1101 Midterms PDF

Introduction to Consumer Behavior decisions of individuals purchasing goods and services for personal use. What is Consumer Behavior? Organizational Consumers: Involve...

Introduction to Consumer Behavior decisions of individuals purchasing goods and services for personal use. What is Consumer Behavior? Organizational Consumers: Involves businesses, Consumer behavior is the study of how governments, and institutions that individuals,groups, or organizations select, purchase goods and buy, use, and dispose of goods, services, services for operational needs, ideas, or experiences to satisfy their needs resale, or production. and desires. It encompasses the decision-making processes and actions that Importance of Understanding consumers undertake before, during, and Consumers after making a purchase. 1. Foundation for Marketing Strategy: Scope of Consumer Behavior: Consumer Understanding consumer behavior behavior is a multidisciplinary field drawing is critical for developing effective from psychology, sociology, anthropology, marketing strategies. By gaining economics, and marketing. It examines insights into what drives consumer various aspects of consumer activities, decisions, businesses can: including: Identify Target Markets: Segment the market based Psychological Processes: How on consumer characteristics motivation, perception, learning, and behaviors, allowing for attitudes, and personality influence more tailored marketing consumer decisions. efforts. Social Influences: The impact of Product Development: family, friends, social groups, and Design products that meet culture on consumer behavior. consumer needs and Decision-Making Processes: How preferences, enhancing consumers recognize needs, search product acceptance and for information, evaluate satisfaction. alternatives, make purchase Pricing Strategies: Set prices decisions, and reflect on their based on consumer purchase post- consumption. perceptions Behavioral Outcomes: The of value, willingness to pay, patterns of consumption, loyalty, and and sensitivity to price disposal practices exhibited by changes. consumers. Promotion and Communication: Craft Types of Consumers: messages that resonate with consumers, leveraging Individual Consumers: Focuses appropriate channels to on the behaviors and reach the target audience effectively.  Distribution Decisions: Select to harm or exploitation. distribution channels that align with consumer preferences for Consumer Behavior & Marketing convenience, accessibility, and Strategy service. 1. Market Segmentation: Market 2. Enhances Customer Satisfaction and segmentation involves dividing a broad Loyalty: consumer market into smaller, more By understanding what consumers value, homogenous groups based on shared businesses can improve the overall characteristics. Understanding consumer customer experience, leading to higher behavior enables marketers to segment satisfaction, repeat purchases, and brand the market effectively by: loyalty. Understanding consumer behavior Demographic Segmentation: helps in addressing pain points, offering Based on age, gender, income, personalized experiences, and creating education, occupation, etc. products or services that exceed Psychographic Segmentation: expectations. Based on lifestyle, personality traits, values, and attitudes. 3. Predicting Market Trends: Behavioral Segmentation: Based Understanding consumer behavior allows on purchase behavior, usage businesses to anticipate market trends and patterns, brand loyalty, and benefits adapt quickly to changes. By sought. monitoring shifts in consumer preferences, Geographic Segmentation: Based businesses can innovate, on location, region, urban/rural adjust their strategies, and maintain status, climate, etc. competitiveness in dynamic markets. 4. Informed Decision-Making: Insights into 2. Positioning: Positioning involves consumer behavior support data-driven creating a distinct image or identity for decision-making across various functions, a product in the minds of consumers relative including marketing, sales, product to competing products. development, and customer service. This Consumer behavior insights help marketers leads to more efficient use of resources, understand how consumers better risk management, and improved perceive different products and brands, return on investment (ROI). allowing them to: Identify Unique Selling 5. Social and Ethical Implications: Propositions (USPs): Highlight Understanding consumer behavior also attributes that are most valued by involves recognizing the social and ethical the target audience. implications of marketing Differentiate from Competitors: practices. Businesses must ensure that their Create a unique brand identity that strategies promote positive stands out in the market. social values, protect consumer rights, and Communicate Value: Develop avoid practices that could lead messaging that aligns with  consumer perceptions and Product Life Cycle emphasizes the benefits that matter Management: Develop most to them. strategies for different stages of the product life cycle, from introduction to decline. 3. Consumer Decision-Making Process: Understanding the stages of the consumer decision-making process helps marketers 5. Customer Relationship design strategies that guide consumers Management (CRM): CRM from need recognition to post-purchase strategies are behavior. The stages include: informed by consumer behavior, Need Recognition: Identifying what focusing on building long-term triggers a consumer's need or desire relationships with customers. By for a product. understanding consumer Information Search: Understanding preferences, where and how consumers seek purchase history, and information about products. communication preferences, Evaluation of Alternatives: businesses can: Knowing the criteria consumers use Personalize Marketing to compare different products and Efforts: Tailor offers and brands. communication to individual Purchase Decision: Influencing the consumer needs. factors that lead to the final Enhance Customer purchase decision. Experience: Provide Post-Purchase Behavior: consistent and high-quality Managing consumer satisfaction, service across all dealing with cognitive dissonance, touchpoints. and encouraging repeat purchases. Increase Customer Retention: Implement loyalty 4. Consumer Insights for Product programs, personalized Development: Consumer behavior rewards, and effective research informs product customer service to retain development by revealing unmet customers. needs, pain points, and desires. Businesses Trends in Consumer Behavior can use this information to: Design New Products: 1. Digital Transformation: The rise of Create innovative products digital technology has significantly that fulfill consumer needs altered consumer behavior, with more more effectively. consumers relying on online platforms Improve Existing Products: for shopping, information, and Make enhancements based communication. Key trends include: on consumer feedback and E-commerce Growth: changing preferences. Increased online shopping  across various product Corporate Social Responsibility categories. (CSR): Consumers favoring brands Mobile Commerce: Growing that demonstrate commitment to social and preference for shopping via environmental causes. mobile devices. Transparency: Increased demand Social Media Influence: The for transparency in supply chains, role of social media in sourcing practices, and product shaping consumer opinions, ingredients. brand perceptions, and purchase decisions. 4. Health and Wellness: The health and Personalization: wellness trend continues Consumers expecting to influence consumer behavior, with a personalized experiences focus on: and recommendations based Healthy Eating: Increased demand on their online behavior. for organic, natural, and plant-based foods. 2. Experience-Driven Consumption: Fitness and Wellbeing: Growing Consumers are increasingly interest in fitness products, wellness valuing experiences over material services, and mental health support. possessions. This trend is Preventive Healthcare: Consumers characterized by: seeking products and services that Experiential Marketing: Brands promote long-term health and creating immersive and memorable prevent illness. experiences to engage consumers. Service Innovation: Businesses 5. Convenience and Speed: Consumers offering services that enhance the today prioritize convenience overall consumer experience, such and speed in their purchasing decisions. as subscription models or on- This trend is evident in: demand services. On-Demand Services: The rise of Emotional Engagement: Brands services that offer immediate or focusing on building emotional same-day delivery, such as food delivery connections with consumers through apps and express storytelling and brand purpose. shipping. Simplified Purchasing Processes: 3. Sustainability and Ethical Businesses streamlining the buying Consumption: Consumers are becoming process with features like one-click more conscious of the environmental and purchasing, mobile wallets, and social impact of their subscription models. purchases. This trend includes: Automation and AI: The use of AI Demand for Sustainable and automation to enhance Products: Growing interest in eco- convenience, such as personalized friendly, organic, and ethically recommendations, chatbots, and sourced products. voice-activated shopping. 6. Influence of Social and Cultural CONSUMER RESEARCH Factors: Consumer behavior is shaped by social and cultural changes, Consumer research plays a critical role in including: helping businesses understand the Cultural Shifts: Changing attitudes behaviors, needs, and towards gender roles, diversity, and motivations of their target audiences. inclusion influencing brand This knowledge informs marketing perceptions and product choices. strategies, product development, and Peer Influence: The growing impact communication efforts, ensuring that of peer reviews, testimonials, and businesses can effectively meet influencer marketing on consumer consumer demands and achieve decisions. competitive advantage Globalization: Exposure to global cultures and trends influencing local The Role of Research in Understanding consumer behavior and preferences. Consumer Summary The primary role of consumer research is Consumer behavior examines how to provide insights into the factors that individuals, groups, and organizations make influence consumer decisions and decisions to purchase, use, and dispose of behaviors. products and services. This involves studying a wide range of It encompasses the processes and factors variables, including cultural, social, influencing these decisions, including personal, and psychological factors that psychological, personal, social, and cultural affect how consumers perceive and interact influences. with products and brands. Understanding consumer behavior is crucial for businesses to effectively meet Consumer research serves several customer needs, segment markets, and essential functions: develop targeted marketing strategies. By analyzing trends such as digital 1. Identifying Consumer Needs and transformation, sustainability, and Wants: Understanding what personalization, companies can adapt their consumers need and want allows strategies to align with evolving consumer businesses to tailor their products preferences and enhance their competitive and services to meet these demands. edge. 2. Predicting Consumer Behavior: By analyzing trends and patterns, businesses can anticipate how consumers might behave in the future, helping them to stay ahead of the competition. 3. Assessing Market Opportunities: Research helps businesses identify new market opportunities by influencing consumer behavior. revealing unmet needs or underserved Limitations: The findings from qualitative segments. research are not easily generalizable due to small sample sizes and the subjective 4. Improving Marketing Strategies: nature of the data. It is also more time- Insights from consumer research guide the consuming and expensive compared to development of more effective marketing quantitative research. strategies, including product positioning, pricing, and promotional tactics. 5. Enhancing Customer Satisfaction: By 2. Quantitative Research: understanding consumer preferences and pain points, companies can improve their Purpose: Quantitative research seeks to products and services, leading to higher quantify customer satisfaction and loyalty. consumer behaviors, attitudes, and opinions. It focuses on numerical data and statistical analysis, Qualitative vs. Quantitative Research providing measurable and comparable results. Consumer research methodologies can be Methods: Surveys, experiments, and broadly categorized into qualitative and structured observations are common quantitative approaches, each offering quantitative methods. Large sample sizes distinct advantages and serving different allow for generalization of findings to the research objectives. broader population. Strengths: Quantitative research provides 1. Qualitative Research: reliable, objective data that can be analyzed statistically to identify trends, correlations, Purpose: Qualitative research aims to and patterns in consumer behavior. explore and understand the underlying Limitations: While quantitative research is reasons, opinions, and motivations excellent for measuring and comparing behind consumer behavior. It provides variables, it often lacks the depth and depth and context, revealing insights that context provided by qualitative research. It might not emerge from purely numerical may also miss the nuances of consumer data. emotions and motivations. Methods: Common methods include focus groups, in-depth interviews, ethnography, Ethical Considerations in Consumer and observation. These approaches Research allow researchers to gather rich, detailed information about consumer experiences Ethical considerations are crucial in and attitudes. consumer research, as the methods used Strengths: Qualitative research is can impact the rights and well-being particularly valuable for uncovering new of participants. Ethical research practices ideas, exploring complex issues, and help maintain public trust, ensure the understanding the emotional and integrity of the research process, psychological factors and protect participants from harm. 1. Informed Consent: Participants should summarizing the data using measures such be fully informed about the purpose of the as mean, median, mode, and standard research, the methods being used, and any deviation. It helps in understanding the potential risks or benefits. They must basic features of the data. voluntarily agree to participate without 3. Inferential Analysis: Inferential statistics coercion. allow researchers to draw conclusions 2. Confidentiality: Researchers must about a population based on a sample. protect the privacy of participants by Techniques such as hypothesis testing, keeping their data confidential and regression analysis, and analysis of secure. Personal information should not be variance (ANOVA) are commonly used. disclosed without consent. 4. Segmentation Analysis: This involves 3. Avoiding Deception: While some dividing consumers into distinct groups research designs might involve deception based on shared characteristics, such as (e.g., in experiments), it should demographics, behavior, or psychographics. be minimized and justified by the research's Segmentation helps businesses target potential benefits. Participants should be specific groups more effectively. debriefed afterward. 5. Predictive Analytics: Predictive 4. Avoiding Harm: Research should not modeling uses historical data to predict cause physical or psychological harm to future consumer behaviors. Techniques participants. Researchers must such as machine learning, regression be mindful of the potential impact of their models, and time series analysis are used questions or activities on participants' to forecast trends and outcomes. well-being. 6. Data Visualization: Presenting data 5. Fairness and Respect: Researchers visually through charts, graphs, and should treat all participants with respect and dashboards helps to communicate ensure that research does not exploit findings clearly and effectively, making it vulnerable populations. easier for stakeholders to understand and act on the insights. Analyzing Consumer Data 7. Continuous Monitoring: Consumer data analysis is not a one-time activity. Once data has been collected through Continuous monitoring and updating of data consumer research, the next step is ensure that businesses remain responsive analysis. Analyzing consumer data involves to changing consumer behaviors and processing and interpreting the data to market conditions. extract meaningful insights that can inform business decisions. Summary: 1. Data Cleaning: Before analysis, data Consumer Research is a powerful tool that must be cleaned to enables businesses to understand their remove errors, inconsistencies, and outliers. customers better, predict behaviors, and This ensures the accuracy and reliability of make informed decisions. By employing the analysis. both qualitative and quantitative methods, 2. Descriptive Analysis: This initial adhering to ethical standards, and analysis involves effectively analyzing data, companies can gain deep insights that drive successful marketing strategies and enhance customer satisfaction. CONSUMER DECISION -MAKING Group 1: Cañadora, Cho, PROCESS Kintanar, Romo, Ybañez AGENDA THE GOALS/OBJECTIVES IDENTIFY DESCRIBE DISCUSS Discuss the role of the company Identify the different aspects of Describe the different stages in curating the customer's each customer decision- and steps a customer takes decision-making process within making process when purchasing a product their powers Objective: "Students will understand the ins and outs of the consumer decision-making process and its different aspects."  ACTIVATE Let’s do a mind warm up! ACTIVATE ACQUIRE An office worker is looking for a new phone for his planned vacation in a few months. He wants a phone with great camera quality and good storage for an excellent price. Let’s look, listen & learn! APPLY You’re trying to find a lippie for your significant other for your anniversary. You know they like the brighter shade and longer-lasting brands but you’re on a budget, so you try and find something on the Let’s Analyze! cheaper side. ACQUIRE The buyer decision process, also called the consumer decision process, is a five-step process through which customers decide if they want to make a purchase or not. Making decisions is a psychological concept. This means that even though a decision cannot be "seen," we I S I T ? can nevertheless deduce its existence from behavior that WHAT is visible.  NEED RECOGNITION THE DECISION- INFORMATION SEARCH MAKING EVALUATION OF PROCESS ALTERNATIVES PURCHASE DECISION In 1910, philosopher John Dewey presented the five stages of a decision POST - PURCHASE process in How We Think. DECISION  When buyers become aware of an unmet need or a missing product/service, spark ing their desire to seek a solution They could become aware of this urg e as a result of internal or external stimuli (Ex. Intern al - hunger & thirst, External - seeing advertisemen ts) REC OG NITION OF NE ED THE DEVIL WEARS PRADA INFORMATION SEARCH When consum potential solu ers start look tions to their ing for inform need. ation about Consumers gather inform including web ation from searches, soc various sour ia l ces, by searching media, and in for products, -store visits, recommenda reading revie tions to unde ws, and seek rs ta n ing their pros and d available opt cons. ions and MONEYBALL  When consumers compare various goods and services according to standards including brand reputation, quality, and cost. They compare the benefits and drawbacks of each choice to decide which best suits their needs. This evaluation is impacted by the data acquired in the previous stage, in addition to personal preferences and external opinions. EVALUATION OF ALTERNATIVES CRAZY RICH ASIANS  PURCHASE DECISION When the consumer has come up with the decision to buy the product. This happens after collecting information from several sources, evaluating it and deciding where to purchase and what to purchase. Consumer purchases the brand or product which he/she gives the highest rank in the evaluation stage. CONFESS ION S OF A SHOPA HO LIC  u rc h a s e fu lfille d their y e r e v a lu a t e s if their p When the bu k o n it. efl e c tin g b a c expectations by r a n im p a ct o n fu ture lu a tio n m ay hav e th is e v a The results of s to m ers POST- hile un s a t is fie d c u b ra n d lo y a lty. W purchases and fie d cust o m e r s m ig h t m a ke l r e v ie w s , s a tis could post critica th e rs t o t h e p r o d uct. a se s o r r ec o m m end o repeat purch a s k in g fo r fe e d b ack. im p ro v e th is p h ase by Marketers can PURCHASE EVALUATION JEFREE STAR VALENTINO REVIEW CO GN ITIV E Common at the post-purchase stage; customers go through the feelings of post- DIS SO N AN CE purchase psychological tension / anxiety. Consumers may experience post-purchase dissonance— a mental discomfort from the fear that another option might have been more satisfying. This discomfort arises when the decision is final, significant, and voluntary. To reduce this dissonance, buyers often justify their choice by enhancing the appeal of the purchased item, downplaying alternatives, seeking information that supports their decision, or adjusting their attitudes to align with their choice.  W H A T IN A FLU R EN E CING THE FACTORS THE PROCESS? Cultural Social Personal Psychological Reference Age Group Motivation Culture Groups Occupation Perception Subculture Family Lifestyle Learning Social Class Roles & Status Personality Beliefs ROLE AND SIGNIFICANCE OF DECISON-MAKING ab les b us ine ss o w ners to: The consumer decision-making process is En eeds Address customer n crucial in marketing, outlining the stages a c e th e cu sto m er e xperience Enhan consumer goes through when making a ategies. Tailor marketing str d uc ts w ith co n su mer purchase. For businesses, understanding Align pro ehavior this process is key to optimizing marketing expectations and b strategies and influencing consumer choices at each stage. THE AIM OF MARKETING IS TO KNOW AND IS UNDERSTAND THE CUSTOMER SO WELL, THE PRODUCT OR SERVICE FITS HIM AND AND SELLS ITSELF. CONCLUSION: To sum up, in order for businesses to effectively sell their goods and increase sales, they must have a solid understanding of the consumer decision-making process. Through strategic optimization at every phase of the process, enterprises can create an engaging customer experience and establish long- term customer relationships. Understanding these factors helps businesses better tailor their approaches to each stage of the consumer decision-making process. APPLY We will be randomly choosing 2 groups to present their findings to the class in a creative way with no visual aids allowed: Roleplay, Jingle and Talk show A sustainable fashion brand like KULTURA is targeting environmentally conscious consumers. What factors might influence environmentally conscious consumers' satisfaction with their sustainable fashion brand purchase? Where do environmentally conscious consumers typically search for information about sustainable fashion? How can alternative brands differentiate themselves in the same market while maintaining a similar focus on sustainability  ASSESS: Let’s play bring me! SIR, NAA NI PLUS POINTS !?  THANK YOU! U ARE VERY DEMURE for listening & cooperating with our discussion!