Summary/ Course Notes Consumer Behavior & Marketing Essay

Why is CB part tot marketing? Term: marketing concept -Successful companies: designing the entire organization to serve customers and stay close to them, Committed to developing quality products and services and selling them at a price that gives consumer high value -All departments focus on doing their jobs in ways that enhance the value of products to consumers -Three major reasons why companies are making changes to serve customers better 1. Dramatic success of Japanese companies providing consumers with alee laden products 2.

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Dramatic increase in the quality Of consumer and marketing research 3. Development of the Internet as a marketing tool Slide 3: What is CB? Term: Consumer behavior -In other words, consumer behavior involves the thoughts and feelings people experience and the actions they perform in the consumption process, -Includes also all the things in the environment that that influence these thoughts, feelings and actions, Include: -Comments from other consumers -Advertisements -Price information -Packaging -Product appearance -Blobs and many others Consumer behavior is dynamic, involves interactions, and involves exchanges

Dynamic: thinking, feelings, and actions Of individual consumers, targeted consumer groups, and society at large are constantly changing Involves interactions: Marketers need to understand what products and brands mean to consumers, what consumers must do to purchase and use them, and what influences shopping, purchase and consumption.

Involves exchanges: people give up something of value to others and receive something in return Slide 4: How is CB studied? -Approaches to Consumer Behavior Research Interpretive approach: based on theories and methods of cultural anthropology.

This approach seeks to develop a deep understanding Of consumption and its meanings. Long interviews and focus groups are used to understand what products and services mean to consumers and what consumers experience in purchasing them. Other study example: how advertising depicts women, or how possessions influence self-images Traditional approach: based on theories and methods from cognitive, social and behavioral psychology, as well as sociology, It seeks to explain consumer decision-making ad behavior.

Studies involve experiments and surveys to test theories and develop insights into such things as consumer information recessing, decision process, and social influences on consumer behavior. Marketing science approach: based on theories and methods from economics and statistics, It commonly involves developing and testing mathematical models to predict the impact of marketing strategies on consumer choice and behavior.

Involves math modeling and simulation. Slide 5: Who uses knowledge about CB? -Uses of Consumer Behavior Research (CAB) Three groups use knowledge about consumer behavior and consumer behavior research: Marketing organizations, Government and political organizations and Consumers. Marketing organizations: not only businesses trying to sell, also hospitals, museums. Parks, nun’s, law firms and other organizations that seek exchanges with consumers.

D They develop marketing strategies according to CAB Government and political organizations: the major concern of these organizations is monitoring and regulating exchanges between marketing organizations and consumers. (This is accomplished through the development of public policies) њ Consumers: includes both consumers and organizational buyers who exchange resources for various goods and services.

Their interest is in making exchanges hat help them achieve their goals and in understanding their own behavior, [l They are involved in consumer activities Term: Marketing strategy Slide 6: Summary Chapter 2: A Framework For Consumer Analysis Slide 2: Wheel of Consumer Analysis: Reciprocal System (Drawn in notebook) Slide 3: Elements of Wheel Consumer Affect and Cognition: Those are mental responses consumers exhibit toward stimuli and events in their environment Affect- refers to feelings about stimuli and events (whether they like or dislike a product, favorable iv, unfavorable) includes relatively intense emotions such s anger and love, less strong feeling states as satisfaction or frustration, moods such as boredom or relaxation and milder overall attitudes such as liking Mac Dona’s big Mac. Mild vs.. Intense Cognition= refers to thinking (beliefs about a certain product) C refers to mental structures and processes involved in thinking, understanding and interpreting stimuli and events. It includes the knowledge, meanings and beliefs that consumers have developed from their experiences and stored in their memories. Paying attention to and understanding, remembering, forming evaluations, and aging purchasing decisions.

Cognition can involve conscious and automatic processes. Slide 4: Consumer Behavior: Behavior= physical actions of consumers that can be directly observed and measured by others. It is critical for organization outcomes, because only through behavior sales and profits can be earned, Influence overt behavior by for instance offering superior quality, lower prices, greater convenience, easier availability, but also by offering products, stores, brands that are trendier, more popular and more prestigious that competitive offerings. Consumer Environment: Environment= refers to everything external to consumers that influences what they think, feel and do.

It includes social stimuli, such as the actions of others in cultures, subcultures, social classes, reference groups, and families that influence consumers, It also includes other physical stimuli, such as stores, products, advertisements, and signs that can influence consumers’ thoughts, feelings and actions. It is the medium in which stimuli are placed to influence consumers. Slide 5: Wheel as a Reciprocal System: Consumer Analysis Implications Examples of the effects of part of wheel on each other page 23!! Reciprocal system= any of the elements can be either a cause or an effect of a change at any particular time. It being a reciprocal system has five implications: 1. Comprehensive analysis of consumers must consider all three elements and the relationships among them. (Study elements and their interrelationship) 2. Any of the three may be the starting point. 3.

Because this view is dynamic, it recognizes that consumers can continuously change. 4. It can be used to analyze not only a single/individual consumer but also a group tot consumers that make up the target market (market segments), larger group of consumers made up of all the purchasers of a product in an industry (industries), or entire societies. 5. This framework for analyzing consumers highlights the importance of consumer research and analysis in developing marketing strategies. (Consumers influence marketing strategy and vice versa) Level of consumer analysis (4) Societies: Changes in what a society believes in and how its members behave.

Example, greater concern with health and fitness D changes the environment (medical research reports), cognition and affect (beliefs about how to live longer ND healthier), behavior (eating healthful foods and exercising), and marketing strategies (development and promotion of health foods, exercise equipment and apparel products) Industries: relationships of a company and its competitors with consumers in specific industries. Example. The effects of health concerns on the beer Industry. Elite beer from Miller took advantage of this trend and created the market for reduced-calorie beer. Market Segments: groups of consumer who have similarity in cognition, affect, behavior and environment. Divide the industry into segments and try to appeal cost strongly to one or more of them. Example, due to trend to become more involved in sports, shoe companies tried to create a pair of shoes to play a sport effectively, so e. G. Specialized for basketball.

Individual consumers: consumption history, a single purchase, or some aspect of a purchase for a specific consumer Slide 6: Relation with Marketing Strategy Illustration in notebook!! Consumer research and analysis: Consumer research includes: test marketing, advertising pretests, sales promotion effects, analysis Of sales and market share data, pricing experiments, raffia and shopping patterns, surveys and many others -Logical sequence: first research and analyze what consumers think, feel and do relative to a company’s offerings and those Of competitors. CIA in addition, an analysis of consumer environments is called for to see what factors are currently influencing them and what changes are occurring.

Marketing starter’ and development: Based on this research and analysis, a marketing strategy is developed that involves setting objectives, specifying an appropriate target market and developing a marketing mix (product, price, promotion, place) to influence it. Consumer research and analysis should not end after marketing strategy implementation. Research should continue to investigate the effects tot the strategy and whether it could be made more effective. Prom a consumer analysis point view, marketing strategy= a set of stimuli placed in consumers’ environments designed to influence their affect, cognition and behavior. (products, brands, packaging, advertisements, coupons, stores, credit cards, price tags, salespeople’s communications and in some cases, sounds (music), smells (perfume), and Other sensory cues. Chapter 15: Market Segmentation and Product Positioning

Slide 2: Market Segmentation Market segmentation= the process of dividing a market into groups of similar consumers and selecting the most appropriate groups and individuals for the firm to serve 0 Consumers purchase goals, product knowledge, involvement and purchase behavior vary CLC If a firm can serve a particular group profitably, it compromises a viable market segment 5 tasks in market segmentation (strongly inter-related): 1. Analyze consumer-product relationships 2. Investigate segmentation bases 3. Develop product positioning 4. Select segmentation strategy 5. Design marketing mix strategy Slide 3: Task 1: Analyze Consumer-product Relationship [I Entails analysis of the affect and cognition, behavior, and environments involved in the purchase/consumption process for the particular product. General approaches: Brainstorm product concept to figure out what types of consumers are likely to purchase and use the product and how they differ from those less likely to buy. Primary research (e. G. Ochs groups) to identify differences in attributes, benefits, and values Of potential markets Secondary research to determine market differences in potential target markets and relative sizes of those markets, and evolve a better understanding Of consumers Of this or similar products Slide 4: Task 2: Investigate Segmentation Bases -Benefit Segmentation: Benefit segmentation- underlying beliefs is that the benefits people seek in consuming a given product are the basic reasons for the existence of true markets segments. C] This approach thus attempts to measure consumer value systems and consumers’ perceptions of various brands in a product class Haley, four basic segments: Sensory, Sociable, Worrier, and Independent -Cryptographic segmentation: Cryptographic segmentation= divides markets on differences in consumer epistyles.

Lifestyles are measured by asking consumer about their activities (work, hobbies, vacations), interests (family, job, community), and opinions (about social issues, politics, business) D AI questions This kind is based on the idea that “the more you know and understand about consumers, the more effectively you can communicate and market to them” Best-known is VAL’S, which originally stood for Values and Lifestyles. Exhibit 15. 3 page 370 figure * explanations: VAL’S groups are arranged horizontally by three primary motivations (Ideals. Achievement, Self-expression) and vertically by high or low resources. Resources include income, education, self-confidence, leadership skills and energy.

C Ideals-motivated thinkers and believers are driven by knowledge and principles Achievement-motivated achievers and striver are driven by a desire to demonstrate success to their peers D Self-expression- motivated experiences and makers are driven by a desire for social or physical activity, variety, and risk taking [l Innovators with extremely high resource levels are very active consumers and are therefore difficult to place in one of the three motivations CIA Survivors on the opposite end of the resource spectrum are not active enough consumers to have a clearly defined motivational category -Person/Situation Segmentation Person/situation segmentation-? division on the basis of the usage situation in conjunction with individual differences among consumers, Example, clothing and footwear markets are also divided on dimensions such as weather conditions, physical activities and social events.

This approach involves following g Steps: In the book, page 372!!!!! This approach includes all four of the major factors (affect etc. ) and thus offers a more comprehensive analysis than many Other approaches. -Stereographic segmentation Stereographic segmentation= identifies specific households in a market by focusing on local neighborhood geography (such as zip codes) to create classifications of actual, addressable, amenable neighborhoods where consumers live and shop. PRIZE EN is “Potential Ranking Index of ZIP Markets – New Evolution” 0 system classifies every US neighborhood into one of 66 segments on the basis of social group and lifestyle stage. Based on the assumptions that consumers in particular neighborhoods are similar in many respects and that the best prospects are those who actually use a product or other consumer like them Slide 5: Task 3: Develop Product Positioning Product positioning: positioning the product relative to competing products in the minds of the consumers 0 form a particular brand image in the consumers’ minds (Example: JP as the ‘uncoil’) -Positioning by attribute= associating a product with an attribute, a product feature, or a customer feature. (e. G. Volvo stresses safety and durability) LIE Sometimes a product can be positioned in terms of two or more attributes simultaneously Al Price/quality attribute dimension is often used -Positioning by use or application- associating product with its use. Wheaten it can be used or applied, (e. G.

Campbell soup for lunch, AT used for long- distance calling -Positioning by product user (or class of users)- associating product with the person who uses it, (shampoo for babies, or mild shampoo for people who wash hair often) -Positioning by product class= associating a product with a product class (e. G. Some margarine’s are positioned with respect to butter) -Positioning by competitors= often the major purpose is to convince consumers that a brand is better than the market leader (or another well-accepted brand) on important attributes. (More tasty burgers of BC than Mac Donaldson due to flame broiled, Avis: We’re No. 2, so we try harder) Positioning maps= visual depiction of consumers’ perceptions of competitive products, brands or models. (Map for automobiles exhibit 15. Page 379) Slide 6: Task 4: Select Segmentation Strategy Segmentation strategy: Alternative strategies -Don’t launch the product -Be a mass marketer -Market to one segment -Different segments with different marketing strategies It may be appropriate to be a mass marketer (serve entire market) for at least three reasons: 1. When the market is so small that marketing to a portion of it is not profitable 2, When heavy users make up such a large proportion of the sales volume that they are the only relevant target 3. When the brand is dominant in the market and targeting to a few segments would not benefit sales and profits Criteria on which to base segmentation strategy decisions, viable segment must be: 1. Measurable: marketers must be able to measure the segment’s size and characteristics, Meaningful: a meaningful segment is one that is large enough to have sufficient sales and growth potential to offer long-run profits .

Marketable: A marketable segment is one that can be reached and served profitably Slide 7: Task 5: Design Marketing Mix Strategy -Finalize marketing mix for each segment -Marketing mix decisions are usually made in conjunction with (rather than after) target market selection Chapter 16: Consumer Behavior and Product Strategy Slide 3: Product Affect and Cognition Satisfaction,’dissatisfaction -Consumer satisfaction- in theory, if consumers are satisfied with a product, service, or brand, they will be more likely to continue to purchase it and tell others about their favorable experiences with it. It they are dissatisfied, they will be more likely to switch products or brands and complain to manufacturers, retailers, and other consumers -Expectancy discrimination with performance approach (most current formulation) [l views consumer satisfaction as the degree to which a product or service provides a pleasurable level of consumption-related fulfillment. It is the degree to which a product ‘s performance exceeds the consumers’ expectations for it. Exhibit 16. Page 388 IMPORTANT -Purchases expectations= the consumer’s beliefs about anticipated performance of the product Postprocessor perceptions= the consumers thoughts about how well the product performed CIA Discrimination: refers to the difference between purchases expectations and postprocessor perceptions Three types: -Positive discrimination: product performance is better than expected (CIA lead to satisfaction or a pleasurable fulfillment) -Negative discrimination: product performance is lower than expected (D leads to dissatisfaction) -Neutral discrimination: performance perceptions just meet expectations Generalizations about dissatisfaction and complaint behavior: 1. Tend to be members of more upscale socioeconomic groups . Dogmatism, locus of control and self-confidence are only weakly related to complaint behavior, it at all 3. Severity tot dissatisfaction is positively related to complaint behavior 4. The greater the blame of dissatisfaction on someone other than dissatisfied party, the greater the likelihood of complaint 5.

The more positive the perception of retailer responsiveness to consumer complaints, the greater the likelihood of complaints Balancing paradigm 0 satisfaction should be studied more broadly that at the level of a single transaction. It is a more active and dynamic phenomenon, situational factors (emotions/moods) Slide 4: Product Behavior -TWO classes Of product behavior: Product contact -E. G. Work with computers in school and when buying a computer yourself, you tend to buy this one due to previous product contact locating product in store, examining it and taking it to the checkout counter -Free sample in the mail, or in a store – Borrow product from a friend -Receive product as a gift -Someone using it and experiencing it vicariously Brand Loyalty/variety seeking Loyalty to particular brands is decreasing in many product categories Exhibit 16. Pour categories of consumer purchasing patterns based on the degree of cognitive commitment and number of brands purchased in a particular time period High – Single: Brand loyalty High – Multiple: Variety seeking Low – Single: Repeat purchase behavior Low – Multiple: Derived varied behavior Brand loyalty an intrinsic commitment to repeatedly purchase a particular brand Variety seeking: cognitive commitment to purchase different brands because of factors such as the stimulation involved in trying different brands, curiosity, novelty, or overcoming boredom with the same old thing Alleges rate is also important” Z] Exhibit 16. 4 page 392 Useful strategies page 390 at the end!! Slide 5: Product Environment CIA Refers to product related stimuli that consumers attend to and comprehend. Two types of environmental stimuli we focus on: product attributes and packaging Product attributes: -Product attributes off new t-shirt might include color, material, sleeve length, type and number of buttons, and type of collar. Also, price might be considered, or the Store selling the t-shirt.

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