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Consumer Behaviour and Target Audience Decisions

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Consumer Behaviour and Target Audience Decisions

  1. 1. 2Consumer Behaviour and TargetAudience Decisions
  2. 2. Chapter Objectives• To understand the role consumer behaviour plays in the development and implementation of advertising and promotional programs.• To understand the consumer decision-making process and how it varies for different types of purchases.• To understand various internal psychological processes, their influence on consumer decision making, and implications for advertising and promotion.• To understand the similarities and differences of target market and target audience.• To understand the various options for making a target audience decision for marketing communications. © 2005 McGraw-Hill Ryerson Limited
  3. 3. Consumer Behaviour• Processes and activities which people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services to satisfy needs and desires. © 2005 McGraw-Hill Ryerson Limited
  4. 4. A Basic Model of Consumer Decision MakingFigure 2-1 © 2005 McGraw-Hill Ryerson Limited
  5. 5. Consumer Decision MakingDecision Stage Psychological Process Need Recognition Motivation Information Search Perception Alternative Evaluation Attitude Formation Purchase Decision Integration Postpurchase Evaluation Learning © 2005 McGraw-Hill Ryerson Limited
  6. 6. Consumer Decision MakingDecision Stage Psychological Process Need Recognition Motivation © 2005 McGraw-Hill Ryerson Limited
  7. 7. Sources of Need Recognition New Needs Out of Stock Dissatisfaction or WantsRelated Product Market-Induced New Purchase Recognition Products © 2005 McGraw-Hill Ryerson Limited
  8. 8. Hierarchy of Human Needs: Love,Nurturance, Belonging © 2005 McGraw-Hill Ryerson Limited
  9. 9. Sexy Ads Get Noticed © 2005 McGraw-Hill Ryerson Limited
  10. 10. Consumer Decision MakingDecision Stage Psychological Process Need Recognition Motivation Information Search Perception © 2005 McGraw-Hill Ryerson Limited © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  11. 11. Information Search Information SearchInternal Search External Search•Scan memory to •Undertaken ifrecall experiences and internal search doesknowledge about past not yield enoughpurchase alternatives. information. © 2005 McGraw-Hill Ryerson Limited
  12. 12. External Sources of Information Personal Sources Mark et Sour ces Pub Sou lic rce s Per Ex son pe rie al nce © 2005 McGraw-Hill Ryerson Limited
  13. 13. Perception• The process by which an individual receives, attends to, interprets, and stores information to create a meaningful picture of the world.• Marketers can formulate communication strategies based upon how consumers acquire and use information from external sources. © 2005 McGraw-Hill Ryerson Limited
  14. 14. The Selective Perception Process Selective Exposure Selective Attention Selective Comprehension Selective Retention © 2005 McGraw-Hill Ryerson Limited
  15. 15. Selective Exposure• Occurs as consumers choose whether or not to make themselves available to information. – TV viewers may change channels or leave the room during commercial breaks. © 2005 McGraw-Hill Ryerson Limited
  16. 16. Selective Attention• Occurs when consumer chooses to focus on certain stimuli while excluding others.• For example, combining colour with black and white grabs attention. © 2005 McGraw-Hill Ryerson Limited
  17. 17. Selective Comprehension• Consumers may interpret information based on their own attitudes, beliefs, motives, and experiences.• An ad disparaging a consumer’s favourite product may be interpreted as biased or untruthful. © 2005 McGraw-Hill Ryerson Limited
  18. 18. Selective Retention• Consumers do not remember all the information they see, hear, or read – even after attending and comprehending it. © 2005 McGraw-Hill Ryerson Limited
  19. 19. Advertisers Attempt to Help Consumers Retain Information• Mnemonics (symbols, rhymes, associations, and images) can assist in consumers’ learning and memory processes.• Example: A telephone number spelling out the company’s name. © 2005 McGraw-Hill Ryerson Limited
  20. 20. Consumer Decision MakingDecision Stage Psychological Process Need Recognition Motivation Information Search Perception Alternative Evaluation Attitude Formation © 2005 McGraw-Hill Ryerson Limited
  21. 21. Attitude Formation is Based on Evaluation of Alternatives All available brandsBrand A Brand B Brand C Brand D Brand EBrand F Brand G Brand H Brand I Brand JBrand K Brand L Brand M Brand N Brand O Evoked Set of Brands Brand B Brand EBrand F Brand I Brand M © 2005 McGraw-Hill Ryerson Limited
  22. 22. Consumers Must Evaluate Their BrandChoices Evaluative Criteria Objective Subjective Price Style Warranty Appearance Service Image © 2005 McGraw-Hill Ryerson Limited
  23. 23. Evaluative Criteria Consumer View •Product or service viewed in terms of its consequences. Evaluative Criteria Marketer View •Products are viewed as bundles of attributes. © 2005 McGraw-Hill Ryerson Limited
  24. 24. Different Perspectives: The Consumer’s View Will the neighbors How does it cut be impressed with the taller grass? my lawn?How close can I Is it going to be as get to the fun to use later this shrubs? summer? Will it pull that Will I enjoy having little trailer I more time for golf? saw at the store? Product Is Seen As Functional A Set of Outcomes Psychosocial FunctionalConsequences Consequences © 2005 McGraw-Hill Ryerson Limited
  25. 25. Attitude• “Attitudes are learned predispositions to respond to an object.” – Gordon Allport• A summary construct representing an individual’s overall feelings toward an object or its evaluation. © 2005 McGraw-Hill Ryerson Limited
  26. 26. Consumer Attitudes Focus on Objects Individuals Products Ads Brands Attitudes Toward:Media Companies Retailers Organizations © 2005 McGraw-Hill Ryerson Limited
  27. 27. Advertising, Promotion, and Attitudes• Advertising and promotion are used to create favourable attitudes, and/or change negative attitudes.• Here, the ad attempts to change attitudes by highlighting added attributes. © 2005 McGraw-Hill Ryerson Limited
  28. 28. Consumer Decision MakingDecision Stage Psychological Process Need Recognition Motivation Information Search Perception Alternative Evaluation Attitude Formation Purchase Decision Integration © 2005 McGraw-Hill Ryerson Limited
  29. 29. Purchase Decision• At some point in the buying process, the consumer makes a purchase decision. – Consumer stops searching for and evaluating alternative brands in the evoked set.• The purchase decision starts with a purchase intention. – Predisposition to buy a certain brand. © 2005 McGraw-Hill Ryerson Limited
  30. 30. Purchase Decision• The purchase decision is not the actual purchase. – Consumer must implement decision and make purchase. – Additional decisions may be needed. – Time delay often exists between making a purchase decision and purchase itself. – The time delay affects the marketing strategy, and depends on: • Type of purchase to be made • Risk involved in purchase © 2005 McGraw-Hill Ryerson Limited
  31. 31. Brand Loyalty May Affect Purchase Decision• Consumers may have a preference for a certain brand, which will result in its repeated purchase. © 2005 McGraw-Hill Ryerson Limited
  32. 32. Integration Processes• The ways in which product knowledge, meanings, and beliefs are combined to evaluate two or more alternatives.• Analysis of the integration process focuses on the different types of integration rules or strategies used by consumers to decide among purchase alternatives. © 2005 McGraw-Hill Ryerson Limited
  33. 33. Types of Integration Strategies Integration Strategies Formal Decision Simplified Decision Rules Rules or Heuristics•Require examination •Easy to use andand comparison of adapt toalternatives on environmentalspecific attributes. situations. •Price- or promotion- based © 2005 McGraw-Hill Ryerson Limited
  34. 34. Consumer Decision MakingDecision Stage Psychological Process Need Recognition Motivation Information Search Perception Alternative Evaluation Attitude Formation Purchase Decision Integration Postpurchase Evaluation Learning © 2005 McGraw-Hill Ryerson Limited
  35. 35. Postpurchase Evaluation• After purchase, consumer assesses the level of performance of product or service.• Provides feedback from actual use of product to influence the likelihood of future purchases. © 2005 McGraw-Hill Ryerson Limited
  36. 36. Satisfaction• “A judgment that consumers make with respect to the pleasurable level of consumption-related fulfillment.”• Cognitive dissonance: – A feeling of psychological tension or postpurchase doubt a consumer experiences after making a difficult purchase choice. – More likely to occur when consumer has to choose between two close alternatives. © 2005 McGraw-Hill Ryerson Limited
  37. 37. Variations in Consumer Decision Making Types of Decision MakingRoutine Problem Limited Problem Extended Solving Solving Problem Solving © 2005 McGraw-Hill Ryerson Limited
  38. 38. Variations in Consumer Decision MakingGroup Decision Making• Group situations constitute many purchase decisions.• Reference group – “A group whose presumed perspectives or values are used by an individual as the basis for his or her judgments, opinions, and actions.” – Used to guide consumers’ purchase decisions even when the group is not present. – Marketers use aspirational or dissociative reference group influences in developing ads and promotional strategies. © 2005 McGraw-Hill Ryerson Limited
  39. 39. Variations in Consumer Decision MakingGroup Decision MakingFigure 2-4 © 2005 McGraw-Hill Ryerson Limited
  40. 40. Target Audience Decision• Consumer understanding is the key to the success of any IMC plan, program, or ad.• The goal of an IMC plan, program or ad is to influence the behaviour of a target audience. © 2005 McGraw-Hill Ryerson Limited
  41. 41. Marketing and Promotions Process ModelFigure 2-5 © 2005 McGraw-Hill Ryerson Limited
  42. 42. Target Market Process Identify Markets With Unfulfilled Needs Determine Market Segmentation Select Market To Target © 2005 McGraw-Hill Ryerson Limited
  43. 43. Target Market and Target Audience• Target market – The group of consumers toward which an overall marketing program is directed.• Target audience – A group of consumers within the target market for which the advertising campaign, for example, is directed. © 2005 McGraw-Hill Ryerson Limited
  44. 44. Target Market Process Identify Markets With Unfulfilled Needs © 2005 McGraw-Hill Ryerson Limited
  45. 45. Market Segmentation• Marketer identifies a target market by: – Identifying the specific needs of groups of people, or segments – Selects one or more segments as a target – Develops marketing programs directed to each. © 2005 McGraw-Hill Ryerson Limited
  46. 46. Beer is Beer? Not really! Popular Imports Specialties Premium Light © 2005 McGraw-Hill Ryerson Limited
  47. 47. A Product for Every Segment © 2005 McGraw-Hill Ryerson Limited
  48. 48. A Package is More Than a Container © 2005 McGraw-Hill Ryerson Limited
  49. 49. The Marketing Segmentation Process Find Ways To Group Consumers According To Their Needs. Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization. Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions. Select the Product Segments Toward Which the Firm Directs Its Marketing Actions. Take Marketing Actions To Reach Target Segments. © 2005 McGraw-Hill Ryerson Limited
  50. 50. Bases for SegmentationPsychographic Demographic Customer CharacteristicsSocioeconomic Geographic Behaviour behaviour Outlets Buying Situation Usage Benefits © 2005 McGraw-Hill Ryerson Limited
  51. 51. Psychographic Segmentation• Dividing the market on the basis of lifestyle, personality, culture, and social class.• Criteria include: – Lifestyle • VALS • VALS 2 – Personality – Culture – Social class © 2005 McGraw-Hill Ryerson Limited
  52. 52. Marketing to a Lifestyle © 2005 McGraw-Hill Ryerson Limited
  53. 53. Abercrombie & Fitch Targets EchoBoomers © 2005 McGraw-Hill Ryerson Limited
  54. 54. Benefit Segmentation• The grouping of consumers on the basis of attributes sought in a product. © 2005 McGraw-Hill Ryerson Limited
  55. 55. Behaviouristic Segmentation• Grouping customers according to their usage, loyalties, or buying responses to a product. – Product or brand usage. – Degree of use. – Brand loyalty.• Can be used in combination with demographic and/or psychographic criteria to develop profiles of market segments. © 2005 McGraw-Hill Ryerson Limited
  56. 56. Target Audience Options: Rossiter and Percy PerspectiveBrand Loyal Regularly buy theCustomers firm’s product.Favourable Buy focal brand but Brand also buy others. Switchers Customers not New category purchasing within a users product category. Not consistently Non- Other brand purchasing focalCustomers switchers brand. Other brand Loyal to another loyals brand. © 2005 McGraw-Hill Ryerson Limited