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CONSUMER BEHAVIORBUAD 307
MARKETING FUNDAMENTALS
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 2
Why does Staples sell Starbucks coffee?
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 3
CONSUMER
PERCEPTION/SENSATION
COGNITION
AFFECT
BELIEFS
SOCIAL ANDOTHER INFLUENCE
INFOSEARCH
CHOICES
PREFERENCES
COMMUNICATION
MARKETRESEARCH
STRATEGY
Influences on and of Consumer Behavior
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 4
Learning Outcome Objectives
• Understand how consumer cognitive (thinking) processes and limitations, affect, beliefs, social influences, and other contextual factors influence consumer decision making, choices, and behavior
• Appreciate how these insights can be used to design and implement effective marketing strategies
• Appreciate individual and segment differences in process and outcome
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 5
True or False?
1. If you have bad breath, you cannot smell it yourself.
2. If you eat a balanced diet, you do not need vitamin supplements.
3. Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation.
4. Dell Computers tend to be of higher quality than those made by HP and Sony.
5. Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 6
Questions Faced By Consumers
• Are veggie burgers actually healthy?• What makeup should you use to get an
“even” skin tone?• Do I get any useful benefits from spending
more than $125 on a digital camera?• Should I get a “make-over?” What am I
looking for? What should I do?• Is my mechanic honest?• Which tie should I wear for a job interview?• Should I give my wife roses, chocolate, or
software?
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 7
Consumer Problems and Recognition
• Consumer problem: Discrepancy between ideal and actual state--e.g., consumer:– Has insufficient hair– Is hungry– Has run out of ink in his or
her inkjet cartridge• Problems can be solved
in several ways--e.g., stress reduction <----- vacation, movie, hot bath, medication
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 8
CONSUMER DECISIONS:Theory and Reality in Consumer Buying
INFORMATIONSEARCH
PROBLEMRECOGNITIO
N
EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/BEHAVIORS
Theory
Complications
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 9
Approaches to Search for Problem Solutions
INTERNAL
EXTERNAL
MemoryThinking
Word of mouth, media,store visits, trial
CATALOG
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 10
Options Identified and Considered
UNIVERSAL SET
RETRIEVED SET
EVOKED SET
All possible options
Options that readily come to mind
Options that will be considered by the consumer
Note: Retrieved and evoked sets will vary among different consumers
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 11
REMINDER
• For low involvement products, efforts aimed at affecting internal search tend to be more effective—the consumer is usually not willing to expend energy on external search.
• External search is more likely for higher involvement products.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 12
Decision Making Issues
• Involvement level– Temporary– Enduring
• Consumer locus of control– Internal– External
• Product category complexity• Consumer knowledge
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 13
Evaluation Type
– Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones)
– Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission)
– Hybrid: Combination of the two (e.g., one non-compensatory measure, then compensatory tradeoffs on other attributes
– Abandoned strategy: Consumer finds initial criteria unrealistic and proceeds to less desirable solution
IMPORTANT
LESSIMPORTANT
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 14
Heuristics—Low Involvement Decision Rules
• If either Coke or Pepsi is on sale, buy that brand; otherwise, buy Coke
• The larger the navels, the better the orange
• The larger package is likely to offer a lower unit price (not true in reality)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 15
Attitudes―components
BELIEFSAFFECT
(FEELING)
BEHAVIORALINTENTIONS
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 16
Attitude Components
• Beliefs– Can be positive,
negative, or neutral
– May or may not be accurate
– May contradict other beliefs held by the other person
• Affect– May be positive or
negative
– May take on specific dimension (e.g., pleasure, disgust)
• Behavioral Intentions– An individual’s plan or
expectations of what he or she will do
– May appear inconsistent with beliefs
– May not predict well what the individual will do in reality
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 17
Generating Beliefs Through Advertising
• Statements must be
– Perceived
– Comprehended
– Remembered
– Believed (at least in part)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 18
Positioning Through Creating Beliefs
• “It’s not delivery; it’s De Journo!”
• “Wal-Mart. Always low prices. Always.”
• “I just saved a bunch of money on my auto insurance.”
• “U-um Good!” (Campbell’s Soup)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 19
Multiattribute Models of Attitude
• Attitude computed as a function of multiple attributes weighted for importance:
Ab= attitude toward brand b
Wi: weight of attribute I
Xib: belief about brand b’s performance on attribute I
• Model assumes rationality
n
iibiXWA
1b
Calculations will not be required on the exam. You should know conceptually what this involves conceptually—i.e., weighing importance and intensity of feeling.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 20
Multiattribute Models
• Caveats– Different segments exist that will weight
factors differently—thus, overall averages can be misleading. Separate analyses should be done for different segments of interest. (Segments can be identified by certain statistical techniques).
– Individual differences exist in scale intensity—for some, it is much “easier” to be extremely good or extremely bad.
– Prior research may be needed to identify issues (dimensions) to be weighted.
– Some factors may be intangible—What are the substantive differences between Windows and Apple computers?
– Non-compensatory factors—“must-haves”—may determine final result.
• Applications– Determining
• Overall performance• Areas of strength and weakness
– Comparison to competitors• Overall• Areas of strength and weakness
REMINDER: PERCEPTIONS ARE NOT
NECESSARILY ACCURATE. We are looking to work with what
consumers believe.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 21
Affect
• Based on– past emotional
associations of product– emotional effect of beliefs
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 22
Attitude Characteristics
• Availability/accessibility
• Constructed vs. natural
• Strength
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 23
Measurement of Attitude Components
• Beliefs– Semantic Differential Scales
– Good -------------------Bad
– Fast --------------------Slow
– Reliable-----------------Unreliable
• Feelings– Likert Scales (Strongly agree … Strongly Disagree)
– “This product makes me happy.”
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 24
Measurement
• Behavioral Intention
– Rating of likelihood of purchase
– May need projection if social desirability affects willingness to admit to product use
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 25
Attitude Change Strategies, Part I
• Change Affect– Classical conditioning
• “Pairing” the brand or product with desired stimulus—e.g., a car with a beautiful woman
– Attitude toward the ad• A likable ad for a brand in a
mundane product category—e.g.,
– Energizer Bunny– Snuggles (fabric
softener)– Mere exposure
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 26
Attitude Change Strategies II
• Change behavior (e.g., sampling)– Attitudes are inferred from
behavior (e.g., I buy the product I must like it or It must be good)
• Change Belief Component– Change existing beliefs
• Difficult• Advertiser’s motives are suspect
– Change importance of attributes– Add beliefs– Change ideal (fashion)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 27
Adding Beliefs (True or Not): Examples
• Brushing and flossing do not reach all areas of the mouth
• People under stress need more vitamins
• Baking soda will reduce odor of refrigerators
• Fragmented hard drives may cause computer errors
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 28
REMINDER
• Changing currently held beliefs tends to be difficult—people know the marketer has an ulterior motive
• Adding new beliefs that are not inconsistent with what is already believed may be more effective
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 29
One-sided vs. two sided appeals
• One-sided: only saying what favors your side
• Two-sided: stating your case but also admitting points favoring the other side– Why is this effective?
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 30
Potential Family Life Cycle Stages
YOUNGSINGLE
BLENDED
SINGLE PARENT
FULL NEST I/II/III
EMPTY NESTI/II
OLDERSINGLE
YOUNGCOUPLE
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 31
Economic/Marketing Implications of Household Cycles
• Income tends to increase with time
• But children/ obligations add cost
• Divorce– increases costs– may change
income distribution marriage
• Product demand due to– singles with low
expenses– new couples– divorced
families– children– empty nesters
--> more income
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 32
Household Decision Making
• Roles/influence– Information gatherers/holders
– Influencers
– Decision makers
– Purchasers
– Users
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 33
The Means-End Chain
Large engine
Fast acceleration
Performance
Feeling of power
Self-esteemAim promotion/
positioning at higherlevels of chain!
Attributes
Consequences
Values
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 34
Subliminal Perception: A Diabolical Marketing Tool?
• Subliminal messages in ads are illegal in U.S.
• Some research support for modest effects– Probably limited to one
syllable words– Complex messages can
probably not be processed subliminally
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 35
Message Framing
• Many tradeoffs can be stated in two, mathematically equivalent ways—e.g.,– “80% lean” vs.
“20% fat”– $49.00 per
person per night based on double occupancy
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 36
Some Consumer Behavior Issues That Will Come Up Elsewhere in the Course
• Demographics (segmentation)
• Lifestyle (segmentation)
• Culture/subculture (segmentation, international marketing)
• Diffusion of innovation (product)
• Attention (promotion)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 37
Organizational Buyers
• Types– Industrial– Reseller– Government and
non-profit organizations
• Purchase types– Straight rebuy– Limited decision
making– Extended decision
making
• Characteristics– Greater involvement– Bureaucracy– Long term
relationships– Price is important but
may not be the most important factor