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Consumer Behaviour

Session 1a
Introduction to Consumer Behaviour &
Importance to Marketing Management

Angela Dalrymple
Module Information
Consumer Behaviour

The behavior that consumers display in


searching for, purchasing, using, evaluating,
and disposing of products and services that
they expect will satisfy their needs.
(Schiffman & Kanuk, 2007)
The Meaning
of Consumption
People often buy products not for
what they do, but for what they
mean
Brands…
…Convey image/personality
…Define our place in modern society
…Help us to form bonds with others who
share similar preferences
The Meaning of Consumption

Consumers can develop


relationships with brands:

Self-Attachment Concept Nostalgic Attachment


(establish identity) (link with past self)

Interdependence Love
(part of daily routine) (create emotions)

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Personal Consumer

The individual who buys goods and


services for his or her own use, for
household use, for the use of a family
member, or for a friend.
Consumers as individuals
Psychological determinants of CB:
Perception how do consumers see/imagine
‘objects’?
Learning how do consumers create and ‘store’
info and beliefs?
Motivation what are the drivers for buying and
consuming?
Personality and Self how do personality and self
traits influence CB?
Attitudes how like/dislike ideas and intensions are
formed
Organisational Consumers

A business, government agency, or


other institution (profit or nonprofit) that
buys the goods, services, and/or
equipment necessary for the
organization to function
Government Buying
The Global Consumer

Global Consumer Culture


People united by common
devotion to:
Brand name consumer
goods
Movie stars
Celebrities
Leisure activities
Pressure to understand
similarities and differences of
customers in various
countries
Impact of Digital Technologies
Consumers have more power and access
to information
Marketers can gather more information
about consumers
The exchange between marketer and
customers is interactive and
instantaneous and goes beyond the PC.
Marketers must offer more products and
services
Virtual Consumption
B2C e-commerce Impact of the Web on
consumer behaviour
Virtual brand communities, Consumer chat rooms,
viral marketing, Price comparison tools
“Wired” Londoners spend…
Less time with friends/family
Less time shopping in stores
More time working at home after hours
But e-mail can strengthen family ties

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Discussion Question 1
In recent years, there has been a large debate about
the influence that internet shopping has on our
consumer lives
List the changes that you personally have made in
your buying and consumption patterns due to e-
commerce
Compare these changes with changes experienced by
other people from various social groups, e.g.
somebody from your parents’ generation, an IT
“geek”, or somebody with a lower educational
background
Consumer Behaviour Model &
Marketing Management
Consumer Behaviour Perspectives
CONSUMER’S MARKETER’S
PERSPECTIVE PERSPECTIVE

PREPURCHASE What are my How are consumer


ISSUES needs/desires; what needs/wants
info do I need? formed/changed? How to
create/influence them?

PURCHASE Is product acquisition How to orient the decision


ISSUES looking like a pleasant process? How do
experience? situational factors (e.g. in
store) affect purchase
decisions?

POSTPURCHASE Does product provide What determines


ISSUES pleasure, perform customer satisfaction
functions? How is and repurchase?
product disposed of?
Why is it important to understand
Consumer Behaviour?
Marketing’s main task is to create endurable customer
satisfaction and loyalty, and a stable competitive
advantage position
Consumer behaviour analysis is essential for
segmentation analysis
Consumer behaviour is essential to identify customer
related opportunities and threats
Consumer behaviour analysis is essential for innovation
management
Consumer behaviour analysis is essential for marketing
mix management
Development of the Marketing
Concept
Production
Concept
Product
Concept

Selling Concept

Marketing
Concept
The Production Concept
Assumes that consumers are
interested primarily in product
availability at low prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion
The Product Concept
Assumes that consumers will buy
the product that offers them the
highest quality, the best
performance, and the most features
Marketing objectives:
Quality improvement
Addition of features
Tendency toward Marketing Myopia
The Selling Concept

Assumes that consumers are


unlikely to buy a product unless they
are aggressively persuaded to do so
Marketing objectives:
Sell, sell, sell
Lack of concern for customer needs
and satisfaction
The Marketing Concept
Assumes that to be successful, a
company must determine the needs
and wants of specific target markets
and deliver the desired satisfactions
better than the competition
Marketing objectives:
Make what you can sell
Focus on buyer’s needs
The Marketing Concept
Implementing the
Marketing Concept
Consumer The process and
Research tools used to study
Segmentation consumer behavior
Targeting
Positioning

Copyright 2007 by
Prentice Hall
The Marketing Concept
Implementing the
Marketing Concept

Consumer Process of dividing


Research the market into
Segmentation subsets of
Targeting consumers with
common needs or
Positioning characteristics
Market Segmentation

The process of dividing a


potential market into
distinct subsets of
consumers and selecting
one or more segments as a
target market to be reached
with a distinct marketing
mix

Copyright 2007 by Prentice Hall


Consumer Behaviour & Segmentation
Market Segmentation
Similar consumers
“Heavy Users” of fast-food
industry
‘Play-stationers’
Fashion victims
Bases for Segmentation

Geographic Use-Related
Demographic Usage-
Psychological Situation
Psychographi Benefit
c Sought
Sociocultural Hybrid
Segmenting Consumers: Demographics

CB analyses important
demographics, such as:
Age
Gender
Family structure
Social class and income
Race and ethnicity

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Segmenting Consumers: Lifestyles
Psychographics
The way we feel
about ourselves
The things we
value
The things we like
and we do in our
working and spare
time

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Geographic Segmentation

The division of a total potential


market into smaller subgroups
on the basis of geographic
variables (e.g. region, state, or
city)
Demographic Segmentation

Age
Sex
Marital Status
Income, Education, and Occupation
Web sites for Singles
Looking for a Match

Match.com targets all The Right Stuff


singles targets only Ivy
League graduates
Psychological Segmentation

Motivations
Personality
Perceptions
Learning
Attitudes
Psychographic Segmentation

Also known as Lifestyle Analysis


Psychographic variables include
attitudes, interests, and opinions
(AIOs)
Sociocultural Segmentation

Family Life Cycle


Social Class
Culture, Subculture, and Cross-
Culture
Use-Related Segmentation

Rate of Usage
Heavy vs. Light
Awareness Status
Aware vs. Unaware
Brand Loyalty
Brand Loyal vs. Brand Switchers
Segmenting Customers by Usage
Current
Share
High Low

Hig HiHigh LowHigh


h s s
Consumptio (stroke (chase)
n )
HiLow LoLow
s s
Low (tickle) (starve
)
Benefit Segmentation

Segmenting on the basis of the most


important and meaningful benefit
Band-aid
offers “flex” as
a
benefit to
consumers.
Hybrid Segmentation Approaches

Psychographic-Demographic
Profiles
Geodemographic Segmentation
SRI Consulting’s VALS
VALS Framework

Copyright 2007 by
Prentice Hall
Criteria for Effective Targeting of Market
Segments

Identification
Sufficiency
Stability
Accessibility
Implementing Segmentation Strategies

Concentrated Marketing
One segment
Differentiated
Several segments with individual
marketing mixes
Discussion Question 2
What products that you regularly
purchase do you think are highly
segmented to meet your profile or
criteria?
What are these segments?
Why is segmentation useful to the
marketer for these products?
The Marketing Concept
Implementing the
Marketing Concept
Consumer The selection of one or
Research more of the segments to
Segmentation pursue
Targeting
Positioning
The Marketing Concept
Implementing the
Marketing Concept
Developing a distinct image
Consumer for the product in the mind of
Research the consumer
Segmentation Successful positioning
Targeting includes:
Communicating the benefits of
Positioning the product
Communicating a unique selling
proposition
Consumers as Individuals

Psychological Marketing Management:


components Analysis - Strategy
Action- Control

How can marketers create and influence perceptions?


How can marketers create information and beliefs?
How can marketers meet or influence motivational factors?
How can marketers use and leverage personality and self
traits to solicit preference?
How can marketers create and influence attitudes?
The Marketing Mix

Product
Price
Place
Promotion
Consumers as Decision Makers
Individuals or Family
Marketing Management:
buying and consumption
Analysis - Strategy
decision making
Action- Control
process

How can marketers step into the buying and consumption


process?
How social groups and opinion leaders influence the buying &
consumption process?
How can marketers use social group and opinion leaders to
influence preferences?
How can marketers meet or influence family decision making?
Relationship Marketing

Building lifetime relationships between


brands and customers
Regular interaction with customers
One to one marketing
Database Marketing
Consumers and Society

Cultural and sub cultural Marketing Management:


influences on CB Analysis - Strategy
Action- Control

How can culture and sub culture influence the buying &
consumption process?
How can marketers use cultural and sub cultural issues
and traits to create and/or influence preferences?
Consumer behaviour and market analysis

Consumer behaviour is mostly about


analysis Consumer behaviour
Marketing Research:
Surveys
Focus groups
Observation