Consumer behavior.docx

What is consumer behaviour? aimed at achieving particular goals Cognitive, Emotional, and Physical activities and processes of consumers at the selection, purchase, consumption and disposal of products, services, ideas, and experiences in order to satisfy their needs and desires. Emotional activiti...

What is consumer behaviour? aimed at achieving particular goals Cognitive, Emotional, and Physical activities and processes of consumers at the selection, purchase, consumption and disposal of products, services, ideas, and experiences in order to satisfy their needs and desires. Emotional activities: Feelings, Emotions Cognitive activities: Thinking Physical activities: Doing Some questions consumer behaviour asks: Why do different consumers purchase different products? What is the best way for consumers to go about buying a particular product? How does advertising work to influence consumer preferences? Types of consumer research Descriptive: Research that describes the actual state of the consumer marketplace. Consumer statistics Inferential: Why do consumers behave the way they do? How will they likely react to new types of products or services? 7 keys to consumer behaviour: Includes many activities Is motivated (is a means to an end - aimed at achieving particular goals) Varies in time and complexity Is a process Influenced by external factors Involves different roles Differs for different people Consumer behaviour includes many activities: Consumer behaviour is motivated by: Functional: Relate to product performance Self-expressive: Relate to a person’s desire to express something about him/herself Consumer behaviour differs in timing and complexity: Timing: how long the process takes Complexity: how many decisions are involved Consumers use heuristics: Rules of thumb that make decision-making easier For example: What is beautiful is good, and Price equals quality, Scarcity, Country of origin, Decision Process approach: A framework that studies consumer behaviour as a sequence of activities. Prepurchase activities: Problem recognition, Information search Purchasing activities: Brick-and-mortar store, online store Postpurchase activities: Evaluation, Customer satisfaction, Loyalty Confirmation/Disconfirmation model of satisfaction: Expectations < Performance = high level of satisfaction Expectations = Performance = satisfaction Expectations > Performance = dissatisfaction Consumer behaviour is influenced by external factors: Consumer behaviour involves different roles: Decider: The person who ultimately makes the decision to buy or not to buy. User: The person who ends up using the product. Purchaser: The individual who actually makes the purchase. Influencer: A person whose view or advice influences the buying decision. Consumer behaviour defers to different people Individual differences Each consumer undertakes different purchases and has somewhat different preferences Market segmentation Pitfalls of consumer behaviour Unspecified focus: We must be specific when using a common term in the field Single-minded explanation: Do not assume that a single factor alone will cause consumer behaviour (e.g. consumers buy toothpaste ONLY to clean their teeth.) The “Me” mentality: We should not assume that our own interests, opinions and experiences are representative of the consumer marketplace. Applications only, please: learn the basic concepts and research methods for consumer behaviour. Different perspectives on consumer behaviour: Marketers Consumers: The view of consumer behaviour from the standpoint of the consumer. Public policymakers External vs Internal views Marketers act in the external world Consumers thoughts, feelings and decisions are private Consumer research is often used to gain a better internal view of consumer behaviour. Aggregate vs individual level views: Aggregate: Marketers view consumers as part of the market. Individual: Consumers view themselves as individuals. Product-specific vs across.products views: consumers cannot specialize in their buying the way marketers do in their selling Brand-specific vs “Best alternative” views: Marketers act as if the best purchase for a particular consumer were the brand that they are offering. The consumer is interested in obtaining the alternative that is best for her/himself. Influencing behaviour vs handling influence: The marketing manager’s role is to influence, while consumers must find ways to adapt to an enormous number of marketing stimuli and to handle intrusive stimuli (guerilla marketing) The dark side of consumer behaviour: Addictive consumption: A physiological and/or psychological dependency on products or services. (Alcohol, drugs, nicotine) Compulsive consumption: repetitive shopping as an antidote to tension, anxiety, depression, or boredom. (not done by choice, short-lived and feels regret) Consumer theft (shrinkage): inventory and cash losses from shoplifting and employee theft Serial wardrobes: unjustified returns Anticonsumption: events in which products and services are deliberately defaced or mutilated. Consumer Information Processing Hierarchy of effects model: Thinking-cognitive stages: unawareness, awareness, knowledge, Feeling-affective stages: preference, liking Doing-conative stages: purchase, conviction Information processing model: Black box model: The model is a concept in consumer behaviour that focuses on the inputs and outputs of the decision-making process, without delving into the internal processing. Consumer information processing model (CIP): The model is an extension of the Information Processing Model, tailored specifically to understand how consumers handle information related to making purchasing decisions. Consumer information processing: the sequence of mental activities that people use within consumption contexts Conceptual system: Mental concepts Sensory system: Five senses Sensory register: Five senses gather external stimuli Sensory impressions are very short Orders and controls, buffer to our CIP activities (STM) short-term memory: - like RAM Thinking Capacity limits (up to 7 items +/- 2) - Chunking Chunk: collection of separate items into a single grouping STM memory and forgetting: Interference: information that competes with the information an individual is trying to store in memory Decay: forgetting that occurs because of the passing of time Rehearsal: Repeating information over and over to keep it in STM Maintenance rehearsal: simple repetition Elaborative rehearsal: reflecting mindfully on the words and their meaning What stays in STM most easily? Primacy effect: words that occur at the beginning of a list Recency effect: words that occur at the end of a list (LTM) long-term memory: - like ROM Storage center Memories Associative network organization: Storing information (LTM) Encoding: categorization of stimulus and choosing a storage location for it in long-term memory (marketers should place brands here) Retrieving information from LTM: Retrieval: locating nodes in long-term memory and bringing them into short-term memory External retrieval cues: stimulus that activates information in memory relevant to the to-be-remembered information Helping consumers remember: Greater rehearsal = stronger memories Spread out repetition (multiple ad executions to prevent wear-out) Dual coding: Information in long-term memory can be stored semantically and visually (brand logos) Concrete wording Use symbols (efficiency and enjoyment) Objective: transfer information Evocative: evoke emotions and interpretations Be distinctive or unique Attitude and Persuasion Attitude: a learned predisposition to respond to an object in a consistently favourable or unfavourable way. Attitude toward: Product Company Retailer Various types of brand associations (logos, symbols and product endorsers) Advertising and spokespersons Attitudes can offer important information to marketers. Understanding why sales are strong or not Improve the marketing mix to improve consumer attitudes. Brand attitude: The feelings and evaluations consumers hold about a brand → Measurement necessary for brand management Brand equity: The value of a brand for the company that owns it. Multi-attribute model: Consumer's attitudes depend on attribute importance and beliefs about how well a brand provides each attribute. Persuasion: An active attempt to change attitudes (and behaviour) Increase belief ratings for the brand: Product improvement Better value for money Increase the importance of a key attribute: Select a strong attribute of our brand and then convince consumers of its importance Low price Health and Safety Reliability Add an entirely new attribute: the creation of new benefits. Decrease the importance of a weak attribute: downplay the price. Decrease belief ratings for competitive brands: comparative advertising Psychological principles of influence and persuasion Reciprocity: We are more likely to give when we receive Scarcity: Things that are scarce are more desirable Authority: People tend to comply with authority Consistency: Once we are committed to something, we tend to stay consistent Liking: We agree with those we like or admire Consensus: We consider what others do before we decide what to do Consumer Perception Perception: The process of sensing, selecting, and interpreting stimuli in the external world. (external world → internal world) What we perceive and how we perceive it: Stimulus characteristics: colour, size, photos, story, scent, volume, design, music Consumer characteristics: influences that our CIP system has on what we perceive Stages Sensing (gather input) Selecting and attending Interpreting (what do they mean) Sensing Sensation: The response of our sensory receptors to stimuli such as light, colour, sound, odour and texture. Sensory marketing: Marketing strategies that focus on the impact of sensations on our product experiences. Sensory receptors: Ears Nose Eyes Mouth Skin Sensory perceptions - vision: (colour blindness) Saturated colours (green, yellow, orange and cyan) are the best to capture attention Symbolic meanings of colours Colours that are strongly associated with a brand Sensory perceptions - smell (scented stores, scented cars and planes, scented household products, scented advertisements) Odours can trigger emotions Congruent scents have the most positive effect Sensory perceptions - sound (sound engineering) Functional music Jingles create brand awareness Background music creates desired moods Sound affects people’s feelings and behaviours Sensory perceptions - touch Little research on the effects of tactile stimulation on the consumer Customers who are lightly touched by waitresses give bigger tips Customers who are lightly touched by food demonstrators in supermarkets are more likely to try a new snack product Associate textures of fabrics and other surfaces with product quality Perceived richness or quality of the material in clothing is linked to its “feel” Sensory perceptions - taste Taste receptors contribute to our experience of many products Changes in culture also determine the tastes we find desirable Bitter, sour, salty, sweet, umami Psychophysics: Science that studies how the physical environment is translated into our personal psychological environments Threshold: the level at which an effect begins to occur. Absolute threshold: a minimum amount that can be detected Differential threshold (JND): a minimum amount of change that can be detected. Weber’s law: The amount of change that is necessary to be noticed is systematically related to the intensity of the original stimulus The stronger the initial stimulus, the greater the change must be for it to be noticed JND (just noticeable difference) = K x I K = constant (caries across senses) I = the intensity of the stimulus where the change occurs Length = 0.03 Loudness = 0.05 Brightness = 0.08 Taste (salt) = 0.2 Application in marketing: Making sure that difference is detected Making sure that difference is not detected = downsizing Selectivity and attention Attention: Planned - consumers use attentional processes to help with consumption activities Involuntary - BANG! - loud noise Spontaneous - a combination of the other 2 types To attract attention: Position: size, placement - Eye level is buy level. Contrast: intensity, movement, colours - A change in the environment activates sensory receptors and stimulates attention. Adaptation theory: people adapt to constant levels of stimuli and pay less attention to them Maintaining attention: consumer‘s motivation and interests (attracting attention ≠ maintaining attention) Subliminal perception: stimulus is presented below the absolute threshold of perception Possible but not very effective Interpreting Organization: The brain has to decide which stimuli belong together. People perceive organized wholes rather than just separate parts. Gestalt principles of organization Figure and ground: states that people instinctively perceive objects as either being in the foreground (figure) or the background (ground). Continuation: Elements that are aligned or follow a path are perceived as more related than elements that do not follow a pattern or line. Closure: The mind tends to fill in gaps to create a complete, whole object. This means that if part of a familiar shape or pattern is missing, our perception fills in the visual gap to see a complete, unified shape. Similarity: Elements that are similar in shape, size, colour, or other characteristics are perceived as belonging together or forming a pattern. Proximity: Objects that are close to each other tend to be perceived as a group. Symmetry: The human mind perceives objects that are symmetrical and simple as more cohesive and orderly. Connectedness: refers to the perception that elements are together or related if they are visually connected. Perceptual context: the principle that various stimuli will affect our perceptions, even if we are not conscious of this happening. Perceptual constancy: The concept that we strive to perceive our world as a relatively unchanging environment. Perceptual set: The readiness to perceive or to act in a particular way in a situation. Categorization: refers to translating sensory inputs into an identification of a stimulus. Important when introducing a new brand Exemplar strategy: A marketing approach to help consumers categorize a new product by associating it with one already well-known. Feature-based strategy: A marketing approach to help customers categorize a new product by stressing its special attributes. Schema: a cognitive structure that represents a person’s knowledge about a given object or behaviour. Script: A form of schema: an organized sequence of behavioural events (check pockets for wallet and keys, lock door of apartment) Exemplar strategy: a marketing approach to help consumers categorize a new product by associating it with one already well-known. Feature-based strategy: a marketing approach to help customers categorize a new product by stressing its special attributes. Perceptual inferences: Inferential belief: A developed belief based on other information. Sensory cues → lead to inferences, about what characteristics the product/service is likely to have Consumer Motivation, Values, Personality Motivation: deals with how behaviour gets started, is energized, is sustained, is directed and is stopped (the WHY of consumer behaviour) (M) CM has two major components: energy and direction Energy: behaviour requires activation, intensity/strength of motivation, consumer inertia Direction: which behaviour is chosen and why, primary/selective motives (O) Consumer's motives are both overt and hidden and are multiple Overt motives: consumers are aware of their motives. Hidden motives: consumers are not aware of their motives. (Projective tests) (T) Consumers are driven by tension reduction Drive theory: biological needs produce unpleasant states of arousal. The human body has a tendency to make adjustments to remain in equilibrium and return to a balanced state (homeostasis) ( I) Consumers are motivated by both internal and external forces Field theory: behaviour is a function of both the person and the environment. (V) Consumer motives have valence – they can be positive and negative Valence: degree of attractiveness of an object (product, store, person) Positive/negative Strong/weak (A) Consumers are motivated to achieve goals Expectancy theory: The tendency to act is based on expectations that the act leads to consequences and on the value of those consequences. Types of Motivational Conflicts; Approach - Approach Approach - Avoidance Avoidance - Avoidance (T) Consumers have a thirst for variety Brand switching Stimulation New experiences Experiential marketing ( I) Consumers´ motivations reflect individual differences External influences (age, income) Personality (O) Consumers desire order in the world People try to understand what they are doing Attribution theory: People try to estimate the causes of events they encounter Attributions after the purchase Self-perception: people examine their own behaviour after they have undertaken it, to help infer their own beliefs and attitudes. Foot-in-the-door (FITD): agreeing to a small request - raises the chance to agree to a larger Door-in-the-face (DITF): Refusing a very large request - raises the chance of agreeing to a second more reasonable request. (N) Consumers are guided by the need hierarchy Maslow’s hierarchy of needs: Murray’s list of psychogenic needs Need: is a force in the brain region that influences a person to perceive and act in ways that would turn unsatisfying situations into more satisfying ones. Personality: classification of people based on consistency in behaviours and reactions to events. Qualitative (older approach, neo-freudian views) Quantitative (newer approach, trait theories) Personality may be described as ‘ the inferred hypothetical constructs relating to certain persistent qualities in human behaviour’. Personality variables reflect consistent, enduring patterns of behaviour. An individual’s personality represents a set of characteristics that can be used to describe consumer segments Research evidence has revealed only weak or inconsistent relationships between personality and consumer behaviour CAD scale: how people behave toward each other and their environments. (Theory of Karen Horney) C - Compliant: those who move towards people A - Aggressive: those who move against people D - Detached: those who move away from people Big 5 personality traits: Openness: curiosity, appreciation for a variety of experiences Conscientiousness: self-discipline, aim for achievement Extraversion: seek stimulation in the company of others Agreeableness: compassion, being cooperative Neuroticism: experience unpleasant emotions easily Consumer values Values: mental representations of underlying needs that take into account the realities of the world. (important goals for people, ideas of what is desirable) (links brands to a certain value) Terminal values: desirable end-states of existence (True friendship, mature love, self-respect, happiness, freedom, social recognition, wisdom, family security etc) Instrumental values: preferable modes of behaviour that are a means of achieving the terminal values (Cheerfulness, ambition, self-control, courage, politeness, honesty, imagination, independence etc) 9 marketing-related terminal values: Self-respect Self-fulfillment Security Sense of belonging Excitement Sense of belonging Excitement Sense of accomplishment Fun and enjoyment in life Being well respected Warm relationships with others Basic A-C-V model; Expanded A-V-C model: Consumer involvement: A state of energy that a person experiences in regard to a consumption-related activity. Low (difficult to change) High Depending on: Cognition and emotion Energy (arousal) Direction Consumer and situation Very low involvement = consumer inertia: The tendency for consumers to continue in the same behavioural mode over time: makes it difficult for marketers to induce changes in behaviour. The challenge for marketers: attract and stimulate consumers Very high involvement = flow: optimal experience Sense of playfulness A feeling of being in control Highly focused attention Mental enjoyment of an activity for its own sake Distorted sense of time Match between the challenge at hand and one’s skills Learning: relatively permanent changes in behaviour, feelings and thoughts as effects of information and experience. Learning as behaviour (LAB): concentrates on the stimuli (S) and the response behaviours (R) made over time (T). Learning is knowledge (LIK): Stress knowledge rather than behaviour as the best measure of learning. Learning is knowledge (LIK) Emphasises the role of memory and thinking Focuses on internal characteristics rather than on behaviour. Learning as behaviour (LAB) Classical conditioning - learning by associations (Pavlov’s experiment) Marketing: emotions can be conditioned (WW siren - negative emotion, Christmas jingle) Factors influencing the effectiveness of classical conditioning: Practice - more repetition = stronger condition effect Contiguity - the time between a conditioned stimulus and an unconditioned Strength of unconditioned stimulus - the intensity of the emotions Sequence of stimuli - neutral stimulus before the unconditioned The novelty of conditioned stimulus - still unfamiliar Elaboration - low Instrumental conditioning: consequences of our behaviour To explain learning that is goal-directed Viewed as an instrument by which we can attain our goal Shifts the focus from the stimulus side to the behaviour side Reinforcement: anything that increases the likelihood that a certain behaviour will occur. Positive reinforcement: Negative reinforcement: Positive punishment: Negative punishment: Positive (consequence): addition of stimulus Negative (consequence): removal of stimulus Reinforcement (preferred by marketers): presentation or withdrawal of a stimulus that increases the likelihood that a certain behaviour will occur. (P - customer receives bonus points, N- headache) Punishment: can be understood as the presentation or withdrawal of a stimulus that reduces the probability of the behaviour occurring (P- low quality, expensive shoes, N- stop stocking your favourite product) Applications of instrumental conditioning Prompting: the targeted use of stimuli that should trigger the desired behaviour. ( verbal cues (additional products), signs, gestures) Reinforcer sampling: a small part of a potential reinforcer is made available to the person in order to initiate the use of the reinforcer. (bonus programs, product sampling) Shaping: reinforcement of a series of behaviours that will gradually bring the consumer to the desired behaviour. (consumer enters shop due to the special event - initial purchase - repeat) (trial subscriptions, freemium strategy) Vicarious reinforcement: targeted behaviour is demonstrated by a model. The model is reinforced or punished. (advertising - use of a product) Cultural Influences on Marketing (crucial for international marketing) What is culture? A complex whole is acquired by a person as a member of a society. Accumulation of shared meanings, rituals, norms, and traditions. (language, religion, clothing, housing, family relations, daily activities, memories, values, views of the world) Macroculture and subcultures Subculture: a group whose members share beliefs and common experiences that set them apart from other members of a macroculture (ethnic subcultures, religious subcultures, age subcultures, place-based subcultures) Components of culture External material (tangible objects of our world) - architecture, clothing, outlets, food Internal material (the ideas and points of view that are shared by most members of the society) Social normative system: Norms - social guides for behaving in certain situations. Fads & Fashions - associated with enthusiasm and intensity (politics, entertainment, literature, management, clothing) Folkways - refer to norms for most routine activities in everyday life. They define what is socially correct. Mores - important behaviour norms, moral and religious values. Subject to intense sanctions if violated. Laws - specific rules of behaviour created and enforced by some type of special power in the culture. (Sanctions) Internalization of the culture Enculturation: is the learning of a person’s own culture. Acculturation: is the learning of a different culture. Dimensions of cultural difference Geert Hofstede’s cultural dimensions Individualism vs Collectivism Importance of individual vs group Masculinity vs Femininity (Career success vs quality of life) Importance of assertiveness, money, material things vs people, caring and quality of life. Power distance The extent to which a society accepts that power in institutions and organizations is distributed unequally. Uncertainty avoidance The extent to which a society feels threatened by uncertain or ambiguous situations. Sample exam questions Sid Mellman is 53 years old and is about to begin a new job in marketing, a field in which he has no training. Sid feels that because he has been a consumer all his life, he understands what consumers are like. Sid is right because there is a great deal of common sense in consumer behaviour theory. Sid is right because marketing people generally understand consumers very well. Sid is wrong. People usually do not understand even their own behaviours completely. You cannot say whether or not Sid is right. Nathan bought a laptop computer to help him with his papers in school. What kind of motive was influencing Nathan? Functional Self-expressive Impulsive Emotional Which of the following regarding Lewin’s study of the effect of internal and external forces on motivation is false? His research is referred to as “Field theory” His basic promise is that behaviour is a function of the person and the environment. The environment is not the psychological reality perceived by an individual, but rather the physical reality itself. The psychological field is the totality of all forces acting on a person. What are the four key concepts of learning defined in the LAB approach? Conditioning, exposure, continuity and practice Practice, conditioning, reinforcement and continuity Resolution, exposure, contiguity and conditioning Reinforcement, practice, conditioning and contiguity Which of the following statements about classical conditioning is false? The key figure in studies using classical conditioning is Ivan Pavlov. The learner is relatively passive; the learning occurs in an almost automatic fashion. The learning is based upon an already existing stimulus-response relationship. Classical conditioning depends primarily on the reinforcements that come after response to stimuli. When a Gestalt psychologist refers to the tendency of people to feature one object at a time and to view the remaining stimuli as background, he is referring to Figure and ground Proximity Closure Similarity