Consumer Behaviour
• Resource Person: Prof. Shahbaz Shamsi
1-1
Consumers Rule
Chapter 1
Welcome to Consumer
Behaviour
• Why study consumer behaviour?
• What is consumer behaviour?
• How does it affect marketing strategy?
1-3
The Marketing Car
Marketing manager
Advertising
Consumer behavior
‘the engine of marketing’
Market research
Distribution
1-4
Consumer behaviour
knowledge is...
the ‘engine’ of a marketing strategy
1-5
Subject Objectives
• Knowledge and understanding
– Theories
Working Model of CB
– Implications for strategic marketing decisions
– A focus on marketing decisions
• Communication skills
– Increase your skills in developing and
presenting ideas orally and in writing
1-6
Reading
• Consumer Behaviour: Buying, Having and
Being
Michael R. Solomon, 6th Edition
• Consumer Behaviour: Implications for
Marketing Strategy
Neal, Quester and Hawkins, 4th Aust. edition
• Course Pack
1-7
What is Consumer Behavior?
• The study of the
processes involved
when individuals or
groups select,
purchase, use, or
dispose of products,
services, ideas, or
experiences to satisfy
needs and desires
1-8
Definitions of Consumer
Behaviour
• The dynamic interaction of cognition,
behaviour and environmental events by
which human beings conduct the
exchange aspects of their lives
(American Marketing Association)
• A discipline dealing with how and why
consumers purchase (or don’t purchase)
products and services.
(Neal et al.)
1-9
Definitions of Consumer
Behaviour (cont.)
• Those behaviours performed by decisionmaking units in the purchase, usage and
disposal of goods and services
(Kotler & Levy)
• The decision process and physical activity
individuals engage in when evaluating,
acquiring, using or disposing of goods
and services
(London & Della Bitta)
1-10
Definitions of Consumer
Behaviour (cont.)
• Those actions directly involved in
obtaining, consuming, and disposing
of products and services, including the
decision processes .
(Engel, Blackwell & Miniard)
1-11
Consumer Behavior is a “Process”
CONSUMER’S
PERSPECTIVE
MARKETER’S
PERSPECTIVE
PREPURCHASE
ISSUES
How does a consumer
decide about needing
a product?
How are consumer
attitudes
formed/changed?
PURCHASE
ISSUES
Is product acquisition
a stressful or pleasant
experience?
How do situational
factors affect
purchase decision?
POSTPURCHASE
ISSUES
Does product provide
pleasure or perform
function? How is
product disposed of?
What determines
customer satisfaction
and repurchase?
Figure 1.1 (Abridged)
1-12
Actors in Consumer Behavior
• Consumer: A person who identifies a need
or desire, makes a purchase, and then
disposes of the product
– Purchaser vs. User vs. Influencer vs. Payer
– Organization/group as consumer
1-13
Consumers’ Impact On
Marketing Strategy
• Understanding consumer behavior is good
business
– Understanding people/organizations to satisfy
consumers’ needs
– Knowledge and data about customers…
• …Help to define the market
• …Identify threats/opportunities to a brand
1-14
Consumers’ Impact On
Marketing Strategy
• Segmenting Consumers
• Relationship Marketing:
Building Bonds with Consumers
1-15
Segmenting Consumers
• Market Segmentation
– Similar consumers
• Example: “Heavy Users” of
fast-food industry
1-16
Segmenting Consumers:
Demographics
•
•
•
•
•
•
Age
Gender
Family Structure & Marital Status
Social Class & Income
Race & Ethnicity
Geography
1-17
Discussion
• Name some products or services that are
widely used by your social group.
– State whether you agree or disagree with the
notion that these products help to form group
bonds, supporting your argument with
examples from your list of products used by
the group.
1-18
Segmenting Consumers: Lifestyles
• Psychographics
– The way we feel
about ourselves
– The things we value
– The things we do in
our spare time
1-19
Relationship Marketing
• Success = building lifetime relationships
between brands and customers
– Regular interaction with customers
– Database Marketing
1-20
Marketing’s Impact on Consumers
• Marketers significantly influence the world
and the information we learn!
– Advertisements, stores, and products
communicate and persuade
1-21
Marketing’s Impact on Consumers
The Meaning of Consumption
• People often buy products not for what
they do, but for what they mean
– Brands…
• …Convey image/personality
• …Define our place in modern society
• …Help us to form bonds with others who share
similar preferences
1-22
The Meaning of Consumption
Types Of Brand Relationships:
•
•
•
•
Self-Concept Attachment
Nostalgic Attachment
Interdependence
Love
1-23
The Meaning of Consumption
• Four distinct types of consumption
activities
•
•
•
•
Consuming as Experience
Consuming as Integration
Consuming as Classification
Consuming as Play
1-24
Marketing’s Impact on Consumers
The Global Consumer
• Global Consumer
Culture
– People united by common
devotion to:
• Brand name consumer
goods
• Movie stars
• Celebrities
• Leisure activities
– Pressure to understand
similarities and
differences of customers
in various countries
1-25
Marketing’s Impact on Consumers
Virtual Consumption
• Impact of the Web on consumer behavior
– 24/7 shopping without leaving home
– Instantaneous access to news
– Handheld devices & wireless communications
• C2C e-commerce
– Virtual brand communities.
– Consumer chat rooms
1-26
Virtual Consumption (Cont’d)
• “Wired” Americans spend…
– …Less time with friends/family
– …Less time shopping in stores
– …More time working at home after hours
• But, many report that e-mail strengthens
family ties
1-27
Marketing and Reality
• “Blurred boundaries” between marketing
efforts and “the real world”
– Popular culture shaped by marketers
1-28
Marketing Ethics and Public Policy
• Business Ethics: rules of conduct that
guide actions in the marketplace
– What is “Right vs. Wrong”
• Differs among people, organizations, and cultures
1-29
Marketing Ethics
and Public Policy (cont’d)
• Consumers think better of products made
by firms they feel behave ethically
– Marketing “violators”
• Mislabeling package contents
• “Bait-and-switch” selling strategy
• Alcohol/tobacco billboards in low-income
neighborhoods
1-30
Manipulating Needs & Wants
• Marketers tell people what they should
want
– Marketerspace vs. Consumerspace
– Response: Marketers recommend ways to
satisfy basic biological needs
1-31
Are Advertising &
Marketing Necessary?
• Marketers foster materialism
– Response: Products are designed to meet
existing needs
• Economics of Information Perspective
• Discussion: do marketers have the ability
to control our desires or the power to
create needs?
– Is this situation changing as the Internet
creates new ways to interact with companies?
If so, how?
1-32
Do Marketers Promise Miracles?
• Advertising promises “magical” products
– Response: Advertisers simply do not know
enough about people to manipulate them
• Failure rate for new products = 40% to 80%
1-33
Figure 1.2 (Abridged)
MICRO CONSUMER BEHAVIOR
(INDIVIDUAL FOCUS)
MACRO CONS BEHAV
(SOCIAL FOCUS)
Exp Psych
Clinic Psych
Develop Psych
Human Ecology
Microeconomics
Social Psych
Sociology
Macroeconomics
Semiotics/Literary Criticism
Demography
History
Cultural Anthropology
1-34
Strategic Focus
• The field of consumer behavior…
– …as an applied social science
– …to understand consumption for its own sake
1-35
Wheel of Consumer Behavior
Figure 1.3
1-36
How Consumer Influences Drive
Marketing Decisions
1-37
Consumer Lifestyle and Consumer
Decisions
1-38
Consumer Decision Process
1-39
Factors that Determine and Influence
Consumer Lifestyles
1-40
Overall Model of Consumer
Behaviour
1-41
Consumer Behaviour and
Marketing Strategy
•
•
•
•
•
•
•
•
Positioning strategy
Market segmentation
New products
New market applications
Global marketing
Marketing mix
Consumerism
Non-profit marketing
1-42