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ajaykumarta-Unit 2 consumer behavior

  1. Consumer Behavior Unit - 2
  2. Discussion Questions 1. How do consumer characteristics influence buying behavior? 2. What major psychological processes influence consumer responses to the marketing program? 3. How do consumers make purchasing decisions? 4. In what ways do consumers stray from a deliberative, rational decision process?
  3. True or False?  If you have bad breath, you cannot smell it yourself.  If you eat a balanced diet, you do not need vitamin supplements.  Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation.  Dell Computers tend to be of higher quality than those made by HP and Sony.  Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.
  4. Consumer Behavior The study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs or wants. Consumer behaviour refers to the mental and emotional processes and the observable behaviour of consumers during searching, purchasing, and post consumption of a product or service.”
  5. TYPES OF CONSUMER BUYING BEHAVIOR Routine Response/Programmed Behavior Limited Decision Making Extensive Decision Making Impulse Buying
  6. ROUTINE RESPONSE / PROGRAMMED BEHAVIOR  Frequently purchased low cost items.  Low involvement required.  Little search and decision effort  Purchased almost automatically. Examples
  7. LIMITED DECISION MAKING  Occasional buying.  When information is needed for a unfamiliar brand in a familiar product category.  Requires a moderate amount of time for information gathering.  Loyalty to a brand Example
  8. EXTENSIVE DECISION MAKING  Complex process- requires high involvement  unfamiliar, expensive, infrequently bought products.  High degree of economic / performance / psychological risk.  Lot of time spent seeking information and deciding. Examples
  9. IMPULSE BUYING  Basis - purchase of the same product does not always elicit the same Buying Behavior.  Reason determines the extent of decision-making. THIS or THIS ?? going for the dinner- reason can be an anniversary celebration, or a meal with a couple of friends. Examples
  10. FACTORS INFLUENCING CONSUMER BEHAVIOR Social Factors Culture and Subculture Roles and Family Social Class Reference Groups Psychological Factors Motivation Perception Learning Attitudes Personality Personal Factors Demographic Factors Lifestyle Situational factors Involvement Level Problem Recognition Information Search Alternatives’ Evaluation Purchase Action Post purchase Actions Consumer Decision-Making Process
  11. Factors influencing consumer Behavior Cultural Factors Social Factors Personal Factors
  12. Cultural Factors Culture Subculture Culture is the fundamental determinant of a person’s wants and behavior. Marketers must closely attend to cultural values in every country to understand how to best market their existing products
  13. Cultural Factors • Culture influences consumers through the norms and values established by the society in which they live. • The sum total of knowledge, beliefs, art, morals, laws, customs, and any other capabilities and habits required by humans as members of society. • Perceptions, wants & behavior learnt by an individual, influence his buying behavior. • Culture reflects what to eat, what we wear, the code of conduct, buying habits • E.g., Kellogg’s
  14. Sub- Culture • Subcultures exist within a given dominant culture. • The group have similar habits, behavior patterns, shared value system, buying behavior on basis of – Nationality – Religion – Region – Ethnicity – Age – Gender – …and many more. • Advertisement strategies of a firm are also affected by subculture differences
  15. Social Factors Reference Groups Family Role and Status Social factors refer to forces that other people exert and which affect consumers’ purchase behaviour
  16. Reference Groups • Groups are many like clubs, friends, schools colleges which influences consumer socialization& learning • Two types of reference groups • Primary reference Groups – Membership reference – club – regular & informal contact – Aspiration reference group – copy the attitude & behaviour – Disclaimant reference group – holds membership but does not belong & opposed to group – Avoidance group – reset the values & beliefs • Secondary Reference Groups – Religious group, professional & trade unions – Opinion leaders are perceived as people with skills, knowledge
  17. Roles and Status • Groups often are an important source of information and help to define norms for behavior. • A role consists of the activities a person is expected to perform. • Each role in turn connotes a status. • People choose products that reflect and communicate their role and their actual or desired status in society. • Marketers must be aware of the status-symbol potential of products and brands.
  18. Joint Decision Making process Initiator Influencer Gatekeeper Decision- maker Buyer User two or more persons related by blood, marriage or adoption and reside together
  19. Social Class • ‘Social class defines the ranking of people in a society into a hierarchy of distinct status classes; • Upper, upper-middle, middle and lower classes, so that the members of each class have relatively the same status based on their power and prestige.’ • Socio economic factor – social class – Unique behaviors • The things what consumers buying become symbols which tell others who they are
  20. Personal Factors Age Life Cycle Stage Personality Personal factors include those aspects that are unique to a person and influence purchase behaviour. These include demographic factors, lifestyle, and situational factors.
  21. Personal Factors Values Occupation Economic situation lifestyle
  22. Psychological factors • Psychological factors are internal to an individual and generate forces within that influence her/his purchase behaviour. • The major forces include – Motives , – Perception , – Learning , – Attitude , and – Personality.
  23. MOTIVATION This refers to driving forces within an individual produced by a state of tension caused by unfulfilled needs, wants, and desires. Motivation Process Learning Unfulfilled Needs, Wants and Desires Felt Tension Drive Appropriate Behaviour Goal or Need Fulfillment Cognitive Processes Tension Reduction
  24. MOTIVATION Freud Maslow Herzberg peoples behavior are unconscious driven by different needs at different times dissatisfiers from satisfiers
  25. Abraham Maslow (1943) Need Theory
  26. MOTIVATION RESEARCH  Some of the methods used to probe the subconscious mind include:  In-depth interviews – Talk freely by asking questions  Association tests – With a stimulus such as word, picture to check the first thing comes to their mind  Projective techniques – Pictures & designs are used  Focus group – Small group brought together
  27. PERCEPTION Selective Distortion Selective Retention Selective Attention Subliminal Perception Perception is the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. People tend to remember information that supports our attitudes and beliefs allocation of processing capacity to some stimulus tendency to interpret information in a way that fits our preconceptions are not consciously aware of them
  28. LEARNING Driver Cues Discrimination Learning is viewed as a relatively permanent change in behaviour occurring as a result information or experience, both direct and indirect. strong internal stimulus how a person responds adjust our responses accordingly
  29. LEARNING • There are two basic approaches to learning: (1) Behavioral approach • Stimulus – response • Classical conditioning (Respondent conditioning) • Favorable association with product or service • Operant conditioning (instrumental conditioning) • Positive or negative reinforcement • If positive use to purchase regular, negative results in decrease (2) Cognitive learning approach. • Learning takes place as a result of consumer thinking & problem solving • Consumers need to exercise some control over environment
  30. ATTITUDES “An attitude is an enduring organization of motivational, emotional, perceptual, and cognitive processes with respect to some aspect of our environment.” • Feeling, action & beliefs • Research will be conducted to study consumer attitudes
  31. MEMORY Brand Associations Mental Maps Memory Processes Encoding Retrieval Brand Association Association Association Association Association
  33. Buying Decision Process Planned & unplanned problems Personal, commercial, public Brand A or Brand B
  34. The Buying Decision Process Problem or need recognition information search alternatives evaluation purchase decision post-purchase evaluation
  35. PROBLEM RECOGNITION Stimulus • Internal - is triggered by a person’s normal needs • External - seeing a commercial for a vacation “I’m Hungry”
  36. INFORMATION SEARCH Personal Commercial Public Experiential looking for reading material, phoning friends, going online, and visiting stores to learn about the product
  38. EVALUATION OF ALTERNATIVES Attitudes Beliefs No single process is used by all consumers trying to satisfy a need. looking for certain benefits product as a bundle of attributes with varying abilities that a person holds about something person’s enduring favorable, emotional feelings
  39. Attribute Memory Capacity Graphics Capacity Size and Weight Price Model Weight: 40% Weight: 30% Weight: 20% Weight: 10% A 8 9 6 9 B 7 7 7 7 C 10 4 3 2 D 5 3 8 5 EXPECTANCY-VALUE MODEL Model A = 0.4 (8) + 0.3(9) + 0.2(6) + 0.1(9) = 8.0 Model B = 0.4 (7) + 0.3(7) + 0.2(7) + 0.1(7) = 7.0 Model C = 0.4(10) + 0.3(4) + 0.2(3) + 0.1(2) = 6.0 Model D = 0.4 (5) + 0.3(3) + 0.2(8) + 0.1(5) = 5.0 by combining their brand beliefs — the positives and negatives — according to importance
  40. PURCHASE DECISION Brand Dealer Quantity Timing Payment method Purchase sub decisions sets a minimum acceptable cutoff level for each attribute chooses the best brand on the basis of its perceived
  41. POST-PURCHASE BEHAVIOR Post-purchase Satisfaction Post-purchase Actions Defect Loyal Dissatisfied Satisfied Delighted Stay or Go public action by complaining to the company, going to a lawyer, stop buying the product closeness between expectations and the product’s perceived performance
  42. How Customers Use or Dispose of Products consumption rate—the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it.
  43. Moderating Effects Low-involvement consumer Variety seeking consumer consumer involvement
  44. Types of Decision Situations New Task Item purchased for 1st time Straight Re-buy Inventory reaches par level Modified Re-buy Repurchase with some minor modifications
  45. MARKET RESEARCH Unit – 2 Contd…
  46. Discussion Questions 1. What constitutes good marketing research? 2. Use of marketing research 3. What are the best metrics for measuring marketing productivity? 4. How can marketers access their return on investment of marketing expenditures?
  47. MARKETING RESEARCH SYSTEM Insight Market Research to help them better understand the customers and markets how’s and why’s certain things happen in the market
  48. Marketing Research It is the process of finding a solution to a problem or a answer to question through the use of scientific tools & techniques The systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.
  49. Creative Research Means Rivals Marketing partners Student projects Internet sources Check out rivals
  50. BUSINESS RESEARCH  Three major forms of business research are  Market research – Understanding & examining the marketplace in which company operates – Helps to device effective business policies & strategies  Operations research – Use of mathematical. Logical & analytical methods to find optimal solutions to business problems – Used for forecasting demand, optimizing production & investment plans etc.,  Motivational research – Analyzing the reasons & motives behind people’s behavior – Used to understand consumer behavior
  51. Marketing Research process Identifying & defining problem / opportunity Planning the research design Selecting a research method Selecting a sampling procedure Data collection Evaluating the data Preparing & presenting the research design
  52. DEFINE THE MARKETING PROBLEM & SET OBJECTIVE  Problem definition – The statement clearly defines the specific & measurable problem that the research project has to address – This will facilitate the company to develop appropriate marketing plan  Research objectives – Who are our customers? – Who are the customers of competing brands – What do these customers like & dislike – How are we currently perceived among customers – What must we do clarify & improve the customers existing perceptions Focused inquiry
  53. CATEGORIES OF RESEARCH  Exploratory research – Carried out to make problem suited to more precise investigation or to frame a working hypothesis – It is not used in cases where a definite result is desired – Rely upon secondary data’s  Descriptive studies – Comes under formal research where objectives are clearly defines – May range general survey of consumers age, education, market potential etc.,  Casual Research (Experimental) – To establish cause & effect relationship between different variables – Possible relationship can arise may be – symmetrical (Fluctuate each other), reciprocal (mutually influence each other) & Asymmetrical (changes in one variable are responsible for changes in another variable)  Discotheques & parties is depend on lifestyle, Ads vs. sales, & price increases sale increase
  54. DEVELOP THE RESEARCH PLAN Sampling plan Contact method Data Sources • Secondary data • Primary data Research Approaches • Observation • Focus groups • Surveys • Behavioral data • Experiments Research instrument • Questionnaires • Qualitative measures • Technological devices
  55. SAMPLING DESIGN  Who is to surveyed (Sampling Unit)  Define the target population (universe)  How many to survey (Sampling Size)  The needed amount of data  How should the respondents be chosen (Sampling procedure)
  56. DEFINITION  Sample  Is a part of total population  It can be an individual or groups of elements  Sample size is represented by “n”  Sampling  Process of selecting a sample from a population using special techniques
  57. SAMPLING APPROACH  Probability Sampling If the purpose of a research is to arrive at conclusion or make predictions affecting the population as a whole  Non – Probability Sampling Research purpose is directed towards evaluating how a small representative group, is doing for purposes of illustration or explanation
  58. PROBABILITY SAMPLING  Simple random sampling  Each element in the target population has an equal chance of inclusion in the sample  Randomly generated or picked out of a box  Systematic sampling  Selection of every kth element from a sampling  Population size / Sample size  Stratified random sampling  Process of grouping members of the population into relatively homogeneous subgroups like age, gender & samples are selected randomly  Multistage cluster sampling  Grouping the elements in a population into various clusters & then selecting a few clusters randomly like cities, villages etc.,
  59. Simple random sampling Systematic sampling Stratified random sampling Multistage cluster sampling
  60. NON – PROBABILITY SAMPLING  Convenience Sampling  Based on their easy availability & accessibility of the researcher  Quota Sampling  The entire population is segmented into mutually exclusive groups or categories  The number of respondents to be drawn from each categories is specified in advance  15 males & 15 females  Judgment sampling  Selection of unit on judgment of an experienced researcher. Mumbai  Snowball sampling  Involve the selection of additional respondents based on referrals of initial respondents  Chain system may be used when samples are not available
  61. COLLECT THE INFORMATION Online surveys Telephone surveys Interviews In-home surveys Most expensive step Most prone to errors
  62. DATA COLLECTION INSTRUMENT  Depends on type of research  Mainly they use questionnaire for quantitative study  Questionnaire  Set of questions to be asked from respondents with appropriate instructions indicating which questions to be asked
  63. Tips to prepare Effective questionnaire  Clear objectives  Should be short to maintain interest  Should be clear & understanding  Opening statement should be minimized  Structure questions logically like general first & important followed by  No suggestive type of questions  Questions which Cross checks previous answer  Pretest the questionnaire & then sharpen it & polish it
  64.  Nominal scale – Uses numbers or letters to identify different objects – 1) 5-10, 2)11-15, 3) 16-20, 4) 21-25 etc.,  Ordinal scale – Used to arrange objects to some particular order – Airtel ____ Hutch____ Idea____ BSNL____ Reliance____  Interval scale – Similar to ordinal but they also arrange objects in a particular objects – Between the points on the scales are equal – 10_____ 9______ 8_______ 7____ 6_____ 5______.......... So on – The value of difference can be identified  Ratio scale – Fixed zero point & have equal intervals – Used to calculate yards, meters, height, weight, money Types of Measurement Scales
  65. Attitude Measurement scales  Open ended  The respondents is free to express  Dichotomous (Closed ended)  Choose only one from yes or no  Multiple item scale  The respondent can make two or more choices  Semantic Differential scales  The respondent can rate on the scale divided between 1 & n where “n” be the excellent & “1” poor
  66. Other Measurement Scales  Comparative scales  Between X & Y product  Pictorial scales  Constant sum scales  Respondents are asked to divide the given numbers among various attributes  Likert scale  Series of statements where the respondents provide answer in the form of degree of agreement or disagreement
  67. ANALYZE THE INFORMATION Develop summary measures Compute averages
  68. Analyze the information  Raw data does not serve the purpose of research  Data need to be analyzed based on requirement to extract the data satisfying objectives  Stages of data analysis – Validation • Helps to confirm if the interview was really conducted – Editing • Checking for mistakes by respondent & interviewer – Coding • Assigning numbers or other symbols to answers in order to group – Data entry • Consistency checks & treatment of missing response – Tabulation & analysis • One-Way frequency tabulation & cross tabulation
  70. Present the Findings  Prefatory Information – Letter of transmittal – Title page – Authorization statement – Executive summary – Table of contents  Introduction – Problem statement – Research objectives  Methodology – Sampling design – Research design – Data collection – Data analysis – Limitations  Findings  Conclusions & recommendations  Appendices  Bibliography Components of research findings
  71. Types of presentation  Written presentation  Oral Presentation – Initial planning – Preparation – Making The Presentation – Delivery • Vocal problems • Physical behaviour • Handling Questions  Visual Aids – Tables • Title & number • Foot notes • Source – Charts & graphs • Line graphs • Pie charts • Bar charts
  72. MAKE THE DECISION Research Decisions Research should guide decisions, not be used to support decisions already made.
  74. Discussion Questions 1. What are the components of a modern marketing information system? 2. What are useful internal records for such a system? 3. What makes up a marketing intelligence system? 4. What are some influential macroeconomic developments? 5. How can companies accurately measure and forecast demand?
  75. Introduction  What is MKIS?  ‘MKIS (MIS) is a set of procedures and methods for the regular, planned collection, analysis and presentation of information for use in marketing decisions  Information about Factors that affect marketing  Changing marketing environments  Expanding business boundaries  Shifts in income,  Changing lifestyles  By the use of technology also companies fail to gain the information that required
  76. Collecting Information Customers Competitors External Factors
  77. Marketing Information System - consists of People Equipment Procedures to gather, sort, analyze, evaluate, and distribute information that is needed, timely and accurate.
  78. Insight Marketing Information System – From Where Marketing Research Marketing Intelligence Internal Records
  79. provide managers with up-to-date information on the current sales Internal Records Order-to-Payment Cycle Databases / Data Mining Sales Information Systems the process that orders go through once Includes invoices and shipping documents such as purchase history, product preferences
  80. Marketing Intelligence News and Trade Publications Meet with customers, suppliers, distributors, and other managersMonitor social media sites a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment
  81. Improving Marketing Intelligence Sales Force External Experts Establish industry network Customer Advisory Panel
  82. Marketing Intelligence & the Internet Independent Online Forums Distributor or sales agents feedback sites Customer review and expert opinion sites Customer complaint sites
  83. Using Marketing Intelligence Share Information Quickly should be gathered and shared with decision makers quickly in order to effectively use the information.
  84. Analyzing the Macro Environment Elements that can impact a company, but cannot be controlled
  85. Major Environmental Forces Economic Sociocultural Natural Technological Political-Legal Demographics
  86. Attributes of good marketing information  Relevance to decision making  Confidentiality  Cost reasonable  Reliability  Clarity  Timeliness  Objectivity (unbiased)  Completeness  Accuracy  Strategic value
  87. Needs and Trends Fad Megatrend Trend Unpredictable, short-lived, and without social, economic, and political significance Offer a view of the future due to their momentum and durability Changes that are slow to form but once established last for 7 – 10 years
  88. Estimating Future Demand Sales Force Opinions Forecasting Past Sales Analysis Buyer’s Intentions Expert Opinions

Notes de l'éditeur

  1. Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means understanding customers— gaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes so the right products are always marketed to the right customers in the right way. Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must fully understand both the theory and reality of consumer behavior. A consumer’s buying behavior is influenced by cultural, social, and personal factors. Of these, cultural factors exert the broadest and deepest influence.
  2. Cultural Factors Culture, subculture, and social class are particularly important influences on consumer buying behavior. Culture is the fundamental determinant of a person’s wants and behavior. Through family and other key institutions, a child growing up in the United States is exposed to values such as: achievement and success, activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism, and youthfulness. A child growing up in another country might have a different view of self, relationship to others, and rituals. Marketers must closely attend to cultural values in every country to understand how to best market their existing products and find opportunities for new products.
  3. Social Factors In addition to cultural factors, social factors such as reference groups, family, and social roles and statuses affect our buying behavior. REFERENCE GROUPS A person’s reference groups are all the groups that have a direct (face-to-face) or indirect influence on their attitudes or behavior. Groups having a direct influence are called membership groups. Some of these are primary groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbors, and coworkers. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction. Reference groups influence members in at least three ways. They expose an individual to new behaviors and lifestyles, they influence attitudes and self-concept, and they create pressures for conformity that may affect product and brand choices. People are also influenced by groups to which they do not belong. Aspirational groups are those a person hopes to join; dissociative groups are those whose values or behavior an individual rejects. FAMILY The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. There are two families in the buyer’s life. The family of orientation consists of parents and siblings. From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love. Even if the buyer no longer interacts very much with his or her parents, parental influence on behavior can be significant. Almost 40 percent of families have auto insurance with the same company as the husband’s parents. ROLES AND STATUS We each participate in many groups—family, clubs, organizations. Groups often are an important source of information and help to define norms for behavior. We can define a person’s position in each group in terms of role and status. A role consists of the activities a person is expected to perform. Each role in turn connotes a status. A senior vice president of marketing may be seen as having more status than a sales manager, and a sales manager may be seen as having more status than an office clerk. People choose products that reflect and communicate their role and their actual or desired status in society. Marketers must be aware of the status-symbol potential of products and brands.
  4. Personal Factors Personal characteristics that influence a buyer’s decision include age and stage in the life cycle; occupation and economic circumstances; personality and self-concept; and lifestyle and values. Because many of these have a direct impact on consumer behavior, it is important for marketers to follow them closely. AGE AND STAGE IN THE LIFE CYCLE Our taste in food, clothes, furniture, and recreation is often related to our age. Consumption is also shaped by the family life cycle and the number, age, and gender of people in the household at any point in time. U.S. households are increasingly fragmented—the traditional family of four with a husband, wife, and two kids makes up a much smaller percentage of total households than it once did. The average U.S. household size in 2008 was 2.6 persons. Marketers should also consider critical life events or transitions—marriage, childbirth, illness, relocation, divorce, first job, career change, retirement, death of a spouse—as giving rise to new needs. These should alert service providers—banks, lawyers, and marriage, employment, and bereavement counselors—to ways they can help. PERSONALITY AND SELF-CONCEPT Each person has personality characteristics that influence his or her buying behavior. By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including buying behavior).We often describe personality in terms of such traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. Personality can be a useful variable in analyzing consumer brand choices. Brands also have personalities, and consumers are likely to choose brands whose personalities match their own. We define brand personality as the specific mix of human traits that we can attribute to a particular brand.
  5. OCCUPATION AND ECONOMIC CIRCUMSTANCES Occupation also influences consumption patterns. Marketers try to identify the occupational groups that have above-average interest in their products and services and even tailor products for certain occupational groups: Computer software companies, for example, design different products for brand managers, engineers, lawyers, and physicians. As the recent recession clearly indicated, both product and brand choice are greatly affected by economic circumstances: spendable income (level, stability, and time pattern), savings and assets (including the percentage that is liquid), debts, borrowing power, and attitudes toward spending and saving. Luxury-goods makers such as Gucci, Prada, and Burberry are vulnerable to an economic downturn. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and reprice their products or introduce or increase the emphasis on discount brands so they can continue to offer value to target customers. LIFESTYLE AND VALUES People from the same subculture, social class, and occupation may lead quite different lifestyles. A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions. It portrays the “whole person” interacting with his or her environment. Marketers search for relationships between their products and lifestyle groups. A computer manufacturer might find that most computer buyers are achievement-oriented and then aim the brand more clearly at the achiever lifestyle. Lifestyles are shaped partly by whether consumers are money constrained or time constrained. Companies aiming to serve money-constrained consumers will create lower -cost products and services. By appealing to thrifty consumers, Walmart has become the largest company in the world. Its “everyday low prices” have wrung tens of billions of dollars out of the retail supply chain, passing the larger part of savings along to shoppers in the form of rock-bottom bargain prices. Consumers who experience time famine are prone to multitasking, doing two or more things at the same time. They will also pay others to perform tasks because time is more important to them than money. Companies aiming to serve them will create convenient products and services for this group.
  6. Freud – Psychological forces that shaped peoples behavior are unconscious. Maslow – People are driven by different needs at different times. According to Maslow, human needs are arranged in a hierarchy from most to least pressing. Herzberg – Developed two-factor theory that distinguishes dissatisfiers (factors that cause dissatisfaction) from satisfiers (factors that cause satisfaction).
  7. Selective retention – People tend to remember (forget) information that supports (differs) our attitudes and beliefs. A motivated person is ready to act—how is influenced by his or her perception of the situation. In marketing, perceptions are more important than reality, because perceptions affect consumers’ actual behavior. Perception is the process by which we select, organize, and interpret information inputs to create a meaningful picture of the world. It depends not only on physical stimuli, but also on the stimuli’s relationship to the surrounding environment and on conditions within each of us. One person might perceive a fast-talking salesperson as aggressive and insincere; another, as intelligent and helpful. Each will respond to the salesperson differently. SELECTIVE ATTENTION Attention is the allocation of processing capacity to some stimulus. Voluntary attention is something purposeful; involuntary attention is grabbed by someone or something. It’s estimated that the average person may be exposed to over 1,500 ads or brand communications a day. Because we cannot possibly attend to all these, we screen most stimuli out—a process called selective attention. Selective attention means that marketers must work hard to attract consumers’ notice. SELECTIVE DISTORTION Even noticed stimuli don’t always come across in the way the senders intended. Selective distortion is the tendency to interpret information in a way that fits our preconceptions. Consumers will often distort information to be consistent with prior brand and product beliefs and expectations. For a stark demonstration of the power of consumer brand beliefs, consider that in “blind” taste tests, one group of consumers samples a product without knowing which brand it is, while another group knows. Invariably, the groups have different opinions, despite consuming exactly the same product. SELECTIVE RETENTION Most of us don’t remember much of the information to which we’re exposed, but we do retain information that supports our attitudes and beliefs. Because of selective retention, we’re likely to remember good points about a product we like and forget good points about competing products. Selective retention again works to the advantage of strong brands. It also explains why marketers need to use repetition—to make sure their message is not overlooked. SUBLIMINAL PERCEPTION The selective perception mechanisms require consumers’ active engagement and thought. A topic that has fascinated armchair marketers for ages is subliminal perception. They argue that marketers embed covert, subliminal messages in ads or packaging. Consumers are not consciously aware of them, yet they affect behavior. Although it’s clear that mental processes include many subtle subconscious effects, no evidence supports the notion that marketers can systematically control consumers at that level, especially enough to change moderately important or strongly held beliefs.
  8. When we act, we learn. Learning induces changes in our behavior arising from experience. Most human behavior is learned, although much learning is incidental. Learning theorists believe learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement. Two popular approaches to learning are classical conditioning and operant (instrumental) conditioning. A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds. Suppose you buy an HP computer. If your experience is rewarding, your response to computers and HP will be positively reinforced. Later, when you want to buy a printer, you may assume that because it makes good computers, HP also makes good printers. In other words, you generalize your response to similar stimuli. A countertendency to generalization is discrimination. Discrimination means we have learned to recognize differences in sets of similar stimuli and can adjust our responses accordingly.
  9. Brand associations consist of all brand related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand node in the brain.
  10. Consumers don’t always pass through all five stages—they may skip or reverse some. When you buy your regular brand of toothpaste, you go directly from the need to the purchase decision, skipping information search and evaluation. The model in Figure 6.4 provides a good frame of reference, however, because it captures the full range of considerations that arise when a consumer faces a highly involving new purchase
  11. Smart companies try to fully understand customers’ buying decision process—all the experiences in learning, choosing, using, and even disposing of a product. Marketing scholars have developed a “stage model” of the process. The consumer typically passes through five stages: problem recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. Clearly, the buying process starts long before the actual purchase and has consequences long afterward.
  12. An internal stimulus is triggered by a person’s normal needs – hunger, thirst – when the need rises to a threshold level. A need can also be aroused by an external stimulus, such as seeing a commercial for a vacation. A person then begins to consider the possibility of taking a vacation.
  13. Information Search Surprisingly, consumers often search for limited amounts of information. Surveys have shown that for durables, half of all consumers look at only one store, and only 30 percent look at more than one brand of appliances. We can distinguish between two levels of engagement in the search. The milder search state is called heightened attention. At this level a person simply becomes more receptive to information about a product. At the next level, the person may enter an active information search: looking for reading material, phoning friends, going online, and visiting stores to learn about the product.
  14. By gathering information, the consumer learns about competing brands and their features. The first box in Figure 6.5 shows the total set of brands available. The individual consumer will come to know a subset of these, the awareness set. Only some, the consideration set, will meet initial buying criteria. As the consumer gathers more information, just a few, the choice set, will remain strong contenders. The consumer makes a final choice from these.
  15. No single process is used by all consumers, or by one consumer in all buying situations. It is important that marketers understand that: The consumer is trying to satisfy a need. The consumer is looking for certain benefits from the product solution. The consumer sees each product as a bundle of attributes with varying abilities to deliver the benefits. -- The attributes of interest will vary based on the product. A belief is a descriptive thought that a person holds about something. Attitudes are a person’s enduring favorable, or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea.
  16. The consumer arrives at attitudes toward various brands through an attribute evaluation procedure, developing a set of beliefs about where each brand stands on each attribute. The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs—the positives and negatives—according to importance.
  17. After a consumer has reached a purchase intention, up to five subdecisions may need to be made. The brand, the dealer (where), quantity, timing (when), and payment method. With noncompensatory models of consumer choice, positive and negative attribute considerations don’t necessarily net out. Evaluating attributes in isolation makes decision making easier for a consumer, but it also increases the likelihood that she would have made a different choice if she had deliberated in greater detail. We highlight three choice heuristics here. 1. Using the conjunctive heuristic, the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes. For example, if Linda decided all attributes had to rate at least 5, she would choose laptop computer B. 2. With the lexicographic heuristic, the consumer chooses the best brand on the basis of its perceived most important attribute. With this decision rule, Linda would choose laptop computer C. 3. Using the elimination-by-aspects heuristic, the consumer compares brands on an attribute selected probabilistically—where the probability of choosing an attribute is positively related to its importance—and eliminates brands that do not meet minimum acceptable cutoffs.
  18. After the purchase, the consumer might experience dissonance from noticing certain disquieting features or hearing favorable things about other brands and will be alert to information that supports his or her decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer’s choice and help him or her feel good about the brand. The marketer’s job therefore doesn’t end with the purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses and disposal. POSTPURCHASE SATISFACTION Satisfaction is a function of the closeness between expectations and the product’s perceived performance. If performance falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted. These feelings make a difference in whether the customer buys the product again and talks favorably or unfavorably about it to others. The larger the gap between expectations and performance, the greater the dissatisfaction. Here the consumer’s coping style comes into play. Some consumers magnify the gap when the product isn’t perfect and are highly dissatisfied; others minimize it and are less dissatisfied. POSTPURCHASE ACTIONS A satisfied consumer is more likely to purchase the product again and will also tend to say good things about the brand to others. Dissatisfied consumers may abandon or return the product. They may seek information that confirms its high value. They may take public action by complaining to the company, going to a lawyer, or complaining to other groups (such as business, private, or government agencies). Private actions include deciding to stop buying the product (exit option) or warning friends (voice option).
  19. Marketers should also monitor how buyers use and dispose of the product ( Figure 6.7). A key driver of sales frequency is product consumption rate—the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it. Consumers may fail to replace some products soon enough because they overestimate product life. One strategy to speed replacement is to tie the act of replacing the product to a certain holiday, event, or time of year.
  20. The manner or path by which a consumer moves through the decision-making stages depends on several factors, including the level of involvement and extent of variety seeking, as follows. LOW-INVOLVEMENT CONSUMER DECISION MAKING The expectancy-value model assumes a high level of consumer involvement, or engagement and active processing the consumer undertakes in responding to a marketing stimulus. VARIETY-SEEKING BUYING BEHAVIOR Some buying situations are characterized by low involvement but significant brand differences. Here consumers often do a lot of brand switching. Think about cookies. The consumer has some beliefs about cookies, chooses a brand without much evaluation, and evaluates the product during consumption. Next time, the consumer may reach for another brand out of a desire for a different taste. Brand switching occurs for the sake of variety, rather than dissatisfaction.
  21. Managers use market research to help them better understand the customers and markets. These insights are the how’s and why’s certain things happen in the market. The text gives an example of how Gillette conducted market research on the woman’s shaver market and how this research led the company to develop the Venus razor, which now has more than 50% of the global market.
  22. Marketers must not focus too broadly or too narrowly on the research question.
  23. Most expensive step Most prone to errors
  24. Develop summary measures Compute averages Statistical analysis / decision models
  25. Transform raw data into insight Present information in clear and compelling fashion
  26. Research should guide decisions, not be used to support decisions already made.
  27. Marketers are in position to collect information from customers, competitors, and other external factors/group that can help to identify market changes.
  28. A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute information that is needed, timely and accurate.
  29. A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute information that is needed, timely and accurate.
  30. The order-to-payment cycle entails the process that orders go through once they are received by the company. Includes invoices and shipping documents. Customers prefer firms that can get orders processed quickly and accurately. Sales information systems provide managers with up-to-date information on the current sales of individual products. Databases store and organize information that can be retrieved based on a number of criteria such as purchase history, product preferences, and can even contain demographic and psychographic information on customers.
  31. A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. This information can come from reading books and trade journals; talking to customers, distributors, suppliers, etc; monitoring social media; and talking to other managers in the company.
  32. Companies can improve marketing intelligence through the methods listed on the slide as well as through channel members, government data sources, and the purchase of information through secondary data sources.
  33.,, or
  34. Marketing intelligence should be gathered and shared with decision makers quickly in order to effectively use the information.
  35. Where the microenvironment refers to those elements closest to the company, customers, competitors, suppliers, etc., the macroenvrionment refers to those elements that can impact a company, but cannot be controlled. These include things such as the economy, culture, demographics, politics, technology, and the natural environment.
  36. Fad – Hula Hoop; Trend – Diet/exercise; Megatrend – Electric automobiles FAD: Unpredictable, short-lived, and without social, economic, and political significance. Fads are measured in months, rather than years. Wham-0 sold 25 million Hula Hoops in its first 4 months. Pet rocks were launched in the mid-1970’s and sold 1 million units in a matter of months. Five month’s later sales were almost non-existent. TRENDS: Offer a view of the future due to their momentum and durability. The fitness/diet trend is an example, although there have been many fads within this trend, the overall movement toward healthier living has remained. MEGATRENDS: Changes that are slow to form but once established last for 7 – 10 years (or more). Megatrends influence all factors of life that impact business, culture, economics, society, and personal lives.
  37. Market-test