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Introduction - Consumer BehaviourLearning Objectives Understand and apply the theories of consumer behaviour  Analyse consumer decision - making processes using consumer behaviour principles  Communicate consumer behaviour theories  Generate and utilise critical and creative thinkingDefinitionsC...

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Introduction - Consumer Behaviour Learning Objectives    

Understand and apply the theories of consumer behaviour Analyse consumer decision - making processes using consumer behaviour principles Communicate consumer behaviour theories Generate and utilise critical and creative thinking

Definitions Consumer - a person/organisation who identifies a need or desire, makes a purchase, uses the product, service, experience and then disposes of it Customer - a person/organisation who pays for what is purchased Consumer behaviour - the processes involved when individuals or groups select, purchase, use or dispose if products, services, ideas or experiences to satisfy needs and desires Consumption - purchasing or obtaining the product, service, experience and using it

Consumer Behaviour as a process Pre-Consumption ⇒ Consumption ⇒ Post-Consumption

Issues that arise during the consumption process

Consumer Behaviour processes Based on exchange

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Exchange theory (2 types of exchange theories)

Based on value  Value-in-use  Symbolic value  Co-created value Crowdsourcing - when a company doesn't have sufficient resources itself to do a certain job

The importance of consumers in marketing strategy   

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Consumers are different Marketers must use their resources to maximum effect Segmentation - the process of identifying groups of consumers who are similar to one another in one or more ways, and then devising marketing strategies that appeal to one or more of these groups o Targeting a small section of a population 80/20 rule o Pareto principle - 80% of income comes from 20% of customers

Bases of segmentation      

Demographic - age, gender, marital status, income, education, occupation Geographic Psychographic - activities, interests, opinions Psychological - personality, attitudes, perceptions Sociocultural - family life cycle, social class, culture Use-related - frequency of use, context of use

Age  

Digital native o Born being aware of computers Digital immigrant o Born outside of the digital age

Gender 

Male, female, LGBT o Pink money - gay males, loyal

Geographic 

Affects clothing attire

Psychographic 

Lifestyle - target them with goods/service/experience that suit their lifestyles,

Sociocultural Family life cycle

Social class Education, Occupation, Income  Snobbism - often insecure people and therefore want to be better/happy to be better than others and show this off

Cultural  

Ethnicity Religious

Use-related

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Heavy users o Light users can become the heavy users

Aspects of segments of interest What is bought Why is it bought When it is bought How often they buy How often they use How they use it How they dispose of it  Garbology - study of people's rubbish bins, how much is thrown out, how much is used

Criteria for segments Sufficiently large Easily identifiable Measurable Accessible Enduring/stable Actionable

Relationship marketing     

Relationship marketing - relationship with consumer and company Database marketing - resulted in development of big data Big data - volume, speed Trust in the brand Direct marketing - selling directly to the consumer

The roles we play Types of relationships consumers might have with products  Self-concept attachment - product helps establish the user's identify  Nostalgic attachment - product services as a link with the past self  Interdependence - product is part of the daily routine  Love - product elicits emotional bonds Holt's distinct approaches to consuming  Consuming as an experience - e.g. fans attending a soccer match  Consuming as integration - e.g. fans wearing jerseys of the club they support  Consuming as classification - e.g. fans having flags of the club they support on display on their cars

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Consuming as play - e.g. fans performing a Mexican wave

Needs, wants, desires Need - something a person must have to live or achieve a goal Want - the particular form of consumption chosen to satisfy a need Desire - an emotional solution to satisfying a higher level hedonistic or emotional need

Decision making Chapter 9 Types of Consumer Decisions Extended problem solving - an elaborate decision-making process whereby consumers collect as much information as possible and carefully weigh up product alternatives Limited problem solving - use of simple decision-making rules to arrive at a purchase decision Habitual behaviour - choices made with little or no conscious effort Based on:  Cognition, affect, conation (behaviour)

Continuum of Buying Decision Behaviour Habitual Behaviour     

Limited problem solving

Low consumer involvement Low-cost products Familiar product class/brands Frequent purchase Little thought, search or time given to purchase

Limited vs extended problem solving

Extended problem solving     

High consumer involvement More expensive products Unfamiliar product class/brands Infrequent purchase Extensive thought, search and time given to purchase

Limited Problem Solving

Extended Problem Solving

Motivation

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Low risk and involvement

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High risk and involvement

Information search

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Little search Information processed passively In-store decision likely

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Extensive search Information processed actively Multiple sources consulted prior to store visits

Weakly held beliefs Only most prominent criteria used Alternatives perceived as basically similar Non-compensatory strategy used

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Alternative evaluation

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Purchase

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Limited shopping  time; may prefer self-service  Choice often influenced by store displays

Strongly held beliefs Many criteria used Significant differences perceived between alternatives Compensatory strategy used Many outlets shopped if needed Communication with store personnel often desirable

Consumers as emotion experiencers Affect events theory - an affective event creates an emotion which leads to an affect-driven attitude and behaviour Affect control theory - we change our thoughts/behaviours to maintain our emotions Affect infusion theory (model) - four reasoning approaches resulting from affect  Direct access  Motivated  Heuristic  Substantive processing

Consumers as habitual actors  

Habits are automatic, continual behaviours with little conscious thought Routines are sets of habits in a particular sequence

French's exchange framework - valence (reward, punishment), cognitive engagement (passive, active)  Problem solving strategy: hug (reward, active)  Problem solving strategy: smack (punishment, active)  Habitual strategy: shove (punishment, passive)  Habitual strategy: nudge (reward, passive)

o o o

Nudging can be condescending Nudging may work in the short term but not long term Nudges are really hard to get right

Consumers are problem solvers      

Engel-Kollat-Blackwell model of consumers behaviour Problem recognition - actual/ideal state, opportunity recognition, need recognition Information search - pre-purchase search and ongoing search (determinants, motives, outcomes) Evaluation of alternatives - product categorisation Product choice - evaluative criteria, determinant attributes Post-purchase processes

Problem Recognition

Consumer decision-making rules Compensatory - consumer evaluates brand options in terms of each relevant attribute and computes a weighted or summated score for each brand. Positives and negatives outweigh one another Non-compensatory

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Conjunctive - a separate minimally acceptable level for each attribute. If any brand falls below that point on any attribute, they're eliminated Disjunctive - if a brand meets or exceeds the cut off point of any one attribute, it's accepted Lexicographic - attributes are ranked in terms of perceived importance. Working down the list, the first brand to exceed the others is accepted

Heuristics - mental shortcuts Based on the notion of bounded rationality 

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Typical shortcuts o Product signal o Market beliefs o Choosing a familiar brand o Inertia - tends to mean lazy / changeable Mental accounting o Sunk-cost fallacy - if you bought something and paid for it, you use it o Hyperopia - when you are too future focused so you don't use the thing because you're saving it to use in the future e.g. nana and poppa o Prospect theory - where you actually assess the pros, cons, gains and losses

Chapter 10 The importance of experience  

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Four realms of experience o Entertainment, educational, aesthetic, escapist Five design principles o Theme the experience o Harmonise impressions with positive cues o Eliminate negative cues o Mix in memorabilia o Engage all five senses Five aspects of customer experience o Cognitive, emotional, physical, sensorial, social

Contextual effects on buying 

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Effect on physical surroundings o Store image o Atmospherics o Shopping centres as "third" places Effect of other customers (social surroundings) Temporal factors o Economic time

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Psychological time - times as a pressure cooker, map, mirror, river, feast Antecedent states Task definition Shopping orientation o Reasons for shopping or not - social, safety, sharing of common interests, instant status, thrill of the hunt

The purchase environment   

Spontaneous or planned shopping POP stimuli Catalogue shopping, E-commerce, M-commerce, f-commerce

Post-purchase outcomes 

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Satisfaction/dissatisfaction - word of mouth/mouse o Complaining - voice, private, third-party response o Post-purchase cognitive dissonance Brand loyalty - a pattern of repeat product purchases, accompanied by a positive attitude to the brand

Product disposal  

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Sustainability Disposal options o Keep - to serve original purpose, to serve new purpose, store it o Get rid of item permanently - throw away, give away, trade it, sell it (to consumer, through middleman, to middleman)  To be (re)sold, to be used o Get rid of item temporarily - rent it, lend it Lateral cycling o Divestment of products

Perception Sensory marketing A sensation is the immediate and direct response of the sensory organs to a stimulus  Vision - colours (international implications)  Smells  Sound - sound symbolism  Touch - the endowment effect  Taste - taste fads

Stages of perception: Exposure

Sensory threshold - the point at which a stimulus is strong enough to make a conscious impact on a person's awareness Absolute threshold - a minimum amount of stimulation that can be detected on a given sensory channel Differential threshold - the ability of a sensory system to detect changes or differences between stimuli Just noticeable different (j.n.d.) - the minimum difference between two stimuli that can be detected by the perceiver Weber's law - the stronger the initial stimulus, the greater its change must be for it to be noticed Sub-liminal perception - the processing of stimuli presented below the level of the consumer's awareness

J.n.d The Briscoes Lady 1990, 2019

Stages of perception: Attention Personal selection factors  Experience  Selective exposure  Selective attention/personal vigilance  Perceptual defence  Perceptual blocking  Adaptation o Intensity o Duration o Discrimination o Exposure o Relevance

Stimulus selection factors  Size, colour, position, novelty

Attention tracking

Colour

Position, size, colour

Novelty, position

Position, colour, novelty

Novelty, colour

Novelty, size, colour

Stages of perception: Interpretation      

Stimulus organisation Gestalt - the whole pattern or configuration The closure principle The principle of similarity The figure-ground principle Interpretation bias

Gestalt

Closure

Figure and ground

The Fibonacci sequence Each number in the sequence is the sum of the two numbers that precede it. So, the sequence goes: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on

Semiotics - the meaning of meaning      

Object - focus of the message Sign - sensory message that represents the intended meaning of the object Interpretant - the meaning derived Icon - a sign that resembles the product in some way Index - a sign that is connected to a product because they share some property Symbol - a sign connected to a product through conventional or agree-upon associations

Icons

Index https://www.pinterest.nz/pin/237424211575104703/

Symbols

Perceptual positioning - perceptual mapping

Perceived price  Reference prices - internal, external  Tensile and objective price claims - e.g. range of discounts, specific discounts Perceived quality  Perceived quality of service o Serqual - tangiles, relatability, responsiveness, assurance, empathy  Price  Retailer image  Manufacturer image

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Risk - functional, physical, financial, social, psychological, time

Motivation and Values Learning Core Concepts Motivation - an internal state that activates goal-oriented behaviour (internal - you've got to be feeling it) Need - primary (innate, comes from you, typically physiological); secondary (acquired, external sources that influence you, you will always be influenced by external sources because you are a social being) Want - the particular form of consumption chosen to satisfy a need Goal - a consumer's desired end state Generic goals (e.g. getting an education); product-specific goals (e.g. what sort of education do you want) Drive - the desire to satisfy a biological need in order to reduce physiological arousal

Aspects of Motivation Motivational strength  Biological (primary) vs learned (secondary) needs o Drive theory - focuses on biological needs that produce unpleasant states of arousal (drive - set of unsatisfied/satisfied arousal state, then motivation is determined) o Expectancy theory - behaviour is largely pulled by expectations of achieving an external outcome rather than pushed from within (externally driven)

Vroom's expectancy theory

Aspects of Motivation continued.. Motivational direction  Needs vs wants Motivational conflicts - two incompatible motivations  Theory of cognitive dissonance - a state of tension is created when beliefs or behaviours conflict with one another  Approach-approach conflict - two desirable alternatives (one ice cream that is rich and creamy, another than is delectably sweet and flavourful - you can't make up your mind, the marketer mixes it together, they resolve the conflict)

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Approach-avoidance conflict - a desirable and an undesirable alternative (desirable eat the ice cream that is delicious, undesirable - not eat it, but eat a non calorie one, try and reduce the sweetness which is undesirable) Avoidance-avoidance conflict - two undesirable alternatives (legacy systems - IT e.g. blackboard, heavily invested in, clunky and expensive to run, keeps running it, OR investing in a whole new system, may cost more, but will be worth it at the end of the day)

Dynamics of motivation     

Needs are never fully satisfied New needs emerge as old needs are satisfied Success and failure influence goals - the more failure you have, the less certain you are, may need to revisit goals) Substitute goals Frustration o Defence mechanisms o Aggression o Rationalisation o Regression

o o o o o

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Withdrawal Projection Autism - withdrawal Identification Repression Multiplicity of needs Needs and goals vary among individuals

Maslow's Hierarchy of Needs

Self-determination theory    

Internal vs external motivation Self-determination theory Intrinsic motivation - occurs when we are motivated by the enjoyment of an activity without a further end-goal Extrinsic motivation - occurs when there is an external reason or force determining the purpose of the activity

3-D model of motivation (meta-theoretic model of motivation and personality) Elemental level - inherited dispositions and tendencies Compound level - add learning and associated traits of, e.g. competitiveness Situational level - add the context/occasion of the behaviour, e.g. Christmas Surface level - add product category influence, e.g. coupon-proneness

Levels of involvement - concepts Involvement - the motivation to process product-related information Inertia - purchase decisions are made out of habit because the consumer lacks the motivation to consider alternatives Flow - a situation in which consumes are truly involved with a product

Measuring involvement Strategies to increase involvement  Appeal to consumers' hedonic needs  Use novel stimuli (something unexpected)  Use prominent stimuli (bigger than what you expected it to be)  Include celebrity endorsers  Build a bond with consumers

Values Value - a belief that some condition is preferable to its possible  Generational

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Cultural o Value system - a culture's ranking of the relative importance of values o Core values - common general values held by a culture; must be pervasive and enduring o Enculturation - the process of learning the beliefs and behaviours endorsed by one's own culture o Acculturation - the process of learning the beliefs and behaviours endorsed by another culture Materialism - the importance o Consumers attach to worldly possessions

Rokeach Values Survey Terminal values - end states desired by members of a culture Instrumental values - goals endorsed because they are needed to achieve desired end states, or terminal values Means-end chain model Laddering - a technique for uncovering consumers' associations between specific attributes and general values

Liberty/Freedom

Feeling good/Health

Wealth

Values scales LOV - list of values VALS - values and lifestyles

Behavioural learning theories Classical conditioning - a learning process where a stimulus is paired with another stimulus and the response transfers to the new stimulus Unconditioned stimulus - a stimulus that is naturally capable of causing a response Conditioned stimulus - a stimulus that produces a reaction through association over time Conditioned response - a response that has been learned through association over time Stimulus generalisation - the process that occurs when the behaviour caused by a reaction to one stimulus transfers to a similar stimulus Stimulus discrimination - the process that occurs when consumers learn to differentiate a stimulus from other similar stimuli

Marketing applications of classical conditioning     

Brand equity Extinction Creating positive associations by marketing e.g. Crayola crayons smell Marketing applications of repetition e.g. Tui Applications of stimulus generalisation o Family branding o Product line extensions o Licensing e.g. Calvin Klein luggage

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Look-alike packaging Marketing applications ...