marketing exam #1

consumer behavior

totality of consumers thoughts, feelings, and decisions about the consumption, acquisition, and disposition of goods, services, activities and ideas

who is the consumer

• not only limited to the consumer

  • purchaser

  • decider

  • influencer

  • disposer

what type of responses do consumers make

• cognitions - thoughts

• affect - feelings

• behaviors - observable

cognitions

product related knowledge, beliefs, opinions, intentions, and memories

affect

product related attitudes, emotions, and visceral states

observable behaviors

product related decisions and actions

when can consumer responses be influenced?

1. acquistion

2. usage

3. disposition

acquisition

• buying

• leasing

• trading

• sharing

• stealing

• finding

usage

• whether

• why

• symbolism

• satisfaction

• perception

disposition

• trash

• recycle

• reuse

• sell

• trade

• give

consumer sake of exploring consumer behavior

• to understand their preferences, desires, and needs

• to help them make the best choice

society sake of studying consumer behavior

• to enable policy makers design effective policies

marketers sake of studying consumer behavior

• to learn how to influence consumers

• to understand consumers, marketers must learn not only what consumers want but why they want it

behavioral design process

1. define

2. diagnose

3. design

4. test

define

• identify the problem you want to solve

• SMART GOAL

  • Specific

  • Measurable

  • Achievable

  • Relevant

  • Time bound

diagnose

• identify bottlenecks to behavior change

• develop and test a theory of behavior change

  • create a behavioral map, a chronological chart of the consumer thoughts, attitudes, and choices may lead to the goal

  • evaluate what situational or contextual factors might serve as levers or bottlenecks to these steps being performed

  • test your theory via observation, interviews, focus groups, surveys, experiemtns

design

• develop strategies to address bottlenecks

• create a behaviorally informed intervention

  • how might we lower on eliminate this bottleneck?

  • how might we guide consumers around this bottleneck?

  • how might we motivate consumers to overcome this bottlenec

test

• evaluate the impact of the intervention

• assess the success of your chosen strategy

  • administer the intervention and measure its

primary data

collected specifically for its own purposes

secondary data

collected by an entity for one purpose and subsequently used for some other purpose

• general rule: collect _________ first because its cheaper and already available, then turn to primary data

nonexperimental research

• experiments that cannot show causation

surveys

structured questionnaires on attitudes, beliefs, choices

PROS: cost effective, broad reach, quick data collection

CONS: limited depth, no follow up

interviews

one-on-one conversations for detailed insights

PROS: flexible, rich, in depth responses

CONS: time consuming, small sample size

focus groups

guided froup discussions on perceptions and ideas

PROS: diverse views, interactive exchange

CONS: risk of bias, may not reflect actual behavior

observational research

watching consumers in real world settings

PROS: shows actual behaviors, competitive insights

CONS: doesnt capture motications or thought processes

hybrid methods

mix of observation + interaction

PROS: conbines depth & realism, reveals usability issues

CONS: costly, resource intensive

experimental research

a research method that shows causation

three features of experimental methodology

• manipulated cause

• control conditions

• random assignment

manipulated cause

change the independent variable, measure effect on the indpendent variable

control conditions

keep everything the same; use a control (no treatment) group or comparison (a different treatment) group

random assignment

assign participants to conditions randomly to rule out pre existing differences

causal inference

shows cause and effect relationships

control

isolates variables to measure their direct impact

replicability

can be repeated to verify results

feasibility

experiments may be difficult to run or costly

ethical constraints

some things cannot be manipulated

three criteria for evaluating research

1. does the study show causality

2. are the findings reliable

3. is the research internally and externally valid

causality

changes in variable cause changes in another

methodology

is the research non experimental or experimental

reverse causation

is it possible that the cause and effect work in the opposite direction

reliability

a study produces consistent results

external validity

the results generalize to real world situationst

internal validity

the study accurately shows cause and effect within the experiment

hawthorne effect

acting differently because you know youre being watched

demand characteristics

answering how you think the researcher wants

placebo effect

feeling the change just from believing you got a treatment

third variables

an outside factor that affects both of the things youre measuring

segmentation

dividing a market into meaningful smaller markets or submarkets based on common characteristics

segments should be

1. identifiable

2. substantial

3. accesible

4. stable

5. differentiable

6. actionable

target marketing

director one’s marketing efforts into specific segments (target markets)

customized target marketing

a unique product is create for the needs of a unique customer

concentrated target marketing

target a large portion fo a small market

differentiated target marketing

develop different value offeings for different targeted segments

undifferentiated target marketing

mass market

differentiate on price

positioning

communicating value to one’s target market by connecting consumers needs and wants to what your company has to offer

types of positioning strategies

• price

• core benefit

• usage situation

• product user

steps in segmentation

1. segmentation

2. target marketing

3. positioning

benefits of segmentation

• enables us to respond to our consumers unique wants and needs

• escapes the majority fallacy

majority fallacy

pursuing the majority segment can be a fallacy because the largest segment where competition tends to be most intense, is not always the most profitable

drawbacks of segmentation

• sales costs tradeoff

• cannibalization of sales

sales costs tradeoff

sales may increase with more specialized products, but so do costs

cannibalization

our product may eat share from our other products

demographic segmentation

• gender

• age

• occupation

• income

• education

• wealth

advantages of demographic segmentation

• easy to apply and use, as governmental statistical data is readily available in most countries

• suitable data can be obtained quickly and cheaply

• easy for management and staff to understand

limitations of demographic segmentation

• assumes that all consumers who share demographic traits are similar in needs

• shallow and sometimes stereotypic understanding of consumers

geographic segmentation

• climate

• population density

• region

• geodemography

advantages of geographic segmentation

• easy to apply and use

• works well in areas where there are significant demographic or lifestyle differences across regions

limitations of geographic segmentation

• assumes that all consumers in a geogrpahic are have similar needs

  • often needs to be used in conjuction with another type of segmentation

PRIZM segmentation tool

• consists of 68 segments

  • social groups (based on urbanization and socioeconomic rank)

    • ubran, suburban, second city, town and rural

  • lifestage groups (based on age and presence of children at home and socioeconomic rank)

    • younger years, family life, mature years

• provides information about segments demographic, lifestyle, and media traits

psychographic segmentation

• personality

• values

• lifestyles

big 5 personality test

1. openness

2. conscientiousness

3. extraversion

4. agreeableness

5. neuroticism

advantages of psychographic segmentation

• gives much better insight into the underlying motives and values of the consumer as a person

• allows for more targeted messaging

disadvantages of psychographic segmentation

• may require detailed data and research on consumers, which may be beyong the reach of small firms

• may better at predicting what sort of messaging will resonate better than actual behavior

• may be context specific

behavioral segmentation

• product benefits

  • price, convenience, ease of use, status

• usage occasions

  • morning, evening

  • leisure, work, rush

  • holiday, special day

• usage frequency

  • current user, potential user, lapsed user

  • light medium, heavy

• purchase history

  • past purchases

  • search history

advantages of behavioral segmentation

• tons of available data

• allows for personalized, highly targeted marketing

• obvious connection to behavior

disadvantages of behavioral segmentation

• doesnt tell us why

• raises issues of privacy

attention

the processes by which we devote mental activity to a stimulus

attention

fill in the blank: ___________ is

• often divided

• limited

• selective

types of divided attention

• multitasking

• distraction

  • driving while texting

limited attention

• millers rule

• limited sensitivity

Millers Rule

working memory holds about 7+- 2 items

capacity rises from childhood to adulthood, then declines

Webers Law

the bigger the initial stimulus, the bigger the change needed to be noticed (a $1 price cut matters on a $5 item, not on a $500 one)

adaptation that leads to advertisement wear out

we stop noticing stimuli that are simple, subtle, repetitive

how to combat advertisement wear out

Stimuli that are

• COMPLEX

• INTENSE

• NONREPETITIVE

• UPDATED

arousal

• determines how many resources we can devote

yerkes dodson curve

an inverted U, so performance is best at moderate arousal and worse when arousal is too low (sleep deprived nurse) or too high (super bowl fans)

selective attention

we focus on one or more stimuli and tuning out others

change blindness

failure to notice an obvious change

inattentional blindness

failing to notice an unexpeced item

cherrys shadowing task

different messages in each ear; participants repeat ("shadow") one.

• Not much gets through: few noticed a switch to gibberish or backwards speech; a word list repeated 35 times wasn't recognized better than chance.

• Some things do: general properties (a tone, a woman's voice); your own name (about a third notice, the cocktail-party effect); a sentence that jumps ears can pull you into switching.

conclusion: we facilitate one stimulus and inhibit others, but still monitor the unattended channel so relevant info can break through

individual factors that captivate a consumers attention

• capacity

• sensitivity

• resources

sources that captivate a consumers attention

• vividness

• intensity

• novelty

consumers capacity

• kiss principle (keep it simple stupid)

consumers sensitivity

• keep the consumers from adapting to your product

  • make it non repetitive, complex, intense

• personalize your message

  • consumers are more sensitive to information that is personally relevant

consumers resources

• too much or too little arousal is a bad thing

• know when your audience is likely to be optimally alert

  • keep complexity to a minimum when arousal is likely to be too low or too high

source factors of vividness

• humor

• emotional inerest

• concreteness

• proximity

source factors of intensity

• size

• volume

• color

• position

source factors of novelty

• unexpected ad or product format

• unexpected ad placement

• unexpected intrusion

perception

the process by which sensations (sights, sounds, smells, tastes, touch) are organized and interpreted

perception myth

we see the world as it is. we simply register sensory inputs and report them back