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Chapter 5: Consumer Behavior

The activities people engage in whenselecting, purchasing, using, and disposing

of products and services



Why Study Consumer Behavior

Marketers¶ success in influencing purchase behavior

depends on how well they understand consumer behavior



Magnitude of Importance

In 2009, US consumers spent $10.1 trillion!

In 2009, over 125,000 new products were introduced(most were brand extensions)

59% of purchases are unplanned

Consumers are more likely to make an unplanned

purchase when the product is displayed at the endof an isle



Consumer Behavior Trends

Changing gender

roles

Health products

Self-expression

Convenience

goodsConsumer to consumer

E-commerce

Need tobe connected

Convenient

shopping Desire for

green goods



Consumer Decision Making

Postpurchase evaluation

Product choice

Alternative evaluation

Information search

Problem recognition

DecisionDecision--Making StagesMaking Stages

Cognitive Dissonance, Bhv &C

ognitive Learning

Decision Rules: Integration,Heuristics

Attitude formation

Perception, Attention,Behvioral & Cognitive Learning

Motivation (Maslow)

Psychological ProcessPsychological Process



Decision Making: A Matter of Involvement

1 ± Problem Recognition2 ± Information Search3 ± Alternative Evaluation4 ± Product Choice5 ± Postpurchase Evaluation

Involvement

Perceived Financial Risk

Perceived Social Risk

Routine (Habitual) Purchase Decision: Low Involvement(2-3 steps)

Extensive Problem Solving: High Involvement

(all 5 steps)



Stage 1- Problem Recognition

Out of Stock Dissatisfaction New Needs

or Wants

Related Products,Purchases

Market-InducedRecognition

NewProducts

Consumer has a need (actual state ideal state)



Marketers help consumers recognizeproblems by tapping into needs

Self-actualization(self realization)

Physiological(hunger, thirst)

Safety

(security, protection)

Social

(sense of belonging, love)

Esteem

(recognition, status)

Maslow¶s Hierarchy of Needs

Which need is this ad tapping?



Which need is this ad tapping into?

Self-actualization(self realization)

Physiological(hunger, thirst)

Safety

(security, protection)

Social

(sense of belonging, love)

Esteem

(recognition, status)

Maslow¶s Hierarchy of Needs



Stage 2 ± Information Search

Bob Needs

a New Car

Internal search

(memory)

Personal sources

(word of mouth)

Market sources

(TV, Mags, News)

Internet : Brings up issues

of behavioral targeting

Bob can searchInternal sources

Bob can searchExternal sources



Behavioral Targeting

Behavioral targeting uses information collected on an individual's web-

browsing behavior (via cookies), such as the pages they have visited

or the searches they have made, to select which advertisements to

display to that individual.

Behavioral Targeting allows site owners or ad networks to display

content more relevant to the interests of the individual viewing the

page.

Theoretically: Properly targeted ads will fetch more consumer interest,



Behavioral Targeting

Again, tracking a user¶s online travels (digital footprint, via cookies)

in order to strategically place ads or product recommendations



Retargeting Example

1. You go to Google and search for µnew BMW convertible¶, which leads you to the BMW pagethat tells you all about the new M6 convertible. Not a bad looking ride!

2. You take a look at the page for a while, but just like 98% of most web-surfers you don¶ttake any action on the page (email a dealership, download vehicle info, etc.) and youtake off to another page that you also found on your Google search.

3. Unknowingly to you (and most other online shoppers), BMW µdropped a ³cookie´ onyou, which basically means that they stored a little piece of data on your computer thatsays something like µthis person is looking for a new BMW convertible¶. This piece of datais small, but very powerful and can be used to follow your every move on the web for upto several days and even weeks.

4. As you surf around other websites you may or may not notice that there is an increasinglyodd amount of BMW ads that seem to be popping up everywhere. If you do notice theseads following you around, you might think that it¶s just a coincidence, but it isn¶t.

The intended goal of these retargeted ads are to follow you around long enough towhere you eventually make your way back to the original BMW site so that you¶ll make

a purchase, download some information or any other action that they would like you,

as a potential customer, to do.



Back to Stage 2 ± Information Search

Bob Needs

a New Car

Internal search(memory)

Personal sources(word of mouth)

Market sources(TV, Mags, News)

Internet

Bob can searchInternal sources

Bob can searchExternal sources

What determineswhat informationBob attends to?



Information Search: A Matter of Perception and Attention

Perception

Process of selecting, organizing, and interpreting information

Internal factors

(past experiences,culture, beliefs)

Stimuli themselves

(color, size, etc)These influence

what we perceive

Selectivity occurs at all stages of the perceptual process

Selective Attention(we choose what

to focus on)

Selective Comprehension(we interpret information based

on our own attitudes, beliefs)

Retention(we retain what is

relevant to us)



The ³F´ Exercise

Count the number of ³F¶s´ in the passage below

FINISHED FILES ARE THE RE-SULT OF YEARS OF SCIENTIF-

IC STUDY COMBINED WITH

THE EXPERIENCE OF YEARS.



How many F¶s were there?

FINISHED FILES ARE THE RE-

SULT OF YEARS OF SCIENTIF-

IC STUDY COMBINED WITH

THE EXPERIENCE OF YEARS.

6 F¶s

Even when you¶ve been told what to search for

and attend to, you may still ³miss´ the point

Now imagine advertisers¶ frustrations



Influencers on Perception & Attention

The information that we select, organize, and interpretcan be influenced by:

Behavioral Learning

Classical Conditioning (associative learning) ± process whereby a neutral

stimulus (Snuggle Fabric Softener) becomes a conditioned stimulus (CS)

capable of eliciting a given response (super soft) after being repeatedly

presented with an unconditioned stimulus (US) (teddy bear)

Teddy Bear (US) = Super soft (UR)

Fabric Softener (CS) + Teddy Bear (US) = Super soft

Fabric Softener (CS) = Super soft (CR

)



More Classical Conditioning

Pro Athletes (US) = Incredible Athletic Talent (UR)

Nike (CS) + Pro Athletes (US) = Incredible Athletic Talent

Nike (CS) = Incredible Athletic Talent (CR)



More Behavioral Learning

Behavioral Learning

Operant Conditioning ± learning that occurs as the result of rewards

or punishments

Rewarded for using the soap

(smell nice)

Punished for not using the soap

(smell bad)

Spray and Wash: Puni shed

Didn¶t work, clothes still stained

Oxi Clean: Rewarded

Stains out, clothes clean

Page Example

Again, thi s can

influ ence what

inf ormat i on or st i muli

we sel ect-to attend to



More Observational Learning

Consumer observes benefits of these products

Consu mer wants the prod u ct



Information Search and Learning TheoriesRecap

Again, what information we select and interpret can be influenced by:

Classical Conditioning

Operant Conditioning

Observational Learning

Example Reaction

Knowledge of famouspro athletes ± gets attention

Interpret brand as high

performance (b/c of pro assn)

If involved with product(care about laundry), likely toattend to message

Interpret brand as poor based on past ³punishment´

Counter-argue the message

If involved with product(want to get fit), likely toattend to message

Interpret brand as effective

(thru observation, works)



Stage 3 ± Alternative Evaluation

All Available BrandsBrand A Brand B Brand C Brand D Brand E

Brand F Brand G Brand H Brand I Brand J

Brand K Brand L Brand M Brand N Brand O

Evoked Set of Brands

Brand B Brand E

Brand I

Brand M

Brand F



Alternative Evaluation

Evoked Set Example:

When I say ³fast food,´ what restaurants come to mind?

This is your Evoked Set



The Multiattribute Model of Attitudes(not in your book but very important)

Multiattribute Attitude Model: A consumer¶s attitude toward

a brand is a function of his/her

1- belief about the brand¶s performance on attribute(i ), and

2- the importance of the attribute to the overall evalulation

AB = Sum of (Bi X Ei )

AB = attitude toward a brand

Bi = belief about the brand¶s performance on attribute i

Ei = importance attached to attribute i



Nissan Altima

Multiattribute Attitude Example: AB = Sum of (Bi X Ei )

Honda Accord Toyota Camry

Honda Accord

Toyota Camry

Nissan Altima

Design MPG

23 city/32 hwy

safety rating 9.2

22 city/31 hwy safety rating 9.9

23 city/33 hwy safety rating 8.7

Safety Total

+

+

+

+

+

+ =

==

(BxE) (BxE) (BxE)

Change Bi

Change Ei

Add an Attribute

Change perceptions of competitors¶ attributes





AB = Sum of (Bi X Ei )

Colgate Total

Ultrabrite AdvWhitening

Tom¶s of Main Anticavity

ADA approved Price Total

+

+

+

+

+

+ =

=

=

(BxE) (BxE) (BxE)

Whitening Rating

ADA 8.0 $3.50

No ADA 9.8 $2.25

ADA 7.9 $3.60

Change Bi

Change Ei

Add an Attribute

Change perceptions of competitors¶ attributes





Stage 4 ± Product Choice

Product evaluation is not the same as actual choice

May evaluate Honda as the best but actually choose Nissan

May evaluate Ultrabite as the best, but actually choose Colgate

Heuristics Information Integration

Consumers combine or integratepieces of information into one

overall judgment

Mental rules-of-thumb used for aspeedy decision, such as:

Actual Decisions may be based on:

multiattribute attitude model

price equals quality

brand loyalty

country of origin

always buy low prices

OR



Stage 5 ± Postpurchase Evaluation

Satisfaction/Dissatisfaction

Cognitive Dissonance (post-purchase regret)

comes from creating an accurate expectation of the product

Marketers Goal: Create an accurate expectation

anxiety or regret from purchase decision (³maybe I should

have bought brand X instead´)

Marketers Goal: Reinforce purchase decision (³congratulations

on your new purchase ± you made the right choice), service-follow

up, relationship marketing



Decision Making Recap

Stage Psychological Process Marketers Influence

Problem Recognition

Information Search

Alternative Evaluation

Product Choice

PostpurchaseEvaluation

Motivation (Maslow)

Perception, Attention,Behavioral & Cognitive

Learning

Attitudes

Information Integration,Heuristics

Satisfaction/Dissatisfac.Cognitive Dissonance,

Stimulate or tap into a need

Get consumer to pay attention tobrand via behavioral and

cognitive marketing strategies

Change beliefs about an attribute,change perceived importance of an attribute, add an attribute,change perceptions of competitors

Offer sales promotions, attractivefinancing, etc.

Create accurate expectations of product, service-follow-up,relationship marketing



Consumer Decision Making: Skidmore

Stages of Consumer Decision Making:

1. Problem Recognition - which of Maslow¶s needs could be used to targetthe problem? How would you, as a college, stimulate students¶ need?

2. Information Search - how did you search for information on different colleges?What could Skidmore do better to attract your attention?

3. Alternative Evaluation - what attributes were important in your ³collegepurchase´ decision? How were the attributes weighted

4. Purchase Decision - how did (or could) Skidmore induce you to ³purchase´ it(once you¶ve decided that it¶s the best alternative)?

5. Postpurchase Evaluation - are you satisfied or do you feel cognitive dissonance?



Influencers on Consumer Decision Making

Internal Influencers personality

age lifestyle

Social Influencers culture subculture (environmentalism) social class group membership

opinion leaders gender roles

Situational Influencers physical environment

time presence of others in-store cues



Internal Influencers: Personality

Personality

A unique set of psychological characteristics that consistently influence

The way a person responds to situations in the environment (and hence

Influences their purchases)

Innovative

Materialism

Self confidence

± cutting edge consumers, try new things

± like status goods

± positive evaluation of one self, buy what they like

Sociablity ± enjoys social interactions, likes entertainment products

Need for Cognition ± big thinkers, evaluates products before buying

M arketers create brand personali t i es to match target market

e.g., Car Compani es



Internal Influencers: Age

Generation Year Key Characteristics

Baby Boomers 1946 to 1964

Generation X(baby bust,Latchkey kids)

1965 to 1976 Maintain a cautiouseconomic outlook

Respond to sociallyresponsible co.¶s

Primary buyers of

most goods by 2010

Generation Y(Millennials,echo boomers)

1977-1994 72 million strong High tech Job fits their lifestyle,

not visa-versa

Want responsibility

Represent 28% of thepopulation

Spend >50% of discretionary income



Marketers cater to the Generations

Baby BoomersGeneration XGeneration Y



Internal Influencers: Lifestyle

Psychographics

Grouping consumers according to their values and

lifestyles ± or their activities, interests, and opinions (AIO)

Mountain Dew

Fidelity Investments

Huggies Diapers

What are the lifestyle

characteristics of the

consumers who buy

these products?

Understanding consumers¶ lifestyles helps to better

promote a brand



Situational Influencers: PhysicalEnvironment

Wal Mart Bass Pro Shop

Décor, smell, lighting

arousal and pleasure determine consumers¶ reaction to store environment

retail experience and entertainment help to enhance the shopping experience



Social Influencers: Culture

Values, beliefs, customs, and tastes of a group of people

Venezuelan Adidas ad: Picking your team

US Nike ad: focus onindividual performance



Social Influencers: Subculture

A group within a society whose members share a distinct

set of beliefs, characteristics, etc.

Moms

College students

Soccer players

Trekkies



Social Influencers: Ethnic Subculture

Major Ethnic Subcultures inMajor Ethnic Subcultures in thethe USUS 2010-2030




2008 data: censusPopulation(in millions)

Buying Power (in millions)

Top Purchases

White

African

American

Hispanic(largest)

Asian(fastestGrowing)

228

46.9

37.6

13.4

* Total us Population is 309 million (table doesn¶t reflect ³others´)

9,136

951

913

509

phone svcs

utilitiesapparel

footware

groceries

foodhousingmajor appliances

telecom svceducationpersonal ins

groceriesphone servicesfurniture

gasolineclothingfootware

S i l I fl Eth i S b lt




Nat i onal

ackg round of ¡

¢ i an ¡

£ ¤ r i cans

Filipino%

J p n9%

Kor n1 %

i n

1 %

hin9%

h r

14%

H ispani c S cul tur s

¥

¦ §

i ̈

©

n

¦

ri¨ ©

n

64%

¦

r

o Ri ̈

©

n

10%

©

n

4%

h

¦

r

©

ino

1

%

rk ing i k :

Treating all people withinan ethnic group as

homogeneous



Ethnic Ads

Maybelline's Garnier usesSpanish-language ads totarget the Hispanic market.

Maybelline's Color

Sensational Lipstick usesspecific ads to target theAfrican American market.



Social Influence: Going Green

Green Marketing Greenwashing

Marketing strategy that supports

environmental stewardship

(protect the environment in all

business activities)

Environmentally friendly claims

that are exaggerated or untrue

Tyson chickens are injectedwith antibiotics before they

are hatched

BEESWAXNaturally replenishing

moisturizer made by bees.

Hydrating barrier that

keeps lips moisturized.

PETROLATUM A non-renewable material

derived from crude oil.

Moisturizes with

an oil based film.

vs



Social Influencers: Social Class

Mass Class

Millions of consumers who enjoy a level of purchasing

power that¶s sufficient to afford them high-quality products



Social Influencers: Group Membership

Reference Group Group, class, or category of people which individuals

believe they belong to, or aspire to belong to

Conformity

Changing one¶s behavior to in reaction togroup pressure (bandwagon effect)

Tupperware parties



Social Influencers: Opinion Leaders

People who influence others¶ attitudes or behaviors

because others perceive them as having expertise

Flip Phillips: Professor of Neuroscience

Knows all things technology

Among the first to buy goods and are a powerful

marketing tool (they talk, blog, etc.)



Social Influencers: Gender Roles

Society¶s expectations regarding appropriate attitudes,

behaviors, and appearance for men and women

Consumers often associate ³sex-typed´ products with

one gender or another

Sex roles are evolving: e.g., Metrosexuals

Bratz Dolls(prosta-tots) Western fun isfor boys



Male Cosmetics

vs.



Male Cosmetics

AvonP

roExtreme Moisturizer C

linique Maximum Hydration

Fudge Putty Hair gel

Nivea Firming Eye Gel



Male Cosmetics

M4Men Hair Wax

Clear Nail Polish for Men



Male Cosmetics

L¶Oreal Anti-Wrinkle Cream for Men

l



Male Cosmetics Case Questions

1. Do you consider the purchase decision for male cosmetic-oriented products to be ahigh or low involvement decision? Why?

2. Which of Maslow¶s Hierarchy of Needs do you feel most motivates men to purchasecosmetic-oriented products?

3. How do men learn about male oriented cosmetics? Where do they search for

information?

4. Based on the multiattribute attitude model, how do you think the marketing of malecosmetic products differs from the marketing of female products? Try contrasting themarketing by product type.

For example:

- fragrances

- hair care

- skin care

5. Which social influence factor has the greatest impact on men¶s decision to purchasecosmetic-oriented products?

AB = Sum of (Bi X Ei )Bi = belief about the brand¶s performance on attribute i


Culture, subculture, social class, group membership,opinion leaders, gender roles



Male Cosmetics

What¶s driving the market?

Metrosexuals, Queer Eye for the Straight Guy

How big is the market?

$37.5 billion (2 )

Who is the main target for male grooming products?

2 -35 year old males

Females: predominant buyers of male grooming products (55 )

What are the biggest brands of male grooming products?

Nivia, Gillette, Clarins, Clinique, L¶Oreal, Estee Lauder,



Male Cosmetics

What are men buying?Facial cleansers, moisturizers (including tinted)

hair coloring (tangible benefit), toning/firming products

How to market to men?

Language is key: Communicate the fact that the products arefunctional, not effeminate

* no: ³enhances your appearance´* yes: ³defends your skin´

Simple brand names with promise: Defender, Perfecter, Improver,Reviver, Enhancer

Promotion: Display active lifestyles, sports, the promise of sex

Educate: Explain the product (e.g., ³bar soaps dry the skin, Brand X

cleans and moisturizes)



Male Cosmetics: In Class Case

Introduce a new cosmetic/grooming product aimedat the male market (young men and/or older)

what is the product?

how would you package it?

how would you promote it?

where would you sell (distribute) it?

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