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CONSUMER BEHAVIOR

BUAD 307
MARKETING FUNDAMENTALS

Why does Staples


sell Starbucks
coffee?
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

Influences on and of Consumer Behavior


PERCEPTION/
SENSATION

MARKET
RESEARCH

INFO
SEARCH

STRATEGY

CHOICES

COGNITION

AFFECT
PREFERENCES
BELIEFS

CONSUMER
COMMUNICATION
SOCIAL AND
OTHER INFLUENCE
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

Learning Outcome Objectives


Understand how consumer
cognitive (thinking) processes and
limitations, affect, beliefs, social
influences, and other contextual
factors influence consumer
decision making, choices, and
behavior
Appreciate how these insights can
be used to design and implement
effective marketing strategies
Appreciate individual and segment
differences in process and
outcome
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CONSUMER BEHAVIOR

Lars Perner, Instructor

True or False?
1. If you have bad breath, you cannot smell it
yourself.
2. If you eat a balanced diet, you do not need
vitamin supplements.
3. Using a razor with five blades will reduce the
likelihood of cutting yourself and will result in
less skin irritation.
4. Dell Computers tend to be of higher quality
than those made by HP and Sony.
5. Rust stains on clothes can be removed with
the use of lemon juice. Bleach actually
makes these stains worse.
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

Questions Faced By
Consumers
Are veggie burgers actually healthy?
What makeup should you use to get an
even skin tone?
Do I get any useful benefits from spending
more than $125 on a digital camera?
Should I get a make-over? What am I
looking for? What should I do?
Is my mechanic honest?
Which tie should I wear for a job interview?
Should I give my wife roses, chocolate, or
software?
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

Consumer Problems and


Recognition
Consumer problem:
Discrepancy between ideal and
actual state--e.g., consumer:
Has insufficient hair
Is hungry
Has run out of ink in his or
her inkjet cartridge

Problems can be solved


in several ways--e.g., stress
reduction <----- vacation, movie, hot
bath, medication

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

CONSUMER DECISIONS:
Theory and Reality in Consumer Buying

PROBLEM
RECOGNITION

INFORMATION
SEARCH

EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS

Theory
Complications

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

Approaches to Search for


Problem Solutions

INTERNAL
Memory
Thinking

EXTERNAL
Word of mouth, media,
store visits, trial
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CONSUMER BEHAVIOR

CATALOG

Lars Perner, Instructor

Options Identified and Considered


UNIVERSAL SET

All possible options


RETRIEVED SET

Options that readily


come to mind

Options that will be


considered by the
consumer

EVOKED SET

Note: Retrieved and


evoked sets will vary
among different
consumers
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CONSUMER BEHAVIOR

Lars Perner, Instructor

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REMINDER
For low involvement
products, efforts aimed at
affecting internal search
tend to be more
effectivethe consumer
is usually not willing to
expend energy on
external search.
External search is more
likely for higher
involvement products.
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Decision Making Issues


Involvement level
Temporary
Enduring
Consumer locus of control
Internal
External
Product category complexity
Consumer knowledge

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Evaluation Type
IMPORTANT

BUAD 307

LESS
IMPORTANT

Compensatory: Decision based on overall


value of alternatives (good attribute can
outweigh bad ones)
Non-compensatory: Absolutely must meet
at least one important criterion (e.g., car
must have automatic transmission)
Hybrid: Combination of the two (e.g., one
non-compensatory measure, then
compensatory tradeoffs on other attributes
Abandoned strategy: Consumer finds initial
criteria unrealistic and proceeds to less
desirable solution
CONSUMER BEHAVIOR

Lars Perner, Instructor

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HeuristicsLow Involvement
Decision Rules
If either Coke or Pepsi is on
sale, buy that brand;
otherwise, buy Coke
The larger the navels, the
better the orange
The larger package is likely to
offer a lower unit price (not
true in reality)

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitudescomponents

AFFECT
(FEELING)

BELIEFS

BEHAVIORAL
INTENTIONS

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Components
Beliefs
Can be positive,
negative, or neutral
May or may not be
accurate
May contradict other
beliefs held by the other
person

Affect
May be positive or
negative
May take on specific
dimension (e.g.,
pleasure, disgust)

BUAD 307

CONSUMER BEHAVIOR

Behavioral
Intentions
An individuals plan or
expectations of what he
or she will do
May appear inconsistent
with beliefs
May not predict well what
the individual will do in
reality

Lars Perner, Instructor

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Generating Beliefs Through


Advertising
Statements must be
Perceived
Comprehended
Remembered
Believed (at least in part)

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Positioning Through Creating


Beliefs
Its not delivery; its De Journo!
Wal-Mart. Always low prices.
Always.
I just saved a bunch of money on
my auto insurance.
U-um Good! (Campbells Soup)

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

18

Multiattribute Models of
Attitude
Attitude computed as a
function of multiple attributes
weighted for importance:

Ab i 1WiXib
n

Ab= attitude toward brand b


Wi: weight of attribute I
Xib: belief about brand bs
performance on attribute I
Model assumes rationality
Calculations will not be required on the
exam. You should know conceptually what
this involves conceptuallyi.e., weighing
importance and intensity of feeling.
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Multiattribute Models
Caveats

Applications

Different segments exist that will weight


factors differentlythus, overall
averages can be misleading. Separate
analyses should be done for different
segments of interest. (Segments can be
identified by certain statistical
techniques).
Individual differences exist in scale
intensityfor some, it is much easier to
be extremely good or extremely bad.
Prior research may be needed to identify
issues (dimensions) to be weighted.
Some factors may be intangibleWhat
are the substantive differences between
Windows and Apple computers?
Non-compensatory factorsmusthavesmay determine final result.
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Determining
Overall performance
Areas of strength and weakness
Comparison to competitors
Overall
Areas of strength and weakness

REMINDER:
PERCEPTIONS ARE NOT
NECESSARILY ACCURATE. We
are looking to work with what
consumers believe.

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Affect
Based on
past emotional
associations of product
emotional effect of beliefs

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CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Characteristics
Availability/
accessibility

Constructed
vs. natural

Strength
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CONSUMER BEHAVIOR

Lars Perner, Instructor

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Measurement of Attitude
Components
Beliefs
Semantic Differential Scales
Good -------------------Bad
Fast --------------------Slow
Reliable-----------------Unreliable

Feelings
Likert Scales (Strongly agree Strongly Disagree)
This product makes me happy.

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CONSUMER BEHAVIOR

Lars Perner, Instructor

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Measurement
Behavioral Intention
Rating of likelihood of
purchase
May need projection if
social desirability affects
willingness to admit to
product use

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Change Strategies, Part I


Change Affect
Classical conditioning
Pairing the brand or product
with desired stimuluse.g., a
car with a beautiful woman
Attitude toward the ad
A likable ad for a brand in a
mundane product category
e.g.,

Energizer Bunny
Snuggles (fabric
softener)
Mere exposure

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Change Strategies II


Change behavior (e.g.,
sampling)
Attitudes are inferred from
behavior (e.g., I buy the product
I must like it or It must be
good)

Change Belief Component


Change existing beliefs
Difficult
Advertisers motives are suspect

Change importance of attributes


Add beliefs
Change ideal (fashion)
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Adding Beliefs (True or Not):


Examples
Brushing and flossing do
not reach all areas of the
mouth
People under stress need
more vitamins
Baking soda will reduce
odor of refrigerators
Fragmented hard drives
may cause computer
errors
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CONSUMER BEHAVIOR

Lars Perner, Instructor

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REMINDER
Changing currently held
beliefs tends to be
difficultpeople know the
marketer has an ulterior
motive
Adding new beliefs that
are not inconsistent with
what is already believed
may be more effective

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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One-sided vs. two sided


appeals
One-sided: only saying
what favors your side
Two-sided: stating your
case but also admitting
points favoring the other
side
Why is this effective?

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

29

Potential Family Life Cycle


Stages

YOUNG
SINGLE

YOUNG
COUPLE

EMPTY NEST
I/II

FULL NEST
I/II/III

SINGLE
PARENT

OLDER
SINGLE
BLENDED

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

30

Economic/Marketing Implications of
Household Cycles
Income tends to
increase with time
But children/
obligations add cost
Divorce
increases costs
may change
income
distribution
marriage

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Product demand
due to
singles with low
expenses
new couples
divorced
families
children
empty nesters
--> more income

CONSUMER BEHAVIOR

Lars Perner, Instructor

31

Household Decision Making


Roles/influence

Information gatherers/holders
Influencers
Decision makers
Purchasers
Users

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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The Means-End Chain


Aim promotion/
positioning at higher
levels of chain!

Self-esteem

Values

Feeling of power

Consequences
Attributes

Performance

Fast acceleration
Large engine

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CONSUMER BEHAVIOR

Lars Perner, Instructor

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Subliminal Perception: A
Diabolical Marketing Tool?
Subliminal messages in ads
are illegal in U.S.
Some research support for
modest effects
Probably limited to one
syllable words
Complex messages can
probably not be
processed subliminally

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CONSUMER BEHAVIOR

Lars Perner, Instructor

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Message Framing
Many tradeoffs
can be stated in
two,
mathematically
equivalent
wayse.g.,
80% lean vs.
20% fat
$49.00 per
person per night
based on double
occupancy
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CONSUMER BEHAVIOR

Lars Perner, Instructor

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Some Consumer Behavior Issues That Will


Come Up Elsewhere in the Course

Demographics
(segmentation)
Lifestyle (segmentation)
Culture/subculture
(segmentation, international
marketing)
Diffusion of innovation
(product)
Attention (promotion)
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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Organizational Buyers
Types

Characteristics

Industrial
Reseller
Government and
non-profit
organizations

Greater involvement
Bureaucracy
Long term
relationships
Price is important but
may not be the most
important factor

Purchase types
Straight rebuy
Limited decision
making
Extended decision
making

BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

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