LECTURE

2
CONSUMER BEHAVIOUR AND MARKETING
M.Sc Diana Casas 2017
 CLASSIFYING CONSUMERS/COMSUMPTION

Chooser

Communicator

Explorer

Identity-seeker

Hedonist

Rebel

Activist

Victim
Citizen Diana Casas M.Sc 2017
 BEHAVIOURAL ECONOMICS
Focuses on the contexts of decisions and concentrate on the environment within which consumption
choices take place.
You are on diet but when invited to a birthday you eat more because the social nature of the occasion
and because you dont want to offend your host

Automatic mode: operating routinely with little effort and no feeling of voluntarily being in control/
involved with the context of the situation/unconscious, fast
Reflective mode: Give effortful attention to a mental activity. Associated with considered choice and
concentration/ Represents the cognitive information processing aspect of decision making/ self-
aware, slow

M.Sc Diana Casas 2017

 CHOICE ARCHITECTURE
&NUDGING

https://www.youtube.com/watch?v=jsy1E3ckxlM

M.Sc Diana Casas 2017

 NUDGING
NUDGE
A nudge, as we will use the term, is any aspect of the
choice architecture that alters peoples behavior in a
predictable way without changing their incentives.
To count as a mere nudge, the intervention must be easy
and cheap to avoid.
A reminder is a nudge; so is a warning Save paper. Save the planet
To qualify as a nudge, an intervention must not impose
significant material incentives. iNcentives
Understand mapping
To count as such, a nudge must fully preserve freedom Defaults
of choice. If an intervention imposes significant material Give Feedback
costs on choosers, it is not a nudge. Expect Error
Structure complex
M.Sc Diana Casas 2017 choices
 Stairmasters users enjoy watching the INCENTIVES
calories burned meter while they work out.
However, a display that indicates the calories
one had burned in terms of food:
After 10 minutes one had earned only a bag
of carrots but after 40 mins a large cookie-
might be more effective.

At the International Airport in Amsterdam. His

idea was to show an image of a black house fly
onto the bowls of the airports urinals, just to
the left of the drain. The result: Spillage
declined 80%. It turns out that, if you give men
a target, they cant help but aim at it
I make it!

MSc Diana Casas 2017

 UNDERSTAND MAPPING
A good choice architecture nudge people to select options that will
make them better transform numerical information into units
that are more readily.
Mappings means how we translate data about an option into what
it actually means for us, like translating kilowatts of energy into
dollars on the electricity bill or megapixels to maximum print size.
Instead of being given the options of 3, 5, 7 megapixels, consumers
might be told that the camera can produce quality photos at 4x6
inches, 9x12 or poster size.

MSc Diana Casas 2017

 DEFAULTS
Make their default (lazy) choice the one you want.
Best for situations when not choosing is common has a big impact. Smartly setting
the default for people who neglect to choose a health care plan or who forget to
decide if they want to give their organs. This is effective due to the status quo bias
which is an emotional bias: a preference for the current state of affairs.
The current Status quo is taken as a reference point, and any change from that
baseline is perceived as a loss.
One of the features that affect how much we eat and hence also how many calories
we consume is plate size. In a study it was shown that moving from a 12-inch dinner
plate to a 10-inch dinner plate leads people to serve and eat 22% less!
You can use this in your day-to-day life by creating defaults when planning where to
hang out. The size of your plate affects the visual
representation and following evaluation
if we cant think of somewhere to go, lets just go to Crepes
of how much food is on your plate.

Ebbinghaus optical illusion

Of course, while this may cause you to
put more food on your plate, it isnt
sufficient for making you eat more.
Unfortunately, your brain takes care of
that often even if you think about"
MSc Diana Casas 2017
 The solution to all such problems is to reward short-term
behaviour.
GIVE FEEDBACK
It turns out that if they put a little smiley face on the bill if
you're using less power than your neighbours, that helps.
Tell people when they are doing well. Repeated and
continuous warnings tend to be ignored.

MSc Diana Casas 2017

 EXPECT ERROR
Help avoiding errors
Attach a file
Provide error tolerance
Look Right!
In London they needed to reduce pedestrian fatalities so they put
This message on every street as it was a common error tourists make
when visiting London.

MSc Diana Casas 2017

 STRUCTURE COMPLEX CHOICES
The paradox of choice is reduced if options are grouped.
Use strategies like collaborative filtering to reduce
options presented.

E.G. Uses several grouping and filtering options to help you make complex
decisions. Which of the thousands of songs on this site should I listen to
now?

MSc Diana Casas 2017

MENTAL ACCOUNTING

Individuals allocate into separate, non-transferable

groupings to which they may assign different levels
of utility or value.
It acts as a way to keep things under control within
our cognitive limitations

You may be willing to spend time queueing for a

reduction of $10000 off a $30000 shirt rather than
queueing for a reduction of $10000 off a $500000
home theater .

M.Sc Diana Casas 2017

 The Endowment Effect: The value of a good increases when it ON SALE
becomes a person ownership. The person demands more to give up
an object. Ownership creates satisfaction
Test drive
LAST
Shops are happy to offer a money-back-with-no-questions-asked
CHANCE
option. You figure the money-back option into your cost-benefit
calculation about whether to take something home, but once
youve got it home your preferences realign that item is now
yours, so youre far less likely to take it back to the shop, even if
it doesnt turn out to be as good as you thought when you bought
it

Loss aversion: People are more motivated by avoiding

Reference Point: a loss than acquiring a similar gain. One implication of
Indicator that orients you
loss aversion is that individuals have a strong tendency
generally in the field of
to remain at the status quo, because the
business
disadvantages of leaving it seems larger than
advantages
https://www.youtube.com/watch?v=
sM91d5I36Po
 NUDGING HOTEL TOWEL RE-USE AND
NORMS
To encourage guests to re-use their towels you can make them
think that the people who stayed in the room before them re-used
their towel.
Guests who stayed in the rooms with the in this hotel signs
used an average of 1.6 towels per person per day, whereas those
who stayed in the in this room option only used 1 towel per
person per day.
People want to be accepted into groups and so we act in ways
that make us belong. Instinctively, we feel close to those who have
used a hotel room before us, believing that they are similar to
ourselves. Thus we are more likely to follow their behaviour"
https://es.pinterest.com/denisedyrvig/nudging/

ENERGY REDUCTION

MSc Diana Casas 2017

MSc Diana Casas 2017
 PRIMING EFFECT

Stimulus: Event that evokes a specific functional reaction in an

organ or tissue
The brain makes unconscious connections to our memory so
that exposure to a stimulus increases the accessibility of
information already existing in the memory.
Thinking about the brand leads consumers to think about closely
related concepts.
Priming effect: Can be reduced by adding new associations to
consumers associative networks.

E.g. Research has found that happier facial images can affect our consequent behaviour.
Coca Cola certainly - Open the happy can. Huge billboards show the top of a can of coke
with a smile in the gap post opening. Every time you open a can, you get a big, wide grin
smiling back at you

MSc Diana Casas 2017

 EXPERIENTIAL MARKETING

Pre-consumption
Consumers are not problem-solvers are experiential Purchase experience
seekers. experience
(Choice process, interaction with
(planning, imagining the the service setting)
2-Way communication
experience)

https://www.youtube.com/watch?v=f4iQ3TCbqTk&t
=116s

Core consumption Remembered

experience consumption and
nostalgic experience
(Sensation of consumption, (reliving the experience and
feelings about the experience) classifying it)

M.Sc Diana Casas 2017

 GENERATIONS

M.Sc Diana Casas 2017

THE PEPSI PARADOX
An individual is prone to prefer Pepsi over Coke when blindfolded, but prone
to prefer Coke over Pepsi with labels visible.

2000s -> New brain imaging studies found evidence that an area of the brain
called the ventromedial prefrontal cortex, or VMPC was activated when one
contemplated a familiar brand-name product.

VMPC: Important part of the neural substrate for taste-independent

processes involved in brand preference. Involves emotion, emotional
regulation and decision-making
It is important for translating commercial images into brand preferences.

Damaged VMPC does not demonstrate the normal preference bias when
exposed to brand information

M.Sc Diana Casas 2017

 THE PEPSI PARADOX
Brain- damaged volunteers (VMPC Healthy Brains (volunteers)
volunteers)
Blind test: Preferred Pepsi to Coke
Blind test: Preferred Pepsi to Coke

Semi-blind test: Their brain brands appreciation Semi- blind test: Preferred Coke over Pepsi (?)
module did not change preferences even though they
were aware of what they were drinking. Kept There is some emotional/affective association with
preferring Pepsi over Coke the Coke brand label that drives their Semi-blind
preference towards Coke, despite their Blind
Lacking the normal affective processing, VMPC preference for Pepsi.
patients may base their brand preference primarily on
their taste preference.

https://www.youtube.com/watch?v=v7lw_vhxtNc
M.Sc Diana Casas 2017
 THE PEPSI PARADOX
If we are to form a complete picture, we must
fill in the blanks, just as we must in our visual
perception.

Enjoyment of a product is not only based on

the qualities of the product, but their
experience of it is also very much based on
the products marketing

The same beer/wine =described in different

ways, or labeled as different brands, or with a
different price, can taste very different.

M.Sc Diana Casas 2017

 ALTHOUGH PEOPLE BELIEVE THEIR CHOICE PREFERENCE DEPENDS ON
THE BEVERAGES INGREDIENTS.
PLACEBO EFFECT ON MARKETING
PLACEBO: Medical treatment that is inert, such as a sugar pill. Around one third of people who
take placebos (believing them to be medication) experience an end to their symptoms

Could the brain really conclude that one beverage tastes

better than another when they are physically the same?
Sensory signals, such as taste, travel from the sense organ
to the region of the brain where they are experienced.
You can run cool wine over your tongue, you dont just
taste its chemical composition, you taste its price and many
other aspects of the drink that do not register on tongue.
Study seems to indicate that people using items from
brands known for strong performance perform better at most
tasks (Journal of Consumer Research, Oxford Academy)

https://www.youtube.com/watch?v=bHBwHVbUwig

M.Sc Diana Casas 2017

 TAKEAWAY

What is true of beverages and brands is also true of the other ways we experience the social
world. Our brains employ far more than direct, explicit data on products (or people) to create
our mental experience. The key word here is create. Our brains are not recording
experiences, they are creating them.

M.Sc Diana Casas 2017

WHAT IS AN INSIGHT?

Diana Casas M.Sc 2017

 LADDERING
The focus of this technique is
on identifying specific
attributes that influence
choice, then the benefits of
those attributes until
personnel values are
uncovered

M.Sc Diana Casas 2017

M.Sc Diana Casas 2017
 FIELDWORK
Objective: To propose and execute an investigation with real data of an organization,
following scientific and academic parameters, whose main aim is the understanding of
consumer behaviour within the Colombian market.
Each working group will make two fieldwork submissions over the semester.

Students will make groups of no more than 4 students and the groups will keep the same
members during the semester. For no reason split ups will be accepted in any moment of
the course.

M.Sc Diana Casas 2017

 FIELDWORK PROPOSAL
20 MINS PITCH (PRESENTATIONS)- AUG 20TH, 2017

1. Choose a company to carry out the research: The group should contact a company in the Colombian real sector and conduct an interview with one of
the managers or employees who work in the area that is directly related to the consumer. Ex, sales area, advertising area, market research area,
2. Diagnostic interview: the group will prepare an interview to investigate information needs of the company that allows to construct a research question.
REMEMBER YOU NEED TO HAND IN THE FORM CONSENT OF THE INTERVIEW
3. Development of the research question: Based on the analysis carried out through the interview, a research question and a general objective will be
established with their respective specific objectives. This should be relevant to the company and should contribute value to it. This question must be
approved by the teacher, so that no working group can continue with the research project without written approval by the teacher. The research
question should be specific, achievable, relevant to the understanding of consumer behaviour and follow the quantitative and / or qualitative
methodological guidelines governing academic work.
4. Review of research background: Students should conduct a search for empirical papers that have addressed the research question in ISI or SCOPUS
indexed journals. A background of research that does not belong to these two databases will not be accepted.
5. Theoretical framework: It is necessary to identify the set of theories that have approached the research problem and arguably opt for one of these.
Students are expected to make a brief presentation and delve into only the selected theory.
6. Methodology: Students should propose a methodological approach that answers the research question correctly. The work may be qualitative,
quantitative or mixed. Students must hand in the document with the instruments they will use in collecting information (surveys, measurement
instruments, interview guides, etc.)
7. PRESENTATIONS: 20 MINS PITCH ABOUT THE COMPANY, RESEARCH QUESTION, THEORETHICAL FRAMEWORK AND METHODOLOGY THAT YOU THINK IS
THE BEST ONE TO CONDUCT ON YOUR PROJECT.

M.Sc Diana Casas 2017

 FIELDWORK PROPOSAL

Proposal: Will be composed by:

Diagnostic Interview results (Minimum 2 pages, maximum 4 pages)
Research question
General objective and specific objectives
Project Justification and planning (Minimum 2 pages, maximum 4 pages)
Theoretical framework (Minimum 2 pages, maximum 4 pages)
Background (minimum 2 pages, maximum 4 pages)
NOTE: YOU NEED TO HAND IN A HARD COPY AND UPLOAD IT ON BB AS WELL

M.Sc Diana Casas 2017

 FIELDWORK FINAL SUBMISSION
FINAL DOCUMENT OCT 30TH/ NOV 20TH

1. Project adjustment with the teacher's comments on the first submission (First submission + A new document with the corrections):
The teacher will review the proposal and provide a set of comments to improve the project. Students should integrate these
comments before beginning the final project.
2. Collection of information: The fieldwork will begin with the research technique proposed in the methodology.
3. Tabulation and analysis: In the case of doing a quantitative research students should build the database in SPSS as seen in class. If
the research is qualitative the respective transcription will be done in documents for analysis in hermeneutic units of Nvivo 11.
4. Analysis of information: Students should apply the statistical analysis that correspond to the information collected in SPSS. Under
no circumstances analysis will be accepted in other statistical programs. For the qualitative information students must carry out the
respective codification in the hermeneutic units of Atlas Ti. Likewise, no analysis will be accepted in any other program.
5. The results obtained
6. The answer of the the research question.
7. Conclusions: Recommendations that the group gives to the company after the completion of the project. (Product insights,
communication insights etc.)
8. Final Presentations
NOTE: ALL THE GROUPS HAVE TO SUBMIT THE HARD COPY AND THE DIGITAL COPY OF THE FINAL SUBMISSION ON OCT 30TH

M.Sc Diana Casas 2017

 REMINDERS
The document must be submitted in Word and must follow the APA Sixth edition. Remember that
under no circumstances will plagiarism and copy be accepted, and remember that if any of these are
detected, the case will be immediately reported to the Business school to open a disciplinary
process. Plagiarism consists in appropriating the ideas of another in a textual way or as a paraphrase
without giving credit to the author and also commited when an author is not cited correctly.
Recommendation: Remember all the guidelines worked on qualitative and quantitative research and
market research. Hernandez, Fernandez y Baptista (2014). Metodologa de la Investigacin. Quinta
Edicin. McGraw Hill.

M.Sc Diana Casas 2017