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STUDY SESSION
CONSUMER BEHAVIOUR
Agenda
• Introduction
• Application of Consumer behavior
• Marketing research
• Market Segmentation
• Purchasing Behavior
• Consumer Motivation
• Social Groups
• Summary
INTRODUCTION
CONSUMER BEHAVIOUR
Introduction
The study of consumers helps firms and organizations improve
their marketing strategies by understanding issues such as how
• 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;
• Limitations in consumer knowledge or information processing
abilities influence decisions and marketing outcome;
• How consumer motivation and decision strategies differ
between products that differ in their level of importance or
interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing
campaigns and marketing strategies to more effectively reach
the consumer.
Introduction
• Limitations in consumer knowledge or information
processing abilities influence decisions and marketing
outcome;
• How consumer motivation and decision strategies differ
between products that differ in their level of importance or
interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing
campaigns and marketing strategies to more effectively
reach the consumer.
Definition of Consumer Behavior
The study of consumers helps firms and organizations
improve their marketing strategies by understanding issues
such as how
• 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;
Contributing Disciplines
• Anthropology
• Sociology
• Psychology
• Economics
• History
• Political Science
Reasons for Studying
• To stay in business by attracting and retaining customers
• To benefit from understanding consumer problems
• To establish competitive advantage
• …because it is interesting!
The Circle of Consumption
• Production
• Acquisition
• Consumption
• Disposal
The Circle of Consumption, continued
• Typically, attention of marketers has focused on
acquisition as the critical phase
• Only recently has more attention been given to include
the full circle and the links between its elements
• Disposal to acquisition
• Disposal to production
• Disposal to consumption
• Production to consumption
• Acquisition to consumption
• Acquisition to disposal
APPLICATION
CONSUMER BEHAVIOR
CONSUMER BEHAVIOUR
Applications
• The most obvious is for marketing strategy - i.e., for
making better marketing campaigns. For example, by
understanding that consumers are more receptive to food
advertising when they are hungry, we learn to schedule
snack advertisements late in the afternoon.
• By understanding that new products are usually initially
adopted by a few consumers and only spread later, and
then only gradually, to the rest of the population, we learn
that (1) companies that introduce new products must be
well financed so that they can stay afloat until their
products become a commercial success and (2) it is
important to please initial customers, since they will in turn
influence many subsequent customers’ brand choices.
Applications
• A second application is public policy. In the 1980s,
Accutane, a near miracle cure for acne, was introduced.
Unfortunately, Accutane resulted in severe birth defects if
taken by pregnant women.
• Although physicians were instructed to warn their female
patients of this, a number still became pregnant while
taking the drug. To get consumers’ attention, the Federal
Drug Administration (FDA) took the step of requiring that
very graphic pictures of deformed babies be shown on the
medicine containers.
Applications
• Social marketing involves getting ideas across to
consumers rather than selling something. Marty Fishbein,
a marketing professor, went on sabbatical to work for the
Centers for Disease Control trying to reduce the incidence
of transmission of diseases through illegal drug use. The
best solution, obviously, would be if we could get illegal
drug users to stop.
• This, however, was deemed to be infeasible. It was also
determined that the practice of sharing needles was too
ingrained in the drug culture to be stopped. As a result,
using knowledge of consumer attitudes, Dr. Fishbein
created a campaign that encouraged the cleaning of
needles in bleach before sharing them, a goal that was
believed to be more realistic.
Applications
• As a final benefit, studying consumer behavior should
make us better consumers. Common sense suggests, for
example, that if you buy a 64 liquid ounce bottle of
laundry detergent, you should pay less per ounce than if
you bought two 32 ounce bottles.
• In practice, however, you often pay a size premium by
buying the larger quantity. In other words, in this case,
knowing this fact will sensitize you to the need to check
the unit cost labels to determine if you are really getting a
bargain.
MARKETING
RESEARCH
CONSUMER BEHAVIOUR
Marketing Research
• The systematic and objective process of gathering,
recording, and analyzing data for aid in understanding
and predicting consumer thoughts, feelings, and
behaviors.
• In a global environment, research has become truly
international.
Important factors:
• Speed
• The Internet
• Globalization
• Data Overload
Primary vs. secondary research methods
• There are two main approaches to marketing. Secondary
research involves using information that others have
already put together.
• For example, if you are thinking about starting a business
making clothes for tall people, you don’t need to question
people about how tall they are to find out how many tall
people exist—that information has already been published
by the U.S. Government.
•
• Primary research, in contrast, is research that you design
and conduct yourself. For example, you may need to find
out whether consumers would prefer that your soft drinks
be sweater or tarter.
The Marketing Research Process
• Defining the Problem and Project Scope
• The Research Approach
• The Research Design
• Data Collection
• Data Analysis and Interpretation
• Report
MARKETING
PHILOSOPHIES
CONSUMER BEHAVIOUR
Marketing Management Philosophies
• Production Concept
• Product Concept
• Selling Concept
• Marketing Concept
• Societal Marketing Concept
• Green Marketing
• Cause-Related Marketing
• De-Marketing
Production Concept
• Focus on Production
• View of consumers:
• They will buy as long as the product is available and
affordable.
• Model T: You can have any color as long as it’s black.
• Focus on production justified:
• Demand higher than supply
• Non-competitive product cost
Product Concept
• Focus on the product
• View of consumers:
• We have to have the best quality and the most features
and they will buy.
• 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
Selling Concept
• Focus on selling
• 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
Marketing Concept
• Focus on marketing
• Creating mutually rewarding exchange relationships
• Consumer needs and wants have priority
• View of consumers:
• They will buy if you fulfill their needs better than the competition.
Societal Marketing Concept
• Same as Marketing Concept plus an added concern for
the well-being of society
MARKET
SEGMENTATION
CONSUMER BEHAVIOUR
Market Segmentation Bases
• Demographic
• Geographic
• Geo-Demographic
• Benefit
• Usage
• Lifestyle
Market Segmentation Advantages
• Specific Definition of the Market
• Satisfaction of Consumer Needs
• Meeting Changing Market Demands
• Assessment of Competitive Strengths and Weaknesses
• Efficient Allocation of Marketing Resources
• Precise Setting of Marketing Objectives
Applications of Benefit Segmentation
• Positioning
• Repositioning
• Competitive positioning
• New market opportunities/niches
• Positioning of multiple brands
Usage Segmentation
• Rate of Usage
• Brand Loyalty
• Usage Situation
Lifestyle Segmentation
• Activities
• Interests
• Opinions
• Demographics
• VALS I and II
• Maslow’s Hierarchy of Needs
Types of Decisions
• Extensive Problem Solving
• Limited Problem Solving
• Routinized Response Behavior
Problem Recognition
• Depletion of Stock
• Dissatisfaction
• Decrease in Finances
• Increase in Finances
Problem Recognition:
Causes in Desired State
• New Need Circumstances
• New Want Circumstances
• New Product Opportunities
• Purchase of Other Products
Information Search
and Evaluation
• Incidental Learning • Directed Search and
Evaluation
• Internal only
• loyalty
• impulse
• Internal and External
PURCHASING
BEHAVIOR
CONSUMER BEHAVIOUR
Definition
Definition of Buying Behavior:
• Buying Behavior is the decision processes and acts of
people involved in buying and using products.
Need to understand:
• why consumers make the purchases that they make?
• what factors influence consumer purchases?
• the changing factors in our society.
Purchasing behavior
Consumer Buying Behavior refers to the buying behavior of
the ultimate consumer. A firm needs to analyze buying
behavior for:
• Buyers reactions to a firms marketing strategy has a great
impact on the firms success.
• The marketing concept stresses that a firm should create
a Marketing Mix (MM) that satisfies (gives utility to)
customers, therefore need to analyze the what, where,
when and how consumers buy.
• Marketers can better predict how consumers will respond
to marketing strategies.
Stages of the Consumer Buying Process
• Six Stages to the Consumer Buying Decision Process
(For complex decisions). Actual purchasing is only one
stage of the process.
• Not all decision processes lead to a purchase. All
consumer decisions do not always include all 6 stages,
determined by the degree of complexity
Stages of the Consumer Buying Process
1. Problem Recognition
• (awareness of need)--difference between the desired
state and the actual condition. Deficit in assortment of
products. Hunger--Food. Hunger stimulates your need to
eat
• Can be stimulated by the marketer through product
information--did not know you were deficient? I.E., see a
commercial for a new pair of shoes, stimulates your
recognition that you need a new pair of shoes.
Stages of the Consumer Buying Process
2. Information search
• Internal search, memory.
• External search if you need more information. Friends and
relatives (word of mouth). Marketer dominated sources;
comparison shopping; public sources etc.
A successful information search leaves a buyer with
possible alternatives, the evoked set.
• Hungry, want to go out and eat, evoked set is
• chinese food
• indian food
• burger king etc
Stages of the Consumer Buying Process
3. Evaluation of Alternatives
• Need to establish criteria for evaluation, features the
buyer wants or does not want. Rank/weight alternatives or
resume search. May decide that you want to eat
something spicy, indian gets highest rank etc.
• If not satisfied with your choice then return to the search
phase. Can you think of another restaurant? Look in the
yellow pages etc. Information from different sources may
be treated differently. Marketers try to influence by
"framing" alternatives.
Stages of the Consumer Buying Process
4. Purchase decision
Choose buying alternative, includes product, package,
store, method of purchase etc.
5. Purchase
May differ from decision, time lapse between 4 & 5, product
availability.
6. Post-Purchase Evaluation--outcome: Satisfaction or
Dissatisfaction. Cognitive Dissonance, have you made the
right decision. This can be reduced by warranties, after
sales communication etc.
After eating an indian meal, may think that really you
wanted a chinese meal instead.
CONSUMER
MOTIVATION
CONSUMER BEHAVIOUR
Motivation
• When we understand why people buy we can enhance
our chances of making a sale. So why do people buy?
Because they have a need or a want? Yeah ok , but what
is behind the need or want? What is their primary reason
they want to buy from you?
• Fundamentally people buy for two reasons:
• 1, To avoid PAIN
• 2, To GAIN something
• Research indicates that buyers are 3 times more
motivated to avoid PAIN than to gain something and
people buy emotionally and defend it logically.
Motivation
• Effective sales people are always looking for their
prospects immediate or future pain, in order to sell
solutions. They are able to ask great questions so the
prospect discovers their own pain and then magnify it by
focusing questions around the impact of the problem.
• When prospects discover their pain and moreover the
impact it has on them personally or the company, they can
get emotionally involved and therefore increasing their
buying motivation. Excellent sales people will ask good
questions to stir up emotion and gain commitment from
the prospect to fix the problem before presenting
solutions.
Motivation Theories
• Freud
• Lewin
• Maslow
Freudian Theory
• According to Freud psychoanalytic theory, all psychic
energy is generated by the libido. Freud suggested that
our mental states were influenced by two competing
forces: cathexis and anticathexis. Cathexis was described
as an investment of mental energy in a person, an idea or
an object.
• If you are hungry, for example, you might create a mental
image of a delicious meal that you have been craving. In
other cases, the ego might harness some of the id's
energy to seek out activities that are related to the activity
in order to disperse some of the excess energy from the
id. If you can't actually seek out food to appease your
hunger, you might instead browse through a cookbook or
browse through your favorite recipe blog.
Lewin’s Field Theory
• Lewin is most renown for his development of the field theory.
The field theory is the "proposition that human behavior is the
function of both the person and the environment: expressed in
symbolic terms, B = f (P, E)." (Deaux 9) This means that one’s
behavior is related both to one’s personal characteristics and to
the social situation in which one finds oneself.
• The field theory may seem obvious to us now, but most early
psychologist did not believe in behaviorism. Many
psychologists at the time believed in the psychoanalytic theory
that held human motives to be blind pushes from within. Lewin
thought of motives as goal- directed forces. He believed "that
our behavior is purposeful; we live in a psychological reality or
life space that includes not only those parts of our physical and
social environment that are important to us but also imagined
states that do not currently exist"
Maslow Theory
SOCIAL GROUPS
CONSUMER BEHAVIOUR
Social Groups
• A social group is a collection of people who interact with
each other and share similar characteristics and a sense
of unity. A social category is a collection of people who do
not interact but who share similar characteristics. For
example, women, men, the elderly, and high school
students all constitute social categories.
• A social category can become a social group when the
members in the category interact with each other and
identify themselves as members of the group. In contrast,
a social aggregate is a collection of people who are in the
same place, but who do not interact or share
characteristics.
Types of Groups
• Primary and secondary
• Formal and informal
• Membership and symbolic
• In and out
Primary and secondary Groups
• Groups play a basic role in the development of the social nature and
ideals of people. Primary groups are those in which individuals
intimately interact and cooperate over a long period of time. Examples
of primary groups are families, friends, peers, neighbors, classmates,
sororities, fraternities, and church members. These groups are
marked by primary relationships in which communication is informal.
Members of primary groups have strong emotional ties. They also
relate to one another as whole and unique individuals.
• In contrast, secondary groups are those in which individuals do not
interact much. Members of secondary groups are less personal or
emotional than those of primary groups. These groups are marked by
secondary relationships in which communication is formal. Members
of secondary groups may not know each other or have much face-to-
face interaction. They tend to relate to others only in particular roles
and for practical reasons. An example of a secondary relationship is
that of a stockbroker and her clients. The stockbroker likely relates to
her clients in terms of business only. She probably will not socialize
with her clients or hug them.
Group Size
• A group's size can also determine how its members behave and relate. A small
group is small enough to allow all of its members to directly interact. Examples of
small groups include families, friends, discussion groups, seminar classes, dinner
parties, and athletic teams. People are more likely to experience primary
relationships in small group settings than in large settings.
• The smallest of small groups is a dyad consisting of two people. A dyad is
perhaps the most cohesive of all groups because of its potential for very close
and intense interactions. It also runs the risk, though, of splitting up. A triad is a
group consisting of three persons. A triad does not tend to be as cohesive and
personal as a dyad.
• The more people who join a group, the less personal and intimate that group
becomes. In other words, as a group increases in size, its members participate
and cooperate less, and are more likely to be dissatisfied. A larger group's
members may even be inhibited, for example, from publicly helping out victims in
an emergency. In this case, people may feel that because so many others are
available to help, responsibility to help is shifted to others. Similarly, as a group
increases in size, its members are more likely to engage in social loafing, in which
people work less because they expect others to take over their tasks.
In, out, and reference groups
• In an experiment, the youngsters also erected artificial
boundaries between themselves. They formed in-groups
(to which loyalty is expressed) and out-groups (to which
antagonism is expressed).
• To some extent every social group creates boundaries
between itself and other groups, but a cohesive in-group
typically has three characteristics:
• Members use titles, external symbols, and dress to
distinguish themselves from the out-group.
• Members tend to clash or compete with members of the
out-group. This competition with the other group can also
strengthen the unity within each group.
• Members apply positive stereotypes to their in-group and
negative stereotypes to the out-group.
SUMMARY
CONSUMER BEHAVIOUR
Summary
The study of consumers helps firms and organizations
improve their marketing strategies by understanding issues
such as how:
• 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
Summary
• Limitations in consumer knowledge or information
processing abilities influence decisions and marketing
outcome
• How consumer motivation and decision strategies differ
between products that differ in their level of importance or
interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing
campaigns and marketing strategies to more effectively
reach the consumer.
Summary
• There are several units in the market that can be analyzed. Our
main thrust in this course is the consumer. However, we will
also need to analyze our own firm’s strengths and weaknesses
and those of competing firms. Suppose, for example, that we
make a product aimed at older consumers, a growing segment.
A competing firm that targets babies, a shrinking market, is
likely to consider repositioning toward our market.
• To assess a competing firm’s potential threat, we need to
examine its assets (e.g., technology, patents, market
knowledge, awareness of its brands) against pressures it faces
from the market. Finally, we need to assess conditions (the
marketing environment). For example, although we may have
developed a product that offers great appeal for consumers, a
recession may cut demand dramatically.

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Ss consumer behavior

  • 2. Agenda • Introduction • Application of Consumer behavior • Marketing research • Market Segmentation • Purchasing Behavior • Consumer Motivation • Social Groups • Summary
  • 4. Introduction The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how • 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; • Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; • How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
  • 5. Introduction • Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; • How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
  • 6. Definition of Consumer Behavior The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how • 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;
  • 7. Contributing Disciplines • Anthropology • Sociology • Psychology • Economics • History • Political Science
  • 8. Reasons for Studying • To stay in business by attracting and retaining customers • To benefit from understanding consumer problems • To establish competitive advantage • …because it is interesting!
  • 9. The Circle of Consumption • Production • Acquisition • Consumption • Disposal
  • 10. The Circle of Consumption, continued • Typically, attention of marketers has focused on acquisition as the critical phase • Only recently has more attention been given to include the full circle and the links between its elements • Disposal to acquisition • Disposal to production • Disposal to consumption • Production to consumption • Acquisition to consumption • Acquisition to disposal
  • 12. Applications • The most obvious is for marketing strategy - i.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. • By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices.
  • 13. Applications • A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. • Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers’ attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers.
  • 14. Applications • Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. • This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.
  • 15. Applications • As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. • In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain.
  • 17. Marketing Research • The systematic and objective process of gathering, recording, and analyzing data for aid in understanding and predicting consumer thoughts, feelings, and behaviors. • In a global environment, research has become truly international. Important factors: • Speed • The Internet • Globalization • Data Overload
  • 18. Primary vs. secondary research methods • There are two main approaches to marketing. Secondary research involves using information that others have already put together. • For example, if you are thinking about starting a business making clothes for tall people, you don’t need to question people about how tall they are to find out how many tall people exist—that information has already been published by the U.S. Government. • • Primary research, in contrast, is research that you design and conduct yourself. For example, you may need to find out whether consumers would prefer that your soft drinks be sweater or tarter.
  • 19. The Marketing Research Process • Defining the Problem and Project Scope • The Research Approach • The Research Design • Data Collection • Data Analysis and Interpretation • Report
  • 21. Marketing Management Philosophies • Production Concept • Product Concept • Selling Concept • Marketing Concept • Societal Marketing Concept • Green Marketing • Cause-Related Marketing • De-Marketing
  • 22. Production Concept • Focus on Production • View of consumers: • They will buy as long as the product is available and affordable. • Model T: You can have any color as long as it’s black. • Focus on production justified: • Demand higher than supply • Non-competitive product cost
  • 23. Product Concept • Focus on the product • View of consumers: • We have to have the best quality and the most features and they will buy. • 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
  • 24. Selling Concept • Focus on selling • 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
  • 25. Marketing Concept • Focus on marketing • Creating mutually rewarding exchange relationships • Consumer needs and wants have priority • View of consumers: • They will buy if you fulfill their needs better than the competition.
  • 26. Societal Marketing Concept • Same as Marketing Concept plus an added concern for the well-being of society
  • 28. Market Segmentation Bases • Demographic • Geographic • Geo-Demographic • Benefit • Usage • Lifestyle
  • 29. Market Segmentation Advantages • Specific Definition of the Market • Satisfaction of Consumer Needs • Meeting Changing Market Demands • Assessment of Competitive Strengths and Weaknesses • Efficient Allocation of Marketing Resources • Precise Setting of Marketing Objectives
  • 30. Applications of Benefit Segmentation • Positioning • Repositioning • Competitive positioning • New market opportunities/niches • Positioning of multiple brands
  • 31. Usage Segmentation • Rate of Usage • Brand Loyalty • Usage Situation
  • 32. Lifestyle Segmentation • Activities • Interests • Opinions • Demographics • VALS I and II • Maslow’s Hierarchy of Needs
  • 33. Types of Decisions • Extensive Problem Solving • Limited Problem Solving • Routinized Response Behavior
  • 34. Problem Recognition • Depletion of Stock • Dissatisfaction • Decrease in Finances • Increase in Finances
  • 35. Problem Recognition: Causes in Desired State • New Need Circumstances • New Want Circumstances • New Product Opportunities • Purchase of Other Products
  • 36. Information Search and Evaluation • Incidental Learning • Directed Search and Evaluation • Internal only • loyalty • impulse • Internal and External
  • 38. Definition Definition of Buying Behavior: • Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand: • why consumers make the purchases that they make? • what factors influence consumer purchases? • the changing factors in our society.
  • 39. Purchasing behavior Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: • Buyers reactions to a firms marketing strategy has a great impact on the firms success. • The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. • Marketers can better predict how consumers will respond to marketing strategies.
  • 40. Stages of the Consumer Buying Process • Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. • Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity
  • 41. Stages of the Consumer Buying Process 1. Problem Recognition • (awareness of need)--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat • Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.
  • 42. Stages of the Consumer Buying Process 2. Information search • Internal search, memory. • External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible alternatives, the evoked set. • Hungry, want to go out and eat, evoked set is • chinese food • indian food • burger king etc
  • 43. Stages of the Consumer Buying Process 3. Evaluation of Alternatives • Need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indian gets highest rank etc. • If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives.
  • 44. Stages of the Consumer Buying Process 4. Purchase decision Choose buying alternative, includes product, package, store, method of purchase etc. 5. Purchase May differ from decision, time lapse between 4 & 5, product availability. 6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an indian meal, may think that really you wanted a chinese meal instead.
  • 46. Motivation • When we understand why people buy we can enhance our chances of making a sale. So why do people buy? Because they have a need or a want? Yeah ok , but what is behind the need or want? What is their primary reason they want to buy from you? • Fundamentally people buy for two reasons: • 1, To avoid PAIN • 2, To GAIN something • Research indicates that buyers are 3 times more motivated to avoid PAIN than to gain something and people buy emotionally and defend it logically.
  • 47. Motivation • Effective sales people are always looking for their prospects immediate or future pain, in order to sell solutions. They are able to ask great questions so the prospect discovers their own pain and then magnify it by focusing questions around the impact of the problem. • When prospects discover their pain and moreover the impact it has on them personally or the company, they can get emotionally involved and therefore increasing their buying motivation. Excellent sales people will ask good questions to stir up emotion and gain commitment from the prospect to fix the problem before presenting solutions.
  • 49. Freudian Theory • According to Freud psychoanalytic theory, all psychic energy is generated by the libido. Freud suggested that our mental states were influenced by two competing forces: cathexis and anticathexis. Cathexis was described as an investment of mental energy in a person, an idea or an object. • If you are hungry, for example, you might create a mental image of a delicious meal that you have been craving. In other cases, the ego might harness some of the id's energy to seek out activities that are related to the activity in order to disperse some of the excess energy from the id. If you can't actually seek out food to appease your hunger, you might instead browse through a cookbook or browse through your favorite recipe blog.
  • 50. Lewin’s Field Theory • Lewin is most renown for his development of the field theory. The field theory is the "proposition that human behavior is the function of both the person and the environment: expressed in symbolic terms, B = f (P, E)." (Deaux 9) This means that one’s behavior is related both to one’s personal characteristics and to the social situation in which one finds oneself. • The field theory may seem obvious to us now, but most early psychologist did not believe in behaviorism. Many psychologists at the time believed in the psychoanalytic theory that held human motives to be blind pushes from within. Lewin thought of motives as goal- directed forces. He believed "that our behavior is purposeful; we live in a psychological reality or life space that includes not only those parts of our physical and social environment that are important to us but also imagined states that do not currently exist"
  • 53. Social Groups • A social group is a collection of people who interact with each other and share similar characteristics and a sense of unity. A social category is a collection of people who do not interact but who share similar characteristics. For example, women, men, the elderly, and high school students all constitute social categories. • A social category can become a social group when the members in the category interact with each other and identify themselves as members of the group. In contrast, a social aggregate is a collection of people who are in the same place, but who do not interact or share characteristics.
  • 54. Types of Groups • Primary and secondary • Formal and informal • Membership and symbolic • In and out
  • 55. Primary and secondary Groups • Groups play a basic role in the development of the social nature and ideals of people. Primary groups are those in which individuals intimately interact and cooperate over a long period of time. Examples of primary groups are families, friends, peers, neighbors, classmates, sororities, fraternities, and church members. These groups are marked by primary relationships in which communication is informal. Members of primary groups have strong emotional ties. They also relate to one another as whole and unique individuals. • In contrast, secondary groups are those in which individuals do not interact much. Members of secondary groups are less personal or emotional than those of primary groups. These groups are marked by secondary relationships in which communication is formal. Members of secondary groups may not know each other or have much face-to- face interaction. They tend to relate to others only in particular roles and for practical reasons. An example of a secondary relationship is that of a stockbroker and her clients. The stockbroker likely relates to her clients in terms of business only. She probably will not socialize with her clients or hug them.
  • 56. Group Size • A group's size can also determine how its members behave and relate. A small group is small enough to allow all of its members to directly interact. Examples of small groups include families, friends, discussion groups, seminar classes, dinner parties, and athletic teams. People are more likely to experience primary relationships in small group settings than in large settings. • The smallest of small groups is a dyad consisting of two people. A dyad is perhaps the most cohesive of all groups because of its potential for very close and intense interactions. It also runs the risk, though, of splitting up. A triad is a group consisting of three persons. A triad does not tend to be as cohesive and personal as a dyad. • The more people who join a group, the less personal and intimate that group becomes. In other words, as a group increases in size, its members participate and cooperate less, and are more likely to be dissatisfied. A larger group's members may even be inhibited, for example, from publicly helping out victims in an emergency. In this case, people may feel that because so many others are available to help, responsibility to help is shifted to others. Similarly, as a group increases in size, its members are more likely to engage in social loafing, in which people work less because they expect others to take over their tasks.
  • 57. In, out, and reference groups • In an experiment, the youngsters also erected artificial boundaries between themselves. They formed in-groups (to which loyalty is expressed) and out-groups (to which antagonism is expressed). • To some extent every social group creates boundaries between itself and other groups, but a cohesive in-group typically has three characteristics: • Members use titles, external symbols, and dress to distinguish themselves from the out-group. • Members tend to clash or compete with members of the out-group. This competition with the other group can also strengthen the unity within each group. • Members apply positive stereotypes to their in-group and negative stereotypes to the out-group.
  • 59. Summary The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how: • 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
  • 60. Summary • Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome • How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
  • 61. Summary • There are several units in the market that can be analyzed. Our main thrust in this course is the consumer. However, we will also need to analyze our own firm’s strengths and weaknesses and those of competing firms. Suppose, for example, that we make a product aimed at older consumers, a growing segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. • To assess a competing firm’s potential threat, we need to examine its assets (e.g., technology, patents, market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to assess conditions (the marketing environment). For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically.