CONSUMER BEHAVIOR LESSON 1

Consumer Behavior

The totality of consumer’s decisions with respect to the acquisition, consumption, and disposition of goods, services, time & ideas by (human) decision making units.

Dynamic process

•Can involve many people

•Involves many decisions big & small – ex. A family acquired a new car.

•Involves consumer feelings & coping

•The abcs of consumer behavior intertwine:

−Attitude/affect

−Behavior

−Cognition

Involves attitude towards:

• Product

• Services

• Experiences

• People

• Ideas

Psychological Core

•Motivation, ability, & opportunity Ex. To have a vacation.

•Exposure, attention, & perception – Look for travel ads and websites and travel agents.

•Categorizing & comprehending information

•Forming & changing attitudes

•Forming & retrieving memories

Consumer Decisions

•Whether? – acquire, use or dispose of a thing.

•What?- buying food or music.

•Why? – according to needs.

•Why Not?-delay in buying.

•How?- consume, use, dispose

•Ways? – the offering must be used correctly by consumers.

•When? – buy according as needed. Ex. Wedding ring

•Where? – Stores, online, mail

 

•How much?

•How often?

•How long?

•Plus, a plethora of online decisions…to tweet or not to tweet…to check in or not to check in…

Problem recognition & search for information

When we realize we have an unfulfilled need.

Judgments & decisions

Investing

    more time, exert mental and

    emotional energy in making it.

Post-decision evaluations

Consumer to judge whether the decision

    made was correct one and to purchase it

    again. Whether the customer is satisfied or not.

Consumer diversity

Regional, cultural

   groups that affect decisions he makes.

Social class & household

Upper or

    middle class also affect his decision

Culture

typical or expected behavior,

                norms that characterize people

Consumer behavior outcomes

Symbolize who we are—external signs used to express identity.

•Diffuse through a market—influence others’ decision making

•Ethics & corporate social responsibility (CSR)

Beneficiaries of Consumer Behavior Research

•Marketing managers

•Advertisers

•Ethicists/advocacy groups

•Public policy makers/regulators

•Scholars

•Media/popular press

•Consumers

Developing/implementing customer-oriented strategy

Segmenting the market? Ex. Minute maid and coca cola.

–Profitability of each segment? Identify needs that have not met.

–Characteristics of each segment? Study the age, education and lifestyle of consumers.

–Customer satisfaction of each segment? Harley Davidson.

Product positioning decisions

–Positioning of competition? Perceptual map

–How should our offerings be positioned? Should be in the eye of consumers.

–Should we reposition offerings? Change their image.

products/services development decisions

Consumers’ ideas for new products? Matching what customers wants.

–Additional or different attributes? Ex. US Postal service with stamp.

–Brand naming? Choosing a brand and differentiating it from other brands.

–Packaging and logo design? Develop “healthy positioning”

IMC

Advertising objectives? Enhance brand awareness.

–Words and visuals of ads? For brand recognition and recall.

–Where should ads be placed? Use of demographic, lifestyle and media. Ex. Facebook

–When should ads be placed? Seasonal variations in purchases.

–Have ads been effective?

Sales promotion objectives? Use research in sales promotion

–When should sales promotions occur?

–Have sales promotions been effective? Compare sales before, during and after a promotion to determine changes in sales.

–How large a sales force?

–How can salespeople best serve customers? Tracking store patronage.

Pricing decision

What should the price be? Prices often end at 99.

–How sensitive are consumers to price and price changes? Consumers are price sensitive.

–When should pricing tactics be used? Consumers are sensitive to price cuts.

distribution decisions

Where does target market shop? Understand consumer’s time and convenience. Ex. 24 hour stores.

–How should stores be designed? Similar or complementary  items stocked near one another.

Market segmentation

can group consumers by similar needs, wants, & attitudes

Customer relationship management (CRM)

providing value & service to customers over time to build loyalty

positioning

niche in consumers’ minds − critical to success