Consumer Behavior

evolution of the marketing concept

simple trade era → production era → sales era

simple trade era

reliance on basic bartering and handmade goods, lasted until mid-19th century (when industrialization began)

production era

corporate focus on mass-production and lowering manufacturing costs - believed affordable products would sell itself, minimal marketing and huge scale, until 1920s

sales era

businesses made what they wanted and then tried to sell to customers - hard-selling, door to door and telephone salesmen - until 1950’s

marketing department era

consolidated marketing, sales, pr, into one department, started putting more emphasis on marketing products - 1960’s

marketing company era

customer-centric, marketing starts to guide overall corporate strategy - 1990’s

customer relationship era

shifted focus to long-term, loyal and mutually rewarding customer relationships

Ranked order of US household consumption

1. Housing

2. transportation

3. food

4. personal insurance, pensions

5. health care

6. entertainment

7. cash contributions

8. clothing and services

social well-being

positive relationships, community and social connection - number 1 determinant of well-being

physical

physical health, good food, sleep, exercise

psychological self

positive emotions, resilience and coping skills, personal growth and self acceptance

psychological environment

purpose and meaning, autonomy and control, environmental mastery

resources

financial stability, time management, material goods

the “self” is at the center of…

• the social world

• the natural world

• the designed world

decision-making units in consumer behavior research

• information gatherer

• influencer

• decider

• purchaser

• user

primary data

data originating from a researcher and collected to provide information relevant to a specific research project - current, specific, accurate, takes time and uses resources

secondary data

data collected for some other purpose that is subsequently used in a research project (includes free and fee-based, ex. databases) - fast, low cost, can be out of data, too general, or inaccurate

qualitative research is useful for…

exploration and discover

• gain insight into research problems

• provide initial areas about specific problems, theories, relationships, variables, scale design

• learn more than you knew to ask initially (ex. active interviewing)

quantitative research is useful for…

validation/estimation

• confirm variable relationships

• test hypotheses

• provide quantifiable descriptive information

• make accurate predictions

examples of quantitative research methods

• surveys (predetermined, quantifiable set)

• experiments and field experiments

• conjoint analysis (determines relative importance and appeal of different levels of an offering’s attributes)

• purchase panels (tracking what consumers buy on different occasions/in different places)

• database marketing (combining all research data into a database for analysis)

• psychophysiological reactions and neuroscience

persona in consumer research

• represents a segment of customers who exhibit similar behavior patterns in their purchasing decisions, use of products, customer service preferences, lifestyle choices, etc.

• This segment is represented by an imagined archetypical customer

journey maps

Distinguish the experience at each step or stage of the consumption experience

motivation is influenced by…

• personal relevance (to self-concept, values, needs, goals, and self-control)

• perceived risk

• moderate inconsistency with attitudes

ability is influenced by…

• financial, cognitive, emotional, physical, and social and cultural resources

• education and age

opportunity is influenced by…

• time

• distractions

• complexity, amount, repetition, and control of information

personal relevance

something that has a direct bearing on the self and has potentially significant consequences or implications for our lives (consistent with self-concept, and related to needs, values, and goals)

needs

an internal state of tension experienced when there is a discrepancy between the current and an ideal or desired physical/psychological state - can be seen as the foundational drivers of values and goals

values

abstract, enduring beliefs about what is right/wrong, important, or good/bad

goals

outcomes that we would like to achieve

goal derived category

things viewed as belonging in the same category because they serve the same goals - positioning an offering as relevant to a goal can be an important marketing objective

General ways to increase attention paid to your messaging

• make it personally relevant

• make it pleasant (ex. attractive models, music, humor)

• be somewhat surprising (novelty, unexpectedness, puzzles)

• be easy to process (prominence, concreteness, limited, contrasting)

creative: useful and novel

comprehension

the process of extracting meaning from what we have perceived, in the context of what we already know - consumers draw conclusions from inferences

consumers draw inferences based on…

• product design, features, packaging

• price

• brand names/symbols

• marketing messages/media

• retail atmospherics, displays, distribution

recirculation

encountering something repeatedly effect of recirculation can be strengthened by creating different ads that repeat the same basic message and by repeating the brand name frequently

schema

the set of associations linked to a concept in memory

scripts

aspect of procedural knowledge/knowledge about how to do something/ use some product - some brands activate scripts for consumers, like IKEA advertising the easy step-by-step assembly of their products

brand image

specific type of schema that captures what a brand stands for/how favorably consumers view it

taxonomic categories

group of objects that are similar to one another in certain ways (ex. schemas for Coke, Pepsi, etc. can be clustered as “soft drinks”)

attention threshold

the minimum amount of active visual time a consumer must spend looking at an ad to trigger cognitive encoding and achieve specific brand outcomes

sleeper effect

consumers forget the source of a message more quickly than they forget the message - may form attitudes even if they don’t directly know where they come from

attitude accessibility

how easily an attitude can be remembered

attitude confidence

how strongly we hold an attitude

attitude persistence

how long our attitude lasts

attitude resistance

how difficult it is to change an attitude

what does the Fishbein Multi-Attribute Model tell us about how we can change attitudes?

a customer’s overall attitude toward a brand is based on their belief that a brand has a salient attribute, their evaluation of or importance placed on an attribute, and the number of salient attributes

mere exposure effect

familiarity leads to consumers liking an object

truth effect

consumers are more likely to have stronger beliefs about a product when they hear the same message repeatedly

thin-slice judgements

evaluations based on very brief observations (why brands try to make packaging attractive/place images in a message that make it easier for consumers to pick it up)

frequency heuristics

beliefs based on how many reasons there are to think a product is good

linear economy

buy → use → throw away: not scalable, doesn’t meet our needs

stages of use

can be non-sequential:

• Honeymoon period

• Regular use

• Peak utility

• Maintenance and repair

• Benign neglect

• Storing/forgetting

• Rediscovery

circular economy

aims to eliminate waste/pollution: products are made to optimize design/material rather than initial price, and are circulated for as long as possible by sharing, leasing, reusing, repairing, refurbishing, and recycling

expectation (dis)confirmation model

Consumers compare expectations and performance → comparison leads to satisfaction (positive disconfirmation), confirmation of expectations, or dissatisfaction (negative disconfirmation)

what can marketers do to make consumers feel a sense of need?

create/enhance discrepancies between actual and ideal state: attempt to create a new ideal state (ex. changing trends, more advanced tech), and try to encourage dissatisfaction with actual state

consideration set

set of 8 brands consumers tend to recall when problem recognition has been stimulated

factors that influence brand recall

• prototypicality

• brand familiarity

• goals/usage situations

• brand preference

• retrieval cues

factors influencing attribute recall

• accessibility/availability of information

• diagnosticity (info that helps consumers differentiate brands, ex. price)

• salience of attributes

• vividness of information (concrete words, pictures)

• consumer goals

factors that increase external search

• motivation to process information (ex. lower for a lower-involvement product)

• ability to process information (ex. consumer knowledge, consumer affect)

• opportunity to process information (ex. time available, information format)

confirmation bias

tendency to recall information that confirms overall beliefs rather than contradicting them in internal search (we are more likely to recall info about brand we like)

hedonic product information search

undirected, exploratory, emotionally driven, relies on visual queues and brand storytelling

utilitarian product information search

active, direct, goal-oriented, relies on search engines, third-party reviews, technical specs

why do marketers focus on creating positive brand attitudes?

• emotional decision making

• attitudes towards brands typically start before developing an actual preference

• long-term loyalty

• competitive advantage/trust

mental accounts in high-effort decision making

mentally designate money/budget range into “accounts” for specific transactions, goals, situations (ex. vacation account, emergency account)

compensatory decision making

evaluate how good each attribute of the brands in their consideration set are, and weight them in terms of how important attributes are for their decision

• multiattribute model

• additive difference model

noncompensatory decision making

consumers use negative information to evaluate brands and immediately eliminate them from consideration set if they are inadequate in one or more attributes

• conjunctive/disjunctive model

• lexicographic model

• elimination by aspects model

conjunctive model

consumers set up minimum cutoffs for each attribute that represent the lowest value they are willing to accept (ex. a car can have no lower than 20 miles to the gallon)

disjunctive model

• consumer sets acceptable levels of cutoffs (ex. no lower than 20 mpg car, but 25 mpg or higher is more acceptable)

• consumer bases decision on several most important attributes, putting weight on positive information

lexicographic model

consumers order attributes in terms of importance and compare the options one attribute at a time, starting with most important, and chooses when one brand dominates the others

elimination by aspects model

consumers order attributes in terms of importance and compare starting with most important, but eliminate those below an acceptable cutoff and continues until one remains

affective forecasting

consumer’s predictions of what they will feel in the future

representativeness heuristic

low-effort decision, consumers make comparisons with category prototype (ex. comparing laundry detergent with tide)

availability heuristic

low effort decision, ease with which an event can be brought to mind, consumers often remember more vivid events