Consumer Behavior
Marketing Management
Definition: Activities necessary to achieve the marketing objectives, including:
Planning
Implementing
Monitoring
Adjusting
Target Market
Definition: The segment selected by a company to which it will direct its marketing efforts.
Ideal Characteristics:
Large: Sufficient size for potential sales.
Reachable: Accessibility through marketing channels.
Available: Actual availability of the product to consumers.
Profitable: Potential for generating profit.
Marketing Concept Requirements
Core Elements:
Segmentation
Target Market
Positioning
4 Ps (Product, Price, Place, Promotion)
Customer Relationships
Key Elements:
Value: The perceived benefit of a product.
Satisfaction: A measure of consumer perception relative to their expectations.
Retention: Efforts made to keep highly satisfied customers loyal.
Value Proposition
Definition: A statement of why customers should choose a specific product over competitors, highlighting unique benefits and value it offers.
Customer Value
Calculation:
Benefits:
Quality
Convenience
Costs:
Money
Time
Effort
Risks
Customer Satisfaction
Definition: Perception of the product’s performance relative to expectations.
Customer Retention
Definition: Providing ongoing value to retain customers, fostering loyalty through satisfaction.
Segmentation
Definition: The process of dividing the market into groups with similar characteristics.
Types of Segmentation
Demographic Segmentation: Segmenting based on varying needs depending on factors like:
Age
Gender
Income & Wealth
Location
Ethnic Background
Usage: Customer's level of use (e.g., frequency at the gym).
Psychographics: Segmentation based on:
Lifestyle
Interests
Opinions
Activities
Geographics: Segmentation based on location.
Behavioral: Examining consumer behavior such as:
Purchase behavior
Brand loyalty
Reactions to holiday specials.
Benefit: Specific benefits sought by consumers.
Motivation Process
Sequence: Unfulfilled needs/wants > Tension > Drive > Behavior > Goal/Need Fulfillment > Tension Reduction.
Types of Needs
Biogenic Needs: Basic biological requirements such as:
Food
Water
Sleep
Psychogenic Needs: Social or emotional needs including:
Belonging
Love
Esteem
Generic Goals: Broad, general ambitions like:
Staying healthy
Saving time
Looking good
Product-specific Goals: Concrete goals related to specific products (e.g., using Nike running shoes).
Types of Arousal
Physiological Arousal: Internal, physical reactions tied to basic needs (e.g., hunger, thirst).
Cognitive Arousal: Awareness-driven reactions to needs (e.g., realizing an outdated phone).
Psychogenic Needs (Murray)
Examples:
Achievement
Exhibition
Affiliation
Power/Dominance
Change
Order
Maslow's Hierarchy of Needs
Levels (from bottom to top):
Physiological Needs: Basic survival (water, food).
Safety Needs: Security and protection.
Belongingness Needs: Relationships and social connections.
Esteem Needs: Feelings of accomplishment and respect.
Self-Actualization Needs: Achieving one's full potential and personal growth.
Sensation and Perception
Sensation: Response of sensory organs to stimuli (input through touch, sound, sight).
Influences on Perception:
Motives: Influence perception through personal relevance.
Expectations: Prior knowledge can bias perception.
Selective Perception: Focus on specific stimuli while ignoring others.
Components:
Attention
Defense
Blocking
Exposure
Cues Affecting Perception
Intrinsic Cues: Physical characteristics directly associated with the product (e.g., color, shape, size).
Extrinsic Cues: Factors surrounding the product that influence judgment, not part of the physical product (e.g., price, brand name, packaging).
Perceptual Interpretation
Definition: The process of assigning meaning to sensory input.
Triggers for Interpretation:
Stereotyping
First Impressions
Descriptive Terms
Halo Effect (one attribute overshadows the rest).
Perceived Value
Components:
Reference Price
Price-Quality Relationship
Positioning: How a brand defines itself in the market based on image and quality.
Consumer Categories
Innovators vs. Laggards: Risk-takers compared to those who prefer familiarity.
Open-minded vs. Close-minded: Flexible individuals versus those who prefer tradition.
Conformity vs. Individuality: Value peer influence versus personal independence.
Need for Uniqueness: A desire to stand out, leading to preference for limited editions.
Optimum Stimulation Level (OSL): Desire for arousal and excitement.
High OSL: Preference for risk and variety.
Low OSL: Preference for routine.
Sensation Seeking vs. Novelty Seeking: Interest in intense experiences versus interest in new products.
Need for Cognition: Preference for researching and analyzing before making purchases.
Visualizers vs. Verbalizers: Preference for graphics versus text representation.
Materialism: Desire for status and luxury items.
Compulsions and Fixations: Patterns of repetitive behavior and persistent focus.
Ethnocentrism: Preference for one’s own culture.
Product Positioning
Definition: Establishing a distinct image and identity in the consumer's mind, differing from competitors.
Differentiation: Highlighting unique attributes of a brand to stand out.
Positioning Process
Define the market.
Research consumers' perceptions.
Research perceptions of competition.
Determine preferred attributes.
Develop a positioning concept.
Create a positioning statement.
Positioning Approaches
Umbrella Positioning: One brand perception covers all products.
Premiere Positioning: Positioned as top-tier or luxury.
Against Competition Positioning: Defined in contrast to competitors.
Key Attribute Positioning: Emphasizes one specific attribute.
Un-owned Positioning: Claims an attribute not fully owned by any competitor.
Repositioning: Changing to appeal to a new audience.
Learning Theories
Behavioral Learning
Classical Conditioning: Forming associations between two stimuli (e.g., fear of needles).
Instrumental (Operant) Conditioning: Learning from trial-and-error, formed through rewards and punishments.
Observational (Modeling) Learning: Imitating observed behaviors.
Cognitive Learning
Definition: Learning through mental processing of information.
Involves thinking, reasoning, and problem solving (e.g., reading product reviews).
Sensory Store
Definition: A brain location for short-term sensory input (loses unprocessed info after seconds).
Measures of Memory
Aided Recall: Retrieval of brand through cues or prompts.
Unaided Recall: Retrieval of brand through memory unaided by cues.