IIPM,Consumer Behavior

1. Consumer BehaviorConsumer Behavior
Kelly Geyskens
Kelly.Geyskens@lessius.eu
Lessius 2008Lessius 2008--20092009
Practical info
Kelly Geyskens
Kelly.Geyskens@lessius.eu
Material:
Consumer behavior; Kelly Geyskens
Compiled from
Kardes, F.R. (2002), Consumer Behavior and Managerial Decision
Making (2nd edition). Upper Saddle River, NJ: Prentice Hall.
Additional papers
Courses: What I tell you…
Written exam: multiple choice + essay
All the material
Individual assignment; how many are you?
The scientific study of consumer behavior
Section I: How consumers acquire, remember,
and use product knowledge
Section II: Persuasion and influence
Section III: Consumer Research
Why study consumer behavior?
Making correct predictions on how consumers respond to marketing
actions can generate €€€!
Marketers need to know how consumers make decisions
Economic model of human decision making
People are often not “rational” decision makers
Limited cognitive capacities : heuristics, rules of thumb
Emotions and feelings
Social influences
Some examples of how consumer’s choices are not always rational in the
economic sense
Important to study consumer psychology in order to understand and
predict consumer choices

2. Is studying consumer behavior
useful for marketers ?
Affective reactions: feelings elicited by an irrelevant product attribute
Is studying consumer behavior useful
for marketers ? (2)
Day-care centers
Children should be picked up at
18.00, but ???
Solution provided by
economists....
Study in 10 day-care centers
Monthly bill = 380€
Fine = 3€ if more than 10 minutes
late (15% more a day)
Number of late pickups a week
8
20
0
10
20
30
before fine after finewhy?
Is studying consumer behavior
useful for marketers ? (3)
perceptions created by
brand communications
change people’s taste
experience
7
Is studying consumer behavior
useful for marketers ? (4)
8
3-5 year old children
hamburgers, chicken nuggets, fries, milk and baby
carrots
Mcdonald’s packaging vs plain wrappers
Fries
0
20
40
60
80
100
McDonald's
wrapper
Plain
wrapper
Carrots
0
20
40
60
80
100
McDonald's
wrapper
Plain
wrapper

3. Is studying consumer behavior
useful for marketers ? (5)
with brand name
0
20
40
60
80
100
Coca-Cola Pepsi don't
know
without brand name
0
20
40
60
80
100
Coca-Cola Pepsi don't
know
Is studying consumer behavior
useful for marketers ? (6)
Other effects
Supermarkets send “bread-smell” from the bakery in the store through
ventilation system
Classic idea : People get appetite
BUT? Study motivational systems
Feelings of hunger are related to feelings of “wealth”
Hungry people donate less to charity
In a room that smells like freshly baked cookies, people gave less
money in an experimental game
Barbara Briers, Mario Pandelaere, Siegfried Dewitte, Luk Warlop (2006) Hungry for Money: The Desire for Caloric
Resources Increases the Desire for Financial Resources and Vice Versa, Psychological Science 17 (11) , 939–943
Is studying consumer behavior
useful for marketers ? (7)
Other effects
Use of loud music in stores
Increases arousal levels
More likely to impulse buy
Reduces cognitive capacity (less ability to think)
Less likely to think of counter-arguments (to high prices for
example)
Real life example
Take 1 page and fill it in INDIVIDUALLY…
In SILENCE…

4. 0
20
40
60
80
100
web
subscription
print & web
subscription
2 options
3 options
Ebbinghaus Illusion-contrast effect

5. Chapter 1: The scientific study of
consumer behavior
Chapter 1: The scientific study of
consumer behavior
What is consumer behavior?
Why is it important to base marketing decisions on
scientific knowledge rather than personal intuition
alone?
Examples
What is consumer behavior?
Consumer behavior describes
how
what
where
when
why
… People buy
Products and services
Marketing stimuli
Consumer
respons
Affect
(feelings
emotions)
Behavior
(purchase/consumption
actions)
Cognition
(beliefs
attitudes
intentions)

6. Why base marketing actions on
scientific research?
Example
P&G developed pampers,
the first disposable diapers
in 1961
Promoted benefits
Convenient, easy to use, save time
Product failed
After scientific research: mothers are more concerned about benefits for
babies!
New campaign promoted the fact that pampers keep babies
dryer and happier Huge succes
P&G fell in to the INTUITION TRAP
The intuition trap
We are all consumers and lay psychologists
But our individual theories are limited and often wrong
We are even bad at predicting the preferences of our life partners!
For managers it is difficult to guess how “the client” thinks
Research showed that marketers are not better in predicting interests and
opinions than consumers themselves
We project our own personal attitudes on other consumers
although these are not representative
Result: failure rate for new products ranges from 40-80%
Hoch (1988) . Who Do We Know: Predicting the Interests and Opinions of the American Consumer. The Journal of
Consumer Research, Vol. 15, No. 3, pp. 315-324
Davy Lerouge and Luk Warlop. (2006) Why It Is So Hard to Predict Our Partner’s Product Preferences: The Effect
of Target Familiarity on Prediction Accuracy. Journal of Consumer Research 33:3, 393-402
Science and market strategy
Market research is important and useful
But you can not investigate EVERYTHING
Business strategy involves taking risks and using one’s “gut
feeling”
Predictions made on gut feeling will be better if they
are made on the basis of sound scientific knowledge
about consumer behavior
“Educated intuition”
Science and market strategy
Making correct predictions in a marketing context can
generate €€€!
Optimal strategical decisions regarding the 4 P’s
To make predictions, you need to have correct knowledge about
relationships between variables
Scientific methodology is best suited to find relationships
between variables
Correlational relationships
Causal relationships

7. Correlational relationships
Positive correlation
Correlational relationships
Negative correlation
Correlational relationships
No correlation
Correlational relationships
Scientific method
Quantifies and measures values
of both variables
Formally calculate correlations
Many datapoints/observations
Intuition
Casual observation
Few observations
Illusory correlations:
We often “see” relationships when
none exist
In order to detect correlational relationships, science
and intuition have different methods

8. Illusory correlations
Focus on instances when both elements are present
“It always rains in the weekend”
“all [insert ethnic minority] are criminals/lazy”
Salient exemplars dominate decision-making
Neglect base-rate information
Much advertising no/little advertising
Large sales volume
Low sales volume
Male students Female
students
Pass exam 27 45
Fail exam 9 15
total
72
24
Total 36 60
Correlation = non-directional
We do not know which variable influences the other
A B
A B
A B
How can we know which variable influences which?
Causal relations
?
Causal relations
Intuitive thinking: people often interpret correlational relation
as causal relationship
But: sometimes correlation is result of confounding variables
example
Confounding variables
Does eating ice cream drive people to commit crimes?
Do criminals celebrate with ice cream?
Warm weather
Ice cream sales Crimes committed
• More people on the street
• More windows open
• More rape

9. Confounding variables
Product development budget
Advertising budget sales
M
arketing
budget
Causal relations
Scientific method to test causality: experiment
Manipulate independent variable...
Create two groups or conditions
A . Show advertising (experimental group)
B. Do not show advertising (control group)
...and asses impact on dependent variable
Measure sales levels
If difference in sales level between experimental and control
group: causal relation
Increase in
Advertising
Increase in
sales
Independent variable Dependent variable
Conclusion…
Intuition and everyday thinking tends to lead to
wrong predictions
Knowing about scientifically studied consumer
behavior will help you as a manager to make
better predictions and therefore better strategical
decisions