Consumer Behavior 375

Consumer Behavior

The process of acquiring, using (consumption), and disposing of an offering by a decision-making unit overtime

Acquisition

Exact moment or process a consumer goes through to obtain, buy, or adopt a product or service

• It can be beyond purchasing: renting, trading, sharing, gifting, finding, and even stealing

Use/Consumption

The actual act of utilizing, experiencing, or applying a product, service, or idea after buying it to satisfy a need or desire

• Can also symbolize something about the consumer

• Customer experience occurs in this stage: A critical component for sellers to manage during the consumption phase

Disposal

How consumers get rid of a product once they are done using it or no longer want it

• Consumers dispose of products through various methods:

  • Throwing away

  • Recycling

  • Reusing

  • Donating

  • Selling

Dynamic Process of Consumer Behavior

It is always non-linear and changes overtime due to shifting attitudes, habits, and external events

How has consumer behavior changed after the pandemic

• Tech-based convinces have transitioned into a ‘’Hybrid-Era’’ like Door-dash or Uber Eats

• Mobile ordering has changed services industry dynamics significantly

• Consumers are more influenced by family/friends than influencers

• Brand loyalty is in flux since consumers prefer better value so they switch to brands with lower prices

• There’s an increase in localism: people are starting to buy from locally owned companies

• Adults in USA going to the gym have increased

• Videoconferencing has increased specifically Zoom is growing

What affects consumer behavior?

1. Psychological core

2. Process of making decisions

3. Consumer culture & external process

4. Outcomes (symbolic consumption, ethnics, social responsibility)

Psychological Core

The thoughts, feelings, and basic mental processes happening inside a consumer before they decide what to buy

• How a person process information and decides what to buy

• Internal mental processes

• Motivation, ability, and opportunity

• Exposure comprehension

• Memory and Knowledge

• Attitudes

Decision-Making Process

The step-by-step journey a person takes from realizing they need something to deciding whether the purchase was a good choice

• Process of making decisions

• Information search

• Decision making: low effort vs high effort

• Post-purchase evaluation

Consumer Culture

How society and cultural surroundings shape WHY and HOW people buy things

• External processes

• Social influence on consumer behavior

• Consumer diversity

• Household and social class influences

• Psychographic: Values, personality, and lifestyle

Consumer Behavior Outcomes

The final results or actions that happen after a consumer goes through the process of thinking about, buying, using, and getting rid of a product or service

• Innovations: Resistance and Diffusion

• CB can symbolize who we are

• Marketing, ethnics, and social responsibility

Loyalty Brands

Can be an effective way for brands to build values with their customers

Symbolic Consumption

How consumers use and buy products and brands to define and communicate their personal identity

What components drive consumer behavior?

1. Motivation

2. Ability

3. Opportunity

Components that Drive Consumer Behavior: Motivation

What drives you to accomplish a goal or a specific need

• Dictates the level of effort a consumer has during a decision-making and information processing

Components that Drive Consumer Behavior: Ability

The availability of resources required to make a consumer execute a behavior

• Education and age can affect it

Components that Drive Consumer Behavior: Opportunity

External factors that affect a consumers’ engagement, such as time and distractions

1. Lack of time

2. Distraction

3. Complexity Information

What are the primary effects of high consumer motivation?

• High effort: Physical/mental energy someone puts in achieving a goal

  • like informing yourself about the product for a week before you buy it

• Processing information: How we handle data about a product —there are 2 types

  • Accurate Processing: Consumer weighs pros and cons to reach the best possible decision

  • Motivated reasoning: Consumer processes information in a bias way to reach the conclusion they want to obtain

    • Can be done through confirmation bias

• Felt involvement: The psychological experience of being connected to the product —occurs in 3 ways

  • Involvement w/ product: Consumer cares deeply about the product —collecting Pokémon cards

  • Involvement w/ brand: consumer has a strong emotional tie to a specific company —being an Apples fan

  • Involvement w/ advert/medium: Consumer finds the marketing itself engaging —getting into a TikTok trend

Confirmation Bias

The tendency to seek out information that supports your beliefs and ignore information that contradicts them

What are the types of Felt Involvemnts?

Refers to the level of interest or connection a consumer has with the product

1. Enduring

2. Situational

3. Cognitive Development

4. Affective

Felt Involvement: Enduring

Show interest in a product for long periods of time

Felt Involvement: Situational

Interested only when the need arises (temporary)

Felt Involvement: Cognitive Development

Learning and processing information about the product

Felt Involvement: Affecrive

Consumer is willing to spend energy/feelings

What are the drivers of motivation?

1. Personal revelance

2. Values

3. Self concept

4. Goals

5. Emotions

6. Perceived risk

7. Needs

Personal Relevance

How much the product matters to the individual

Values

How the product aligns with how the consumer wishes to be perceived

• Does it connect with my beliefs and values?

Self-concept

How the product aligns with how the consumer wishes to be perceived

Goals

The specific targets or outcomes the consumer wants to achieve to satisfy underlying needs or desires

Emotions

How thoughts about an outcome (e.g. gaining confidence) drive emotion and action

Perceived Risk

The potential for a negative consequences resulting from a purchase

EX:

• Buying from a non-cruelty brand

• Financial risks

• Physical risks

• Social risks

• Time risks

Drivers of Consumer Motivation: Needs (Maslow’s Hierarchy of Needs)

Does it fulfill my needs?

1. Physiological: Biological requirements for human survival. Without these the body can’t function

2. Safety: The need for protection and security like home security systems, safe car features like an airbag

3. Social: The human desire for interpersonal relationships and being part of a group an be seen in social media, dating apps, clothing brands

4. Egoistic: The desire for respect, status, recognition, and self-esteem like Luxury brands, high end credit cards that signal status or success

5. Self-Actualization: Realizes self-potential, self-fulfillment, and seeking personal growth like Universities, hobby equipment (high-end sewing supplies), travel experience that promises transformation

Drivers of Consumer Motivation: Needs (Functional, Symbolic, and Hedonic)

Does it fulfill my needs?

• Functional needs: All about solving a problem or helping the consumer achieve a task

  • EX: You buy an iPhone bc you need a reliable way to call emergency or you buy a calendar to manage your schedule

• Symbolic needs: How we see ourselves and how we want others to see us. They fulfill internal desires for status and belonging

  • EX: You buy the latest IPhone bc you want status or because you don’t want to be seen as a green bubble in IMessages

• Hedonic (experimental) needs: Are about pleasure, excitement, and sensory experiences. They fulfill our desire for fun and stimulation

  • EX: You use the IPhone to play high-graphic video games or watch vivid 4K videos

Why it matters?

Marketers want to appeal to multiple categories at once

• A car can be functional (gets you to school), symbolic (luxury brands), and hedonic (it has great sound systems and its great to drive)

Asymmetric Information

Occurs when one party of the transaction (usually the sellers) knows much more about a product or service than the other part (the buyer)

What are the 4 step processes in marketing to consumers?

The journey to encountering a marketing stimulus (product, logo, ad, anything marketing related) to understanding it involves stages

1. Exposure: Consumers coming into contact with marketing stimuli

2. Attention: The consumer’s cognitive processing of those stimuli

3. Perception: The use of senses to process stimuli

4. Comprehension: The interpretation of the message and the resulting inferences

When does exposure occurs?

It occurs when consumers come into contact with a stimulus through various channels (different ways a consumers get into contact with a stimulus like an ad, pop up, TV commercials)

What are the factors influencing exposure?

1. Location of advertisement within a medium: The placement of an advertisement within a medium (e.g. front vs. middle of a magazine) affects view ability

2. Product distribution and shelf placement: Product shelf placement in retail environments significantly impacts exposure

   1. The milk and eggs being in the back of the store in Walmart

What are the types of selective exposure

Consumers actively avoid certain stimuli through various methods:

1. Zapping: Skipping commercials

2. Zipping: Fast-forwarding through commercials

3. Cord cutting: Canceling cable TV services and instead getting content from streaming platforms (e.g. Netflix) there you can skip ads or pay a subscription to not see them

4. Digital Privacy: Opting out of browser cookies (tracks at what you search and clicked so you keep getting personalized ads)

How do marketers fight back against selective exposure (non-traditional exposure channels)

1. Gaming: Brands are creating immersive brand-centric experiences (e.g. Puma on Roblox) to reach 3.2 billion gamers worldwide

2. Retail Media: Ads placed in retail environments like digital billboards on Uber vehicles or in-store TVs at Walmart.

What is attention?

The process where a person allocated mental focus to a specific stimulus

1. Limited: Humans have a limited capacity for attention

2. Selective: Consumers choose what to focus on

3. Divided: Attention can be split between multiple tasks

4. Subject to Habituation: Consumers may stop noticing repetitive stimuli

What are the types of attention?

1. Focal attention: Concentrated focus on a specific stimulus

   1. Locked in on the ad

2. Non-focal attention: Your brain is processing information (bits of it) but you’re not actively focused on the stimulus (e.g. Makeup AD)

What are the strategies to attract attention?

Marketers can enhance attention by making stimuli:

1. Personally relevant: appealing to needs, values, or emotions

2. Pleasant: Using humor, music, or attractive models

3. Surprising: Utilizing unexpectedness

4. Easy to process:

   1. Using Prominent stimuli: A stimulus that stands out visually and hard to miss it pops out (stands out)

   2. Using a Concrete stimuli: A stimulus that shows the products use so the consumer can see how it functions

What does perception involves?

Senses (vision, hearing, taste, smell) to interpret stimuli

When is the stimuli perceived by consumer?

1. Absolute Threshold: Minimum level of stimulus intensity needed for stimulus to be perceived

2. Differential Threshold: The minimum change in a stimulus (such as price, a package redesign, or a smaller product) that a customer can clearly detect

   1. Intensity between 2 stimuli (the original product and present product)

What is comprehension and inferences?

1. The stage where the consumer interprets what a marketing message means

2. The conclusion or assumption the consumer draws from that message ( often going beyond what it literally said)

EX:

An ad shows a big cereal box comprehension is understanding its cereal and the inference is a bigger box mist be a better value

You weren’t told that you assumed that

What are the types of comprehension?

1. Objective comprehension: When the meaning is consistent with the intended message

2. Subjective comprehension: Additional meaning consumers attach to the message whether intended or not but they understand the original meaning of message

3. Miscomprehension: They think they understand the message but their inference is inaccurate meaning of message

What are the influencing factors that affects comprehension?

1. Source identification: Consumers must identify if a message is an AD; the FTC requires sponsored content to be clearly labeled

2. MAO (Motivation, Ability, and Opportunity) LOW MAO levels can lead to poor comprehension, such as, misunderstanding food labels

3. Culture:

   1. Low context cultures (US & Europe): Consumers pay Attention to marketers words

   2. High context cultures (Asia): Consumers pay attention to how the message is communicated nonverbally, message sender’s characteristics matters from marketer

What are the consumer inferences?

Consumers make mental shortcuts (inferences) based on marketing elements

1. Price & quality: Consumers believe that a Higher price equals the product quality must be better

2. Product features and packaging: Big packages correlated with the amount of product being given (more product) and price, something that tastes good is unhealthy, store brand and country of origin correlated with quality (assumption that certain countries make products of better quality)

3. Brand names and symbols: Consumers make inferences based on brand evolution or names