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Admin Stuff
• Name : Puan Haslinda Mohd. Yunus
haslinda@sunway.edu.my
• Consultation Hours :
▪ Monday @ 3.30pm –4.30pm
▪ Tuesday @ 9.30am - 10.30am
▪ Tuesday @ 3.30pm – 4.30pm
▪ Thursday @ 11.30am – 12.30pm
▪ Or by appointments
(via imail at least 48 hours, excluding
weekends, before the appointment time)
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Admin Stuff
• Name : Mr. Alvin Fong
alvinf@sunway.edu.my
• Consultation Hours :
▪ Wednesday @ 10.30am – 12.30pm
▪ Wednesday @ 2.30pm – 3.30pm
▪ Friday @ 11.30am - 12.30pm
▪ Or by appointments
(via imail at least 48 hours, excluding
weekends, before the appointment time)
Admin Stuff
Missing lectures will weaken
• 2 hours of lectures
your understanding of the
core topics and hence will
impact on your assessments
• 1 hour of tutorial
and final exam
• Subject Guide, text book and
recommended readings.
Pre-requisite:
BHO 1171 (Introduction to Marketing)
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Text Books
• Text Book
– East, Singh, Wright, & Vanhuele 2017, Consumer
Behaviour: Applications in Marketing (3rd edition).
• Recommended Reading
– Sharp 2010. How brands grow.
East, Singh, Wright & Vanheuele Consumer Behaviour
3rd edition
ISBN: 9781473919501
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Unit Assessment
Assessment
Weightage
Due Date
Format
1. Assessment One
(Online Quiz B4 Class)
15%
Week 1 – Week 10
2. Assessment Two
(Online Quiz After Class)
15%
3. Group Report & Video
30%
Week 11 (21 Oct)
Short Report &
Video
4. Final Exam
40%
Assigned Time
Short-Answer
Essay
MCQ
Starts
today!
Week 2 – Week 11
Starts on
9/8
Short-Answer
Questions
VU Collaborate
• Consumer Behaviour Web Site:
• Electronic copies of lecture notes
• Important documents
• Discussion forum
• Resources
• Strongly recommended you visit this site at
least once a week.
For Sunway students, Elearn can be accessed too.
(Please go through the self-enrolment process on
your own using BHO2434 as password)
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Lectures and Tutorials
Class Mode
Punctuality
Attendance
Participation
Learning!
“You are responsible for your
own learning”
• Lectures, readings, and assessments are
all important.
• The lectures will explain the overheads
rather than just repeat them, so
attendance is important.
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Course Topics
•
•
•
•
•
•
•
Introduction
Loyalty
Brand equity
Stationary markets
Market change
Consumer differences
Predicting and explaining
behaviour
• Biases in decision
making
• Satisfaction
• Price response
• Price promotions
• Shopper behaviour
• Word of mouth
• Advertising
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Purpose of this Lecture
• To explain the difference between marketing and consumer
behaviour
• To show the bases of different consumer behaviours
– how do consumers decide?
• To remind you of some familiar ideas that we use in
explanations
• Read: Ch1 of East, Singh, Wright and Vanhuele (2017)
Consumer Behaviour: Advances in Marketing, Sage
Section 1:
Consumer Behaviour is ...
• Factual: e.g. are well-off people more loyal?
– How do you define loyalty?
• Explanative: why are some customers more loyal?
• Investigative: many techniques such as:
survey, experiment, analysis of Internet posts
• Quantitative: how much more loyal?
• So, it is evidence-based
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Your Definition???
• …What is Consumer Behaviour?
• …How does knowledge of consumer
behaviour help marketers?
Definition
“ Consumer behaviour is a discipline dealing with
how and why consumers purchase (or do not
purchase) goods and services”
(Quester et al. 2011)
“Consumer behaviour is about human responses in a
commercial world: how and why people buy and
use products, how they react to prices, advertising
and other promotional tools…”
(East 1997)
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Marketing and Consumer Behaviour
• Marketing is prescriptive: how you should operate as a
marketer
• Buyer behaviour is descriptive: how consumers and
industrial buyers do behave and react to market
intervention
• The two approaches are linked: prescribe what works
and don’t prescribe what doesn’t work
• Practitioners may not know or may ignore evidence
– the more knowledgeable person has an advantage
So is Consumer Behaviour about
Manipulating your marketing mix to
encourage consumers to buy your brand…
The Importance of Studying CB
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An Example: The Aspirin Pack
• Viscusi (1984) found that the provision of
more advanced, tamper-proof packages for
aspirin resulted in more child poisoning
• Why do you think this occurred?
• What lessons do we take from this?
Section 2:
Three Models of Purchase
1. Cognitive. Deliberate decision-making, based on
personal knowledge and opportunity.
– often applies to first-time decisions or changes
2. Reinforcement. Behaviour steered by opportunity
and reinforcement (environmental control)
– explains how the behaviour is acquired
3. Habit. Past learning cued by environmental stimuli
(so environmental control again). Brand packs,
atmospheric effects
– applies to much repeat purchase
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The Cognitive Model: Rational Choice
Buying a Car?
• Consumers consider and evaluate evidence, so
marketers need to
– control consumer behaviour with information
– make factual claims in advertising
• Requires the decision-maker to have knowledge,
time and processing capacity
– but how much do people use information sources?
– do they always have a second alternative?
• Rationality is often partial as in satisficing (Simon)
– medical diagnosis as satisficing
• But rational processing does sometimes occur
Satisficing Model
“Accepting the first option to solve a problem”
• For example:
•
•
Your freezer is spoilt. During the first visit to an electrical shop,
you found an appropriate model, hence you purchase it there and
then.
If the shop does not offer a suitable freezer, you may turn to
other shops.
“the order in which products are evaluated is important since
the first satisfactory solution will be the one that is adopted”
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The Cognitive Model: Rational Choice
• Behaviour is determined, in
whole or part, by internal
processing of information, or
the action of mental traits.
• Decisions rests on beliefs
about alternatives, which are
investigated and compared.
Exercise:
Your Last Computer Purchase
• How did you choose? Did you
– read brochures? Consult others?
– use the Web to find bargains?
– build a checklist?
– have a consideration set of more than one?
– did you satisfice?
• How did opportunity and social influence
affect your choice?
– Did you have a choice?
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Overall Model of
Consumer Behaviour
How Consumer Influences Drive
Marketing Decisions
CB Influences - Phone Ad
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Reinforcement Approach
You purchase the product because of the
discount (reinforcement).
Stimulus (cue)
Response
Reinforcement
Reinforcement Approach
“How it works”
“Action is explained by reference to the
environmental circumstances that act on a
person”.
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Implications of Reinforcement
• To manage consumers, manage environmental
reinforcers and opportunities, e.g.
– 100% increase in facing in supermarkets gives 20%
increase in sales
– loyalty schemes and discounts
– control purchase through distribution
• Generalisation. Consumers adopt products
more easily if they seem familiar. Brand
extensions, look and feel familiar.
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Habit Approach
• What you learn becomes a habit
• Pre-established pattern of behaviour (the response
is automatic)
– Elicited by certain situations
• E.g., buy nice wine when drinking with friends, buy a cheaper
beverage when drinking at home
– Markets are generally in a stable state
• Determine buying habits when young
– But do you buy brands because you are familiar with
them?
• my wife has one/uses that brand
The Habit Paradigm
• To manage the consumer, provide the right cues so
that purchase is stimulated
– brand names, packaging and shop contexts serve as cues
to recognition, recall and purchase. These need to be
shown in ads to build associations.
– classical music induced up-market wine choice (Areni and
Kim 1994).
– stimulus influence of pack in the order: colour>size>shape
according to Williams, L.G. (1966) Perception and
Psychophysics, 1, 315–318) – but this may vary with the
category.
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Your Habits?
• Do you
– use the same route to work each day?
– have you settled into unhealthy eating habits?
• Could you change
– your route to work?
– bad dietary habits, e.g. sugar in tea, junk food?
• Are your current brand preferences really the
best for you?
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Figure 1.1. Five-year changes in the use of the Internet
by UK shoppers
(Nielsen, The State of the Nation, 2011)
51%
71%
Every/Most days
78%
12%
8%
8%
About 2-3 times a
week
About once a week
6%
4%
3%
About once a
fortnight
2%
1%
1%
About once a
month
2%
1%
1%
Less than once a
month
Oct-06
Jan-10
Jan-11
3%
2%
2%
25%
Never use
12%
7%
Overview
• Textbooks still tend to emphasise rational decisionmaking and the freedom of the consumer:
– well thought out decisions are important but rare
– relevant to new product adoption and switching
• Many purchases are routine, habitual and controlled
by the consumer’s environment.
• The two are distinguished by involvement. Purchases
that are more novel, important, risky and personally
relevant get more conscious thought.
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Consumer Involvement
Low Involvement
High Involvement
Involvement Continuum
1. Routine
•
•
•
Most purchases
consumers make
are routine (e.g.
FMCGs):
Habitually buy from
a small repertoire of
brands
Differences
between brands
seen as trivial
2. Limited
•
•
3. Extended
Occasional
•
purchases
•
moderately
expensive
•
e.g. holiday, new
TV, etc.
•
•
More deliberate
decision making
some information
search and
evaluation takes
place
Rare purchases:
more serious
investment of
money, time and
effort,
•
•
e.g. new car or
home.
Involves much
information and
evaluation
Section 3:
Classifications and Explanations:
Categories, Brands and Variants
• To a marketer:
– a brand is a set of signals which identify a type of product and
differentiate it from others. Branding includes the name,
package (shape, colour, etc.) and other symbols (e.g. the Burger
King)
• To a consumer:
– the brand is one of many signals and may be quite weak
compared to other cues (consider wine).
– The brand is the producer/chateau but what about the colour,
grape variety, country of origin, price, sweetness, strength, age.
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Categories, Brands and Variants
Category
(product type)
Cars
Brand
(make)
VW, Ford
Sub-brand
(model)
Golf, Focus
Variant
Diesel estate
What is an SKU?
https://www.tradegecko.com/blog/managing-inventory-with-skus
Differentiation
• Often the main differences are between the variants
– cars: small, medium, executive saloons, SUVs
– sugar: Demerara, castor, granulated
• Some products differ only in brand name (and price)
– Tate and Lyle versus Silver Spoon sugar
• Raises a problem in positioning
– your brand must be detectably different from others but
is more differentiation an advantage?
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The Importance of Market Share
Mobile phone shares in 2005
Brand
Nokia
Sony-Ericsson
Motorola
Samsung
Siemens
Others
Market share
(%)
40
25
14
10
4
7
Share of
Recommendations
40
21
20
11
2
4
Many brand performance statistics reflect market share
Other Distinctions
• Goods and services
• Repertoire and subscription categories
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Market Structure
• There are two markets:
– Subscription
• You subscribe to a brand for a period of time
• Aggregately, brand switching can be predicted
• E.g. banks, insurance, ISPs, telephone
• Repertoire
• You cycle through a small number of brands on an
‘as-if’ random basis
• Consumers purchase more than one brand
• Aggregately, brand sharing can be predicted
• FMCGs, etc
45
Readings
• To review these, and the topics presented in
more detail, read Ch1 of East, Singh, Wright
and Vanhuele (2017) Consumer Behaviour:
Advances in Marketing, Sage.
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Online Quizzes
Lecture Focus
Before Class MCQ Test
After Class MCQ Test
(A1)
(A2)
Opening and closing
date/time (Malaysia)
Opening and closing
date/time (Malaysia)
Starts 1 Aug/6am (TODAY!)
Starts 9 Aug/6am
(AFTER L1 in WEEK 2)
Introduction to the Unit and the Tutorial
Programme and The assignments!
Ideas and Explanations in Consumer Research
Chapter 1
Customer Loyalty
Closes 7 Aug/8pm
Chapter 2
Closes 14 Aug/8pm