CONSUMER BEHAVIOR

Why study Consumer Behavior?

1.If marketers understand why and how individuals make their consumption decisions, they are better able to shape their

marketing strategies.

2. Studying CB helps marketers understand consumer perceptions about a particular product or range of products.

Uncovering and correcting erroneous perceptions about a particular product may give marketers an additional competitive advantage over competitors.

3. Consumer

attitudes very often

determine consumer beliefs about certain products.

Discovering consumer attitudes allows marketers to fine tune their campaigns to resonate with a particular consumer niche.

4. Changing population demographics around the world affect the way marketing campaigns are designed.

Understanding

cultural nuances and

subtleties may allow marketers to help further define their particular target market.

5. Consumer lifestyles also determine what products appeal to certain consumer markets..

Understanding consumer lifestyles is a key component to CB, it lets marketers make the appropriate appeals in promoting lifestyle products

5. Analyzing CB attempts to answer the deeper question of why consumers behave as they do and purchase, or not purchase certain products.

If a large sports car is not selling well, then the manufacturer wants to know if it is a general distaste for sports cars or a seasonal decision connected to the price of fuel. Information like this can tell companies if a products performance is intrinsic to its own merit or defects or linked to external variables.

6. Analyzing the underlying factors in CB can help predict how products will perform in the long

run.

The decision to continue or discontinue production of a particular item can prove costly mistake if a company confuses a temporary lull in sales with broader distaste for the item.

Similarly, making the inverse mistake of sticking with a product due to misplaced faith in seasonal factors can prove just as costly.

7.CB analysis helps producers pick

winners in their line up of

products. The ones that CB indicates are popular, will stay around and make money for the company. Those products that CB indicates will fail will be cut to minimize Company losses.

8. Understanding CB and preferences also helps to guide future product development. This analysis will not just look at product type, but individual features as well.

9. Like consumer attitudes, experience also colours consumer responses to certain products.

By studying CB, marketing professionals can tap into consumer experiences with similar products to promote consumption and gain competitive advantage over competitors.

10. Another reason for studying Consumer Behavior is to better understand

macro-marketing problems how a society

meets the needs of its people as an aggregate.

Aggregate: (in the aggregate)

as a whole

Who is a consumer?

Consumer purchaser of goods and services

Buyer a purchaser, a customer

Customer - The term is typically used to refer to someone who

regularly purchases
from a particular store or company.

What is Consumer Behavior?

a study of how individuals, groups and organizations select, buy, use and dispose of goods, services, or ideas to satisfy their needs and desires.

It is a study about:

what they purchase, why they purchase the way they do,

how much they buy, how they buy,

where they buy, when they buy,

how often they buy and

how they dispose the things they buy.

For eg: toothpaste: What type of toothpaste do consumers buy?(gel, paste,liquid)

What brand? ( colgate, aquafresh, close up)

Why do people buy it?( to prevent cavities, to brighten or whiten teeth, as a mouthwash, to remove stains )

Where do they buy it?(supermarket, convenience store, chemist)

How often do they use it?(when they wake up, after each meal, when they go to bed)

How often do they buy it?(weekly, biweekly monthly)

Essential elements in the definition.

1.Disposal of goods and services.

Why would marketers have interest in the disposal of the product?

Marketers are also interested in how individuals dispose of their once-new purchases.

For example, after consumers have used a product, do they store it, throw it or give it away, sell it rent it or lend out?

Answers to these questions are very important to marketers in the following respect:

Marketers must match their production to the frequency with which consumers buy replacements.

solid waste disposal has become a major environmental problem that marketers must address in their development of new products and packaging.

disposal strategies

disposal strategies

disposal strategies

disposal strategies

2. Personal and organizational consumers.

It is important to note that the term consumer is used to describe two different kinds of consuming entities: The personal consumer The organizational consumer.

The personal consumer buys goods and services for his/her own use (shaving cream, perfume), for the use of the household( a tv set) or as a gift for a friend(a book)

The organizational consumer encompasses for-profit and not-forprofit businesses, government agencies, institutions(schools, hospitals, prisons),

all of which must buy products, equipment and services in order to run their organizations.

BUYING ROLES

INITIATOR

USER

BUYING DECISION

INFLUENCER

BUYER

DECIDER

There is need to know what people are involved in the buying decision and what role each person plays.

there are five roles that people play in a buying decision which can be distinguished.

Initiator: the
person who first suggests the idea of buying the product or service.

Influencer: the person whose view or advice influences the decision.

Decider: the person who decides on any component of a buying decision: whether to buy, what to buy, how to buy, or where to buy.

Buyer: the person who makes the actual purchase.

User: the person who consumes or uses the product or service.

How is the buyer role analysis important to the marketer?

It is important to note that the person who makes a product purchase is not always the user, or the only user of the product.

A mother may buy toys for her children(who are the users); she may buy a handbag(and be the only user)

Marketers must therefore decide at whom to direct their promotional efforts, the buyer or the user.

For some products, they must identify the person who is most likely to influence the decision.

Who is the best prospect for marketers promotional efforts, the buyer or the user?

TYPES OF CONSUMER BEHAVIOR

Consumer decision making varies with the type of buying decision.

The decision to buy toothpaste, a personal computer and a new car are all very different.

Complex and expensive purchases are likely to involve more buyer deliberation and more participants.

Henry Assael distinguished four types of consumer buying as follows:

1. complex buying behavior. 2.habitual buying behavior 3.variety seeking buying behavior 4. Dissonance reducing buying behavior.

1. Complex Buying Behavior Consumers engage in complex buying behavior when the product is expensive, bought infrequently, risky and highly self-expressive like a vehicle.

The marketer of a high involvement product must understand consumers information gathering and evaluation behavior

The marketer needs to develop strategies that assist the buyer in learning about the products attributes.

The brands features, benefits and advantages should be clearly differentiated to influence the final brand choice.

2. Habitual buying behavior This happens on products that are bought on low involvement and the absence of significant brand differences.

Consider salt! Consumers have little involvement in this product category. They go to the store and reach for the brand.

There is good evidence that consumers have low involvement with low cost frequently purchased products.

Strategies that could be employed to uplift low involvement products to higher involvement.

1.Marketers of such products find it effective to use price and sales promotions to stimulate product trial.

2.They could also use Television advertising which is deemed more effective than print because it is a low nvolvement medium.

3. They can link the product to some involving issue, as when Colgate toothpaste is linked to avoiding cavities.

4. They can link the product to some involving personal situation eg by advertising a coffee brand early in the morning when the consumer wants to shake off sleepiness.

5.They might design advertising to trigger strong emotions related to personal values or ego defense.

Ego: self esteem

6.They might add an important feature for eg fortifying a plain drink with vitamins.

3. Variety-seeking buying behavior

Some buying situations are characterized by low involvement but significant brand differences.

Here consumers do a lot of brand switching.

Think about cookies. The consumer chooses a brand of cookies without much evaluation and evaluates the product during consumption.

Brand switching occurs for the sake of variety rather than dissatisfaction.

The marketer may encourage habitual buying by dominating the shelf space, avoiding out of stock conditions, and sponsoring frequent reminder advertising

4.Dissonance-reducing buyer behavior. This is when a buyer is highly involved in an expensive, infrequent and risky purchase. After the purchase, the consumer experience dissonance that stems from noticing certain disquieting features or hearing favourable things about other brands

Dissonance: unharmonious, incongruous, clashing

In this instance the consumer first acted, then acquired new beliefs, then ended up with a set of attitudes.

In this case, marketing communications should beliefs and evaluations that help the consumer feel good about his or her brand choice.

THE BUYING DECISION MAKING PROCESS

The BDMP is a series of intellectual and procedural activities which a consumer goes through when deciding which product to buy rather than the other.

intellectual: faculty of reasoning, knowing and thinking procedural: series of actions conducted in a certain order or manner

It is a process that describes the behavioral processes that happen from the time the consumer recognizes some need, to the point at which some post-purchase evaluation of the particular purchase is made.

The configuration of the BDMP consists of five processes linked in a sequence: oProblem recognition oInformation search oEvaluation of alternatives oPurchase decision oPost-purchase behavior

Configuration: arrangement in a particular form.

The decision to purchase may have evolved over several months, or in some instances, the entire process may involve only a few seconds.

It is not that the exact sequence of the five processes within a specific time frame is strictly followed but that a similarity in decision patterns does exist among consumers.

BELOW IS A DMP MODEL BY ENGEL, KOLLATT AND BLACKWELL(1978).

Perceptual system

Evaluative system
CENTRAL CONTROL UNIT DECISION PROCESS

Motivation system

Choice
Satisfaction

Outcome
Dissonance

STEPS IN CUSTOMER DECISION MAKING PROCESS

1. NEEDS IDENTIFICATION / PROBLEM RECOGNITION

The buying process starts when the buyer recognizes a problem or need.

how?

Define existing state

Define gap

Define desired state

The problem can be triggered by internal or external stimuli.

With an internal stimulus, one of the persons normal needs hunger, thirst, rises to a threshold level and becomes a drive.

A need aroused by external stimulus would be for eg, a person passing a bakery and sees freshly baked bread. That stimulates hunger. One can admire a neighbors car or see on television ad an attractive product.

By gathering information from a number of consumers, marketers can identify the most frequent stimuli that spark an interest in a product category. They can then develop marketing strategies that trigger consumer interest.

Problem recognition can also be viewed as either simple or complex.

Simple problem recognition refers to the needs that occur frequently and that can be dealt with almost automatically, such as becoming hungry and purchasing something to eat.

Complex problem recognition is characterized as a state in which a problem develops over time, as the actual and desired state gradually move apart.

2. INFORMATION SEARCH

An aroused customer will be inclined to search for more information.

 Consumer information sources fall into four groups:

Personal sources: family, friends, neighbors, acquaintances Commercial sources: advertising, salespersons, dealers, packaging, displays Public sources: mass media, consumer organizations Experiential sources: handling, examining, using the product.

Personal sources: family, friends, neighbors, acquaintances

Commercial sources: advertising, salespersons, dealers, packaging, displays

Public sources: mass media, consumer organizations

Experiential sources: handling, examining, using the product.

Experiential: based on experience

The consumer receives the most information about a product from commercial sources. However the most effective information comes from personal sources.

Commercial information normally performs an informing function, and personal sources perform a legitimizing or evaluation function.

For example, physicians often learn of new drugs from commercial sources but turn to other doctors for evaluative information.

3. EVALUATION OF ALTERNATIVES

The acquired information enables the consumer to evaluate product benefits and brand image to arrive at a decision or brand choice.

how?

When evaluating potential alternatives, consumers tend to use two types of information:

A list of brands from which they plan to make their selection-the choice set The criteria they will use to evaluate each brand.

Total set-awareness set-consideration set-choice set

IBM APPLE DELL HP TOSHIBA COMPAQ NEC TANDY

awareness

IBM APPLE DELL HP TOSHIBA COMPAQ

IBM APPLE DELL TOSHIBA

HP COMPAQ DELL

 TOTAL SET: Brands available to the consumer AWARENESS SET: a subset of the total set of brands which the individual consumer will get to know. CONSIDERATION SET: brands which will meet initial buying criteria. CHOICE SET: the few brands that remain as strong contenders.

The final purchase is made from the choice set.

The criteria that consumers use to evaluate brands that constitute their choice set is expressed in terms of important product attributes.

Examples of attributes that consumers have used as criteria: Cameras: Picture sharpness, auto focusing, built in flash, size and weight Paper towels: strength, design, color price, absorbency, Shaving cream: fragrance, consistency, price, smoothness of shave Tyres: safety, tread life, price, ride quality Hotels: location, cleanliness, atmosphere, price Color tvs: picture quality, size of screen, length of warranty, price,

4. PURCHASE DECISION

In the evaluation stage, the consumer forms preferences among the brands in the choice set.

However, two factors can intervene between the purchase intention and the purchase decision: Attitude of others Unanticipated situational factors

The influence of others becomes complex when people close to the buyer hold contradictory opinions and the buyer would like to please them.

Related to attitudes of others is the role played by infomediaries who publish their evaluations. Eg, consumer reports, music reviewers, chat shows where people discuss products.

Unanticipated situational factors may erupt to change the purchase.

A person might lose their job, some other purchase might become more urgent, or a store salesperson may turn someone off, weather.

ATTITUDES OF OTHERS
EVALUATION OF ALTERNATIVES

PURCHASE INTENTION

UNANTICIPATED SITUATIONAL FACTORS

PURCHASE DECISION

oIn executing a purchase intention, the consumer may make up to five purchase sub-decisions: oA brand decision(brand A) oVendor decision(dealer) oQuantity decision(one computer) oTiming decision(weekend) oPayment method decision(credit card)

Purchases of everyday products involve fewer decisions and less deliberation.

5. post purchase behavior

After purchasing the product, the consumer will experience some level of satisfaction or dissatisfaction

The marketers job does not end when the product is bought. Marketers must monitor post purchase satisfaction, post purchase actions, and post purchase product uses.

Post purchase satisfaction:

The buyers satisfaction is a function of the buyers expectations and the product perceived performance.

If performance falls short of expectations, the customer is disappointed. If it meets expectations, the customer is satisfied. If it exceeds expectations, the customer is delighted.

Consumers form their expectations on the basis of messages received from sellers, friends, and other information sources.

Post purchase actions:

Satisfaction or dissatisfaction with the product will influence a consumers subsequent behavior.

Post purchase use and disposal: Marketers should also monitor how buyers use and dispose of the product.

 If consumers store the product in a closet, the product is probably not very satisfying, if they sell or trade the product, new product sales will be depressed, if the consumers throw the product away, the marketer needs to know how they dispose of it especially if it can hurt the environment eg: beverage containers, disposable diapers.

For example:

Recycling and ecological concerns as well as consumer complaints about having to throw away beautiful bottles, led French perfume maker Rochas to think about introducing a new refillable fragrance line.

Five-stage model of the Consumer Buying Process

Problem recognition Information search Evaluation of alternatives

Purchase decision
Post purchase

the Consumer in their Social and Cultural settings

Could also be referred as the External influences on consumer behavior

SOCIAL
PERSONAL
Culture oSubculture Social class Reference groups Family
Age Lifecycle stage Occupation Economic circumstances Lifestyle Personality Self concept

PSYCHOLOGICAL Motivation Perception Learning Beliefs And Attitudes BUYER

Roles and Status

Social factors and group dynamics

the consumer as an individual

This segment looks at individual

pyschological factors
oConsumer Needs and Motivation oConsumer Personality oConsumer Attitudes oConsumer Perception oConsumer Learning

consumer needs and motivation

This presentation will focus on the basic

needs that operate

in most people to motivate behavior.

There are countless examples of products that have succeeded in the market place because they fulfilled consumer needs.

There are also examples of products and companies that have failed because they did not recognize or understand consumer needs.

NEEDS

Every individual has needs: some are innate, others are acquired.

Innate: Inborn, natural

Innate needs are physiological

(biogenic).

They include the needs for:

food, water, air, clothing, shelter etc.

Because they are needed to sustain biological life, the biogenic needs are considered primary needs or motives.

A motive is a need that is sufficiently pressing to drive the person to act.

Acquired needs on the other hand are also referred to psychogenic needs. These are needs that we learn in response to our culture or environment.

These may include needs for: self esteem, Prestige, affection, recognition, Belonging, Power, learning.

Because acquired needs are generally psychological, they are considered secondary needs or motives.

They result from the individuals psychological states of tension and from relationships with others.

For example: Finding a place to live fulfills an important primary need for a newly transferred executive. However, the kind of residence he rents or buys may be the result of secondary needs.

MOTIVATION

Motivation can be described as the driving force within individuals that impels them to action.

The driving force is produced by a state of tension, which exists as the result of an unfulfilled need.

Unfulfilled needs, wants, and desires

tension

drive

behavior

Goal/ need fulfill ment

Individuals strive to reduce this tension through behavior that they anticipate will fulfill their needs and thus relieve them of the

Psychologists have developed theory of Human Motivation.

Abraham Maslow sought to explain why people are driven by particular needs at particular times.

Maslow arranged human needs in a hierarchy, from the most pressing to the least pressing.

In order of importance, they are:

physiological needs safety needs social needs esteem needs self-actualization needs.

1. Physiological needs: are the demands that our bodies place on us for survival and health. These are needs that must be satisfied before other needs are activated.

2. Safety needs: After the first level of needs is satisfied , safety and security needs become the driving force behind an individuals behavior.

In addition to physical safety, Maslow referred to psychological security. Thus oorder, ostability, ofamiliarity, oControl oRoutine/predictability ocertainty over ones life and environment are important needs.

Certainty for example, the knowledge that the individual will eat dinner not only that day and the following day, but also every day far into the future.

Health is also a safety concern. o Social welfare programs, o saving accounts, o insurance policies, o education, o vocational training are all means by which individuals satisfy the need for security.

3. Social needs: the third level of Maslows hierarchy include such needs as:

love, affection, belonging, acceptance.

If both physical and safety needs are fairly gratified, the needs to give and receive love or affection, and feel the sense of belonging are likely to emerge.

If these needs are not satisfied, a person is likely to feel lonely and perhaps depressed.

Depending on the situation, a special friend, or a small group can help toward resolving this set of needs.

Because of the importance of social motives in most societies, advertisers of personal care products often emphasize this appeal in their advertisements.

4. Egoistic needs: egoistic needs can take either an inward or outward orientation, or both.

Ego: self-esteem

 Inwardly directed ego needs reflect an individuals need for:

self-acceptance, self-esteem, success, independence, personal satisfaction a job well done.

Outwardly directed ego needs include the needs for:

prestige, reputation, status, recognition from others.

5. Need for SelfActualization: this need refers to an individuals desire to fulfill his or her potential to become everything he or she is capable of becoming.

Fulfillment of a persons unique potential, the becoming of everything that one is capable of becoming.

In Maslows words, what a man can be, he must be

This need is expressed in different ways by different people. A young man may desire to be an Olympic star and work single-mindedly for years to become the best in his sport. A research scientist may strive to find a new drug to eradicate disease.

Advertisements for banking services, and for military recruitment often try to appeal to the selfactualization need.

Evaluation of Maslows Hierarchy

Maslows hierarchy is a useful tool for understanding consumer motivations and is readily adaptable to marketing strategy because consumer goods often serve to satisfy each of the need level.

1.Maslows theory helps marketers understand how various products fit into the plans, goals, and lives of consumers.

2. the hierarchy offers a useful, comprehensive framework for marketers trying to develop appropriate advertising appeals for their products.

3. the hierarchy is often used as the basis for market segmentation with specific advertising appeals directed to individuals on one or more need levels.

For example, soft drink ads directed to teenagers often stress a social need appeal by showing a group of young people sharing good times as well as the advertised product.

4. another way to utilize the need hierarchy is positioning products. The key to positioning is to find a niche that is not occupied by a competing product or brand.

This application of the need hierarchy relies on the notion that no need is ever fully satisfied, that it always continues to be somewhat motivating. Safety, for example, is a continuing need.

5. versatility of the need hierarchy: one way to illustrate the usefulness of the need hierarchy in designing promotional programs is to show how workable appeals for a single product can be developed for each level.

Self-actualization needs (Self-fulfillment, self-development) Esteem needs (Self-esteem, recognition, status)

Social needs (Sense of belonging, love)

Safety needs (security, protection) Physiological needs (food, water, shelter)

question

Is Maslows hierarchy still relevant today? Justify your answer.

question

Marketers dont create needs, needs preexist marketers. Discuss this statement.

question
Consumers have both innate and acquired needs. Give examples of each kind of need and show how the same purchase can serve to fulfill either or both kinds of needs.

question
Specify the innate and/or acquired needs that would be useful bases for developing promotional strategies for airbags in cars, vitamins, swimming pools, a Mercedes benz, insurance policy

question
You are a member of an advertising team assembled to develop promotional campaign for a new running shoe. Develop three slogans for this campaign, each based on one of the levels in Maslow hierarchy of needs.

question
Choose three magazine advertisements for different consumer goods. Through the advertising appeal used, identify which need/s each product is presumed to satisfy.

Herzberg Theory

Frederick Herzberg
developed a

twofactor theory
that distinguishes dissatisfiers

that is, factors that cause dissatisfaction

and Satisfiersfactors that cause satisfaction

Satisfiers must be actively present to motivate a purchase.

For example: ease of use of a computer would be a satisfier, but a computer that does not come with a warranty would be a

dissatisfier.

Herzbergs theory has two implications: 1. sellers should do their best to avoid dissatisfiers (for example a poor training manual)

2. the manufacturer should identify the major satisfiers or motivators of purchase in the market and then supply them.

The satisfiers will make the major difference as to which brand the customer buys.

consumer perception

special terms in this topic

Perceive/ perceptio n

Defined by Paul Young(1961) in a model as follows:

To perceive= to see
to hear to touch a thing to taste some event to smell relation to sense internally

Perception: way of seeing or understanding

stimulus

A stimulus is any unit of input to the senses. Examples of stimuli include products, packages, brand names, advertisements, and commercials.

Stimuli characteristics such as color, size, photos, scent, loudness, design, music, and so forth help marketers understand which properties of a stimulus will cause it to receive attention.

Sensory receptors

Humans rely on five senses to bridge the gap between the external world and their mental worlds.

That is, we see, we hear, we taste, we smell, and we touch the world around us in order to sense it.

Our Sensory receptors are our human organs: othe eyes oears onose omouth, oand skin that receive inputs from the environment.

All five of our sensory receptors are employed in Consumer Behavior.

sensation

Sensation: is the immediate and direct response of the sensory organs to simple stimuli(an ad, a package, a brand name)

sensitivit y

sensitivity refers to the experience of sensation.

Sensitivity to stimuli varies with the quality of an individuals sensory receptors(eyesight or hearing) and the amount or intensity of the stimuli to which he or she is exposed.

absolute sensory threshold

The lowest level at which an individual can experience a sensation is called absolute threshold.

The point at which a person can detect a difference between something and nothing is that persons absolute threshold for that

For e.g. the distance at which a driver can note a specific billboard on the highway is that individuals absolute threshold.

adaptation

Under conditions of constant stimulation, such as driving through a corridor of billboards, the absolute threshold increases.

After an hour of driving through billboards, it is doubtful that any billboard will make an impression.

The term adaptation refers specifically to getting used to certain sensations.

Sensory adaptation is a problem experienced by many TV advertisers, and it is for this reason that advertisers tend to change their advertising campaigns regularly.

Differential threshold/Just noticeable difference(JND)

The minimum actual change that can be detected between stimuli is called the differential threshold or j.n.d.

For example, if the price of an automobile were increased by $100, it would probably not be noticed(the increase would fall below the j.n.d.)

It may take an increase of $200 or more before a differential in price would be noticed.

However, a one dollar increase in the price of petrol would be noticed very quickly by consumers because it is a significant percentage of the initial cost.

Subliminal perception

Subliminal means below the threshold. A subliminal stimulus therefore is one that cannot be discriminated by our conscious

Stimuli that are too weak or too brief to be consciously seen or heard may nevertheless be strong enough to be perceived by one more receptor.

What then is perception?

In a broad sense, perception can be described as, how we see things around us

Two individuals may be subject to the same stimuli under apparently the same conditions, but how they recognize them, select them, organize them, and interpret them is a highly individual process based on each persons own needs, values and expectations.

One person might perceive a One fast talking salesperson as aggressive and insincere, another, as intelligent and helpful. Each will respond differently to the salesperson.

William. L. Wilke (1994)gives a more specific definition that says: perception is the process of sensing, selecting, organizing and interpreting consumer stimuli in the external world.

Analysis of definition

perceptual selection.

Consumers subconsciously exercise a great deal of selectivity as to which aspects of the environment, - stimuli

An individual may look at some things, ignore others, and turn away from still others.

 Consider for example a woman in a supermarket: she may be exposed to over 2000 products of different colors, sizes, and shapes to perhaps 100 people looking, walking, searching, talking to smells from fruit, from meat, from disinfectant, from people to sounds, within the store cash registers ringing, shopping carts rolling, air conditioners humming, and clerks sweeping, mopping isles, stocking shelves to sounds outside the store- cars honking, tyres screeching, children shouting, car doors slamming, planes passing

Yet she manages to select the items she needs, pay for them and leave, all within a relatively brief time, without losing her sanity or personal orientation to the world around her.

This is because she exercises selectivity in perception.

Important Selective Perception Concepts

Selective exposure

Selective attention Selective distortion Selective retention Perceptual defense

Selective exposure

Consumers actively seek out messages they find pleasant, necessary or with which they are sympathetic, and actively avoid painful or threatening ones.

Thus heavy smokers avoid articles that link cigarette smoking to cancer.

Consumers also selectively expose themselves to ads that reassure them of the wisdom of their purchase decisions

Selective attention:

People are exposed to a tremendous amount of daily stimuli.

Because a person cannot possibly attend to all of these, most stimuli will be screened out a process called selective attention.

Selective attention means that marketers have to work very hard to attract consumers notice.

The real challenge is to explain which stimuli people will notice.

Here are some findings:

1. people are more likely to notice stimuli that relate to a current need.

A person who is motivated to buy a computer will notice computer ads; he will probably not notice radio ads.

2. People are more likely to notice stimuli that they anticipate.

You are more likely to notice computers than radios in a computer shop because you do not expect the shop to carry radios.

3. people are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli.

You are more likely to notice an ad offering $100 off the price of a computer than one offering $5 off.

SELECTIVE DISTORTION

Selective distortion is the tendency to twist information into personal meanings and interpret information in a way that will fit our

Preconceive: form an idea, or opinion beforehand. Preconception: A preconceived idea.

Unfortunately there is not much marketers can do about selective distortion.

Selective Retention

Because of selective retention people are likely to remember good points mentioned about a product they like and forget good points mentioned about competing goods.

People will forget much that they learn but will tend to retain information that supports their attitudes and beliefs.

This explains why marketers use drama and repetition in sending messages to their target market.

Perceptual organization

People do not experience the numerous stimuli they select from the environment as separate and discreet sensations, rather they tend to organize them and perceive them as unified wholes.

Three of the most basic principles of perceptual organization were developed by the Gestalt school of psychology and they are:

oFigure and ground oGrouping oClosure

People have a tendency to organize their perceptions into figure and ground relationships.

Advertisers have to plan their advertisements carefully to make sure that the stimulus that they want noted is seen as figure and not as ground.

Grouping:
individuals tend to group stimuli so that they form a unified picture or impression.

e.g an ad for coffee may show a young man and woman sipping coffee, in a beautifully appointed room, before a blazing hearth.

 the grouping of stimuli by proximity leads the consumer to associate the drinking of coffee with romance, fine living, and winter

Grouping can be used advantageously by marketers to imply certain desired meanings in connection with their products.

Individuals have a need for

closure.

If the pattern of stimuli to which they are exposed is incomplete, they tend to consciously or subconsciously fill in the missing pieces.

The need for closure has some interesting implications for marketers.

The presentation of an incomplete ad message begs for completion by consumers.

The very act of completion serves to involve them more deeply in the message itself.

Perceptual interpretation

When people perceive something, they make efforts to interpret it.

The interpretation of stimuli is also uniquely individual since it is based on what individuals expect to see in light of their previous experiences and their interests at the time of perception.

Once a stimulus is sensed, the problem becomes one of identifying so that we know what it is. This activity is termed

perceptual categorization.

Why are marketers interested in understanding consumer perception?

1. it is important to note that all marketing stimuli(the marketing mix) exist only in the external world and they must be perceived by consumers to have any impact at all.

Thus an understanding of sensory processes, the first step in perception, is an important issue for marketers.

2. for marketers, understanding how consumers selectivity operators work offers guidance for designing ads that break through the clutter to gain attention. (packages and displays that attract attention)eye level is buy level

question
How does sensory adaptation affect advertising comprehension? How can marketers overcome sensory adaptation and increase the likelihood that consumers will notice their ads?

question
Describe how manufacturers of chocolate bars can apply their knowledge of differential threshold to packages and prices during periods of:
Rising ingredient costs Increasing competition Heightened consumer awareness regarding nutrition.

question

Discuss the difference between the absolute threshold and the differential threshold.

question
Define the following terms:
Absolute threshold Closure Grouping J.N.D Sensory adaptation

consumer attitudes

people have attitudes toward almost everything;

Religion Politics Clothes food

Attitudes put people in a frame of mind of liking or disliking an object.

An attitude is a persons favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea.

Positive/favorable attitudes predispose consumers to react favorably to advertised products.

Negative or unfavorable attitudes may lead to consumers avoiding own-label products because they are thought to be inferior.

A persons attitudes settle into a consistent pattern, attitudes are very difficult to change.

Thus a company would be well advised to fit its product into existing attitudes rather than try to change peoples attitudes

consumer personality

Each person has personality characteristics that influence his or her buying behavior.

By personality is meant a persons distinctive qualities (a strong personality )

Patterns of behavior and ways of thinking that determine a persons response to stimuli surrounding him.

All the ways in which one individual can differ from another.

Personality is often described in terms of such traits as self confidence, dominance, autonomy, sociability, defensiveness etc.

traits: characteristic s

Personality is shaped by inborn potential, unique experiences, and by cultural and social influences.

Personality can be useful in analyzing consumer brand choices.

The idea is that brands also have personalities,

and consumers are likely to choose brands whose personalities match their own.

Brand personality is the specific mix of human traits that may be attributable to a particular brand.

Jennifer Aaker conducted research into brand personalities and identified the following traits:

 1.

sincerity:

Down-to-earth, honest, wholesome, and cheerful

2. excitement: Daring, Spirited Up-to-date

3. competence: Reliable, Intelligent, and successful

4. sophistication:

Upper-class, charming

5. ruggedness:

outdoor tough

She went on to analyze some well known brands and found out that a number of them tended to be strong on one particular trait:
Levis with ruggedness MTV with excitement CNN with competence Campbells with sincerity.

The implication is that these brands will attract persons who are high on the same personality traits.

Marketers attempt to develop brand personalities that will attract consumers with the same selfconcept.

A persons actual selfconcept(how she views herself)may differ from her ideal self-concept(how she would like to view herself) and from her others-selfconcept(how she thinks others see her.)

question

In which circumstances and for which products and services do you think a consumers self concept is likely to affect his or her purchasing behavior?

question
In line with Jennifer Aakers thinking that brands have personalities, ascribe adjectives to describe the personality of any four popular brands of your choice.

Consumer learning

When people act, they learn.

Learning involves changes in an individuals behavior arising from experience.

Most human behavior is learned.

Suppose you buy an hp computer.

If your experience is rewarding, your response to computers will be positively reinforced.

Later on, when you want to buy a printer, you may assume that because HP makes good computers, HP also makes good printers.

When this happens, it means you have generalized your response to similar stimuli.

This tendency is referred to as discrimination. It means that the person has learnt to recognize the differences in sets of similar stimuli and can adjust responses accordingly.

Learning theory teaches marketers that they can build up demand for a product if they develop positive reinforcement in the customer.

ANALYSING ORGANIZATION AL BUYING BEHAVIOUR.

ANALYSING ORGANIZATIONAL BUYING BEHAVIOUR

Business organizations do not only sell, they also buy What do they buy? vast quantities of raw materials, manufactured parts, installations, accessories, supplies and services. Organizational buyers do not buy goods and services for personal consumption or utility. They buy goods and services to make money, to reduce costs, or to satisfy a social or legal obligation. Commonly, there are three types of organizational markets.

MARKETS
Industrial markets- Consists of all individuals and organizations that acquire goods and services to use in the production of other products or services that are sold, rented, or supplied to others. Reseller markets Government markets

The major industries making up the industrial market are:

Agriculture, Forestry Fisheries Mining Manufacturing, Construction,

 Transportation Communication Public utilities Banking, Finance Insurance and Services.

CONTRAST BETWEEN INDUSTRIAL AND CONSUMER MARKETS

Fewer buyers The industrial marketer normally deals with far fewer buyers than does the consumer market. Larger buyers A few large buyers do most of the purchasing. Close supplier- customer relationship Because of the smaller customer base and the importance and power of the larger customers over suppliers, close relationship between customers and sellers in industrial markets. Derived demand

 The demand for industrial goods is derived from the demand for consumer goods. Inelastic demand The total demand for many industrial goods and services is not much affected by price changes. Professional purchasing Industrial goods are purchased by professionally trained purchasing agents, who spend their work lives learning how to buy better. Several buying influences More people typically influence business buying decisions than consumer buying decisions.

Who participates in the industrial buying process?

Users: are those who will use the product or service. In many cases, the users initiate the buying proposal and help define the product specifications. Influencers: are persons who influence the buying decision. They often help define specifications, and technical personnel are particularly important as influencers. Deciders: are persons who decide on product requirements and/or suppliers. Approvers : are persons who authorize the proposed actions of deciders or buyers. Buyers: are persons with formal authority for selecting the supplier and arranging the terms of purchase. They play a major role in selecting vendors.

How do industrial buyers make their buying decisions?

1. PROBLEM RECOGNITION- The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a good or service. 2. GENERAL NEED DESCRIPTION - The buying organization next analyses product value. Some of the questions asked in product- value analysis are: Does the use of the item contribute value? Is its cost proportionate to its usefulness? Does it need all its features? Is there anything better for its intended use? Will another dependable supplier provide it for less? 3. SUPPLIER SEARCH - The buyer now tries to identify the most appropriate vendors. 4.PROPOSAL SOLICITATION - The buyer will now invite qualified suppliers to submit proposals. 5. SUPPLIER SELECTION- In this stage, the members of the buying center will review the proposals and move toward supplier selection.They will consider not only the suppliers technical competence but also their ability to deliver on time and provide necessary services.

THE RESELLER MARKET

Consists of all the individuals and organizations that acquire goods for the purpose of reselling them or renting them to others at a profit. Resellers purchase goods for resale and goods and services for conducting their operations. Resellers handle a vast variety of products for resale except those that producers sell directly to final customers, such as heavy or complex machinery, customized products or products sold on a door to door basis.

WHO PARTICIPATES IN THE RESELLER BUYING PROCESS?

Buying is carried out in different ways by department stores, supermarkets, drug wholesalers and differences can be found within each reseller type. But the bottom line is that the buying process is handled by specialist buyers or merchandise managers. The buyers are aided by assistant buyers.

The buyers are aided by assistant buyers.

RESELLER BUYING DECISION MAKING

For new items, resellers use roughly the same buying process described for the industrial buyer. For standard items, reseller simply reorder goods when the inventory gets low. The orders are placed with the same suppliers as long as their terms, goods and services are satisfactory.

THE GOVERNMENT MARKET

The government market consists of governmental units that purchase or rent goods for carrying out the main functions of government. Government agencies buy an amazing range of products and services. They buy weaponry, aircraft, vehicles, chalk boards, furniture, toiletries, clothing, fuel, tools, equipment, stationery, buses, lorries, houses, drugs, etc

WHO PARTICPATES IN GOVERNMENT BUYING PROCESS?

Many government agencies control a substantial percentage of their own buying. The responsibility is shared, with some procurement activities centralized and others decentralized. Government has specialist buyers who handle all paperwork and follow laid down procedures of procurement.

How do government buyers make their buying decisions?

Government follows almost the same system done by industrial buyers. However, government buying practices are complex. Suppliers complain about excessive paperwork, bureaucracy, needless regulations, emphasis on low bid prices, decision making delays.

CONSUMER BEHAVIOUR MODELS

A model is a simplified representation of reality. One basic function of Consumer Behavior Models is that: they describe in a simplified form the market characteristics affecting purchase of certain types of goods or services. Qualities of an effective model 1. Relevance: In order to be useful, an effective model should be relevant. It must be as closely linked as possible to real marketing situations. 2. comprehensibility: Decision makers cannot use models which are vague and poorly constructed.

THE BLACK BOX MODEL

MARKETING ENVIRONMENTAL STIMULI STIMULI
BUYER CHARACTERISTICS DECISION PROCESS BUYERS RESPONSE

PRODUCT

Economic

Motivation

Problem recognition

Product choice

PRICE PLACE

Technological

Perceptions

Information search Alternative evaluation

Purchase decision

Brand choice

Political

Personality

Dealer choice

PROMOTION Cultural
Demographic

Attitudes

Purchase timing

Lifestyle

Post-purchase behavior

Purchase amount

Natural

The Black Box Model

The Black Box Model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses The marketing stimuli are planned and processed by companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society. The Buyers Black Box contains the buyer characteristics and the decision process which determines the buyers response.

The Black Box Model

INPUTS: SETS OF STIMULI

INFORMATION PROCESSOR:

THE BUYER

OUTPUTS: SETS OF RESPONSES

CULTURAL
oCULTURAL BELIEFS AND VALUES oLIFESTYLES oETC

SOCIOLOGICAL
oSOCIAL CLASS STRUCTURE oFAMILY/GROUP INFLUENCE oLIFE-CYCLE oOPINION LEADERSHIP

ECONOMIC
oPRICE oDELIVERY oPAYMENT TERMS oSALES SERVICE

INDIVIDUAL PSYCHOLOGICAL FACTORS

oMOTIVATION oPERCEPTIONS oPERSONALITY oATTITUDES oLEARNING PROCESSES

BUYERS DECISION MAKING PROCESS

PRODUCT OR SERVICE

Question
With the assistance of a consumer behavior model, clearly explain what Consumer Behavior is all about.

Integrated Marketing Communications

Consumers are increasingly aware of their power in the market place. They can no longer be treated in an offhand manner by companies seeking their patronage. Businesses now operate in a far more critical climate today than in past years. Integrated marketing communications is a way of looking at the whole marketing process from the viewpoint of the consumer.

The marketing communications mix consist of five major modes of communication:

Advertising Sales promotion Public relations and publicity Personal selling Direct and interactive marketing

Steps in developing effective communications

1. Identify the target audience- The target audience is a critical influence on the communicators decisions on what to say, how to say it, when to say it, where to say it and to whom to say it. The communicator should have a clear target audience in mind. 2. Determine the communication objectives - What does the marketer want to put into the consumers mind? Does he want to change the consumers attitude, or get the consumer to act? 3.Design the message - The marketer should develop an effective message. Ideally the message should gain Attention, hold Interest, arouse Desire, and elicit Action(AIDA Model) 4. Select the communication channel-The communicator must select efficient channels to carry the message. 5. Establish the total marketing communications.

How do Companies decide on the promotion budget?

There are four common methods: Affordable method Percentage of sales method Competitive parity method Objective and task method

Deciding On The Marketing Communications Mix