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Consumer Behaviour

• Resource Person: Prof. Shahbaz Shamsi

Consumers Rule

Chapter 1

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Welcome to Consumer Behaviour

• Why study consumer behaviour?

• What is consumer behaviour?

• How does it affect marketing strategy?

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Market research

Marketing manager Consumer behavior‘the engine of marketing’

Advertising

Distribution

The Marketing Car

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Consumer behaviour

knowledge is...

the ‘engine’ of a marketing strategy

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Subject Objectives

• Knowledge and understanding– Theories Working Model of CB– Implications for strategic marketing decisions– A focus on marketing decisions

• Communication skills– Increase your skills in developing and

presenting ideas orally and in writing

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Reading

• Consumer Behaviour: Buying, Having and Being

Michael R. Solomon, 6th Edition

• Consumer Behaviour: Implications for Marketing StrategyNeal, Quester and Hawkins, 4th Aust. edition

• Course Pack

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What is Consumer Behavior?

• The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires

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Definitions of Consumer Behaviour

• The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspects of their lives(American Marketing Association)

• A discipline dealing with how and why consumers purchase (or don’t purchase) products and services.(Neal et al.)

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Definitions of Consumer Behaviour (cont.)

• Those behaviours performed by decision-making units in the purchase, usage and disposal of goods and services (Kotler & Levy)

• The decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services(London & Della Bitta)

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Definitions of Consumer Behaviour (cont.)

• Those actions directly involved in obtaining, consuming, and disposing of products and services, including the decision processes .

(Engel, Blackwell & Miniard)

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Consumer Behavior is a “Process”

Figure 1.1 (Abridged)

CONSUMER’S PERSPECTIVE

MARKETER’S PERSPECTIVE

PREPURCHASE ISSUES

How does a consumer decide about needing

a product?

How are consumer attitudes

formed/changed?

PURCHASE ISSUES

Is product acquisition a stressful or pleasant

experience?

How do situational factors affect

purchase decision?

POSTPURCHASE ISSUES

Does product provide pleasure or perform

function? How is product disposed of?

What determines customer satisfaction

and repurchase?

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Actors in Consumer Behavior

• Consumer: A person who identifies a need or desire, makes a purchase, and then disposes of the product

– Purchaser vs. User vs. Influencer vs. Payer– Organization/group as consumer

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Consumers’ Impact On Marketing Strategy

• Understanding consumer behavior is good business– Understanding people/organizations to satisfy

consumers’ needs– Knowledge and data about customers…

• …Help to define the market• …Identify threats/opportunities to a brand

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Consumers’ Impact On Marketing Strategy

• Segmenting Consumers

• Relationship Marketing: Building Bonds with Consumers

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Segmenting Consumers

• Market Segmentation– Similar consumers

• Example: “Heavy Users” of fast-food industry

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Segmenting Consumers: Demographics

• Age

• Gender

• Family Structure & Marital Status

• Social Class & Income

• Race & Ethnicity

• Geography

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Discussion

• Name some products or services that are widely used by your social group.– State whether you agree or disagree with the

notion that these products help to form group bonds, supporting your argument with examples from your list of products used by the group.

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Segmenting Consumers: Lifestyles

• Psychographics– The way we feel

about ourselves– The things we value– The things we do in

our spare time

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Relationship Marketing

• Success = building lifetime relationships between brands and customers– Regular interaction with customers– Database Marketing

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Marketing’s Impact on Consumers

• Marketers significantly influence the world and the information we learn!– Advertisements, stores, and products

communicate and persuade

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Marketing’s Impact on Consumers The Meaning of Consumption

• People often buy products not for what they do, but for what they mean– Brands…

• …Convey image/personality• …Define our place in modern society• …Help us to form bonds with others who share

similar preferences

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The Meaning of Consumption

Types Of Brand Relationships:

• Self-Concept Attachment

• Nostalgic Attachment

• Interdependence

• Love

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The Meaning of Consumption

• Four distinct types of consumption activities

• Consuming as Experience

• Consuming as Integration

• Consuming as Classification

• Consuming as Play

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Marketing’s Impact on Consumers The Global Consumer

• Global Consumer Culture– People united by common

devotion to:• Brand name consumer

goods• Movie stars• Celebrities• Leisure activities

– Pressure to understand similarities and differences of customers in various countries

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Marketing’s Impact on Consumers Virtual Consumption

• Impact of the Web on consumer behavior– 24/7 shopping without leaving home– Instantaneous access to news– Handheld devices & wireless communications

• C2C e-commerce– Virtual brand communities.– Consumer chat rooms

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Virtual Consumption (Cont’d)

• “Wired” Americans spend…– …Less time with friends/family– …Less time shopping in stores– …More time working at home after hours

• But, many report that e-mail strengthens family ties

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Marketing and Reality

• “Blurred boundaries” between marketing efforts and “the real world”– Popular culture shaped by marketers

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Marketing Ethics and Public Policy

• Business Ethics: rules of conduct that guide actions in the marketplace– What is “Right vs. Wrong”

• Differs among people, organizations, and cultures

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Marketing Ethicsand Public Policy (cont’d)

• Consumers think better of products made by firms they feel behave ethically

– Marketing “violators”• Mislabeling package contents• “Bait-and-switch” selling strategy• Alcohol/tobacco billboards in low-income

neighborhoods

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Manipulating Needs & Wants

• Marketers tell people what they should want

– Marketerspace vs. Consumerspace– Response: Marketers recommend ways to

satisfy basic biological needs

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Are Advertising &Marketing Necessary?

• Marketers foster materialism– Response: Products are designed to meet

existing needs• Economics of Information Perspective

• Discussion: do marketers have the ability to control our desires or the power to create needs?– Is this situation changing as the Internet

creates new ways to interact with companies? If so, how?

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Do Marketers Promise Miracles?

• Advertising promises “magical” products

– Response: Advertisers simply do not know enough about people to manipulate them

• Failure rate for new products = 40% to 80%

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Figure 1.2 (Abridged)

Exp Psych

Clinic Psych

Develop Psych

Human Ecology

Microeconomics

Social Psych

Sociology

Macroeconomics

Semiotics/Literary Criticism

Demography

History

Cultural Anthropology

MICRO CONSUMER BEHAVIOR(INDIVIDUAL FOCUS)

MACRO CONS BEHAV(SOCIAL FOCUS)

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Strategic Focus

• The field of consumer behavior…

– …as an applied social science– …to understand consumption for its own sake

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Wheel of Consumer Behavior

Figure 1.3

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How Consumer Influences Drive Marketing Decisions

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Consumer Lifestyle and Consumer Decisions

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Consumer Decision Process

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Factors that Determine and Influence

Consumer Lifestyles

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Overall Model of Consumer Behaviour

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Consumer Behaviour and Marketing Strategy

• Positioning strategy

• Market segmentation

• New products

• New market applications

• Global marketing

• Marketing mix

• Consumerism

• Non-profit marketing