creating a consumer profile
• Complete a group project that consists of studying
  consumer behavior for a company of your choice.
   – In-depth description of the typical consumer in terms of
     lifestyle and psychographics.
   – Propose some recommendations on product positioning
Course Materials
• Textbook:
  – 5th Canadian edition of the textbook Consumer
    Behaviour: Buying, Having, and Being, by
    Solomon, Zaichowsky, and Polegato published in
    2011 by Pearson Prentice Hall.
Evaluation
1. Consumer Profile Project:                                           70

Group evaluation
    Assignment 1: Presentation of the brand / product / service             10
    Assignment 2: Manager’s insights (including interview recording)        10
    Assignment 3: Consumers’ insights                                       10
    Assignment 4 : Final report                                             10
    Oral presentation                                                       10

Individualevaluation
    Participation in session 7                                              5
    Participation in session 9                                              5
    Recording and summary of a consumer interview                           5
    Evaluation of the other groups’ final presentations                     5

2. Final cumulative exam:                                              30
Logistics: ZoneCours2
• All writtenassignments and recordings must
  beturned in electronicallythroughZoneCours 2,
  in « Remise de Travaux » section
• For eachassignment, requirements are
  specified in terms of:
  – Contents
  – Format
• Be verycareful to the deadlines!
First step: Team Allocation
• For next week, Jan. 16th, in Zone Cours,
  ‘Team Allocation’
   – Name of your team: pick the company/brand
     you will work on if you already have an idea
   – Names of the team members: 3 to 5

• Start thinking about a company: Assignment
  1 due on Jan. 30th
   – Portrait of the company
   – Name and contact details of the manager to be
     interviewed
                        10
Example: listeners’ profile of radio
                station Energie

French-Canadian men between 25 and 34 yearsold. 50% bluecollar / 50% white collar (sales & services).
They are teenagers withresponsibilities. In betweentwoages, theyhold on to teenage values
(risk, game, sexualpermissiveness, impertinence), while living an adult life (house, car, girlfriend, kids).
They are whattheyown: my BBQ, my TV, my car, mygirlfriend. Theylike sport, they practice and watchit.
It is for them, likesex, violent videogames or nights out withbuddies, a way to escape
fromresponsibilities of daily life. Theylike to revive theirchildhood and teenage brands: Converse, Passe-
Partout, PlayStation, Adidas, etc. Theytry to betheirownheroes, theirown stars. Theywatch reality TV a
lot and follow pop culture. Friends are necessary to theiridentity: I have my gang, therefore I am.
Withtheir pals, theyshareproblems and experiences, they compare themselves to
eachother, theyapprove of eachother. Theywentthrough the major revolution of men’srole in society
and the hyperfeminizationera. Nowthattheyreach the age of
responsibilities, theywonderwhichroletheyshouldplay as men. Together, theyrebelagainst concepts of
‘pink man’ or ‘metrosexual’, celebratevirility and champion masculinity.
Whythisproject…
• What types of information compose the
  consumer profile?

• How these information canbeuseful for
  marketers?
  – You will have to give one
    managerialrecommendationbased on the
    consumer profile youwillget
Introduction

Whatis Consumer Behavior?
Definition
The study of the
processesinvolvedwhenindividuals or groups
select, purchase, use, or dispose of
products, services, ideas, or experiences to
satisfyneeds and desires
Evolution of Consumer Status

Business orientation

ManufacturingConsumers buy what is available

SellingConsumers can be coaxed into buying

MarketingConsumers buy superior value
Marketing Management Process
                 Information System
                 Data:                     1
                     Internal
                     Secondary           Market
 Firm
                     Primary
Analysis                              Consumers
Planification                         Needs
Implementation                        Demand
Control                               Segments


                   Marketing Mix
                 Product
                 Price
                 Customer Service
                 Promotion
                 Retailing
Marketing Management Process
Assignment 2:
Manager’s Insights           Information System
                             Data:
Final report:
                             Internal            Consumer Behavior
Must includesecondary data
                             Secondary
Assignment 3:                Primary
Consumer interviews
Influences on Consumer Behavior
                                   Marketing mix influences
                               •   Product
                               •   Price
                               •   Place
                               •   Promotion
      Personal /
Psychological influences
•   Age/lifecycle stage                                           Sociocultural influences
•   Occupation                                                •     Family
•   Economic status                                           •     Reference groups Session 6
•   Lifestyle                                                 •     Roles & status
•   Personality Session 2                                     •     Subculture
                                                                                      Session 3
•   Motivation                                                •     Social class
•   Beliefs                                                   •     Culture          Session 10
                   Session 4
•   Attitudes
•   Perception Session 5            Situational influences
                               •   Purchase task
                               •   Social surroundings
                               •   Physical surroundings
                               •   Temporal effects
                                                                                     18
                               •   Antecedent states
Consumer Behaviour is a “Process”
             (session 3)
Need recognition: Perceiving need for value

  Search for information: Searching for value

      Pre-purchase evaluation: Assessing value

         Purchase decision: Buying value

             Post-purchase behavior: Consuming & disposing
               of value                                19
Consumer Behaviour is a “Process”
                  CONSUMER’S               MARKETER’S
                  PERSPECTIVE              PERSPECTIVE
PREPURCHASE    How does a consumer        How are consumer
   ISSUES      decide about needing           attitudes
                    a product?            formed/changed?

 PURCHASE      Is product acquisition    How do situational
  ISSUES       a stressful or pleasant      factors affect
                    experience?          purchase decision?

POSTPURCHASE   Does product provide        What determines
   ISSUES       pleasure or perform      customer satisfaction
                  function? How is         and repurchase?
               product disposed of?
Why do businesses care about CB?
• Understanding what people buy
  – Benefits/Value vs. Attributes vs. Products
• Understanding why people buy
• Understanding how to connect with people
  – Relationship marketing
Influencing the consumer: a reality

                         IMPROVED!
       2 for the
      price of 1!
                               Now in handy
                               snack size!
Diamonds
are forever
                                 For a
                Don’t drink      younger look!
                and drive!
                                                 22
Influencing the consumer: a myth

• It is much easier to understand consumer behavior
  than to manipulate it

• It is legitimate for businesses to try to appeal
  consumers to their products and services

• Consumerist movements




                                                      23
Understanding CB is good for you!
• When we understand why we do the things
  we do, we can change undesirable behaviors!
   – Understanding consequences
   – How emotions impact decisions
   – How social interactions impact decisions
   – How the environment impacts decisions
• Effects at a societal level
Research in Consumer Behavior
Interdisciplinarity

Economics             Psychology




Sociology             Anthropology
                                     26
Different perspectives
              MICRO CONSUMER BEHAVIOR
                      (INDIVIDUAL FOCUS)




                                      Experimental Psych
                                      Clinical Psychology
                                     Developmental Psych
                                        Human Ecology
                                       Microeconomics
                                       Social Psychology
                                           Sociology
                                       Macroeconomics
                                   Semiotics/Literary Criticism
MACRO CONSUMER                            Demography
        BEHAVIOR                             History
   (SOCIAL FOCUS)                    Cultural Anthropology
Two main perspectives
Assumptions    Positivist Approach        Interpretativist Approach

Nature of      Objective, tangible        Socially constructed
reality        Single                     Multiple

Goal           Prediction                 Understanding

Knowledge      Time free                  Time-bound
generated      Context-independent        Contest dependent

View of        Existence of real causes   Multiple, simultaneous
causality                                 shaping events

Research       Separation between         Interactive, cooperative
relationship   researcher and subject     with researcher being
                                          part of phenomenon
                                          under study
Experimentalapproach
Consumer                              Consumer
 Group A                               Group B
                     >
                     =
                     <

           L’Oréal awareness
           Attitude towards L’Oréal
           Purchase intention
Ethnographicapproach
New methodologies in consumer
         behaviorresearch

• Eyetracking
• RFID (Radio-Frequency Identification)
• fMRI(functionalMagneticResonance Imaging)
Eye-tracking
RFID and shopping paths
New approach: Neuroscience
Nextweek
• Motivations, Values, Personality&Lifestyles

• Team composition

Cb session 1 zonecours 1

  • 1.
    Consumer Behavior Session 1 Sandra Laporte Sandra.laporte@hec.ca
  • 2.
    Agenda • Session outline: – A little about me, a little about you – Evaluations • The team project – Logistics – Example – Introduction: What is Consumer Behavior? • Course outline • Research in consumer behavior 2
  • 3.
    A Little AboutMe • Ph.D. from HEC Paris • Expertise – Consumer Behavior – Consumer Decision-Making under Uncertainty: Sweepstakes, lotteries – The relationship between money and food – The impact of regret on consumer behavior – The antecedents of donating behavior • Where to find me? – Room 4.507 (Marketing Dept., Red Zone, 4th floor) 3 – Office hours: By appointment
  • 4.
    Course Objectives • Understandhow managers’ decision making benefits from a refined understanding of consumers • Better appreciation for the complexity of consumer behavior – Understand theoretical principles – Develop your analytical skills within the concrete context of creating a consumer profile • Complete a group project that consists of studying consumer behavior for a company of your choice. – In-depth description of the typical consumer in terms of lifestyle and psychographics. – Propose some recommendations on product positioning
  • 5.
    Course Materials • Textbook: – 5th Canadian edition of the textbook Consumer Behaviour: Buying, Having, and Being, by Solomon, Zaichowsky, and Polegato published in 2011 by Pearson Prentice Hall.
  • 6.
    Evaluation 1. Consumer ProfileProject: 70 Group evaluation Assignment 1: Presentation of the brand / product / service 10 Assignment 2: Manager’s insights (including interview recording) 10 Assignment 3: Consumers’ insights 10 Assignment 4 : Final report 10 Oral presentation 10 Individualevaluation Participation in session 7 5 Participation in session 9 5 Recording and summary of a consumer interview 5 Evaluation of the other groups’ final presentations 5 2. Final cumulative exam: 30
  • 8.
    Logistics: ZoneCours2 • Allwrittenassignments and recordings must beturned in electronicallythroughZoneCours 2, in « Remise de Travaux » section • For eachassignment, requirements are specified in terms of: – Contents – Format • Be verycareful to the deadlines!
  • 10.
    First step: TeamAllocation • For next week, Jan. 16th, in Zone Cours, ‘Team Allocation’ – Name of your team: pick the company/brand you will work on if you already have an idea – Names of the team members: 3 to 5 • Start thinking about a company: Assignment 1 due on Jan. 30th – Portrait of the company – Name and contact details of the manager to be interviewed 10
  • 11.
    Example: listeners’ profileof radio station Energie French-Canadian men between 25 and 34 yearsold. 50% bluecollar / 50% white collar (sales & services). They are teenagers withresponsibilities. In betweentwoages, theyhold on to teenage values (risk, game, sexualpermissiveness, impertinence), while living an adult life (house, car, girlfriend, kids). They are whattheyown: my BBQ, my TV, my car, mygirlfriend. Theylike sport, they practice and watchit. It is for them, likesex, violent videogames or nights out withbuddies, a way to escape fromresponsibilities of daily life. Theylike to revive theirchildhood and teenage brands: Converse, Passe- Partout, PlayStation, Adidas, etc. Theytry to betheirownheroes, theirown stars. Theywatch reality TV a lot and follow pop culture. Friends are necessary to theiridentity: I have my gang, therefore I am. Withtheir pals, theyshareproblems and experiences, they compare themselves to eachother, theyapprove of eachother. Theywentthrough the major revolution of men’srole in society and the hyperfeminizationera. Nowthattheyreach the age of responsibilities, theywonderwhichroletheyshouldplay as men. Together, theyrebelagainst concepts of ‘pink man’ or ‘metrosexual’, celebratevirility and champion masculinity.
  • 12.
    Whythisproject… • What typesof information compose the consumer profile? • How these information canbeuseful for marketers? – You will have to give one managerialrecommendationbased on the consumer profile youwillget
  • 13.
  • 14.
    Definition The study ofthe processesinvolvedwhenindividuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfyneeds and desires
  • 15.
    Evolution of ConsumerStatus Business orientation ManufacturingConsumers buy what is available SellingConsumers can be coaxed into buying MarketingConsumers buy superior value
  • 16.
    Marketing Management Process Information System Data: 1 Internal Secondary Market Firm Primary Analysis Consumers Planification Needs Implementation Demand Control Segments Marketing Mix Product Price Customer Service Promotion Retailing
  • 17.
    Marketing Management Process Assignment2: Manager’s Insights Information System Data: Final report: Internal Consumer Behavior Must includesecondary data Secondary Assignment 3: Primary Consumer interviews
  • 18.
    Influences on ConsumerBehavior Marketing mix influences • Product • Price • Place • Promotion Personal / Psychological influences • Age/lifecycle stage Sociocultural influences • Occupation • Family • Economic status • Reference groups Session 6 • Lifestyle • Roles & status • Personality Session 2 • Subculture Session 3 • Motivation • Social class • Beliefs • Culture Session 10 Session 4 • Attitudes • Perception Session 5 Situational influences • Purchase task • Social surroundings • Physical surroundings • Temporal effects 18 • Antecedent states
  • 19.
    Consumer Behaviour isa “Process” (session 3) Need recognition: Perceiving need for value Search for information: Searching for value Pre-purchase evaluation: Assessing value Purchase decision: Buying value Post-purchase behavior: Consuming & disposing of value 19
  • 20.
    Consumer Behaviour isa “Process” CONSUMER’S MARKETER’S PERSPECTIVE PERSPECTIVE PREPURCHASE How does a consumer How are consumer ISSUES decide about needing attitudes a product? formed/changed? PURCHASE Is product acquisition How do situational ISSUES a stressful or pleasant factors affect experience? purchase decision? POSTPURCHASE Does product provide What determines ISSUES pleasure or perform customer satisfaction function? How is and repurchase? product disposed of?
  • 21.
    Why do businessescare about CB? • Understanding what people buy – Benefits/Value vs. Attributes vs. Products • Understanding why people buy • Understanding how to connect with people – Relationship marketing
  • 22.
    Influencing the consumer:a reality IMPROVED! 2 for the price of 1! Now in handy snack size! Diamonds are forever For a Don’t drink younger look! and drive! 22
  • 23.
    Influencing the consumer:a myth • It is much easier to understand consumer behavior than to manipulate it • It is legitimate for businesses to try to appeal consumers to their products and services • Consumerist movements 23
  • 24.
    Understanding CB isgood for you! • When we understand why we do the things we do, we can change undesirable behaviors! – Understanding consequences – How emotions impact decisions – How social interactions impact decisions – How the environment impacts decisions • Effects at a societal level
  • 25.
  • 26.
    Interdisciplinarity Economics Psychology Sociology Anthropology 26
  • 27.
    Different perspectives MICRO CONSUMER BEHAVIOR (INDIVIDUAL FOCUS) Experimental Psych Clinical Psychology Developmental Psych Human Ecology Microeconomics Social Psychology Sociology Macroeconomics Semiotics/Literary Criticism MACRO CONSUMER Demography BEHAVIOR History (SOCIAL FOCUS) Cultural Anthropology
  • 28.
    Two main perspectives Assumptions Positivist Approach Interpretativist Approach Nature of Objective, tangible Socially constructed reality Single Multiple Goal Prediction Understanding Knowledge Time free Time-bound generated Context-independent Contest dependent View of Existence of real causes Multiple, simultaneous causality shaping events Research Separation between Interactive, cooperative relationship researcher and subject with researcher being part of phenomenon under study
  • 29.
    Experimentalapproach Consumer Consumer Group A Group B > = < L’Oréal awareness Attitude towards L’Oréal Purchase intention
  • 30.
  • 31.
    New methodologies inconsumer behaviorresearch • Eyetracking • RFID (Radio-Frequency Identification) • fMRI(functionalMagneticResonance Imaging)
  • 32.
  • 33.
  • 34.
  • 35.
    Nextweek • Motivations, Values,Personality&Lifestyles • Team composition