Week 1: Course Introduction &

Introduction to Consumer Behaviour


Presented by: Dr. Trevor Smith
January 24, 2014

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Career Track

Consultancy

Executive Employment

Entrepreneurship

Researcher/ Lecturer
Course Overview
This course explores the dynamics of
consumer behaviour throughout the
purchasing process and provides students
with the necessary skills to analyze and
shape marketing strategies for effectively
meeting consumer needs. Consumer
motivation, behavioural considerations
affecting consumer purchasing decisions;
and meeting consumer needs through
selling, advertising and distribution are
some of the key areas presented in this
course.
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Student Learning Objectives
 Upon successful completion of this course, the
student should be able to:
 Determine the factors that motivate consumers into
buying certain products/services.
 Assess products as "bundles of satisfaction" and
develop strategies to maximize consumer
acceptance of such products.
 Demonstrate an understanding of how consumers
process information into decisions and the
strategic implications of this process.
 Demonstrate insight into the continuum of factors
that affect consumer decisions.
 Develop an understanding of the environmental
considerations affecting the behaviour of
consumers.
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Readings
 Required Text
◦ Schiffman, L.G., Kanuk, L. L., Wisenblit, J. (2010),
“Consumer Behavior”, 10th Edition, Prentice Hall,
Upper Saddle River, NJ .

◦ Articles
 The material presented in the required text will be
supplemented with hand-outs. These hand-outs will
be distributed by the course instructors.
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Guest Lecture
 A guest lecture will be delivered by an
industry practitioner aimed at enhancing
classroom knowledge with industry
experience. Date of guest lecture will be
announced on confirmation.
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Deliverables
◦ Midterm Test 15% - February 28, 2014
◦ Group Project 25% - Mar 28, 2014
◦ Final Exam 60%
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Office Hours
◦ Wednesdays 10-12noon

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Week Topic Deliverables
WK1  Introduction to Course
 Introduction to Consumer Behaviour
 Read course outline
 Read chapter 1
WK2  Consumer Research & Market
Segmentation
 Read chapter 2 & 3
WK3  Consumer Motivation  Read chapter 4
WK4  Personality and Consumer
Behaviour
 Read chapter 5

WK5  Consumer Perception  Read chapter 6
WK6  Exam

 Take Mid-Semester
Exam (February 28)
WK7  Consumer Learning  Read chapter 7
WK8  Consumer Attitude formation and
Change & Communication and
Consumer Behaviour
 Read chapters 8 & 9
WK9  Social Class and Consumer
Behaviour
 Read chapter 11
WK10  Influence of Culture/Subculture /
Cross Culture on Consumer
Behaviour
 Read chapters 12, 13 &
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 Submit Project (March
28)
WK11  Consumer Decision Making and
Beyond
 Read chapter 16
WK12  Revision
Exam Period)  To be announced

 Take Final Exam
 Overview of Consumer Behavior
 The Marketing Concept
 The Marketing Mix and Relationships
 Digital Technologies
 Societal Marketing Concept
 A Simplified Model of Consumer Decision
Making
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The behaviour that consumers display in
searching for, purchasing, using, evaluating,
and disposing of products and services that
they expect will satisfy their needs.

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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.
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A business, government agency, or other
institution (profit or nonprofit) that buys the
goods, services, and/or equipment necessary
for the organization to function.

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Production
Concept
Selling Concept
Product Concept
Marketing
Concept
 Assumes that consumers are interested
primarily in product availability at low prices
 Marketing objectives:
◦ Cheap, efficient production
◦ Intensive distribution
◦ Market expansion
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 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
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 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
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 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

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 What two Jamaican companies do you believe
grasp and use the marketing concept?
 Why do you believe this?
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 Consumer
Research
 Segmentation
 Targeting
 Positioning
 The process and
tools used to study
consumer behavior
 Two perspectives:
◦ Positivist approach
◦ Interpretivist approach

Implementing the
Marketing Concept
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 Consumer
Research
 Segmentation
 Targeting
 Positioning
 Process of dividing
the market into
subsets of
consumers with
common needs or
characteristics

Implementing the
Marketing Concept
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 What products that you regularly purchase
that are highly segmented?
 What are the different segments?
 Why is segmentation useful to the marketer
for these products?
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 Consumer
Research
 Segmentation
 Targeting
 Positioning
The selection of one or
more of the segments
to pursue
Implementing the
Marketing Concept
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 Consumer
Research
 Segmentation
 Targeting
 Positioning
 Developing a distinct image
for the product in the mind of
the consumer
 Successful positioning
includes:
◦ Communicating the benefits
of the product
◦ Communicating a unique
selling proposition



Implementing the
Marketing Concept
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This product is
positioned as
a solution to
facial
redness.
 Product
 Price
 Place
 Promotion
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Customer
Value
Customer
Satisfaction
Customer
Retention
Customer
Trust
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 Customer
Value
 Customer
Satisfaction
 Customer
Retention
 Customer
Trust

 Defined as the ratio between
the customer’s perceived
benefits and the resources
used to obtain those benefits
 Perceived value is relative and
subjective
 Developing a value
proposition is critical
Value, Satisfaction,
,Retention & Trust
 How does Burger King create value for the
consumer?
 How do they communicate this value?
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 Customer
Value
 Customer
Satisfaction
 Customer
Retention
 Customer
Trust
 The individual's perception of the
performance of the product or
service in relation to his or her
expectations.
 Customers identified based on
loyalty include loyalists, apostles,
defectors, terrorists, hostages,
and mercenaries


Value, Satisfaction,
Retention, Trust
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 Customer
Value
 Customer
Satisfaction
 Customer
Retention
 The objective of providing value is
to retain highly satisfied
customers.
 Loyal customers are key
◦ They buy more products
◦ They are less price sensitive
◦ They pay less attention to
competitors’ advertising
◦ Servicing them is cheaper
◦ They spread positive word of
mouth


Value, Satisfaction,
Retention & Trust
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 Customer
Value
 Customer
Satisfaction
 Customer
Retention
 Customer
Trust
 The objective is for the customer to trust the
company and its products
 Foundation for maintaining long standing
relationship with customer; helps to increase
loyalty
 Trust is key
◦ Online and off-line product
◦ Neilsen’ Customize Research Services:
 Word-of mouth communications/
recommendations from other consumers
(78% trusting such source)
 Newspaper, consumer opinion posted
on-line, brand website (high in trust)
 “Online banner ads”, text ads to mobile
phones (low in trust)


Value, Satisfaction,
Retention & Trust
 Tracks costs and revenues of individual
consumers
 Categorizes them into tiers based on
consumption behavior
 A customer pyramid groups customers into
four tiers
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Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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Traditional Marketing Concept
Value and Retention
Focused Marketing
Make only what you can sell instead
of trying to sell what you make
Use technology that enables
customers to customize what
you make
Do not focus on the product; focus on
the need that it satisfies
Focus on the product’s
perceived value, as well as the
need that it satisfies
Market products and services that
match customers’ needs better than
competitors’ offerings
Utilize an understanding of
customer needs to develop
offerings that customers
perceive as more valuable than
competitors’ offerings
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 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
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Marketers adhere to principles of social
responsibility in the marketing of their
goods and services; that is, they must
endeavor to satisfy the needs and wants of
their target markets in ways that preserve
and enhance the well-being of consumers
and society as a whole.

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 Psychology
 Sociology
 Social psychology
 Anthropology
 Economics
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 Consumer Research & Market Segmentation
◦ Chapters 2&3
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