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MARK2051: Consumer Behaviour Study Notes CONSUMER BEHAVIOUR AND MARKETING STRATEGY • Marketing strategy: combination of product, price, distribution and promotion most suited to

a particular group of consumers. • à key to successful marketing strategy is an understanding of CONSUMER BEHAVIOUR

(CB): discipline dealing w/ how and why consumers purchase (or don’t) goods + services.

o Dynamic interaction of cognitive, behaviour and environmental events by which human beings conduct the exchange aspects of their lives – (American Marketing Association)

• Org must provide customer value: different between all benefits derived from a total product + all the costs of acquiring those benefits.

Consumer behaviour a crucial aspect of:

Marketing strategy

• MARKET SEGMENTATION o = identifying consumer groups w/ unique needs/purchasing

processes and developing specific marketing programs targeted at individual groups.

o Basis of most marketing strategies. o e.g. benefit segmentation: focus on particular outcome consumers

seek from using a product. • POSITIONING STRATEGY

o = the way a product/brand compares to its competitors, as perceived by customers.

New market applications

• Examining CB can yield insights that can produce new marketing opportunities and markets.

Global marketing

• = form of international marketing that aims to target particular consumer segments, regardless of where they are located in the world.

o à using STANDARDISED marketing mixes. o More cohesive, less costly. o But, may fail when there is no universal appeal.

• Must understand differences in CB between international markets.

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Marketing mix

• = 4 Ps = Product, Price, Place (Distribution), Promotion. • Products must solve a consumer problem. • Consumer behaviour audit: systematic review of all important aspects

of consumer behaviour. o List of key questions as guide to develop marketing strategy from CB

perspective. o Organised around key decisions MMs must make re:

§ Target market/segmentation. § Product positioning. § Marketing mix – 4Ps.

o Reveals gaps à points to need for future research. An overview of consumer behaviour The nature of consumption • MMs view the consumer as a

decision-making unit that takes in info, processes it and takes action to achieve satisfaction and enhance their lifestyle.

• Past decisions and time-related events lead to lifestyle CHANGES that pose additional consumption problems and result in new purchases/attitudes à further lifestyle changes.

Model of consumer behaviour

Inte

rnal

influ

ence

s

External influences

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• Key to understanding consumers to develop marketing strategies à maximise sales .: profitability.

• LIMITATIONS: o Appears static à does reflect dynamic nature of CB. o Consumers are continually evolving and changing as they process new information related

to their lifestyle and the outcome of past purchase decisions. o .: underlying model is the assumption that information processing is a never-ending

activity. Consumer behaviour and society • Consumerism: evolving activities of govts, businesses, orgs and consumers aimed at

protecting/enhancing rights of consumers. o Movement in response to increasing roles of ethics in business.

• Issue of injurious consumption for MMs = CB that may be harmful/have negative consequences – e.g. cigarettes, alcohol, gambling.

PART A: Internal influences

1) PERCEPTION • Perception: process through which people notice/attend to/interpret the stimuli (objects,

messages, events) they encounter. • Critical activity that links individual consumers

to group/situation/marketer influences. The nature of perception • Critical part of human brain’s information

processing system: series of interlinked activities by which stimuli are transformed into info and stored.

• PERCEPTION PROCESS: 1. Exposure 2. Attention 3. Interpretation

• 4TH step in information processing system =

MEMORY: how the meanings given to perceptual situations are recorded as info for s-t/l-t storage.

• Distinction between s-t and l-t memory referred to as duplex theory of memory.

• Perceptual selection – only small % of info person is exposed to is passed onto the brain for interpretation.

o EFFECT: consumers are active in process of perception à important for MMs.

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1. Exposure • = stimulus comes w/in a range of person’s sensory receptors. • Stimulus must be placed in consumer’s immediate environment – via different

promotional/distribution channels. • Stimulus must exceed absolute threshold: lowest level of stimulation necessary for detection

by a person’s sensory receptors. • Selective exposure: process by which individuals deliberately seek out exposure to certain

stimuli and avoid others; exposure can be: o RANDOM. o DELIBERATE à consumers seek info that will help them achieve certain GOALS

(immediate + long-range). 2. Attention • = stimulus activates sensor receptor nerves and resulting sensations go to brain

for processing. Attention determined by…

1. Stimulus factors Physical characteristics of stimulus

• Size and intensity (loudness/brightness) o Bigger. o Insertion frequency: no. of times the same ad appears in the same

program. • Colour and movement • Position

o Centre – e.g. competition for eye-level space in grocery stores. • Isolation (separation from other objects) • Format

o Simple. • Contrast

o Adaptation level theory: people adjust to the level/type of stimulus to which they are accustomed.

§ .: MMs must change campaigns regularly. o Differential threshold: consumer’s ability to notice differences in

levels of stimulation. § Just-noticeable difference (jnd): min amount of change in a

stimulus that needs to occur for consumers to notice difference.

• Compressed messages (sped up to increase attention) • Information quantity

o MMs must avoid info overload.

2. Individual factors Personal characteristics influencing perception

• Consumer INTERESTS/NEEDS/MOTIVATIONS are the primary individual characteristics that influence attention.

o à reflection of lifestyle and goals. • Tendency for customers to demonstrate a:

o Heightened awareness of stimuli relevant to their needs/interests = perceptual vigi lance.

o Decreased awareness of stimuli not relevant to their needs/interests = perceptual defence.

• Increasing trend of ‘adversarial shoppers’ and ‘ad sceptics’.

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3. Situational factors Environmental elements other than the focal object

• Program involvement o Gain in attention occurs when program involvement moves from

low to moderate levels. o But high levels of program involvement may detract from attention

paid to some types of commercials.

Non-focused attention • = automatic monitoring = superficial/distracted allocation or processing ability to a stimulus. • Explained by hemispheric lateralisation: two sides of brain control different types of

activities. o Left: rational though, verbal info. o Right: pictorial, geometric, non-verbal info.

• Controversy over subliminal messaging: message not consciously attended to by audience exposed.

o Prohibited under the Commercial Television Industry Code of Practice. 3. Interpretation • = assignment of MEANING to

sensations. • Gestalt psychology: school of

psychology that examines the process by which stimulus info is organised/categories by human brain into patterns.

• 2 components: a) COGNITIVE

INTERPRETATION: stimuli are placed in existing categories of meaning. § Adding meaning from existing knowledge. § FACTUAL. § Info more likely to be recalled w/out prompting.

b) AFFECTIVE INTERPRETATION: emotional response triggered by stimulus. § Adding meaning from feeling. § EMOTIONAL. § Info more likely to be recognised w/out prompting.

• Must distinguish between semantic meaning (conventional) and psychological meaning (based on experience/context).

Interpretation determined by…

1. Individual characteristics

• Learning o Provides framework w/in which people give meaning to new

events/data. o Can vary across different cultures.

• Expectations o Play a role in how quality is perceived and how satisfaction is

experienced.

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2. Situational characteristics

• Moods. • Motivations (e.g. hunger). • Temperature. • Proximity.

o Perception of objects close together as related. o e.g. advertisements during ‘feel-good’ programs.

• Internet. o e.g. pop ups are involuntary exposure formats.

3. Stimulus characteristics

• SEMIOTICS: science of how meaning is created, maintained and altered. o Focuses on signs – anything that conveys meaning incl. words,

pictures, colour, music, prices.

Issues • Misinterpretation of marketing messages

o Beware of misleading claims. o Particular issue w/ radio broadcast messages and package info. o Currently no workable set of guidelines for eliminating this problem.

• Children’s information processing o Evidence that younger children:

§ Have a limited ability to process certain info. § Pay more attention to visual versus auditory stimuli.

Perception and marketing strategy a) Retail strategy • MMs must consider:

o Store layout. § Sought-after items separated so consumer will travel through more of store =

increased exposure. § Cold and hot zones. § Traffic and islands: high-margin items placed in high-traffic areas = increased

exposure. o Shelf position and shelf space.

§ Eye level. o Point-of-purchase displays.

§ Attract attention to sales. o Reference prices.

b) Brand name and logo development • Important source of perception; but, long + expensive development process. • To develop a single corporate identity. • e.g. Commonwealth Bank spent > $20 million to develop logo. c) Media strategy • Selective exposure .: MMs must assess which media target consumers are most often exposed

to à place advertising accordingly. o Selective approach: reach where target market it. o Random approach: reach where target market may be.

• Depends on whether high or low involvement w/ product category.