Consumer Behaviour - MS30E Lecture 1

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Week 1: Course IntroductionIntroduction to Consumer Behaviour

Presented by: Dr. Trevor Smith

January 24, 2014

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Career Track

Consultancy

Executive Employment Entrepreneurship

Researcher/ Lecturer


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Course OverviewThis course explores the dynamics ofconsumer behaviourthroughout thepurchasing processand provides studentswith the necessary skills to analyze andshape marketing strategiesfor effectivelymeeting consumer needs. Consumermotivation, behavioural considerationsaffecting consumer purchasing decisions;and meeting consumer needsthroughselling, advertising and distribution aresome of the key areas presented in thiscourse.

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Student Learning Objectives Upon successful completion of this course, the

student should be able to: Determine the factors that motivate consumers into

buying certain products/services. Assess products as "bundles of satisfaction" anddevelop strategies to maximize consumeracceptance of such products. Demonstrate an understanding of how consumersprocess information into decisionsand thestrategic implications of this process. Demonstrate insight into the continuum of factorsthat affect consumer decisions. Develop an understanding of the environmentalconsiderations affecting the behaviour of

consumers.5


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Readings Required Text

Schiffman, L.G., Kanuk, L. L., Wisenblit, J. (2010),Consumer Behavior,10th Edition, Prentice Hall,Upper Saddle River, NJ .

Articles The material presented in the required text will be

supplemented with hand-outs. These hand-outs willbe distributed by the course instructors.

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Guest Lecture A guest lecture will be delivered by an

industry practitioner aimed at enhancingclassroom knowledge with industryexperience. Date of guest lecture will beannounced on confirmation.

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Deliverables Midterm Test 15%-February 28, 2014 Group Project 25% - Mar 28, 2014 Final Exam 60%

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Office Hours Wednesdays 10-12noon

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Week Topic DeliverablesWK1 Introduction to Course

Introduction to Consumer Behaviour

Read course outline

Read chapter 1

WK2 Consumer Research & Market

Segmentation

Read chapter 2 & 3

WK3 Consumer Motivation Read chapter 4

WK4 Personality and Consumer

Behaviour

Read chapter 5

WK5 Consumer Perception Read chapter 6

WK6 Exam Take Mid-Semester

Exam (February 28)

WK7 Consumer Learning Read chapter 7

WK8 Consumer Attitude formation and

Change & Communication and

Consumer Behaviour

Read chapters 8 & 9

WK9 Social Class and Consumer

Behaviour

Read chapter 11

WK10 Influence of Culture/Subculture /

Cross Culture on Consumer

Behaviour

Read chapters 12, 13 &

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Submit Project (March

28)

WK11 Consumer Decision Making and

Beyond

Read chapter 16

WK12 Revision

Exam Period) To be announced Take Final Exam


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Overview of Consumer Behavior The Marketing Concept

The Marketing Mix and Relationships

Digital Technologies Societal Marketing Concept

A Simplified Model of Consumer DecisionMaking

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The behaviour that consumers display insearchingfor, purchasing, using, evaluating,and disposing of products and services thatthey expect will satisfy their needs.

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weblink
http://www.froogle.com/http://www.froogle.com/


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The individual who buys goods and services forhis or her own use, for household use, for theuse of a family member, or for a friend.

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A business, government agency, or otherinstitution (profit or nonprofit) that buys thegoods, services, and/or equipment necessaryfor the organization to function.

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Production

Concept

Selling Concept

Product Concept

Marketing

Concept


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Assumes that consumers are interestedprimarily in product availability at low prices

Marketing objectives: Cheap, efficient production

Intensive distribution

Market expansion

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Assumes that consumers will buy the productthat offers them the highest quality, the bestperformance, and the most features

Marketing objectives: Quality improvement

Addition of features

Tendency toward Marketing Myopia

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Assumes that consumers are unlikely to buy aproduct unless they are aggressivelypersuaded to do so

Marketing objectives: Sell, sell, sell

Lack of concern for customer needs andsatisfaction

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Assumes that to be successful, a companymust determine the needs and wants ofspecific target markets and deliver thedesired satisfactions better than the

competition Marketing objectives:

Make what you can sell

Focus on buyers needs

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What two Jamaican companies do you believegrasp and use the marketing concept?

Why do you believe this?

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Consumer

Research Segmentation

Targeting

Positioning

The process and

tools used to studyconsumer behavior

Two perspectives: Positivist approach

Interpretivist approach

Implement ing the

Market ing Concept


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Consumer


Targeting

Positioning

Process of dividing

the market intosubsets ofconsumers withcommon needs or

characteristics

Implement ing the

Market ing Concept


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What products that you regularly purchasethat are highly segmented?

What are the different segments?

Why is segmentation useful to the marketerfor these products?

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Consumer


Targeting

Positioning

The selection of one or

more of the segmentsto pursue

Implement ing the

Market ing Concept


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Consumer


Targeting

Positioning

Developing a distinct image

for the product in the mind ofthe consumer

Successful positioningincludes:

Communicating the benefitsof the product

Communicating a uniqueselling proposition

Implement ing the

Market ing Concept


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This product is

positioned asa solution to

facial

redness.


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Product Price

Place

Promotion

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CustomerValue

CustomerSatisfaction

CustomerRetention

CustomerTrust


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Customer

Value Customer

Satisfaction

CustomerRetention

CustomerTrust

Defined as the ratio between

the customers perceivedbenefits and the resourcesused to obtain those benefits

Perceived value is relative andsubjective

Developing a valueproposition is critical

Value, Satisfactio n ,

,Reten t ion & Trust


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How does Burger King create value for theconsumer?

How do they communicate this value?

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Customer

Value Customer

Satisfaction

CustomerRetention

CustomerTrust

The individual's perception of the

performance of the product orservice in relation to his or herexpectations.

Customers identified based onloyalty include loyalists, apostles,

defectors, terrorists, hostages,and mercenaries


Reten t ion , Trust


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Customer

Value Customer

Satisfaction Customer

Retention

The objective of providing value isto retain highly satisfiedcustomers.

Loyal customers are key They buy more products They are less price sensitive

They pay less attention tocompetitors advertising Servicing them is cheaper They spread positive word of

mouth


Retent ion & Trus t


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Customer

Value Customer

Satisfaction Customer

Retention Customer

Trust

The objective is for the customer to trust thecompany and its products

Foundation for maintaining long standingrelationship with customer; helps to increaseloyalty

Trust is key

Online and off-line product

Neilsen Customize Research Services:

Word-of mouth communications/

recommendations from other consumers(78% trusting such source)

Newspaper, consumer opinion postedon-line, brand website (high in trust)

Online banner ads, text ads to mobilephones (low in trust)


Retent ion & Trus t


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Tracks costs and revenues of individualconsumers

Categorizes them into tiers based onconsumption behavior

A customer pyramid groups customers intofour tiers

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Traditional Marketing ConceptValue and RetentionFocused Marketing

Make only what you can sell instead

of trying to sell what you make

Use technology that enables

customers to customize what

you makeDo not focus on the product; focus on

the need that it satisfies

Focus on the products

perceived value, as well as the

need that it satisfies

Market products and services that

match customers needs better than

competitors offerings

Utilize an understanding of

customer needs to develop

offerings that customersperceive as more valuable than

competitors offerings


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Consumers have more power and access toinformation

Marketers can gather more information aboutconsumers

The exchange between marketer and customers isinteractive and instantaneous and goes beyond thePC.

Marketers must offer more products and services


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Marketers adhere to principles of socialresponsibility in the marketing of their

goods and services; that is, they mustendeavor to satisfy the needs and wants oftheir target markets in ways that preserveand enhance the well-being of consumers

and society as a whole.


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Psychology

Sociology

Social psychology

Anthropology

Economics


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Consumer Research & Market Segmentation Chapters 2&3

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Documents

Consumer Behaviour - MS30E Lecture 1