Week 4 Notes: Consumer Behavior and Mid-Semester Exam Logistics

Course logistics and context from the lecture
- Week 4 materials are posted on the Week 4 page; Week 3 slides are posted and cleaned up.
- Academic honesty module (compulsory for commencing/new students): required for new students to access results; takes about 1 hour; usually counted toward the degree and required only once.
- Pearson Revel is the prescribed digital textbook used for the mid-semester exam; about half the cohort had accessed it by the prior week; contains practice quizzes helpful for exam prep.
- Group work: groups should be settled by now; no moving around; groups select ideas and begin research progressively.
- Tutorial activities: weekly tasks (e.g., Virgin, middle seat lottery) are accessible in exams as well; tutors may give varying instructions on collection/posting; you may be asked to produce work in any random week; tutor collects them as your participation record.
- Mid-semester exam logistics (overview): more details will be reinforced in week 6.
- Week 6: there will be a very short lecture focusing on mid-exam and early feedback quiz questions; some sample questions will be provided; best practice for the mid-semester exam is to study via Pearson Revel (five chapters: Lecture 1–5).
- The mid-semester exam format: all MCQs; paper-based (not Canvas-based); must attend in person at a venue determined by the Exams Office.
- Exam timetable: Saturday of Week 6 at 12:10 PM; venue emailed to students (venue may differ from friends’); verify details in the email.
- Exam structure: 46 multiple-choice questions; each question worth 0.5 marks; total = 23 marks; all marks accumulate to 100.
- The mid-semester exam serves as a blueprint for the final exam; performing well on the mid-semester exam provides a realistic sense of final exam style.
- Revision guidance: start reading early; five topics/chapters for the mid-semester; while breadth is large, the content is manageable if followed weekly.
- Last week covered a Strategy/Industry lecture; consumer behavior is chapter five; consumer behavior is a core topic with significant psychology elements; consumer behavior underpins marketing strategy by understanding why consumers behave the way they do before applying the marketing mix.
Key concepts: what is a consumer and what is a market?
- Consumer market = actual and potential consumers who purchase for personal consumption; contrasted with business market (B2B), which behaves differently (purchasing frequency, size, etc.).
- For your course projects, focus on the consumer market only; business consumer behavior sections are excluded from Pearson Revel.
- People like you and I buy goods/services/experiences for personal consumption based on needs and wants; marketing strategy is anchored in understanding the consumer (the why and how behind purchase behavior).
- The consumer decision process is used to explain what consumers go through when making a purchase; involves several stages and is influenced by involvement level.
Involvement: high vs low; a spectrum, not a binary
- Involvement denotes the degree of consumer interest and perceived importance/complexity of a purchase.
- High involvement purchases are often important or complex, leading to more time/money/effort spent researching and evaluating.
- Low involvement purchases are routine, cheap, or everyday (e.g., daily-use items); decisions are quicker and more automatic.
- Involvement influences motivation and the depth of the information search and evaluation.
The Consumer Decision Process (Five Stages)
- Stage 1: Problem recognition (recognizing a need or problem to solve)
- Stage 2: Information search (internal memory and external sources: online reviews, ads, friends/family, experiences, etc.)
- Stage 3: Evaluation of options (considering brands, prices, warranties, origins, features; higher involvement leads to more thorough evaluation; may set criteria and weigh options)
- Stage 4: Purchase (the actual buying decision; omnichannel opportunities: in-store, online, mobile, etc.)
- Stage 5: Post-purchase behavior (satisfaction, repeat purchases, word-of-mouth, or negative WOM)
- Post-purchase dissonance: a state of cognitive dissonance arising after high-involvement purchases; consumer tries to justify the decision or may seek refunds; more involvement increases likelihood of dissonance
- This five-step model assumes rational, utilitarian decision-making (System 2 thinking) but in practice purchases are often not fully rational or linear.
System 1 vs System 2 thinking (Kahneman)
- System 2: slow, deliberate, careful thinking; used in high-involvement, complex decisions; deliberate weighing of pros/cons.
- System 1: fast, automatic, heuristic-based (quick judgments, habits, emotions); used for low-involvement, routine purchases.
- Most everyday purchases are System 1 (habit, emotion, repetition) rather than System 2; System 2 is invoked for complex, risky, or high-cost purchases.
- Example: toilet-paper panic during COVID-19 illustrates System 1, scarcity-driven behavior, availability/recency effects, and fear responses, not a carefully reasoned five-step decision process.
Heuristics and biases (mental shortcuts) that influence fast decisions
- Representativeness: rely on stereotypes or perceived typical characteristics to judge options; e.g., assuming a bank or a profession based on cues; can lead to biased inferences.
- Availability: decisions based on what is readily recalled or reported in the media; high advertising frequency or recent events influence perception of likelihood or risk.
- Anchoring: relying on an initial reference point (anchor) to judge subsequent prices or options; example: a product offered at an high anchor price, then discounted to seem like a good deal.
- Example bear pricing scenario: initial anchor of $300, then price drops to $100; if the bear had always cost $100, the $300 anchor anchors the consumer’s perception of value.
- Heuristics reduce cognitive effort but can bias decisions away from optimal choices.
Five-step model critique and real-world deviations
- Not all purchases go through all five steps; time and effort constraints lead to shortcuts or habitual behavior.
- Some purchases are impulse-driven or emotionally motivated rather than rational.
- When engaging in higher involvement purchases, consumers may rely more on System 2; for many routine purchases, System 1 dominates.
- The model assumes rationality and utilitarian motives; actual consumer behavior includes emotional, symbolic, and social influences.
- After purchase, consumers may engage in behavior to reduce dissonance or will display post-purchase reflexes like word-of-mouth (positive or negative).
Conspicuous and invidious consumption (Weberian/contrast concepts)
- Conspicuous consumption: purchases intended to show off social status or class; signaling a particular social status
- Invidious consumption: purchases designed to evoke envy in others (e.g., prestige brands, exclusive items showcased publicly)
- These forms are influenced by cultural and social context and can drive purchasing decisions beyond functional value.
The Weblenian framework: four types of buying behavior (beyond the five-step model)
- Complex buying behavior: high involvement and significant perceived differences between brands; large risk; likely to follow the five-step process
- Dissonance-reducing buying behavior: high involvement but perceived little difference between brands; effort spent trying to justify purchase after the fact
- Habitual/routinized buying behavior: low involvement; decisions made out of habit or routine; brand switching or price-driven choices are common when price is a primary driver
- Variety-seeking (brand switching) buying behavior: low involvement but high perceived variety; consumers switch brands for novelty or exploration
Cultural factors and the environment affecting consumer behavior
- Culture shapes norms, rituals, and acceptable behaviors; cultural shifts are slow but influential
- Cultural factors incorporate issues like cultural appropriation and usage of cultural symbols in marketing; some campaigns are well-executed, others are controversial
- Cultural trends examples from a Future 100 Trends snapshot include:
- Reality shift: Gen Z seeking different realities due to cost-of-living, climate change, etc.
- Wellness/workspace trends: healthier workspaces, yoga mats, holistic wellness influences on purchase decisions
- Desire for real human connections and nature, reducing screen time; preference for authentic experiences
- Japanese cultural products and tourism influence on consumer behavior; cross-cultural marketing implications
- Cultural trends can inform project ideas for consumer research and trend spotting
- A note on sources: Euromonitor provided some data; a separate VML Intelligence study (Future 100 Trends) provides broader cultural trend insights; Roy Morgan segmentation is a practical example of lifestyle-based market research in Australia.
Social and personal factors in consumer behavior
- Social factors:
- Groups and reference groups: direct influence from family, friends; indirect influence from peers, aspirational groups, and role models
- Public vs private consumption: the visibility of a product affects the strength of social influence
- Personal factors:
- Demographics: age, life stage, occupation, income; these affect both consumption ability and product choice
- Personality and self-image: how a product aligns with self-concept; brands may try to influence self-perception (e.g., Dove campaigns focusing on inner beauty)
- Lifestyle: expressed through Activities, Interests, and Opinions (AIO); Roy Morgan’s lifestyle segments (e.g., Young Optimism) illustrate psychographic differentiation useful for segmentation and targeting in projects
Psychological factors in consumer behavior
- Needs and motivation: needs prompt purchase decisions; motives become actions when strong enough to drive behavior
- Maslow’s hierarchy of needs (simplified for marketing context):
- Physiological needs (bottom of the hierarchy): food, water, basic survival
- Safety needs, belongingness, esteem, self-actualization (higher-order needs)
- In developing contexts, fulfilling basic needs may take precedence over aspirational goals; marketing messages often aim to address higher-order needs once basic needs are met
- Perception: how consumers see and interpret information; marketing influences perception through branding, messages, and sensory cues
- Perceptual processes (three core ideas):
  - Selective exposure/attention: consumers notice some messages over others
  - Selective distortion: consumers interpret information in a way that aligns with their beliefs
  - Selective retention: memory retention favors information that confirms existing beliefs
- Learning: how consumers acquire information about brands and products; learning can be passive or active
- Classical conditioning: learning through association (Pavlov’s dog) – repeated pairing of a cue with an outcome leads to conditioned responses; marketing use: jingles, logos, color schemes linked to brands
- Operant conditioning: learning through rewards or punishments (positive reinforcement or negative reinforcement/punishment)
  - Marketing applications: loyalty programs, rewards points, freebies after several purchases; negative reinforcement examples include campaigns that emphasize consequences of unsafe behavior (e.g., long weekends and driving safety campaigns)
- Attitudes: think, feel, do (ABC model)
- Affect (emotions), Behavior (actions), Cognition (beliefs and thoughts)
- Attitude components can be influenced to shape consumer responses; some elements are easier to change than others
- Example distinctions:
  - Belief example: “Australia-made products are better than imported ones.” (cognitive belief)
  - Attitude example: “I like Australian-made products and will buy them to support local families” (affective/emotional and normative reasoning)
- The ABC model can be used to understand how marketing can influence consumer attitudes; in many cases, changing behavior is easier than changing beliefs or emotions, especially in low-involvement contexts
Practical implications for your project and exams
- Your projects focus on consumer markets and consumer behavior principles as a foundation for marketing strategy
- Consider how involvement level affects information search depth, evaluation criteria, and the likelihood of using heuristics
- When analyzing a product or service, identify whether it is a high-involvement or low-involvement purchase and apply the corresponding decision-process framework (and whether consumers may experience dissonance post-purchase)
- Use the four types of buying decisions to categorize consumer behavior for your target market segment(s) and to justify strategy choices (e.g., pricing, promotions, messaging)
- Consider cultural, social, personal, and psychological factors in market research; use AIO lifestyle segmentation for practical project planning (Roy Morgan examples like Young Optimism)
Exam details recap (week 4 focus)
- Mid-semester exam format: MCQ, paper-based; total questions = 46; each = 0.5 marks; total = 23 marks; contributes to 23% of final grade
- Coverage: Lectures 1–5 and corresponding Pearson Revel chapters for the mid-sem exam
- Final exam coverage: material from Lecture 7 onward; the mid-semester exam serves as a blueprint for final exam expectations
Quick reminders for students
- Access Pearson Revel for practice quizzes and as a core study resource
- Complete the academic honesty module if you are new; it is a prerequisite for results submission
- By Week 6, expect a short lecture on mid-exam content, early feedback quiz questions, and additional sample exam questions
- Start revision early; do not rely on cramming; the breadth of content is large even though individual concepts may not be extremely difficult
- Prepare for the STP topic (Segmentation, Targeting, Positioning) next week as part of the project; this is the second major step for your project beyond selecting ideas
Miscellaneous practical anecdotes from the lecture
- A jelly cat plush toy example used to illustrate consumer behavior and social signaling; discusses how cultural trends and personal storytelling influence consumer interest and purchases
- Observations on consumer behavior (e.g., adults bringing plush toys to cafes) illustrate how personal experiences, childhood deprivation, and nostalgia can affect buying behavior and brand perception
- Emphasis on interpreting consumer behavior through a blend of psychological, social, and cultural lenses rather than purely rational models
Core takeaway
- Marketing strategy hinges on understanding the consumer: who they are, what drives their decisions (needs, motivations, and emotions), how they perceive options, and how they learn and form attitudes toward brands
- Real-world behavior often diverges from the idealized five-step decision model due to time constraints, emotional drivers, social influences, and heuristics; effective marketers leverage this understanding to design better products, messages, and experiences.
Next steps for students
- Confirm Pearson Revel access and begin using it for the five chapters covering the mid-sem exam
- Form and engage with groups; start outlining your research on consumer trends and environment for your project
- Prepare for week 6 review on early feedback quiz questions and sample final exam questions
- Familiarize yourself with STP concepts to be addressed in next week's lecture