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• MKTG 1030 covers marketing management.
• This class focuses on consumer behaviour and also touches on B2B.

Agenda

• The mid term exam will be covered
• Introduction to consumer behaviour, including
• Why consumers buy
• What influences buying behaviour
• How consumers make purchase decision
• Introduction to B2B marketing.
• A look at this week's labs.

Mid Term Exam - Logistics

• Held during tutorial (lab) time
• Rooms are to be determined (TBD).
• There will be multiple versions of the test
• Consists of 20 multiple choice questions
• Students have 30 minutes to complete.
• No computers or phones are allowed
• Bring 3 HB # 2 Pencils, in case some happen to fail
• Accommodation Letters are considered

Mid Term Exam - How to Prepare

• Do the reading before the lecture
• Come to the lecture and pay attention
• Take notes in the lecture
• Three questions on the exam are lecture-based
• This material is not covered in the textbook or lecture notes
• Go to the labs, do the lab prep, & participate

Course Outline

• Topics covered include course review, the marketing plan, personal branding, promotion, distribution, pricing & sales, new products, midterm exam, branding, marketing research, understanding the consumer, and targeting/positioning/segmentation.

Consumer Behavior

• Considers the reasons behind personal, situational, psychological, and social considerations
• It relates to why people shop, buy, use, and sometime become loyal customers before disposing of products

Why Do Consumers Buy

• Considerations include why one purchases what they do, how they make purchase decisions, and where and when they prefer to shop.

Getting the Answers

• Billions are spent studying consumer behaviours
• Data collection methods include
• Web visits
• Blogs
• Social networks
• Psychological profiles
• Surveys

Situational Factors

• Store location matters
• Physical factors impact decisions
• Social situation also impacts decisions
• Crowding is influential
• Time is a consideration
• Reason for purchase matters
• Mood of the consumer can make a difference

Physical Factors

• Atmospherics are the physical aspects that retailers try to control within the selling environment
• Store layout
• Music played
• Lighting
• Temperature
• Smell
• Uncontrolled factors include weather

Social Situation

• Circumstances push consumers toward compulsive purchases
• Factors include obligation, expected behavior, and need to impress

Time

• Getting the right product, right place or right time can all impact success

Reason for Purchase

• Considerations on if a purchase is due to an emergency, a gift, occasion, completing a task or quick need

Mood

• Peoples moods affect their spending habits, with some enjoying shopping more than others & a bad mood spoiling the desire to shop

Economic Situation

• Peoples economic situation affects what and how much they buy
• During economic downturns, people reduce spending
• Stores with lower prices fare better during economic downturns than high end stores

Changes in Demand During the Pandemic

• Increased demand was seen for drive-throughs, video games, Peloton bikes/home gyms, home delivery/curb-side pickup, home office equipment & spaces, online gambling, take-out liquor, teleconferencing, recreational vehicles, and live-streamed concerts.
• Decreased demand for indoor dining, amusement parks, public gyms, in-store shopping, commercial office equipment & space, in-person gambling, bars, in-person conferences, vacation & resort rentals, and public concerts.

Personality

• Describes a persons disposition and why people are different
• Encompasses a person's unique traits

"Big Five" Personality Traits

• Openness: Reflects how receptive one is to new experiences.
• Conscientiousness: Indicates how diligent one is.
• Extraversion: Measures how outgoing or shy one is.
• Agreeableness: Shows how easy it is to get along with someone.
• Neuroticism: Demonstrates susceptibility to negative states.
• The link between personalities and buying behavior is unclear at present.

Self Concept

• Marketers have had better luck linking peoples self-concepts to their buying behaviour
• Self-concept reflects how you view yourself--be it positive or negative
• U.S. Army used "Be All That You Can Be" to encourage this

Self-Concept Continued

• The ideal self influences choices based on goals like being fitter, more popular, or eco conscious
• People buy things to feel good about themselves

Gender

• Women tend to try on everything and shop 'til they drop
• Men see what hey want and buy it and prefer sites which show pictures of the products

Gender 2

• Men buying online prefer to save time and money
• Women prefer to browse diverse sets, and see products in lifestyle contexts
• Women are 2x as likely as men to use viewing tools online

Gender 3

• Gender-based shopping differences do appear to be changing
• Younger, well-educated men shop for groceries more
• Men today are also more likely to buy diapers and change them

Age

• A consumer's age influences their purchase decisions
• Chronological age: A persons measured age
• Cognitive age: How old a buyer perceives themselves to be

Lifestyle

• Consumer lifestyles are researched by companies and they aks questions like what products they like, where they live, how they spend time, what are their priorities, and who they talk to

Lifestyle 2

• Psychographics combines
• Lifestyle traits of consumers and their personality styles
• Personal attitudes, activities and values

Motivation

• Inward drive to get what one needs
• In the mid 1900's, Abraham Maslow developed the hierarchy of needs

Maslow's Hierarchy of Needs

• Self-actualization: realising one's full potential
• Evaluation: Being respected as a result of accomplishments
• Social needs: Being loved, befriended and accepted
• Safety needs: Feeling safe and sheltered from harm
• Physiological needs: Needing food, water and sleep

Perception

• How people interpret their surroundings and involves five external senses
• Sight, Smell, Taste, Touch, Hearing

Perception and Retention Factors

• Selective Attention: Filtering out unwanted information
• Selective Retention: Forgetting information that clashes with beliefs

Perception and Retention Factors 2

• Shock Advertising: Increasing retention through surprising stimulus
• The CDC used shock advertising to try and convince Americans of the terrible toll smoking has on peoples health
• Research on shock advertising is mixed

Perception and Retention Factors 3

• Subliminal Advertising: Stealthily embedding messages in media
• Includes Movies and ads
• Banned by the Federal Communications Commission (FTC)
• This is the opposite of shock advertising

Learning

• The process by which consumers change their behaviour after gaining information or experience
• Operant (instrumental) conditioning: a type of behaviour thats repeated when rewarded
• Prizes and toys in Cracker Jack boxes and McDonalds Happy Meals, free sandwich after a certain number of purchases, free car washes when you fill up your car with a tank of gas

Learning 2

• Gamification is building a game component into a product/service to encourage consumers to buy or use it more
• Peloton uses an exercise bike to show this component

Attitudes

• Mental or emotional feelings
• Favorable or unfavorable evaluations
• Action tendencies regarding products, services, companies, ideas, issues, or institutions
• These tend to be enduring and are hard to change
• Based on people's values and beliefs

Societal Factors

• Include culture, social class and family as well as subcultures
• Reference groups and opinion leaders also can influence consumers

Consumer Cultures

• Culture is a group of people who share beliefs, customs, bahaviours and attitudes.
• A subculture is different from the dominant culture but has something in common
• Common interests, Vocations or jobs, Religions, Ethnic backgrounds, Geographic locations.
• Social class has the same social/economic/educational status in society
• income does help define, but occupation is main variable.
• Refence groups and opinion leaders
• Have people who have consumer identifies with and may want to join
• Trusted publicly known figures
• Influencers as people who are not experts but who have influence over what people purchase

Consumer Cultures

• One of the most important determinants is from the family with the children they produce
• Children follow parents and influence house hold purchases
• -Risk for advertising comes with alienating the parents

Key Takeaways - Why Consumers Buy

• Situational influences are conditions that affect how buyers behave.
• Market researchers think consumers buy products to enhance feelings towards themselves.
• Gender, Age, Lifestage and Lifestyle are influencers on how people shop
• Basic needs come before wants per the fundamental condition.
• Consumers' attitudes are the "mental positions" people take based on values and beliefs. These tend to be difficult to change. ` Learning is process of change after they obtain information about the product
• The key ones
• Culture effects purchasing, to live
• Subculture- vocations/Jobs, Reliogions, Backgounds
• social class effects shopping
  • all the above can determine consumer choices. Reference groups- consumer identified with and wants to be that group
• hire celebrities to endorse opinion leaders- expertise, good influence
• people copy, consumers look up to them

Consumer Decision Making

• Routine response behavior: Automatic purchase decisions based on past information. Impulse buying: Purchases that occur with no planning.
• Low-involvement decisions: For products with low failure risk/price.
• High-involvement decisions: For products with high failure risk/price.
• Limited problem solving: Some information, but more is acquired before buying.
• Extended problem solving: Significant information gathering before buying.
• High risk
• Price, or long use
• High risk
• Price/long use
• Problem solved
• dissonace

Involvement in Buying Decisions

• Low involvement includes routine purchases and inexpensive or low risk items
• High involvement includes high risk, price items

Stages in the Consumer's Purchasing Process

• Need Recognition: Realizing the need for an item.
• Search for Product Information: Exploring different options/products.
• Product Evaluation; Determining 'must have' criteria for a product.
• Product Choices and Purchase; Deciding on an affordable product.
• Postpurchase Use and Evaluation of a Product: Deciding if the product meets needs.
• Disposal of the Product: Buying another version, or doing away with the product.
• Awareness of the product
• Searched for solutions and evaluated
• Intent to purchase
• After purchased - eval and did it work

Post-Purchase Dissonance

• Rethinking decisions after purchasing, especially when experiences don't match expectations.

The Customer's Journey

• Involves rethinking a buyer's purchase decision as a journey.
• Involves developing journey maps to understand consumer actions.
• Involves getting customer emotional feedback at each stage of doing business.

Key Takeaways - Consumer Decision-Making

• Consumer behavior covers why people buy and then dispose of items, distinct buying phases.
• Involves realizing a need/want, searching, evaluating, choosing, purchasing, using, and evaluating. How interested they are in buying a product -Inexpensive, low risk, higher costs/prices
• Instead of the journey

Business Customers are Different From Consumers

• Number sold: B2B transactions involve much greater volume.
• Complexity: B2B products are more complex, involve customization.
• Personal selling: Common in interacting to allow for changes in selling

Demand for B2B Products

• Derived demand: Demand from a source other than the primary buyer.
• Fluctuating demand: Small consumer demand changes can have a big effect throughout businesses.
• Joint demand: Increases in demand for one product increases demand for another.
• try influence thru consumers. B2b different from consumers.

B2B Markets

• B2C has many, geographically dispersed
• Smaller $ than B2B
• Shorter cycles - fast decision cycles
• B2B personal selling more important
• Mass TV marketing
• Standards less strict

B2B Buyers

• Can be either for profit or non-profit
• Includes Producers
• Resellers
• Institutions
• Governments

Producers Resellers and Governments

• Producers: Companies that buy and transform goods and services.
• These must buy certain products to produce what they create and buy in large quantities Resellers: Companies that sell goods and services by other firms w/o materially changing them.
• The government is worlds largest
  • sealed bids, etc

Value-Added Resellers

• Value Added Reseller or VAR’s will buy finished products and then sell them at mark up

Governments (B2G Markets)

• Selling to the government isn't always easy, with regulations required
• Decsion cycles can be v e complicated Each agency will give its bid requirements
• The U.S. government is the world's largest buyer

Institutions

• Institutional markets include nonprofit organizations Charitable organizations, private colleges, civic clubs are examples,
• Buy products and services in large quantities
• Holding costs important

Institutions and Purchase Decisions

• The product quantity is much larger and the same ones normally used

Purchasing Decisions in Business Markets

• Determining the final decision maker is the challenge with sales being like a scavenger hunt as there are B2B tiers

Dynamics of B2B Marketing

• Among other factors
• try influence thru consumers

This Week's Lab

• Look Deeper into
• Product, and the reasons for what people buy through marketing.
• Use NIKE as the example
• How lifestyle helps firms understand what to use
• how do culture + other factors all effect that consumer.
• 3. Maslaws/influence- marketing pros

Next Week's Lecture

• 7 P's break, and getting to essential topics.
• gathering
• facts for marketing. -marketing - research