How Concepts Affect Consumption

Presented By:

Sandeep

Sharad

Dipendra

Sailesh

Amit

Rajesh

Nikhil

Back in the day…

Nowadays…

Conceptual Consumption

• Negative Conceptual Consumption

• Positive Conceptual Consumption

Horror Movies

5-Star Hotel Vs. Ice Hotel

Why??

• Its about “collecting and possessing experiences”

• Self-image – Being Different

Positive Conceptual Conumption

• Mobile Phones with “extra features”– Showing off

• Better Camera is enough

• SUVs– Status Symbol

"When dealing with people, remember that you are not dealing with creatures of logic,

but with creatures of emotion."

-

CONSUMER PSYCHOLOGY

PETER DRUCKER

“Clearly markets have little understanding of what consumers want -- perhaps because people have little clue themselves.”

BELIEFS INFLUENCE TASTE : Meat Is Murder..

Pepsi challenge..

Potato for President?

Organic Food, Beer

PSYCHOLOGY OF CONSUMPTION

SMELL OF MONEY :

How Smells Affect Our Behavior..

UNDER THE INFLUENCE :

‘Good’ Wine Increases Food Consumption by 12%

1. It could be that expectations about wine 'leak across' to the food: if the wine is good, the food should be good as well. So more chomping.

2. More drinking the 'tasty' wine decreases self-restraint leading to more chomping.

3. Greater enjoyment of the wine leads to better overall wine+food experience. And so more chomping.

???

CAN’T TALK? Drink!

When the music goes up, the beers go down.

Talkers aren't the best drinkers

Arousal..

TOO MUCH CHOICE!? - Barry Schwartz

‘The Paradox Of Choice:Why More Is Less’ '

Consuming Expectations

People’s expectation about the value of what they are consuming profoundly affect their

experience.

For Instance: “Coke vs. Pepsi”

“Beer”

When people truly enjoy anexperience—deriving utility and

satisfactionfrom it—they forgo ever repeating it.

Examples

Memories are not always easily retrievable.

Repositioning – An attempt to change consumer perception of the brand

Consuming Goals

•Consuming goals are the basic concept of consumptions in consumer behaviour.

•Consuming goals provide the concepts that consumer wish to consume.

•Experimentally induced goals have a powerful impact on consumer behaviour.

• Powerful trigger for consumption.

• Cognitive representations of what consumers wish to HAVE, DO, and BE

• Consuming goals leads to increase in physical consumption, as well as leads to decrease in physical consumption.

Consuming Goal in Practice• At a convenience store where the average purchase was $4,

researchers gave some customers coupons that offered $1 off any purchase of $6, and others coupons that offered $1 off any purchase of at least $2. Customers who received the coupon that required a $6 purchase increased their spending in an effort to receive their dollar off; more interestingly, those customers who received the coupon that required only a $2 purchase to receive the dollar off actually decreased their spending from their typical $4, though of course they would have received their dollar off had they spent $4. Consuming the specific goal implied by the coupon – receiving a savings on a purchase of a designated amount — trumped people’s initial inclinations. Customers who received the $2 coupon left the store with fewer items than they had intended to buy.

Goal consumption leading to increase in physical consumption

Nunes And Dreze Field study (2006)300 loyalty cards given to customers of car

washHalf the customers 10 additional purchases

resulted in a free car wash, 2 given as a headstart

Other customers, 8 purchases for free car wash, no free stickers attached.

Counting of cards redeemed. Twice the number of cards redeemed that

had the additional 2 stickers. Price of the car wash is sameConsuming the goal offered additional utility

over and above consuming the product.

Dhar Et Al (2007)Consumers given opportunity to buy a 7 rupee

key chainBefore considering purchase.. Some were

given opportunity to buy CD while others given opportunity to buy less exciting electric bulb

More people bought CD Whether electric bulb or CD consumers

purchase the key chainCompleting goal and consuming concept –

driver of behavior.

“When a person with money meets a person with experience, the person with the experience winds up with the money and the person with the money winds up with the experience ..”

PSYCHOLOGY OF MONEY

FREE! But at What Price?

We like 'free' because it makes us feel good and there's no downside. But sometimes 'free' tricks us into poor decisions.

Which of these two offers you would go for ?

A $10 gift certificate for FREE!

A $20 gift certificate costing $7.

seductive POWER of ‘FREE’ !

THE RELATIVITY TRAP

"I would love to understand why I find some things expensive and won't buy them, and other things not so expensive and will buy them, when they are the same price/cost. For example, I'll spend $50 going out for dinner with my kids when we don't have to (a treat) but I won't buy a $50 appliance for my kitchen (new toaster). I imagine that if I understood why I do this, I'd be able to spend my $ more wisely."

The solution?Think globally not locally

Cross – Category Comparisons

Avoid Comparing Dissimilar Things

www.spring.org.uk

www.predictablyirrational.com

The Annual Review of Psychology by Harvard University (arjounals.annualreviews.org)

www.tripdatabase.com

www.psychologyofmoney.com

THANK YOU