Lecture notes for the IMC course, for lecture 3 PDF

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Lecture notes for the IMC course, for lecture 3...

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8/03/2021

Integrated Marketing Communications 24210 Week 3 Dr Sorush Sepehr

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 Consumer Empowerment  Model of Consumer Decision Making  Target Marketing

Agenda

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Consumer Behaviour

Consumer behaviour refers to the process and activities that people engage in when searching for, selecting, purchasing, using, evaluating and disposing of products and services so as to satisfy their needs and desires.

decision making process

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Consumer Empowerment

lots of choices

 Empowerment is a consumer’s subjective experience

that they have greater ability than before to intentionally produce desired outcomes and prevent undesired ones and that they are benefiting from the increased ability.  Consumers are in control  Consumers are empowered through the use of mobile

technologies and the internet.

more and easier access to information in order to make a smarter decision

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Type text here

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consumers have more power provide easier feedback to businesses

Consumer empowerment in the ‘push–pull’ marketplace 5

Consumer Decision Making

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product, performance or image

Problem Recognition and Sources Problem recognition occurs when there’s a perceived discrepancy between the consumer’s ideal and actual state.

Out of stock

Dissatisfaction

New needs or wants

Related product purchase

Marketer-induced recognition

New products

run out of something = change in actual state

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Information Search

Personal sources

Personal experience

Market sources

Public sources

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Alternative evaluation

 After gathering and selecting information, the

consumer moves to evaluation.  A set of brands with the potential to meet the

consumer’s needs is identified.  These are known as the evoked set.  Consumers will evaluate these brands further before

proceeding to a purchase decision.

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Evaluation of Alternatives All available brands Brand 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

evaluating brands on certain criteria

Evoked Set of Brands Brand B

Brand E

Brand F

Brand I Brand M

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Evaluative criteria and consequences

▪ Evaluative criteria are the dimensions or attributes of a

product or service that are used to compare different alternatives.

quantities

qualities

▪ Evaluative criteria can be objective or subjective. •

For example, when buying a motor vehicle, consumers use objective attributes such as price, warranty and fuel economy as well as subjective factors including image, styling and perceived performance.

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Different Consequences

personal, subjective, intanagible abstract outcomes of product or service usage 12

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Purchase decision

▪ A purchase decision is not the same as an actual

purchase.

▪ Once a consumer chooses which brand to buy, he or

she must still implement the decision and make the actual purchase.

▪ Additional decisions may be needed, such as: • when to buy • where to buy • how much money to spend.

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Postpurchase Evaluation

The consumer decision process does not end with the purchase. After use the consumer compares performance with expectations and is either satisfied or dissatisfied. ▪

Satisfaction occurs when the consumer’s expectations are either met or exceeded.

▪

Dissatisfaction results when performance is below expectations.

Type text here 14

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Postpurchase Evaluation cognitive dissonance

Cognitive dissonance is a state of psychological tension or postpurchase doubt that a consumer may experience after making a purchase decision. This tension often leads the consumer to try to reduce it by seeking supportive information. ▪ Marketing communication may need to reassure

consumers about their decision.

more importance purchase decisions psychological: self doubt

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Examining consumer motivations

▪ Internal or psychological drivers influence each stage of

the decision-making process.

▪ Marketers devote considerable attention to examining

drivers… the first is motivations—that is, those factors that compel a consumer to take a particular action.

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Consumer Decision Making

affect how consumers make decisio Decisio Making

Psychological Process

Problem recognition

Motivation

Information search

Perception

Alternative evaluation

Attitude formation

Purchase decision

Integration

Postpurchase evaluation

Learning

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Consumer Decision Making

Psychological Process

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Consumer motivations

▪ Internal or psychological drivers influence each stage of the decision-making process. ▪ Marketers devote considerable attention to examining drivers… the first is motivations—that is, those factors that compel a consumer to take a particular action.

maslows hierarchy of needs 19

Consumer motivations Psychoanalytic theory

▪ Psychoanalytic theory, pioneered by Freud, explored motivation and personality in a clinical setting. ▪ Psychoanalytic theory applied to consumer behaviour explored motivations for purchasing that may be complex and unclear to the casual observer—and to the consumers themselves. ▪ Motivation research arose in order to explore these hidden and complex drivers. ▪ Motivation research has its limitations.

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Perception

Marketers are interested in how consumers:

Perception is the process by which an individual receives, selects, organises and interprets information to create a meaningful picture of the world.

▪ sense external information ▪ select and attend to diverse information sources ▪ interpret and give meaning.

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e.g. size, colour of ad combination of 2 or more

Three Processes of Perception

marketing stimuli e..g being hungry

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Perception

Sensation: response of the senses (sight, sound, smell, taste, touch) Selection of information: determines which inputs will receive attention Interpretation: filtering the information inputs

Type text here

e.g. cultural differences

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The selective perception process

Selective exposure

perception process when consumers interpret info based on own attitudes, beliefs, motives and experiences is selection comprehension

Selective attention

Selective comprehension

Selective retention

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Attitudes

▪ Attitudes – learned predispositions to respond in a consistently favourable or unfavourable manner with respect to an object. •

‘Object’ – a brand, a company, another person, a retail store, an ad, etc.

▪ It is a summary construct that represents an individual’s enduring evaluation of, feelings about, and behavioural tendencies toward an object or idea.

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Consumer Attitudes Products/ Services

Individuals

Ads

Attitudes

Brands

learned predispositions to respond to an objec – linked to purchase decisions.

Companies

Media

Retailers

Organisations

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Multiattribute Attitude Models

 A brand is viewed as a composite of a number of

attributes.

 Consumers have beliefs about attributes and attach

weights to specific attributes.

 Consumers weigh up beliefs about attributes alongside

their estimation of the attribute’s importance.

Ab = sum bi x ei

 To predict attitudes, marketers must know how much

importance or salience is attached to given attributes.

ab = attitude towards brand bi = beliefs about the brand's performance on attitude i ei = importance attached to attribute i n = number of attributes considered

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reductinist = cannot capture complexities of what is in the consumers' mind

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Attitude change strategies

Type text here

apple watch new blood oxygen

Change strength or belief rating about an important attribute

Change perceptions of importance of an attribute

Add a new attribute to the attitude formation mix

Change perceptions or belief ratings about a competing brand

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Integration The way product knowledge, meanings, and beliefs are combined to evaluate two or more alternatives.

▪ Consumers integrate information from various sources. ▪ Decision Rules: the strategies used to decide among alternatives. ▪ Integration can use complex decision rules, evaluating alternatives or attribute by attribute. ▪ Or simplified decision rules known as heuristics—for example, buying the cheapest or buying the most impressive (e.g. price based heuristics and promotionbased heuristics)

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Learning

▪ The process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behaviour. ▪ Two basic approaches: • behavioural learning theory • cognitive learning theory

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Behavioural Learning Theory

Behavioural Learning Theory: External environmental stimuli cause behaviour, rather than internal psychological processes. • Classical Conditioning • Operant Conditioning

marketing stimuli

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Classical Conditioning Process

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rewards and punishment for behaviour pos, neg, punshiment

Operant Conditioning Process

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thank you letter after pruchase increases brand trust

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Operant Conditioning Process (example)

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Operant Conditioning: Reinforcement Through Shaping

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Cognitive Learning Theory

▪ Cognitive learning theory is preferred by marketers. ▪ Five-stage model of consumer decision making is based on cognitive learning theory.

closer to rality better expolain the complexities ▪ Behavioural theory is criticised for: of consumer behaviour and decision ▪ being to simplistic making ▪ emphasising external stimuli

▪ ignoring internal processes (psychological).

goal --> positive behaviour --> insight --> goal achievement 35

External influences on consumer behaviour

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Situational Determinants

Types of situations

Purchase

Usage

Communication

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Target Marketing Type text here

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STP Process

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Bases for Segmentation

Consumer Markets

Business Markets

▪ Geographic

▪ Geographic

▪ Demographic

▪ Demographic

▪ Psychographic

▪ Product type

▪ Behaviouristic

▪ Buying situation

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Major Segmentation Variables for Consumer Markets

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Segmentation By Buying Group

New category users (NCU)

Brand Switcher s

Brand Loyals (BL)

(BS)

Otherbrand Loyals

(OBL)

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Profile Market Segments

 Having identified the range of ways in which market

segments can be described, the next task is to develop a market segment profile.  Such a profile describes the typical potential

customer in the market segment; that is, it describes the common features shared by members of market segments and how they differ between market segments.  Segment profiles will typically be described in terms

of a number of segmentation variables.

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Select target markets

 With a detailed evaluation of potential market

segments based on sales potential, the competitive situation and the organisation’s cost structures, the organisation can proceed to decide which market segments it will target and which it will disregard.  Having identified a range of potential target market

segments, the organisation needs to undertake a rigorous analysis to choose between the range of possible segments.

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Positioning

 The organisation must determine how its offer is

‘positioned’ in the minds of each of its target market segments and develop its marketing mix accordingly.  Positioning describes how target markets perceive the

organisation’s offer relative to competing offers.  Positioning involves two steps: • Firstly, determining the position that the company wishes

to occupy in the minds of buyers • Secondly, developing a marketing mix to reflect the

expectations of the target market segment and which reflects that positioning.

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Determine positioning for each segment

 To determine the appropriate positioning for its

products, an organisation needs to undertake detailed market research to understand its current position in the minds of its target market segments.  A common technique for determining positioning

is called perceptual mapping, which typically produces two‐dimensional maps showing how each of the competing brands relate to each other in terms of a range of product attributes.

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Perceptual Mapping Examples

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Perceptual Mapping Examples

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Perceptual Mapping Examples

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 Lecture4: Communication Process Reading: Chapter 5

 Tutorial 3 Group Project Preliminary Report Due

Next Week

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