Understanding Consumer Behavior - Unit 2 Lecture PDF

UNDERSTANDING Consumer Behaviour Unit 2, MR1073 AGENDA Part One: The Impact of Consumers on Marketing Strategy Part Two: Marketing's Impact on Consumers Part Three: The Meaning of Consumption Part Four: Marketing/Business Ethics Part Five: Anti-Consumption Consumer Behaviour Is A Process PART...

UNDERSTANDING Consumer Behaviour Unit 2, MR1073 AGENDA Part One: The Impact of Consumers on Marketing Strategy Part Two: Marketing's Impact on Consumers Part Three: The Meaning of Consumption Part Four: Marketing/Business Ethics Part Five: Anti-Consumption Consumer Behaviour Is A Process PART ONE The Impact of Consumers on Marketing Strategy WHAT IMPACT DO CONSUMERS HAVE ON MARKETING STRATEGY? ➢ Marketers are concerned with satisfying consumer wants and needs ➢ A marketer will try to persuade you that a product is not just a want but a need ➢ The better marketers understand consumers, the better they can satisfy them ➢ Consumer behaviour is important in every part of a marketing plan ***Consumers are more involved than ever and more influential than they realize. MARKET SEGMENTATION ➢ Segmentation is separating consumers into groups ➢ Marketers identify groups of consumers who are similar in one or more ways to try to appeal to particular groups Demographics: the observable measurements of a population's characteristics: birth rate, age distribution, income, gender, family structure, ethnicity, geography (These are all measurable and defined) This Photo by Unknown Author is licensed under CC BY-NC Psychographics: values, personality, lifestyles, AIOs=Activities, Interests, Opinions Demographics: Population Pyramid Demographics: Canada Demographics: India View Here Statistics Canada: Trends https://www150.statcan.gc.ca/n1/en/catalogue/11-627-M AIOs=Activities, Interests, Opinions GATHERING AND ANALYZING PSYCHOGRAPHIC DATA Some methods include the use of: • • • • • • • • Traditional focus groups/interviews Set-top box viewing data Surveys/questionnaires/quizzes Psycholinguistic dictionaries Website analytics (e.g. Google analytics) Browsing Data Social media (i.e. likes, clicks, tweets, posts, etc.) Third-party analytics SEGMENTING BY RELATIONSHIPS & BIG DATA RELATIONSHIP MARKETING DATABASE MARKETING •Marketers want to create a relationship and maintain it. • Marketers use all the data through tracking of consumer purchases, and behaviour on social networks or websites to create specific appeals. • Data comes from a multitude of sources: when you send in a warranty, your points on any card like Air Miles, Optimum, cookies on your computer. •The marketer is not just interested in this purchase but your future purchases. "We have a "relationship" with you." EXAMPLE: IBM EXAMPLE: CALIBRE NATURAL LANGUAGE PROCESSORS CaliberMind, which raised $3.2M in a second tranche of a seed round in 2017, builds psychographic profiles using machine learning and human language analysis. The company assesses a person’s language using natural language processing (NLP) in order to understand what buyers are talking about. “There are some cues in the way someone expresses themselves in text, some nuances in language. It’s not just the words; it’s semantics. We can take 100 words and place you on the emotional vs. analytical side. The adjectives, the verbs, context in the sentence allow us to say someone is more analytical or more emotional. If you’re analytical and I send you a webinar or video, there’s a good chance I’ll miss you. If you’re analytical, I’ll send you a return-on-investment calculator or a spreadsheet. If you’re emotional, I’m going to use more emotional language.” — Raviv Turner, CEO CaliberMind Think about it! Ethics of Marketing AIO MARKETING EXAMPLES IRL https://www.consuunt.com/aiomodel/ PART TWO Marketing's Impact on Consumers Memes Memes didn’t start with the internet. Some linguists argue that humans have used memes to communicate for centuries. Memes are widely known as conduits for cultural conversations and an opportunity to participate in internet trends. Memes and Catch Phrases Memes 101 | How Cultural Evolution Works 1600s: Isaac Newton and Gottfried Leibniz both discover calculus. 1770s: Carl Wilhelm Scheele and Joseph Priestley discover oxygen. 1800s: Charles Darwin and Alfred Russel Wallace both describe natural selection. 1839: Louis Daguerre and Henry Fox Talbot invent the first photographic methods. Multiple Discoveries in History PART THREE The Meaning of Consumption TYPES OF RELATIONSHIPS A PERSON MIGHT HAVE WITH A PRODUCT People often buy things not for what they do but for what they mean ( a brand of beer defines the person; a brand of running shoe tells who you are; the music you choose) SELFCONCEPT ATTACHMENT: The product helps to establish the user’s identity. NOSTALGIC ATTACHMENT: The product serves as a link with a past self. INTERDEPENDENCE: The product is a part of the user’s daily routine. LOVE The product elicits emotional bonds of warmth, passion, or other strong positive feelings. THE GLOBAL CONSUMER • • • • • • • World has become smaller because of media (The Global Village) Consumers may be devoted to a brand, movie star, celebrity and feel a part of a group Digital revolution has caused significant change in consumer behaviourWe can shop/buy 24/7, but is our information safe online? Survey show more people are spending time online and are spending less time watching TV and reading newspaper less With the rise of Social networking sites, marketers are realizing that more and more the consumer is the producer and creator of content. They are getting more and more involved in social media sites and allowing the consumer to create content Reality TV/versus Reality- shows are opportunities for companies to sponsor product placement Viral - Memes How much of our lives is influenced by marketing? Are our perceptions about reality shaped by marketing? Is what we see real? Think for a minute about the last big movie you saw in the cinema. How many brand name products can you recall seeing? Whether an old time western or a vision of the future, there's no doubt that multiple big name brand products found their way into the scenes. With consumers taking advantage of ad skipping techniques for television shows, marketers finding new to get our attention. We watch a movies/TV and see products strategically placed You wouldn't be surprised to see placements in current shows, but now, retro shows in re-runs have virtually placed products that were not even available when the original show was produced Today Companies digitally alter old episodes by adding new brands and product placement. This process is called "re-placement." WATCHDOGS Commercial Alert, co-founded by Ralph Nader, a consumer activist group opposes advertising to children and the commercialization of culture. In 2004, they called on the US government to label product placements. The FTC rejected the labeling saying there was no harm done and that the placements did not deceive or mislead consumers as no claims about the products were made. In the UK broadcasters are required to inform viewers by displaying the letter 'P' for three seconds at the start and end of a program containing product placement. Augmented Reality Augmented reality (AR) Augmented reality (AR) is a term for a live direct or indirect view of a physical real-world environment whose elements are merged with (or augmented by) virtual computer-generated imagery - creating a mixed reality. R enhances the real physical environment by overlaying virtual elements. These elements can be information or images seen through displays, augmented reality devices like Google Glass or through the camera or app on a smart device. Examples are • the layered on field displays on a football filed during a match as seen on television, • the ads seen behind the batter during a baseball game during a television broadcast. Ads are virtually placed. • an app or display that layers information or images over the real world. (seeing how a sofa in a store looks in a picture of your home, seeing how clothes look on you without trying them on • pointing your smart phone or smart device at printed image and seeing images, text or video that adds information to the scene PART FOUR Marketing/Business Ethics Thinking About Ethics Do marketers give people what they want or tell people what they should want? Are people less happy because of the gap they see in what the media tells them they need and what they actually have? Do marketers create artificial needs? Premium high octane gasoline is used by one third of motorists, even though 80-90% of cars run well with regular gas. Is this because of advertising? Is that ethical? People feel imperfect so they are increasingly turning to cosmetic enhancements and surgery, even dogs get plastic surgery. Is this the result of unattainable images of beauty that we see reflected in ads? Is that ethical? What does it take to cross the line in the world of advertising? ORGANIZATIONS THAT MONITOR, REGULATE ADVERTISING Marketers and businesspeople are monitored by various codes of conduct. In the US the FCC (Federal Communications Commission) looks into advertising complaints in these areas: The nature of the products being advertised; The timing of certain ads; Commercials believed to be indecent or in poor taste and False and misleading advertisements. Advertising Standards Canada is a not-for-profit self regulatory body that administers the Canadian Code of Advertising Standards, handles consumer complaints, and for a fee they give pre-clearance to ensure ads meet standards. There is also CRTC in Canada approves commercials for airing, the LLBO in Ontario monitors and approves liquor and beer ads, and television Networks and ad agencies that have screening committees NON- PROFITS An organization called About Face posts articles and offenders of advertisements that promote false reality of body image and negative stereotyping of women PART FIVE THE DARK SIDE OF CONSUMER BEHAVIOUR AD TARGETING There's a common phrase that has been making the rounds for a few years. It goes something like this "If you're not paying for it, you're the product" or "When something online is free, you're not the customer, you're the product." The basic idea is that these socalled "free" online services are not really free. The cost may be our privacy. When consumers use these "free" services, money is made on the massive amounts of data extracted from the users. In this section we'll be talking about the techniques companies and marketers use to know us online. For them this is not the dark side, but for the consumers, these techniques may feel like a step too far into our private lives. Behavioural Targeting Behavioral targeting refers to a method of tracking frequent and popular searches made by a browser using sophisticated Internet technology. The purpose of behavioral targeting is to deliver more relevant advertisements and links to a browser based on what a computer perceives to be their interests and priorities of a user. Every time we visit a website information is collected about us. One quarter of most popular sites place "cookies" on your hard drive to track information on you. This is called Behavioural Targeting. Behavioural Targeting Addressable Advertising ddressable advertising is sending a message or media content to a specific device or customer based on their address. The address of the customer may be obtained by searching viewer profiles to determine if the advertising message is appropriate for the recipient. The use of addressable advertising allows for fast and direct measurement of the effectiveness of advertising campaigns. Personalized Viewer-specific Content, Behaviour-based Profiling, One example of this would be sending different ads to different households who may be viewing a program. The ad sent to each household would be specifically targeted to them. Ads based on something we just did will produce a specific ad for us. For example, you buy a coffee at Tim Horton's in the morning, ads appear before you for things that will go with your coffee. ADDICTIVE CONSUMPTION Buying can be an addiction. People become addicted to drugs, but they can become addicted to buying: shopaholic, internet junkie, stock trading addiction Gambling is becoming an increasing problem in Canada with over 340,000 people from Ontario admitting to a gambling problem. Yahoo has a support group for Shopping Addicts (outside link)-the site leaves cookies, and has a flashing banner ad at the top to click to Yahoo Shopping!! Foran article on shopping addiction click the following How to Manage Compulsive (outside link) Shopping by an Indiana University professor ANTI CONSUMPTION Anti-consumption can be defined as an ideology against the continual buying and consuming of products. Anti-consumerists believe that advertising plays a role in shaping our values and culture and is responsible for perpetuating the idea that the more possessions you have the more fulfilled you will be. There are a number of different types of anti-consumerism practices. Let's look at a couple of examples: • If a product or service is deliberately defaced it can be thought of as anti-consumption • Graffiti can be seen as anti-consumption. See the image here "The Joy of not being sold anything" or • Culture jamming is used to disrupt or subvert by defacing or altering ad material as a form of political expression. It is a movement against conformity. For more information on culture jamming see ADBUSTERS Adbusters is one organization involved in the anti-consumerist movement. They describe themselves this way, "Adbusters is a not-for-profit magazine fighting back against the hostile takeover of our psychological, physical and cultural environments by commercial forces." Adbusters is known for their spoof ads, culture jamming and activism. For example, Buy Nothing Day, a global day of protest against consumerism, and the Occupy Movement. See: Adbusters Spoof Ads References BigThink. (2017). Daniel Dennett: Memes 101 | How Cultural Evolution Works . YouTube. https://www.youtube.com/watch?v=5fG-3f4f0hA CB Insights. (2021). What Are Psychographics?. CB Insights Research. https://www.cbinsights.com/research/what-ispsychographics/ Government of Canada. (2019). Annual Demographic Estimates: Canada, Provinces and Territories, 2019 Analysis: Population by age and sex. Statistics Canada. https://www150.statcan.gc.ca/n1/pub/91-215-x/2019001/sec2-eng.htm Memetics on Strikingly. Memetics. (n.d.). https://memetics.mystrikingly.com/ Satpathy, M. (2017). A United Nations Development Programme [UNDP] Expert Research Report HOW THE PRIVATE SECTOR DEVELOPS SKILLS: LESSONS FROM INDIA. Research Gate. https://www.researchgate.net/search/publication Solomon, M. R., White, K., & Dahl, D. W. (2021). Consumer behaviour buying, having, and being (8th ed.). Pearson Canada. Tait, A. (2023). Let’s not forget the real star of Barbie: shameless product placement | Amelia Tait. The Guardian. https://www.theguardian.com/commentisfree/2023/aug/10/barbie-shameless-product-placement-film-adverts-globalcinema