Consumer buyer behavior module 1

Consumer behavior

consumer decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas

Why firms study consumer behavior

• to know how to influence consumers

• to know what consumers want

Evolution of marketplace power

wholesaler → manufacturer → retailer → consumer (increasing consumer power over time)

Shifts in business orientation

1. manufacturing orientation: product

2. selling orientation: make people want what you sell

3. market orientation: sell what people want

Selling orientation

profit through sales volume by selling and promoting

Market orientation

profit through customer satisfaction by integrated marketing

Changes in consumer behavior

• internationalization

• technological advances

• big data

• changing demographics

Demographic consumer changes

• aging population

• less traditional family structure

• tech-savvy young adults

Cultural consumer changes

• price conscious

• sharing economy culture

• appearance-focused

• more online purchasing

Qualitative methods

1. projective techniques

2. focus groups

3. in-depth interviews

4. observation via ethnographic methods

Projective techniques Nescafe example

Prompted shoppers to characterize woman with different shopping lists. Revealed underlying associations of Nescafe with being cheap and lazy.

Projective technique examples

1. shopping lists

2. word association

3. sentence completion

4. storytelling

5. anthropomorphizing

6. music association

Focus group disadvantages

• small-samples

• self-monitoring

• biased answers

In-depth interviews methods

• laddering

• ZMET (pictures illustrating thoughts and feelings)

• projective techniques

Heineken’s bottle restyling

conducted in-depth interviews to determine consumer response to new bottle

ZMET (Zaltman Metaphor Elicitation Technique)

respondents use a collection of pictures to represent thoughts/feelings, interviews are performed to uncover meanings behind images

Observation vis ethnographic methods

1. natural settings

2. artificial settings

3. netnography (online behavior)

Types of surveys

• mall intercepts

• mail questionnaires

• telephone/internet

• longitudinal surveys

Problems with surveys

• self-selection

• self-reporting

• sensitivity to wording and order

determining causality

1. hold all other variables constant

2. cause must precede the effect

3. random assignment

Nicolas Cage example

correlation is NOT causation- strong correlation between Nic Cage movies and pool drownings

Degree of discrepancy

distance between actual and ideal state; determines need recognition

Identify unfulfilled needs example

Hanes tagless shirts

Changes in consumers’ needs example

sunscreen → tanning bed → self tan lotion

Creating associations with needs example

Sunkist pushing lemon juice as a low-sodium salt alternative; “s’alternative”

How firms influence consumer need recognition

1. change consumer ideal state

2. change perceived actual state

3. remind consumers of need

Motivation

inner state of arousal that provides energy needed to achieve a goal

What affects motivation?

• personal relevance

• perceived risk

• prior attitudes

• values

• needs

• goals

• emotions

• self control

Characteristics of needs

• hierarchical

• dynamic

• internally or externally aroused

• may conflict

Implementation intentions

set plans to achieve goals

Goal-gradient hypothesis

people increase their effort as they get closer to a goal

Mental effort can lead to…

ego depletion

Perceived risk and motivation

Higher perceived risk leads to greater motivation to pay attention to marketing information

Prior attitudes and motivation

Moderately inconsistent information leads to more motivation to pay attention to marketing

Marketing implications of motivation

• enhance consumer motivation to seek out and process marketing communications

• product development and positioning

Ability

the extent to which consumers have the resources to make the outcome happen

Marketing implications of ability

• target those with ability to process marketing communication

• educate less knowledgeable consumers

• provide monetary assistance

Opportunity limiters

• time

• distraction

• complexity/ amount of information

Opportunity enhancers

• make purchase ability easier

• repetition of information

• control of information (what’s presented, how long, what order)

Marketing implications of opportunity

• reduce time pressure

• reduce time needed to buy, use, and learn

• repeat marcoms

• offering accessible information

Types of exposure

1. intentional

2. incidental

3. selective

Absolute threshold

minimum amount of stimulation that can be detected; varies with sensory adaptation

Differential threshold

ability of a sensory system to detect changes or differences; J.N.D

Weber’s law

amount of change for JND is related to original intensity of stimulus

Mere exposure

positive evaluation results merely from prior exposure

Perceptual fluency

the ease with which a stimulus can be processed

Selective exposure

consumers decide what they will be exposed to by searching or avoiding; tend to be exposed to confirmatory information

Strategic exposure

• in-store

• tv

• digital/social media

• daily life

• guerilla marketing

Product placement issues

• emotional storylines may not be good fits

• repeated exposure over time can annoy consumers (transformers)

Guerilla marketing pros

• cheap

• creative

• word-of-mouth

• snowball publicity effect

Guerilla marketing cons

• messages may be misunderstood

• unpredictable obstacles

• potential backlash

Mere exposure works best for

• complex stimuli

• neutral stimuli

Avoid advertising wear out/ over-exposure by..

different ad executions

Properties of attention

• limited

• selective

• can be divided

Pre-attentive processing

information processing via peripheral vision

Perception

recognizing and interpreting stimuli using the senses

Limits on attention span

• 30 seconds and 7± 2 chunks

• depends on knowledge

• depends on arousal

How to grab consumers’ attention

• promote voluntary attention

• promote involuntary attention

capturing voluntary attention

• connect with consumers’ current needs

• make message personally relevant

Capturing involuntary attention

• increase salience

• increase vivdness

Increasing salience

• novelty/surprise

• movement

• interactivity

• intensity- color, size, volume

Increasing vividness

• emotional interest

• celebrity endorsements

• sex appeal

• humor

• concrete imagery

• proximity- sensory, spatial

Perception

recognizing and interpreting stimuli using the senses

Perceptual organization

organizing multiple simple stimuli into a unified whole

Gestalt principles of perceptual organization

1. figure and ground

2. closure

3. grouping

Figure and ground

people interpret a stimuli in the context of a background

Closure

perceive shapes as being whole, even when they are not complete

Grouping

group stimuli to form a unified picture of impression; stimuli that are close to each other appear to form groups

Perceptual confirmation

we perceive and interpret ambiguous data to be in line with our expectations and beliefs

Perception marketing applications

• brand name affects perceptions of taste

• expectations change perception (MIT brew, Palessi)

Taxonomic categorization

group similar objects in the same category in hierarchical structure: subordinate → basic → superordinate

Goal derived categorization

Contain things relevant to a goal, created through rules and experience

Marketing implications of Categorization

• defines comparison points

• brands with strongest associations define category attributes

• strong category associations increase probability of brand activation

Affect transfer

categorization of your brand influences evaluation of your brand

Comprehension

the process of extracting meaning from what we have perceived in the context of what we already know to interpret a marketing message

Objective comprehension

does the consumer understand what message the sender intended?

subjective comprehension

does the consumer gleam any other understanding from the message, accurate or not?

Miscomprehension concerns

• misleading advertising/visuals

• literal vs. figurative meanings

• misrepresentation

• wrongfully inferring causality

Increase believability through

• distraction

• repetition

Stages of memory

sensory memory → short term memory → long term memory

Working memory

temporary storage/processing of info used to solve problems, respond to stimuli, or achieve goals; active memory

3 components of working memory

1. verbal memory store

2. visual memory store

3. central executive

Encoding

perceived info converted into a construct that can be stored from LTM

Types of rehearsal

1. maintenance rehearsal

2. elaborative rehearsal

Peak-end rule

we judge an experience based on its peak and at the end, rather than evaluating the experience collectively as a whole

Probability of encoding highest depending on…

primacy and recency

Types of stored long term memory

1. declarative (conceptual)

2. procedural

Declarative (conceptual) memory

• semantic- knowledge/facts

• episodic- memories

Procedural memory

skills or habits

Explicit memory

achieved by active attempts to remember/retrieve

Day after recall (DAR) questions

marketing strategy to measure ad effectiveness through recognition, unaided, and aided recall

Implicit memory

memory of concepts without conscious awareness

Why do we forget things?

• absent-mindedness

• transience

• blocking

• decay

Absent-mindedness

shallow processing during encoding

Transience

memory worsens the longer the delay between learning and recall

Blocking

concept in long term memory becomes confused with other info during encoding that distorts or disrupts memories

Decay

weakening of association nodes or links over time if not reviewed or recalled consistently

How can marketers improve recall?

• imagery

• chunking

• simple messages

• repetition

• elaboration

Why use imagery?

• consumers purchase products they can imagine using

• imagery is easily processed and remembered well

• imagery makes it easier to evaluate options

Elaboration

information can be transferred into long-term memory if it is processed at deeper levels