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CONSUMER BEHAVIOR

SHAMIM AKHTAR

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Why does Staples sell Starbucks coffee?


BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Influences on and of Consumer Behavior


PERCEPTION/ SENSATION

MARKET RESEARCH

INFO SEARCH

COGNITION

STRATEGY
AFFECT

CHOICES

PREFERENCES BELIEFS

CONSUMER
COMMUNICATION SOCIAL AND OTHER INFLUENCE
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Learning Outcome Objectives


Understand how consumer cognitive (thinking) processes and limitations, affect, beliefs, social influences, and other contextual factors influence consumer decision making, choices, and behavior Appreciate how these insights can be used to design and implement effective marketing strategies Appreciate individual and segment differences in process and outcome
SHAMIM AKHTAR
BUAD 307

CONSUMER BEHAVIOR

Lars Perner, Instructor

True or False?
1. If you have bad breath, you cannot smell it yourself. 2. If you eat a balanced diet, you do not need vitamin supplements. 3. Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation. 4. Dell Computers tend to be of higher quality than those made by HP and Sony. 5. Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Questions Faced By Consumers


Are veggie burgers actually healthy? What makeup should you use to get an even skin tone? Do I get any useful benefits from spending more than $125 on a digital camera? Should I get a make-over? What am I looking for? What should I do? Is my mechanic honest? Which tie should I wear for a job interview? Should I give my wife roses, chocolate, or software?
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Consumer Problems and Recognition


Consumer problem:
Discrepancy between ideal and actual state--e.g., consumer: Has insufficient hair Is hungry Has run out of ink in his or her inkjet cartridge

Problems can be solved in several ways--e.g., stress reduction


<----- vacation, movie, hot bath, medication

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

CONSUMER DECISIONS:
Theory and Reality in Consumer Buying

PROBLEM RECOGNITION

INFORMATION SEARCH

EVALUATION OF ALTERNATIVES PURCHASE POSTPURCHASE EVALUATION/ BEHAVIORS


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Theory Complications

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Approaches to Search for Problem Solutions

INTERNAL
Memory Thinking

EXTERNAL
Word of mouth, media, store visits, trial
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CATALOG

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

Options Identified and Considered


UNIVERSAL SET

All possible options


RETRIEVED SET

Options that readily come to mind


EVOKED SET

Options that will be considered by the consumer

Note: Retrieved and evoked sets will vary among different consumers
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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REMINDER
For low involvement products, efforts aimed at affecting internal search tend to be more effectivethe consumer is usually not willing to expend energy on external search. External search is more likely for higher involvement products.
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Decision Making Issues


Involvement level Temporary Enduring Consumer locus of control Internal External Product category complexity Consumer knowledge

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Evaluation Type
IMPORTANT
Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones) Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission) Hybrid: Combination of the two (e.g., one noncompensatory measure, then compensatory tradeoffs on other attributes Abandoned strategy: Consumer finds initial criteria unrealistic and proceeds to less desirable solution
SHAMIM AKHTAR CONSUMER BEHAVIOR
Lars Perner, Instructor

BUAD 307

LESS IMPORTANT

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If either Coke or Pepsi is on sale, buy that brand; otherwise, buy Coke The larger the navels, the better the orange The larger package is likely to offer a lower unit price (not true in reality)
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HeuristicsLow Involvement Decision Rules

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitudescomponents

BELIEFS

AFFECT (FEELING)

BEHAVIORAL INTENTIONS

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SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Components
Beliefs
Can be positive, negative, or neutral May or may not be accurate May contradict other beliefs held by the other person

Behavioral Intentions
An individuals plan or expectations of what he or she will do May appear inconsistent with beliefs May not predict well what the individual will do in reality

Affect
May be positive or negative May take on specific dimension (e.g., pleasure, disgust)

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Generating Beliefs Through Advertising


Statements must be
Perceived Comprehended Remembered Believed (at least in part)

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Positioning Through Creating Beliefs


Its not delivery; its De Journo! Wal-Mart. Always low prices. Always. I just saved a bunch of money on my auto insurance. U-um Good! (Campbells Soup)

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Multiattribute Models of Attitude


Attitude computed as a function of multiple attributes weighted for importance:

Ab i 1WiXib
n
Ab= attitude toward brand b Wi: weight of attribute I Xib: belief about brand bs performance on attribute I Model assumes rationality
Calculations will not be required on the exam. You should know conceptually what this involves conceptuallyi.e., weighing importance and intensity of feeling.
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Multiattribute Models
Caveats
Different segments exist that will weight factors differentlythus, overall averages can be misleading. Separate analyses should be done for different segments of interest. (Segments can be identified by certain statistical techniques). Individual differences exist in scale intensityfor some, it is much easier to be extremely good or extremely bad. Prior research may be needed to identify issues (dimensions) to be weighted. Some factors may be intangibleWhat are the substantive differences between Windows and Apple computers? Non-compensatory factorsmust-haves may determine final result.

Applications
Determining Overall performance Areas of strength and weakness Comparison to competitors Overall Areas of strength and weakness

REMINDER:
PERCEPTIONS ARE NOT NECESSARILY ACCURATE. We are looking to work with what consumers believe.

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Affect
Based on
past emotional associations of product emotional effect of beliefs

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Characteristics
Availability/ accessibility

Constructe d vs. natural

Strength
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SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Measurement of Attitude Components


Beliefs
Semantic Differential Scales
Good -------------------Bad Fast --------------------Slow Reliable-----------------Unreliable

Feelings
Likert Scales (Strongly agree Strongly Disagree)
This product makes me happy.

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Measurement
Behavioral Intention
Rating of likelihood of purchase May need projection if social desirability affects willingness to admit to product use

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Change Strategies, Part I


Change Affect
Classical conditioning Pairing the brand or product with desired stimuluse.g., a car with a beautiful woman Attitude toward the ad A likable ad for a brand in a mundane product category e.g.,

Energizer Bunny Snuggles (fabric softener)


Mere exposure

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Attitude Change Strategies II


Change behavior (e.g., sampling)
Attitudes are inferred from behavior (e.g., I buy the product I must like it or It must be good)

Change Belief Component


Change existing beliefs
Difficult Advertisers motives are suspect

Change importance of attributes Add beliefs Change ideal (fashion)

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Adding Beliefs (True or Not): Examples


Brushing and flossing do not reach all areas of the mouth People under stress need more vitamins Baking soda will reduce odor of refrigerators Fragmented hard drives may cause computer errors
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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REMINDER
Changing currently held beliefs tends to be difficultpeople know the marketer has an ulterior motive Adding new beliefs that are not inconsistent with what is already believed may be more effective
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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One-sided vs. two sided appeals


One-sided: only saying what favors your side Two-sided: stating your case but also admitting points favoring the other side Why is this effective?

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Potential Family Life Cycle Stages


YOUNG SINGLE YOUNG COUPLE

EMPTY NEST I/II

FULL NEST I/II/III

SINGLE PARENT
BLENDED
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OLDER SINGLE

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Economic/Marketing Implications of Household Cycles


Income tends to increase with time But children/ obligations add cost Divorce increases costs may change income distribution marriage Product demand due to singles with low expenses new couples divorced families children empty nesters -> more income

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Household Decision Making


Roles/influence
Information gatherers/holders Influencers Decision makers Purchasers Users

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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The Means-End Chain


Aim promotion/ positioning at higher levels of chain!

Self-esteem

Values Consequences Attributes

Feeling of power
Performance

Fast acceleration
Large engine

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Subliminal Perception: A Diabolical Marketing Tool?


Subliminal messages in ads are illegal in U.S. Some research support for modest effects Probably limited to one syllable words Complex messages can probably not be processed subliminally

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Message Framing
Many tradeoffs can be stated in two, mathematically equivalent ways e.g.,
80% lean vs. 20% fat $49.00 per person per night based on double occupancy

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Some Consumer Behavior Issues That Will Come Up Elsewhere in the Course

Demographics (segmentation) Lifestyle (segmentation) Culture/subculture (segmentation, international marketing) Diffusion of innovation (product) Attention (promotion)
BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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Organizational Buyers
Types
Industrial Reseller Government and nonprofit organizations

Characteristics
Greater involvement Bureaucracy Long term relationships Price is important but may not be the most important factor

Purchase types
Straight rebuy Limited decision making Extended decision making

BUAD 307

SHAMIM AKHTAR CONSUMER BEHAVIOR

Lars Perner, Instructor

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