CM

Ch. 1 Intro to Consumer Behavior

Define and scope of consumer behavior

  • Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
  • Example to illustrate different approaches to consumer behavior:
    • Air France and Flexjet ads target the same consumers with similar luxury travel products but use two very different strategies.
    • They are based on different assumptions about consumer behavior and how to influence it.
    • Both feature luxury travel, but one shows a commercial carrier (Air France) while the other features private flights (Flexjet).
  • This demonstrates that marketing strategy is built on assumptions about how consumers think and act.

Learning objectives (brief overview from page 3)

  • Define consumer behavior.
  • Summarize the applications of consumer behavior.
  • Explain how consumer behavior can be used to develop marketing strategy.
  • Explain the components that constitute a conceptual model of consumer behavior.
  • Discuss issues involving consumption meanings and firm attempts to influence them.

Applications of consumer behavior

  • Applications fall into several broad areas:
    • Marketing Strategy
    • Regulatory Policy
    • Social Marketing
    • Informed Individuals

Applications examples: Dove and social marketing

  • Dove (nonprofit and commercial): both types of organizations base their efforts on knowledge of consumer behavior to maximize success.
  • Dove’s "Men+Care" campaign uses an emotional-based appeal with the theme that “care makes a man stronger,” emphasizing men’s mental and physical health.
  • Haggar’s support of the ASPCA campaign is provided as an example of social marketing.
    • These illustrate how organizations use consumer insights to influence consumption patterns.

Marketing Strategy and the consumer experience

  • Marketers increasingly recognize that the total product includes experiences, not just goods or services.
  • The experience is often internal to the customer and can be as important as the tangible product.
  • The image and context in advertising can shape perceived value and experience, influencing satisfaction and future behavior.

The marketing strategy framework: 4 broad components

  • 1) The Consumers
  • 2) The Company
  • 3) The Competitors
  • 4) The Conditions
  • These form the basis of market analysis and guide strategic decisions.

Market analysis components (1-10)

  • Market Analysis Components include:
    • The Consumers
    • The Company
    • The Competitors
    • The Conditions
  • These components help identify opportunities and threats and inform strategic choices.

Market segmentation: definition

  • Market segmentation is a portion of a larger market whose needs differ from the larger market.
  • It allows firms to target groups with similar needs more effectively.

Market segmentation steps

  • Four steps:
    1. Identifying product-related need sets.
    2. Grouping customers with similar need sets.
    3. Describing each group.
    4. Selecting an attractive segment(s) to serve.

Needs and differentiated products

  • The term “need set” reflects that most products in developed economies satisfy more than one need.
    • Example: a watch can meet needs beyond telling time (status, style).
  • Dual ad examples illustrate how different products meet different need sets:
    • Advil vs Tylenol: same basic product (pain relief) but designed to meet different needs (medicine efficacy vs mitigation of side effects).

Market segmentation visuals (1-14)

  • Market segmentation is introduced and illustrated; it emphasizes that segmentation leads to more precise targeting.

Marketing Strategy: value proposition and the marketing mix

  • Marketing Strategy is the answer to the question: How will we provide superior customer value to our target market?
  • This requires a consistent marketing mix with the following elements:
    1. Product
    2. Communications
    3. Price
    4. Distribution
    5. Service

Marketing communications

  • Marketing communications include advertising, the sales force, public relations, packaging, and any other signal the firm provides about its products.
  • An effective communications strategy considers:
    • The target market
    • The intended effect
    • The most effective message
    • What means and media to use
    • Message timing
  • All aspects of the marketing mix should be designed around the needs and characteristics of the target audience. Some segments may respond differently to various approaches (e.g., a Weber ad illustrating targeted relevance).

The consumer decision process

  • The consumer decision process intervenes between the marketing strategy (as implemented in the marketing mix) and the outcomes.
  • The firm can succeed only if:
    • Consumers perceive a need that the product can solve
    • They become aware of the product and its capabilities
    • They decide that it is the best available solution
    • They proceed to buy it
    • They become satisfied with the outcome of the purchase

Outcomes from marketing strategy (1-18)

  • There are three broad outcome categories:
    • Firm outcomes
    • Individual outcomes
    • Society outcomes
  • Firm outcomes include product position, sales and profits, and customer satisfaction.
  • The most basic outcome is product position — the image of the product or brand in the consumer’s mind relative to competing products and brands.
    • Example: The Starburst ad positions the brand as fun; color and imagery reinforce this image.
  • Figure references (e.g., Figure 1-2 Creating Satisfied Customers) illustrate how outcomes flow from strategy and execution.

The nature of consumer behavior: external influences (1-22)

  • External influences include:
    • Culture
    • Demographics and social stratification
    • Ethnic, religious, and regional subcultures
    • Families and households
    • Groups
  • Culture is perhaps the most pervasive influence on consumer behavior. While Americans share values and behaviors, diversity and change create marketing opportunities and challenges.
  • Ads such as Longchamp reflect and embrace cultural diversity.

The nature of consumer behavior: internal influences (1-24)

  • Internal influences include:
    • Perception
    • Learning
    • Memory
    • Motives
    • Personality
    • Emotions
    • Attitudes

Self-concept and lifestyle (1-25)

  • Self-concept: the totality of an individual’s thoughts and feelings about oneself.
  • Lifestyle: how one lives, including the products one buys, how one uses them, what one thinks about them, and how one feels about them.

Consumer decision process (Applications in CB)

  • Consumer decisions result from perceived problems and opportunities.
  • Consumer problems arise in specific situations, and the nature of the situation influences resulting consumer behavior.

Organizations and regulations (1-27)

  • Organizations or businesses can be consumers; this is part of business-to-business (B2B) marketing to differentiate it from business-to-consumer (B2C) marketing.
  • Regulation is an aspect of consumer behavior that permeates marketer actions and strategies.

The meaning of consumption (1-28)

  • Consumption has meaning beyond the satisfaction of minimum or basic needs.
  • Symbolic needs include:
    • Status
    • Identity
    • Group acceptance
  • These symbolic aspects influence how consumers choose, use, and dispose of products and services.