Consumer Behaviour Chapter 1
Slide 1
 Consumers have more power today.
 Meeting consumers expectations or go out of business
 Consumers have access to greater amounts of information on products and reviews for
potential products
 Lots of variety of products, unique time whereby we have instantaneous access to all of
human kinds knowledge.
 Consumer behaviour, expectations has changed a lot.
 Consumer is empowered.
 As marketers we need to realize and recognize that if we piss off some consumer, they’ll
go to a competitor.
Slide 2 Outline
 Background
 CB-Overview
What is it?
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Consumer Analysis: recognize to understand the consumer, we need to understand the
consumer intimately
Anchor CB in marketing
 Applicable vs theoretical – use examples
 Relevant – to current marketing
To do marketing we need to understand consumer behaviour
 Map course
Slide 3 Background
What is marketing? ANS marketing we recognize it’s a broad field, boil it all down to a core
nugget, the core is called the marketing concept
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Marketing concept: Meeting the needs and wants of the customer profitably.
How do we fulfil this marketing concept
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Market orientation: being the operationization of the marketing concept. (How do we
do the marketing concept), 3 stage kind of process- marketing orientation
1) getting market place information (consumer research)
2) Bringing it into the firm and disseminating it (moving it around, R&D guys,
leadership etc)
3) reacting to it
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CB: Balance in approach
Slide 4 What is Consumer Behaviour
 A multitude of form of definitions
CB is a whole process, not a static concept, its intimately related to consumers needs and
wants, also CB it incorpates an approach to pre-purchase, the actual purchase and to post
purchase, and ultimate disposal. CB spans all of that.
 Consumer choice / Decision Process
 Core nugget of CB, is about decision making process and all the things that are involved
in that
1) Problem Recognition: Figure out problem we have
2) Search: Search for information
 3) Evaluation: whats our best solution
 4) Decision: Make that purchase, where do we go online, In-store?
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5) Post-purchase behaviour
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Mothersbaugh et al. 2022 p.6
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“Customer-Centrism” = Critical
Slide 5
 Consumer choice / Decision Process
 Core nugget of CB, is about decision making process and all the things that are involved
in that
 Problem Recogntion
 Search
 Evalaution
 Decision
 Post-purchase behaviour
Slide 6 CB and MKTG Strat
 CB Tied to a broader domain of marketing, to do marketing we need to understand CB
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Connected
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Mktg Strat:
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Influence the behavioural setting such that the probability the consumer will purchase
our desired product is enhanced and the probability they’ll engage in another behaviour
Is decrease.
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Influence the behavioural setting: For example, signage (way price is presented), make
consumer behave in a certain way, or inside the retail environment how the consumer
acts in that place,
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Costco wont see any signage, so they can look around and brings on a sense of discovery
or their inventory moves around, feeds into the notion of discovery. Influence a
behavioural setting increasing desirability of purchasing products.
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Give consumer big shopping carts, tendency to fill the cart up.
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Con rft Sched: Control reinforcement and scheduling in order to achieve our goals
Means rewarding the consumer with something, loyalty points, enhance same brand
purchasing, enhance loyalty and more purchasers, great volumes of purchases,
rewarding the consumer with a sale, for example.
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DO ALL THIS BY understand the consumer
Slide 7 Customer Analysis
Develop an overall marketing strategy,
1) Objectives: What we want to accomplish
2) Customer Targets: who to target
3) Competitor targets: who are competitors, strength and weaknesses
4) Core Strategy: What is our core marketing strategy, we can have our core marketing
strategy based on growth or a positioning strategy.
5) Implementation: marketing mix (product, promotion, price, place – CRM- Customer
Relationship Management) by arranging our 4 P framework we do the above. Organize
all 4 P’s in order to impose the above
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How do we do customer targeting, do that by consumer behaviour, how we effect
customer Targets
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Then Ask us the 5 W’s, who are the consumer, where do they go
1) Who - are our consumers.
Slide 8 1) Who are the Customers
 Understanding the consumer is a starting point to understand who are our customers
 Who are our current customers,
 who are our potential customers,
 who are our previous customers and why did they leave us and
 who are the competitor customers?
MUST understand the customer, we understand consumers and learn about them by engaging
in market research (customer research)
Customers?
Who? -> segmentation: Do this through segmentation: Segmentation is breaking down that
mass market into identifiable groups of consumers
Slide 9 Market Segmentation
 We want to do this because as business ppl we cant be all things to all people, not
everyone wants a big mac, or a Ford truck
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What?
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Tailor Marketing: Tailor our marketing efforts to those particular consumers (segments
of consumer’s)
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Efficiency and Effectiveness, need to build this into our marketing strategies, how well
we can do something’s, effectives is whether or not we do it
Segmentation vs choosing segments: Break mass market into groups / segments, then
select several segments to focus our marketing efforts.
That segment is then known as our target market
Slide 10 Market Segments
 Groups of customers that have similar needs and wants, typically seek similar benefits
Similar buying patterns, captures the essence of what a segment is all about
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Target customers (pieces you want to target)***
Slide 11 Ways to Segment
 Geographic: Location of consumers, regions of country, countries, North vs south side of
a street, very broad or specific.
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Demographic: university students (educational level), income, single mothers 30-40)
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Psychographic: two major things, lifestyle and Personality, Lifestyle about activities a
consumers engages in throughout time.
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Behavioural: Frequency of purchase, where they go
Slide 12 A composite Approach
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Combine
E.G -auto makers
25-44 age segment and “off-road driving”
Demographic and behavioural
Slide 13 Requirements of effective segmentations
 Distinctive in the sense of the segments is segmented
 Measurable: Marketing efforts, has to be large enough or can it grow more in the future
 Substantial:
 Accessible: Is our segment accessible
Slide 14 Criteria -satisfied by segmentation
 Homo. Within, Hetero. Between
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Size
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Growth
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Competitive position: Can we adopt a competitive position within the segment, is it
already saturated, can we even compete?
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Identifiable and Accessible
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Cost: Segment in Northern Canada would cost a lot more money to access them.
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Compatibility: Strategic compatibility, whatever segment we choose should be
consistent with our brand and marketing strategy.
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EG) Would Apple go after an aged demographic aged 80 years + no they would not, not
their branding strategy, more froward looking brand and young
Slide 15 Monstanto’s “Round Up”
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Industrial segment for farmers and a consumer segment as well, 2 major segmentation
groups
Also used for farmers as well. After Winter they will blanket the field in round up and kill
all the weeds and a short half-life, so seed can be put in pretty quickly after.
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Farm Market: 8.99 /litre, Add 80 litres of water and applied price is .10 cents a litre
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Consumer Market: 10 bucks a litre, add no water, applied price (10 bucks a litre)
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Scotts = MKTG agent
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For each segment we have a ubique 4 P configuration dedicated to each one of those
two Segments.
Slide 16 The New Product Consumer Adoption Categories Bell shaped curve
 Innovators: 2.5% Folks who love practicing option leadership, love being go to ppl for
new technology, not price sensitive, camp out in front of apple store before the launch
of IPAD
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Early adopters: 13.5%
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Early Majority: 34%
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Late majority: 34%
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Laggards: 16%, Avoid new technology at all costs, use old phones in home
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Focus in on one or more of these segments
Slide 17 Alternative Targeting Strategies
 Unfocused strategy, no!
 Focussed strategy: Do this one figure out the segment you want
Slide 18 2) Why do customers Buy?
Trigger: NEED = ideal vs actual state. Laptop dies, that’s the actual situation don’t have a laptop,
triggers a need that needs to be fulfilled.
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Motivation- benefits: Energizing force to satisfy that need. Consumers are seeking
benefits from a product not just attributes
Link: Attributes, We need to link benefits to consumers from the attributes (each
segment seeking their own benefits)
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1st step
Need recognition
Maslow
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Consumers don’t buy attributes, consumers buy benefits EXAM
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Seeking resolution to that need.
Slide 19 Features & Benefits
 “translate attributes (features) onto benefits.
 All benefits are matched to the feature
 A tire, don’t care about composition of the rubber and read size (attributes), im buying a
comfortable ride, smooth ride, snow and mud handling, stopping distance (benefits
youre buying).
 Need to highlight to the consumer the benefits
Slide 20 3) How do Consumers Make Purchase Decisions?
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Info Search
Internal and external sources, search for info, starts internal then goes external (ask
family members)
 Categorization
Evoked / consideration set: My truck blew up do I consider a Ram 1500 or Toyota Tundra or
ford raptor, then we pick out of that set
Evaluation
 Multi-attribute model
Slide 21 Continued, How do Consumers Make Purchase Decisions
Post Purchase Evaluation:
1) Assessment of satisfaction, based off of satisfaction am I going to tell people
about it?
2) Word of mouth
3. Cognitive Dissonance: Tense about buying a new house for 500k, anxiety that arises
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Slide 22 How do Consumers Make Purchase Decisions?
 External Influences
 Key influences include”
 Group (soc Inf)
 Product class MKTG
 Situational
Slide 23 4) Where and (5) when do customers buy?
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Where? Wait until
When? Wait until things go on sale, black Friday?
Slide 24
 Understanding the consumer – key to analyzing markets
 The Consumer is central
 Sounds easy… but its not
 Segmentation- critical importance to marketing
 Learning CB is instrumental
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