Consumer Behaviour

Front 1

The Nature of Consumer Behaviour

Back 1

Front 2

ORGANIZATIONS AS CONSUMERS

Back 2

Front 3

Marketing Strategy and Consumer Behaviour

Back 3

The firm can succeedonly if consumers see aneed that its productcan solve, becomeaware of the productand its capabilities,decide that it is the bestavailable solution,proceed to buy it, andbecome satisfied withthe result of thepurchase.

Front 4

A Trio of Needs

Back 4

• Power

– individual’s desire to control environment

• Affiliation

– need for friendship, acceptance, and belonging

• Achievement

– need for personal accomplishment

– closely related to egoistic and self-actualizationneeds

Front 5

The “why” of consumption

Back 5

Front 6

Consumer behaviour is a process

Back 6

Front 7

A Simple Model of Consumer Decision Making

Back 7

Front 8

Impact of Digital Transformation and Technologies

Back 8

Marketers

Consumers

Front 9

Marketers

Back 9

•More products andservices throughcustomization

•Instantaneous exchanges

•Collect and analyze data

Front 10

Consumers

Back 10

•Power

•Information

•New Products andGadgets

Front 11

Consumer Innovation

Back 11

• Market-oriented definitions

– Based on consumer exposure

• Consumer-oriented definitions

– Consumer judges it as “new”

• Firm-oriented definitions

– Product is “new” to the company

• Product-oriented definitions

– Continuous

– Dynamically continuous

– Discontinuous

Front 12

Adoption Process and Extended Decision Making

Back 12

Front 13

CONSUMERS AROUND THE GLOBE

The Imperative to Be Multinational

Back 13

• Global Trade Agreements

• Winning Emerging Markets

• Acquiring Exposure to OtherCultures

• Country-of-origin (COO) Effects

• Country-of-manufacturing(COM)

• Country-of-design (COD)

• Country-of-assembly (COA)

• Country-of-parts (COP)

Front 14

Multinational Reactions toBrand Extensions

Back 14

• A global brand does not alwayshave success with brandextensions

• Example Coke brand extension –Coke popcorn

– Eastern culture saw fit andaccepted the brand extension

– Western culture did not see fit

Front 15

Consumer culture

Back 15

• More and more of our personal identities and the relationshipsbetween people are mediated through consumption.Consumer society is thus characterized by a consumer culture.

• The core of consumer culture is that consumption goes farbeyond solving practical and utilitarian problems.

• In a reality, consumption becomes more a matter of culturalmeaning and less a matter of utility.

• Consumption branding and marketing have become some ofthe prime reflectors of current cultural values, norms and socialroles.

• Economy and cultures of consumption are thus closelyintertwined.

Front 16

Consumer Acculturation in International Management

Back 16

Front 17

Acculturation (Continued)

Back 17

Front 18

Bases for Segmentation inConsumer Behaviour

Back 18

Front 19

Self & Lifestyle

Back 19

• Self concept is the totality of anindividual’s thoughts andfeelings about oneself.

• Lifestyle is how one lives,including the products one buys,how one uses them, what onethinks about them, and how onefeels about them.

Front 20

Different Self-Images

Back 20

Front 21

Independent/InterdependentSelf-Concepts

Back 21

Individuals with anindependent self-concept tendto be

•Individualistic

•Egocentric

•Autonomous

•Self-Reliant, and

•Self-Contained

Individuals with aninterdependent self-concepttend to be

•Obedient

•Sociocentric

•Holistic

•Connected, and

•Relation oriented

Front 22

Shopping Types

Back 22

• Economic shopper

• rational and goal-oriented shopper.

• Personalized shopper

• tends to form strong attachments to store personnel.

• Ethical shopper

• likes to support local small shops.

• Apathetic shopper

• does not like shopping and sees it as a necessary chore.

• Recreational shopper

• sees shopping as a fun and social activity.

• Hate-to-shop shopper

Front 23

Shopping Motivations and Experiences 1

Back 23

• Retailing is like theater – the consumer’s evaluation of stores andproducts may depend on the type of ‘performance’ they witness.

• The actors (e.g. salespeople)

• The setting (the store environment, atmospheric)

• Props (store displays or image)

• Like a brand personality, a number of factors such as perceivedconvenience, sophistication and the expertise of salespeopledetermine store image.

• With increasing competition from non-store alternatives, creatinga positive shopping experience and competing for customers’attention are important.

Front 24

Shopping Motivations and Experiences 2

Back 24

• With increasing competition from non-store alternatives, creating apositive shopping experience has never been more important.

• We don’t make many purchase decisions until we’re actually in thestore, point of purchase (POP) stimuli are very important sales tools.

• product samples, elaborate package displays, place-based media,and in-store promotional materials such as ‘shelf talkers’.

• POP stimuli are particularly useful in promoting impulse buying,which happens when a consumer yields to a sudden urge for aproduct.

Front 25

Organizational Buyer Segments andMarketing Strategy

Back 25

Buyers can be segmented by their approach to the seller andthe decision

Transactional exchanges

Short term and few relational investments

Lack of loyalty

Relational exchanges

Long term and high relational investments

Strong loyalty

Sellers must adapt strategies for these different buyer types

Front 26

Personality

definition

Back 26

• Personality is an individual’scharacteristic response tendenciesacross similar situations.

• While motivations are theenergizing and directing force thatmakes consumer behaviorpurposeful and goal directed, thepersonality of the consumer guidesand directs the behavior chosen toaccomplish goals in differentsituations.

Front 27

Personality

Back 27

1. Multi-trait Approach

• The Five- - Factor Model is the most commonly used bymarketers and identifies five basic traits that areformed by genetics and early learning. .2. Single Trait Approach

• Consumer Ethnocentrism

• Need for Cognition

• Consumers’ Need for Uniqueness

Front 28

Personality- Multitrait Approach

Back 28

Front 29

Theories of Personality

Back 29

• Freudian theory

– Unconscious needs or drives are at the heart of humanmotivation

• Neo-Freudian personality theory

– Social relationships are fundamental to the formation anddevelopment of personality

• Trait theory

– Quantitative approach to personality as a set ofpsychological traits

Front 30

Freudian Theory

Back 30

• Id

– Warehouse of primitive orinstinctual needs for whichindividual seeks immediatesatisfaction

• Superego

– Individual’s internal expression ofsociety’s moral and ethical codesof conduct

• Ego

– Individual’s conscious control thatbalances the demands of the idand superego

Front 31

Neo-Freudian Personality Theory

Back 31

• Social relationships are fundamental to personality

• Alfred Adler:

– Style of life

– Feelings of inferiority

• Harry Stack Sullivan

– We establish relationships with others to reduce tensions

• Karen Horney’s three personality groups

– Compliant: move toward others

– Aggressive: move against others

– Detached: move away from others

Front 32

Trait Theory

Back 32

• Focus on measurement of personality in terms oftraits

• Trait - any distinguishing, relatively enduring way inwhich one individual differs from another

• Personality is linked to broad product categories andNOT specific brands

Front 33

Use of Personality in Marketing Practice

Back 33

Sometimesconsumerschoose productsthat fit theirpersonality.

Other times, consumersuse products to bolsteran area of theirpersonality where theyfeel weak.

Brand image is what people think of and feel when theyhear or see a brand name.

Brand personality is a set of human characteristics thatbecome associated with a brand and are a particulartype of image that some brands acquire.

Front 34

Attitudes and Influencing Attitudes

Back 34

• An attitude is an enduring organization ofmotivational, emotional, perceptual, and cognitiveprocesses with respect to some aspect of ourenvironment.

• Social marketing refers toattempts to changeconsumers’ attitudes andbehaviors in ways that arebeneficial to society as awhole.

Front 35

Three hierarchies of effects

Back 35

Front 36

Do Attitudes Predict Behaviour

Back 36

Front 37

Behavioural learning theories

Back 37

Front 38

The Nature of Learning and Memory

Back 38

Front 39

The Nature of Motivation

Back 39

• Motivation is the reason for behavior.

• A motive is a construct representing an unobservable inner force that stimulates andcompels a behavioral response and providesspecific direction to that response.

• Marketing Strategy Based on Multiple Motives:Involvement is a motivational state caused byconsumer perceptions that a product, brand, oradvertisement is relevant or interesting.

Front 40

Model of the Motivation Process

Back 40

Front 41

Motivation Theory & Marketing Strategy

Back 41

Front 42

Consumer involvement

Back 42

Front 43

Types of Consumer Involvement

Back 43

• Cognitive involvement– where a person is motivated tolearn all she/he can about the product.

• Product involvement– the consumer’s level of interest inmaking a particular purchase, which can range from inertiato very high involvement.

• Message-response involvement(advertising involvement) –the consumer’s interest in processing marketingcommunications.

• Ego involvement(enduring involvement) – the importanceof a product to a consumer’s self-concept.

Front 44

Strategies to Increase Involvement

Back 44

• Appeal to the consumer’s hedonic needs.

• Use novel stimuli.

• Use prominent stimuli.

• Include celebrity endorsers.

• Build a bond with consumers by maintaining an ongoingrelationship with them.

• Online platform continues to provide companies withopportunities for creating loyal bonds with customers andthe possibility to personalize products and services.

Front 45

The perceptual process

Back 45

Front 46

The Nature of Perception

Back 46

Front 47

Interpretation is determined by

Back 47

1. Individual Characteristics

– Traits, Learning and Knowledge and Expectations

2. Situational Characteristics

– The situation provides a context within which the focal stimulus isinterpreted.

– The contextual cues present in the situation play a role inconsumer interpretation independent of the actual stimulus.

3. Stimulus Characteristics

– Traits

– Organization (Proximity, Closure, Figure-Ground)

– Changes (Sensory Discrimination, JND)

Front 48

Stimulus Characteristics- Changes (J.N.D.)

Back 48

• Marketers need to determine the relevant j.n.d. for theirproducts

– so that negative changes are not readily discernible to the public

– so that product improvements are very apparent to consumers

Front 49

Advertising Appeals

Back 49

• Comparative

• Fear

• Humor

• Abrasive

• Sex

• Audience participation

• Timely

• Celebrities