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Consumer Behaviour

Session 1aIntroduction to Consumer Behaviour &Importance to Marketing Management

Angela Dalrymple

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Module Information

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Consumer Behaviour

The behavior that consumers display in

searching for, purchasing, using, evaluating,and disposing of products and services thatthey expect will satisfy their needs.(Schiffman & Kanuk, 2007)

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The Meaning

of ConsumptionPeople often buy products not for what they do , but for what they

meanBrands

Convey image/personality

Define our place in modern societyHelp us to form bonds with others whoshare similar preferences

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The Meaning of Consumption

Consumers can developrelationships with brands:

1- 5

Self-Attachment Concept(establish identity)

Nostalgic Attachment(link with past self)

Interdependence(part of daily routine)

Love(create emotions)

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Personal Consumer

The individual who buys goods andservices for his or her own use, for household use, for the use of a familymember, or for a friend.

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Consumers as individualsPsychological determinants of CB:

Perception how do consumers see/imagineobjects?Learning how do consumers create and storeinfo and beliefs?Motivation what are the drivers for buying andconsuming?Personality and Self how do personality and self traits influence CB?Attitudes how like/dislike ideas and intensions areformed

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Organisational Consumers

A business, government agency, or other institution (profit or nonprofit) thatbuys the goods, services, and/or equipment necessary for the

organization to function

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Government Buying

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The Global Consumer

Global Consumer CulturePeople united by commondevotion to:

Brand name consumer goodsMovie starsCelebritiesLeisure activities

Pressure to understandsimilarities and differences of customers in variouscountries

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Impact of Digital TechnologiesConsumers have more power and accessto informationMarketers can gather more informationabout consumersThe exchange between marketer andcustomers is interactive and

instantaneous and goes beyond the PC.Marketers must offer more products andservices

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Virtual Consumption

B2C e-commerce Impact of the Web onconsumer behaviour

Virtual brand communities, Consumer chat rooms,

viral marketing, Price comparison toolsWired Londoners spend

Less time with friends/familyLess time shopping in stores

More time working at home after hoursBut e-mail can strengthen family ties

1- 12

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Discussion Question 1In recent years, there has been a large debate aboutthe influence that internet shopping has on our

consumer livesList the changes that you personally have made inyour buying and consumption patterns due to e-commerce

Compare these changes with changes experienced byother people from various social groups, e.g.somebody from your parents generation, an ITgeek, or somebody with a lower educationalbackground

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Consumer Behaviour Model &Marketing Management

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Consumer Behaviour Perspectives

CONSUMERSPERSPECTIVE MARKETERSPERSPECTIVE

PREPURCHASEISSUES

What are myneeds/desires; what

info do I need?

How are consumer needs/wants

formed/changed? How tocreate/influence them?

PURCHASEISSUES

Is product acquisitionlooking like a pleasant

experience ?

How to orient the decisionprocess? How do

situational factors (e.g. instore ) affect purchase

decisions?

POSTPURCHASEISSUES

Does product providepleasure , performfunctions ? How is

product disposed of?

What determinescustomer satisfaction

and repurchase ?

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Why is it important to understandConsumer Behaviour?

Marketings main task is to create endurable customer satisfaction and loyalty, and a stable competitiveadvantage positionConsumer behaviour analysis is essential for segmentation analysisConsumer behaviour is essential to identify customer related opportunities and threatsConsumer behaviour analysis is essential for innovationmanagementConsumer behaviour analysis is essential for marketingmix management

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Development of the Marketing

ConceptProduction

Concept

Selling Concept

ProductConcept

MarketingConcept

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The Production ConceptAssumes that consumers areinterested primarily in productavailability at low pricesMarketing objectives:

Cheap, efficient production

Intensive distributionMarket expansion

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The Product Concept

Assumes that consumers will buythe product that offers them thehighest quality, the bestperformance, and the most featuresMarketing objectives:

Quality improvement

Addition of featuresTendency toward Marketing Myopia

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The Selling Concept

Assumes that consumers areunlikely to buy a product unless theyare aggressively persuaded to do soMarketing objectives:

Sell, sell, sell

Lack of concern for customer needsand satisfaction

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The Marketing ConceptAssumes that to be successful, acompany must determine the needsand wants of specific target marketsand deliver the desired satisfactionsbetter than the competitionMarketing objectives:

Make what you can sellFocus on buyers needs

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Copyright 2007 byPrentice Hall

The Marketing Concept

Consumer ResearchSegmentationTargeting

Positioning

The process andtools used to studyconsumer behavior

Implementing theMarketing Concept

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The Marketing Concept

Consumer ResearchSegmentationTargeting

Positioning

Process of dividingthe market intosubsets of consumers withcommon needs or characteristics

Implementing theMarketing Concept

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Copyright 2007 by Prentice Hall

Market Segmentation

The process of dividing apotential market into

distinct subsets of

consumers and selectingone or more segments as atarget market to be reached

with a distinct marketing

mix

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Consumer Behaviour & SegmentationMarket Segmentation

Similar consumers

Heavy Users of fast-foodindustryPlay-stationersFashion victims

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Bases for Segmentation

GeographicDemographicPsychological

PsychographicSociocultural

Use-RelatedUsage-SituationBenefitSoughtHybrid

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Segmenting Consumers: Demographics

CB analyses importantdemographics, such as:

AgeGender Family structureSocial class and income

Race and ethnicity

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Segmenting Consumers: LifestylesPsychographics

The way we feelabout ourselves

The things wevalueThe things we likeand we do in our working and sparetime

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Geographic Segmentation

The division of a total potentialmarket into smaller subgroups

on the basis of geographicvariables (e.g. region, state, or

city)

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Demographic Segmentation

Age

SexMarital StatusIncome, Education, and Occupation

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Web sites for SinglesLooking for a Match

Match.com targets allsingles

The Right Stuff targets only Ivy

League graduates

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Psychological Segmentation

Motivations

PersonalityPerceptionsLearningAttitudes

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Psychographic Segmentation

Also known as Lifestyle Analysis

Psychographic variables includeattitudes, interests, and opinions(AIOs)

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Sociocultural Segmentation

Family Life Cycle

Social ClassCulture, Subculture, and Cross-Culture

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Use-Related Segmentation

Rate of Usage

Heavy vs. LightAwareness Status

Aware vs. Unaware

Brand LoyaltyBrand Loyal vs. Brand Switchers

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High

Low

Consumption

High Low

LoLows

(starve)

HiHighs

(stroke)

LowHighs

(chase)

HiLows

(tickle)

Segmenting Customers by Usage

CurrentShare

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Benefit Segmentation

Segmenting on the basis of the mostimportant and meaningful benefit

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Band-aidoffers flex as

abenefit to

consumers.

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Hybrid Segmentation Approaches

Psychographic-Demographic

ProfilesGeodemographic SegmentationSRI Consultings VALS

k

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Copyright 2007 byPrentice Hall

VALS Framework

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Criteria for Effective Targeting of MarketSegments

Identification

SufficiencyStabilityAccessibility

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Implementing Segmentation Strategies

Concentrated Marketing

One segmentDifferentiated

Several segments with individual

marketing mixes

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Discussion Question 2What products that you regularlypurchase do you think are highlysegmented to meet your profile or criteria?What are these segments?Why is segmentation useful to themarketer for these products?

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The Marketing Concept

Consumer ResearchSegmentationTargeting

Positioning

The selection of one or more of the segments topursue

Implementing theMarketing Concept

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The Marketing Concept

Consumer ResearchSegmentationTargeting

Positioning

Developing a distinct imagefor the product in the mind of the consumer Successful positioningincludes:

Communicating the benefits of

the productCommunicating a unique sellingproposition

Implementing theMarketing Concept

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Consumers as Individuals

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?

Psychologicalcomponents

Marketing Management:Analysis - Strategy

Action- Control

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The Marketing Mix

Product

PricePlacePromotion

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Consumers as Decision Makers

How can marketers step into the buying and consumptionprocess?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?

Individuals or Familybuying and consumption

decision makingprocess

Marketing Management:Analysis - Strategy

Action- Control

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Relationship Marketing

Building lifetime relationships betweenbrands and customers

Regular interaction with customersOne to one marketingDatabase Marketing

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Consumers and Society

How can culture and sub culture influence the buying &consumption process?How can marketers use cultural and sub cultural issuesand traits to create and/or influence preferences?

Cultural and sub culturalinfluences on CB

Marketing Management:Analysis - Strategy

Action- Control

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Consumer behaviour and market analysis

Consumer behaviour is mostly about

analysis Consumer behaviour Marketing Research:Surveys

Focus groupsObservation