An Introduction to Applied Buyer Behavior

Partha Krishnamurthy Spring 2006

Agenda • What’s this course is about • Contrast buyer and consumer behavior • Define consumer behavior – What is marketing exchange • Who is interested in consumer behavior • How do we study consumer behavior • Exercise for Chapter 1 .

• …rather. • What’s the difference? . consumer behavior.What’s this course about? • This course is about buyer behavior.

… so buyer behavior cannot be the whole story .Buyer Behavior • Buyer behavior focuses primarily on buyers and buying. spouses. knowing how to use. using. searching. learning to search. and disposing. children) – To buy.g. you have to engage in activities other than buying e. – But. friends. often you buy for others (significant others..

• Consumers – Those who engage in consumption activities • Consumer Behavior (Brief definition) – How consumers go about achieving satisfaction. thoughts and feelings (of individuals and groups) directed toward achieving satisfaction (often using market offerings).Consumption and Consumer Behavior • Consumption – Activities. .

000 . activities etc. » Helicopter and Chef on demand. taste. » Only $32. up-close and personal with wild game • Nimmo Bay – British Columbia » $26000 for 3-6 guests. dining.Examples of Consumption (and why it is just not “buying”) • Ulusaba – South African Private Game Reserve » $10000 per night. » Based on your style. exclusive fishing. and only you. 4 days/nights. » Can’t keep the fish though! • Personal Perfume » Created for you.

. • Specifically. it is a study of how people respond to marketing entities such as products. promotion. price etc.What Does it Mean to Study Consumer Behavior? • It is a study of the feelings. and behaviors of consumers. from a managerial point of view. • This study is aimed at increasing the likelihood and frequency of the marketing exchange. advertisements. thoughts.

goods and services exchanged for money. Goods & Services Marketer Money Consumer • Marketing strategies are activities geared toward increasing the probability and frequency of the exchanges so that the exchange is profitable and satisfying.What is Marketing Exchange? • Marketing is an exchange process between the consumer and the producer – benefits are exchanged for profits. more concretely. .

. how can you make the decision? – Hence. your product is not selling well.Why should Consumer Behavior be Studied – Suppose. understanding consumer behavior is absolutely important. for marketing strategies to be successful. offer consumer promotions? – If you don’t know how consumers respond to these marketing actions. increase advertising. Should you decrease the price.

It encourages/facilitates marketing exchange .How to Study Consumer Behavior: A Real World Application of How Studying Consumer Behavior Facilitates Marketing Exchanges Activebuyersguide. what you like and don’t like about the features of products and then creates a list of products that fit your needs. It provides the degree of fit between your preferences and the product features. descriptions of features is a website which assesses your goals. preferences.

A Correction • In this course. . … sometimes these goals may have little to do with the probability/frequency of marketing exchange. our study of consumer behavior will also focus on: – consumer satisfaction. – consumer well-being.

.Returning to Consumer Behavior • What do we study? – Primarily. three aspects • Affect/Cognition: » Feelings (“I love the restaurant”) » Thoughts (“$14. we will be examining consumers’ affective/cognitive and behavioral responses in the environmental context.99 for a bowl of soup? Why is it so expensive?”) • Behavior: » Action (Going to the restaurant) • Environment: » Context (The lighting in the restaurant) In other words.

Groups Interested in Consumer Behavior Marketing organizations Marketing strategies Public Policy Government and political organizations Consumer activities Consumers .

Approaches to the Study of Consumer Behavior Approach Core Disciplines Interpretive Cultural anthropology Primary Objectives Understand consumption and its meaning Primary Methods Long interviews & focus groups .

Approaches to the Study of Consumer Behavior (cont’d) Approach Core Disciplines Traditional Psychology & Sociology Primary Objectives Explain consumer decision making and behavior Primary Methods Experiments & Surveys .

Approaches to the Study of Consumer Behavior (cont’d) Approach Core Disciplines Marketing Science Economics & Statistics Primary Objectives Predict consumer choice and behavior Primary Methods Math-modeling & Simulation .

Exercise # 1 “Out of Class” Exercise • Home Work: Vacation Fantasy Consumption Story – Surf the web. 1-inch margins on all sides. . and based on information available in the web. and create an imaginary vacation. double-spaced. 10 points). complete with details about the vacation ($5000 budget). – Type written. • To be handed in class next Monday. times-roman 12-point font only. Describe the vacation as if it were a story (2 pages.

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