Chapter 4

Principles of Marketing

Chapter 4

Consumer Behavior

• The study of when, where, and how people buy things and then dispose of them.

• CB is the main intersection point between psychology and marketing.

Avenues of Research

• Typical Marketing Research– Survey, focus group, etc.

Avenues of Research

• Observing behavior directly– In person, from a distance, on camera, etc

Avenues of Research

• Monitoring behavior remotely:– Through RFID, mobile phone signal, etc.

Avenues of Research

• Monitoring directly:– fMRI, eye-tracking, etc

Consumer Decision-Making Process


1) Need Recognition

Before any action can be taken, there has to be a need/want, or at least a perceived need/want.

Can be due to a natural body function (thirst, hunger), a primer (seeing an advertisement), or any other stimulus that forms a need.


Stimulus


1) Need Recognition

It can also come from a need due to a new development.

I camp a fair amount, but I am about to start camping for longer distances and durations.

I now have a need to update my current sleeping arrangement.

My current one is too large, heavy, and warm for this

type of camping. I now recognize I need

a new sleeping bag or alternative.


2) Search for Product Information

In this stage, the focus is on information gathering and determining what is needed for the product or service.

In my example, I haven’t purchased a sleeping bag in years, so I have no knowledge of what is available and what I need to focus on.


2) Search for Product Information

Since I am looking for lightweight and small size, I find that synthetic down is both lightweight and easily packed away.

I also know that there are alternatives such as the use of a hammock and the use of military poncho-liners that can provide what I am looking for.


3) Product Evaluation

He the decisions are made about what price is acceptable, what are the features that are must-have and not important, and determine the right mix of what is needed (there will always be a tradeoff).


3) Product Evaluation

The main decision for me is packability* and price.

Most lightweight materials are expensive, so the prices are possibly going to drive me away from a sleeping bag. The non-sleeping bag alternatives are almost a moot point with concern with packing.

*totes a word


4) Product Choice and Purchase

Here is where the decision is made and the actual purchase takes place.

I decided to go with a hammock since it is cheaper, more packable, and sufficient for the camping I am planning.

I have an REI membership and

they were having a sale, so the

purchase was made online due to

those factors and a lack of a close

REI store.


5) Postpurchase Use and Evaluation of Product

The first camping trip I went on, the hammock sufficiently met my needs. I would have preferred it not be -50degrees the next time I camp since it was freezing cold (overpass freezing before the road).


6) Disposal of the Product

So far, the product is fine, but I will most likely upgrade in the future since where I am moving has no trees, and hammocks lose most of the benefits on the ground.



Some products are more suited to longer-lifespans than others. For instance, I have an axe and cast-iron Dutch-oven that will most likely outlast the end of the world.



Some products are not likely to last all that long or will be outdated relatively quickly (such as electronics).

If this is something that is planned by the manufacturer, it is known as planned obsolescence.

Involvement

• Involvement is how we describe how personally important or interested a consumer is in a product/service.

• Low involvement products have a low risk of failure or an inconsequential loss if it is incorrect. – If you purchase a pack of gum that isn’t your usual

flavor and it isn’t good, you probably won’t be completely ruined mentally and financially by the decision.

Involvement

• Low involvement products are generally associated with routines or non-thinking situations. – Have you ever made a purchase at the grocery

store and not noticed you made the purchase until you were home. • I have this problem with this involving chocolate.

Involvement

• In a similar vein, impulse purchases are generally associated with low involvement products. Impulse purchases are those that are made with no real planning. Think POP displays.

Involvement

• High involvement is the opposite end of the spectrum with the product being very risky and carrying a high cost if an error is made. – Think a house, car, vacation, etc.

• Caveat: remember this is personal, so what is high involvement for me could be low involvement for you.

• With high involvement there is the common process of extended problem solving, or spending a large amount of resources to gather information before making a decision.

Involvement

• Limited problem solving is only a small amount of time in making a purchase. I have limited problem solving when it comes to wine since I have spent a lot of time around wine, so I know a lot about the process and need only a little time to make a purchase.

Involvement

• There is no right or wrong way to make purchases. Sometimes situations dictate that high involvement decisions be made very fast and sometimes low involvement choices take a little time.

Physical Situation

• Where is the milk in Kroger? Walmart?–Why?

• Is Ikea easy to navigate?

http://www.businessinsider.com/this-heat-map-reveals-the-secret-to-ikeas-store-design-2014-1

Physical Situation

• Anything physical attributes a firm has control over is called atmospherics.

• Who has been to an Apple store?–What did it smell like?

• Where are clocks in a casino?

Physical Situation

• Some things are uncontrollable.–Weather: Imagine looking for a car and it rains?

No among of atmospherics can deal with that problem.

– People: Is it a good idea to go to Walmart during the week of moving into the dorms?• Not always bad, when people see a crowd, we generally

think something good is happening.

Social Situation

• Which would you buy from:– A Girl Scout selling cookies in front of Walmart,

or a your neighbors daughter, a Girl Scout, selling cookies?

– I hate going out for drinks with my friends due to the social aspects.

Time Situation

• When time-crunched, we generally act differently and purchase at different levels than normal.

Purchase Reasoning

• When looking for a gift for an acquaintance, you probably don’t want to spend an afternoon looking for a gift. – Giftcards are a perfect answer to getting someone a

gift without a lot of hassle.

Mood

• Some people are exhilarated by shopping, some hate it. Some that love it may dread shopping on holidays.

• Mood affects how and why we purchase. – The fair and Jenny

Consumer’s Personality

• Personality traits define who we are (to a degree) and can affect how we shop.– The big five personality traits:• Openness- how open you are to new experiences• Conscientiousness- how diligent you are• Extraversion- how outgoing or shy you are• Agreeableness- how easy you are to get along with• Neuroticism- how prone you are to negative mental

states

Consumer Self-Concept

• Consumers have an idea in their mind of what they are, known as self-concept. This opinion can be in line with reality or it can be counter to what others see that person as.

• When a person sees him/herself as one thing, but are really another, it can be an instance of someone seeing their ideal self and not their actual self.

Consumer Age and Stage of Life

• How many of you are in the market for a tuxedo?

• Life-stages can dictate what products you are actually going to look at or avoid altogether.

• This can also tie to the difference in cognitive age and chronological age. –Moosey vs Betty–Wife and I vs K and D

Consumer’s Lifestyle

• Just because you are in a demographic, your life can be wildly different from someone “like you”.

• We can look at psychographics, or the attitudes, values, lifestyles, and opinions of consumers, to aid in determining what lifestyle a person has.

Psychological Factors

• Motivation- inward drive to get what we need.

Maslow’s Hierarchy of Needs

• Physiological needs– Food, water, sleep

• First level that must be satisfied to continue along the hierarchy.– This is why when you get really hungry, nothing

else matters


• Safety needs– Feeling safe and sheltered from harm

• Once we are fed, we start thinking about being safe from any harm.


• Social Needs– Love, friendship, and acceptance

• This stage is when we feel comfortable and will pay attention to the outside world and building relationships.


• Esteem Needs– Respect from others

• Now that friendships can be had, now there is an effort to make something of your accomplishments and be noticed by others.


• Self-Actualization Needs– Internal satisfaction with one’s self


• So where does a new Italian sports car fit?

• What about a high end attaché, purse, etc?

Consumer Perception

• Perception is how an individual sees the world. • Since it is individualized, perception is

arguably* the only thing that matters.

*I am making that argument

Consumer Perception

• How cool are these glasses?

Consumer Perception

• How about now?

Consumer Perception

• How about now?

Consumer Perception

• Selective perception is the filtering of information based on relevance. – Have you ever ignored an advertisement or retail

store until you needed what they provided?

Consumer Perception

• Selective retention is when information is remembered due to its matching of your values.– How many health warnings are forgotten when an

opportunity to participate in an activity are presented?


• Shock advertising is used to garner attention using attention-grabbing means.


• Shock doesn’t have to be negative– Carl’s Jr ad during superbowl was shocking due to

the nature of the commercial

Subliminal Advertising

• Not really a factor due to it being illegal, but some argue it still occurs.

• Most notable use was in 1957 during a movie• Increased coke sales 57.8%• Popcorn 18.1%

http://youtu.be/L6pgoqZpfUU

Learning

• How behavior changes once information is gained. – You buy a Sony DVD player and it breaks, you

stop buying Sony. You learned that Sony isn’t good (anecdotal, please don’t sue me).

• Learning can also occur through trials, like free samples or test drives and even just stuff with information on it like mugs and tshirts.

Operant Conditioning

• Behavior that is repeated when rewarded.

Consumer’s Attitudes

• Attitudes are mental positions or feelings consumers have about products, companies, ideas, issues, or institutions.

• Some of these are somewhat under your control, some are just inherent.



Societal Factors

• Consumer culture- shaped beliefs, customs, behaviors, and attitudes that characterize a society. (The Joneses is a great example)

Consumer Subculture

• Subculture is a group of people within a culture who are different from the dominant culture but have something in common with one another. – These can be interest-based, religion, ethnicity,

background, etc.

Consumer Social Class

• Social classes are groups of people who have the same social, economic, or educational status in society.

• Scion, Toyota, Lexus• VW, Audi, Porsche, Bugatti, Bentley

Reference Group and Opinion Leaders

• Reference groups are groups you identify with and wants to join.

• If you like sports, most likely you reference with people similar to these guys.

Reference Group and Opinion Leaders

• Opinion Leaders are the people with expertise in certain areas that have an influence over a group. – This doesn’t have to be a celebrity, it can be as

simple as a friend that is very knowledgeable or an associate at a store.• Golf business

Consumer Family

• Generally, you are a lot like the people in your life, especially your caretakers. Most likely, the little details in your life were crafted by your parents, siblings, extended family, etc.

• If you have kids, it works the other way as well. Parents ask kids for advise and also for input into decisions more than ever due to technology.

Bottom Line

• CB is one of the largest subsets of marketing for a reason. We are all influenced by so many things and our experiences are so idiosyncratic that the exploration into what makes us tic will be one that is fruitful and everlasting.

• This year’s Super Bowl was an exciting one to say the least. The game was a battle until the end with major plays coming from both teams and the halftime show was one of the best in recent memory. One thing that was noticeably different was a change in a general tone for the commercials during the game. (If you missed the commercials or just want a refresher, you can see them all at https://www.youtube.com/adblitz) Your assignment is to discuss the commercials, their general tone/feeling/mood, and explain what commercial was your favorite and why. This is to be submitted to the Blackboard drop box before 2:30 on Tuesday February 10, 2015. Use a Microsoft Word, 12-point, Times New Roman, one-inch margin document for your submission. If you want, you can start the assignment on this sheet right after the instructions and you don’t have to change anything on the document! (The instructions don’t count toward your word count). The length should be between 300 and 500 words. For reference, this instruction is over 200 words. If you do not submit the assignment or submit an assignment in a form other than that specified above, you will receive a “0” for the assignment.

https://www.youtube.com/user/adblitz

Documents

Chapter 4