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the cb model

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the cb model

  1. 1. WHAT IS CONSUMERBEHAVIOR AND WHY DO WENEED TO KNOW?
  2. 2. 22DEFINITION (H&M BOOK,PAGE 3) Consumer behavior reflects the totality ofconsumers’ decisions with respect to the acquisition,consumption, and disposition of goods, services,activities, experiences, peoples, and ideas by (human)decision making units [over time].
  3. 3. Goods Services ActivitiesExperiences People Ideas
  4. 4. 44EXHIBIT 1.1
  5. 5. 55CONSUMER BEHAVIORINVOLVES MORE THAN JUSTBUYING Acquiring Using Disposing Is a dynamic process Can involve many people Involves many decisions
  6. 6. 66MANY MANY CONSUMERDECISIONS To acquire, use, or disposeWhether?What?Why?Why Not?How?• When?• Where?• How much?• How often?• How long?
  7. 7. 77WHATAFFECTSCONSUMERBEHAVIOR?Exhibit 1.6:A Model ofConsumerBehavior
  8. 8. 88WHAT AFFECTSCONSUMER BEHAVIOR?Having.. Motivation Ability OpportunityConsumer’sCultureConsumer BehaviorOutcomesProcess of MakingDecisionsPsychologicalCore
  9. 9. 99WHAT AFFECTSCONSUMER BEHAVIOR? Problem Recognition and Searchfor Information Making Judgments and Decisions Making Post-DecisionEvaluationsProcess of MakingDecisions
  10. 10. 1010WHAT AFFECTSCONSUMER BEHAVIOR? Exposure, attention, andperception Categorizing andcomprehending information Forming and changing attitudes Forming and retrievingmemoriesPsychologicalCoreProcess of MakingDecisions
  11. 11. 1111WHAT AFFECTSCONSUMER BEHAVIOR? Consumer behaviors cansymbolize who we are Consumer behaviors can diffusethroughout a market Dark side of MarketingConsumer BehaviorOutcomesProcess of MakingDecisionsPsychologicalCore External Processes:• Diversity: e.g. age, education• Social Class and HouseholdInfluences• Reference GroupsConsumer’sCulture
  12. 12. NOWWhy is it useful to know aboutconsumer behavior?
  13. 13. 1313MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR Developing a customer-oriented strategy What are the characteristics of consumers in eachsegment? Are customers satisfied with existing offerings? How profitable is each segment?SEGMENTATION
  14. 14. 1414MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR Selecting the Target Market Positioning How are competitive offerings positioned? How should our offerings be positioned? Example: Wild OatsTARGETING AND POSITIONING
  15. 15. 1515MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR Selecting the Target Market Positioning How are competitive offerings positioned? How should our offerings be positioned? Should our offerings be repositioned? Example: Domino’s pizzaTARGETING AND POSITIONING
  16. 16. 1616MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR – 4PS Developing PRODUCTs or services What ideas do consumers have for new products? What attributes can be added to or changed in an existingoffering? What should our offering be called? What should our package and logo look like?
  17. 17. 1717MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR Making PROMOTION (Marketing Communications)Decisions Advertising What are our advertising objectives? What should our advertising look like? Where should advertising be placed? When should we advertise? Has our advertising been effective? Sales promotion What about sales promotion objectives and tactics? When should sales promotions happen? Have our sales promotions been effective? How many salespeople are needed to serve customers? How can salespeople best serve customers?
  18. 18. 1818MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR Making PRICING decisions What price should be charged? How sensitive are consumers to price andprices changes? When should certain pricing tactics beused?
  19. 19. 1919MARKETING IMPLICATIONS OFCONSUMER BEHAVIOR Making PLACEMENT (Distribution) Decisions Where are target consumers likely to shop? How should stores be designed?
  20. 20. SOHow does one get to know aboutconsumer behavior?
  21. 21. 2121CONSUMER BEHAVIORRESEARCH METHODS Surveys Focus Groups Interviews Storytelling Photography, Pictures Diaries Experiments Field Experiments Conjoint Analysis Observations Purchase Panels Database Marketing
  22. 22. 2222EXHIBIT EN.3: WHO CONDUCTSCONSUMER RESEARCH?
  23. 23. 2323AN APPLICATION OF CONSUMERRESEARCH Coke: Market maker and leader 1975: The Pepsi Challenge Early 1980s: Coke losing share Decided to take Pepsi on, change the tasteof Coke (Project Kansas) Conducted extensive research: 55% of participants favored the new Coke(N=40,000) Some dissent: “It was like trying to makethe flag prettier”
  24. 24. 2424THE AFTERMATH New Coke launched in April 1985 Old coke withdrawn from market Initial sales response positive HUGE backlash from brand loyals WHY?
  25. 25. 2525MORAL OF THE STORY Lack of understanding of consumers In contrast, Pepsi demonstrated an understanding ofconsumer needs Market Research issues Corporate arrogance assumed that consumers will step in line Ignored the vocal minority Statements like – “after a while they will fall in love”
  26. 26. 2626 Read Chapter 2 (except “Types of Needs”, pages 50-52) Email me your group membership by Feb. 19. Group photos will be taken on Feb. 20 in class. Make sure youattend so that you are in the photo! Slides on LMES before class. Note: Webpage slides usuallywon’t have all the examples we discuss in class!

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