Consumer Behavior: Market Segmentation & Research

• Consumer behavior involves individuals or groups selecting, purchasing, using, or disposing of products, services, ideas, or experiences.
• Consumer behavior is a process that includes pre-purchase, purchase, and post-purchase activities.

Consumer Research & Marketing Strategy

• Marketers use consumer behavior insights to design effective strategies.
• Understanding consumer needs and decision-making is key for business success.
• A company's ability to satisfy consumer needs determines its success.

Market Segmentation

• Market segmentation divides the market into groups based on shared traits.
• Demographic segmentation factors include age, gender, family structure, social class, income, race, and geography.
• Newer segmentation trends encompass LGBT communities, niche tourism, and psychographic and behavioral segmentation.

Consumer Research & Perspectives

• Consumer research has grown, significantly since the 1970s.
• Positivism (modernism) in consumer research uses objective, predictive, and quantitative methods.
• Interpretivism (postmodernism) is subjective, qualitative, and context-dependent.

Ethical & Transformative Consumer Research

• Ethical consumption includes sustainability, conscientious consumerism, green marketing, and LOHAS (Lifestyle of Health and Sustainability).
• Transformative Consumer Research (TCR) focuses on social change.

The Dark Side of Consumer Behavior

• Identity theft and data breaches are negative aspects of cyber attacks.
• Consumer addiction examples include social media addiction, compulsive buying, and cyberbullying.
• Shoplifting and counterfeiting are illegal consumer activities.

Shopping, Buying & Disposing

• Consumer choices are affected by personal influences like mood, time pressure, and shopping orientation.
• Situational factors affecting consumer choices include context, social surroundings, and time constraints.
• Economic shoppers are rational and value-focused.
• Personalized shoppers form attachments with salespeople.
• Ethical shoppers support small/local businesses.

Purchase Environment & In-Store Influences

• Shopping experiences are either utilitarian (practical) or hedonic (pleasurable).
• Retail strategies include product placement, end cap displays, and store atmosphere.

Online vs. Offline Shopping

• E-commerce enables global reach but increases competition.
• Retailers enhance in-store experiences to compete with online shopping.

Spontaneous Shopping & Impulse Buying

• Unplanned buying occurs due to unfamiliarity, time pressure, or in-store promotions.
• Impulse buying defined as a sudden, irresistible urge to purchase.

Role of the Salesperson

• Salespeople influence purchase decisions based on expertise, appearance, and motivation.
• Exchange theory maintains that customers are willing to engage with a salesperson if they expect somthing valuable.

Product Disposal & Sustainability

• Consumers dispose of products due to a desire for new features or changes in identity/environment.
• Lateral cycling involves selling or exchanging second-hand items as viable disposal option.
• Recycling and upcycling are sustainable disposal options that reduces waste.

Key Takeaways

• Consumer behavior is a process with multiple stages.
• Market segmentation helps businesses understand consumer needs.
• Different research perspectives exist in consumer behavior analysis.
• Consumer behavior has both positive and harmful effects.
• Shopping behavior is influenced by situational, personal, and environmental factors.

The Perceptual Process

• Consumers are constantly bombarded with sensations from ads, packaging, and media.
• Consumers manage sensory input by selecting certain stimuli and ignoring others.

The Three Stages of Perception

• Exposure occurs when a stimulus enters a consumer's sensory range.
• Attention refers to the extent a consumer focuses on a stimulus.
• Interpretation is the meaning a consumer assigns to the stimulus.

From Sensation to Perception

• Sensation is the immediate response of sensory receptors to stimuli.
• Perception is the process of selecting, organizing, and interpreting sensations.
• Schemas assist in categorizing and interpreting stimuli based on past experiences.

Stages of the Perceptual Process

• Primitive Categorization identifies the basic characteristics of a stimulus.
• Cue Check analyzes stimulus characteristics to fit into an existing schema.
• Confirmation Check selects the most appropriate schema.

Sensory Marketing

• Vision, including color, size, and styling, influences brand perception.
• Scent evokes emotions and memories.
• Music influences mood and brand recall through sound symbolism.
• Tactile experiences affect perceived product value.

Exposure & Perceptual Selection

• Sensory Thresholds is the minimum level of stimuli that can be detected.
• Absolute Threshold is the smallest amount of stimulus that can be detected.
• Differential Threshold (Just Noticeable Difference) detects the smallest change noticed.
• Weber's Law states the stronger the initial stimulus, the greater the change needed to be noticed.

Stage 2: Attention

• Consumers filter stimuli due to sensory overload.
• Past interactions shape perception, reffered to as experience.
• Stimuli relevant to needs are noticed by perceptual vigilance.
• Consumers ignore threatening information through perceptual defense.
• The impact of repeated exposure reduces the senses, also known as Adaptation.

Stage 3: Interpretation

• Interpretation is based on schemas and can be culturally specific.
• Priming: Exposure to certain stimuli influences perception of later stimuli.

Gestalt Principles of Perception

• Closure involves filling in gaps to perceive a complete picture.
• Similarity involves grouping similar objects together
• Figure-Ground involves focusing on a key element while background fades.

Meaning & Branding

• Consumers buy products for the conveyed meanings, not just the functionality.
• Meaning Transfer: Advertisers use cultural cues to create associations.
• Meaning creation is strategic and is known as Branding.

Semiotics & Marketing

• Signs and Symbols are studied using Semiotics as a method of communication.
• McDonald's is a use case example of signs and symbols when advertising their products.

Learning

• Learning is defined as a permanent change in behavior caused by experience.
• Direct learning uses personal experiences to shape behavior.
• Learning when one watches others is referred to as Observational learning.
• Incidental learning happens unintentionally.

Theories of Learning

• Behavioral learning theories focus on stimulus-response associations.
• Consumers learn by problem-solving in Cognitive learning theories.

Behavioral Learning Theories

• Classical Conditioning (Pavlovian Learning) occurs through association between two stimuli.

Conditioning Issues

• Repetition reinforces learning, but excessive repitition causes advertising wear-out.
• Similar stimuli evoke the same (halo effect) through Stimulus Generalization.

Marketing Applications

• Brand Equity utilizes strong brand associations to build loyalty.
• Repetition in Ads increases brand awareness through more exposure.
• Licensing copycat packaging is known as Stimulus Generalization.

Instrumental (Operant) Conditioning

• Leaning occurs through reards and punishments.
• Reward strengthens behaviour through Positive reinforcement.
• Negative reinforcement means avoiding negative outcomes.
• Behavious is discouraged by unpleasant consequence through Punishment.

Cognitive Learning Theory

• Internal mental processes are needed for learning, like attention, encoding, storage and retrieval.
• Information is actively processes and applied by consumers.
• Creativity and insight are increased though the use of metaphors and problem-solving.
• Leaning occurs through observation (influencer marketing) thought Observational Learning.

Memory & Consumer Behavior

• In order, the Memory Process phases are Encoding, Storage and Retrieval
• Encoding processes and stores information.
• In associative networks, information is liked to prior knowledge.
• Memory is accessed when needed through Retrieval.

Types of Memory

• Sensory Memory is a form of short-term storage.
• Working Memory is used to temporarily store information.
• Long-Term Memory is used to permanently store learned concepts.

Marketing Applications of Memory

• Brand-specific, Ad-specific, and product category memory link with brand identity, advertising, and product types respectively.
• Evalutive reactions are emotional judgements.

Factors Influencing Retrieval

• Repeated exposure over time enhances recall through the Spacing Effect.
• Recall increases with the matching of emotional information through emotional state.
• Early-learned brands are remembered often through the Familiarity Effect.
• Unique or striking stimuli improve memory retention through Salience.

Factors Infuencing Forgetting

• Memory weakens over time with Decay.
• The Interferences happens when new information disrupts old memories.
• Proactive interferences blocks the old information from learning.
• Retroactive interferences replaces new information into old information.

Nostalgia & Memory in Marketing

• Nostalgia is emotional longing that enhances brand connections.
• Reintroducing past themes is called Retro Marketing.
• Memory markers have products that trigger the expression of specific past experiences.

Measuring Consumer Memory

• Recognition can identify stimuli with re-exposure when asked.
• Recall is remembering something without signals being passed.

Motivation

• Motivation drives consumer behavior which occurs with needs that result in a tension to the consumer.
• Utilitarian (practical/functional) vs Hedonic (pleasure-driven).
• The goal is a consumers desired state, and can be a product used to saitsfy the goal.

Motivational Factors

• Motivational strength refers to an intensity and drive when in need of behaviour.
• Motivation direction needs to fulfill objectives.

Types of Goals

• Consumers are motivated to avoid or approach certain products.
• Motivatational Conflicts involve approach or avoid products that fulfill the type of consumer.

Classifying Consumer Needs

• Survival depends on biogenic requirements, examples include food and water.
• Culturally-influenced shaped psychogenic needs, like independence.
• Specific is defined as achievement, affiliation and power.
• Consumers look to Maslow's Heiracrchy of Needs to fulfill all basic functions required.

Consumer involvement

• Products must be relevant and needed.
• Types of involvement include product, message, or in a certain situation.

Lifestyles & Market Segmentation

• Money and time are reflecting as a pattern of consumption, defined as lifestyle.
• People are grouped together via lifestyle marketing based on activities, leisure time and the spending habits.

Values & Beliefs in Consumer Behavior

• Universal and cultural values can be defined as Beliefs about the desirable states.
• Personal behaviour are influenced by Belief systems of how individuals respond.
• Values and social behaviour can change consumption rate via Core Values.