CHAPTER 2
Developing and Using Information About
Consumer Behavior
CHAPTER SUMMARY
The goal of this chapter is to show that understanding consumer behavior can help marketers to design
marketing programs, help in the development of laws and public policy decisions regarding public safety,
and aid our understanding of how and why we behave as consumers.
Consumer researchers use a variety of research tools to collect information. Some tools focus on what
consumers say (surveys, focus groups, interviews, storytelling) while others emphasize what customers
do (observations, ethnographic research, web-tracking software). Researchers may collect information
from a small sample of consumers (focus groups) or from a larger group (surveys), and they may examine
consumers at a single point in time (experiments) or follow their behavior over time (tracking studies,
database marketing, data mining).
There are many types of consumer researchers, including in-house marketing research departments,
external marketing research firms, advertising agencies, syndicated data services, retailers, foundations,
the government, academic institutions, and consumer organizations. Data that researchers collect for their
own purposes is called primary data. Data collected by one entity and later used by another entity for a
different purpose is called secondary data. The collected data allows marketers to understand how
markets are segmented, pinpoint the most viable targets for marketing tactics, decide how an offering
should be positioned, and make informed marketing mix decisions.
Consumer research, which is essential to the development of successful goods and services, raises ethical
issues. The positive results of research are better consumption experiences and the opportunity to build
stronger relationships between marketers and consumers. On the other hand, research, which is expensive
to conduct and may lead to higher costs for consumers, can invade consumers’ privacy and can be
misused.
CHAPTER OUTLINE
I.
Consumer Behavior Research Methods
A. Many tools are available for the consumer researcher to use.
1. A survey is a written instrument that asks consumers to respond to a predetermined set of
research questions.
a) Surveys may be used to understand a specific customer segment, gather
demographic information, and help marketers learn about media usage and product
purchase.
2. Focus groups are gatherings of 6 to 12 consumers who are asked to discuss an offering or
an issue and are led by a moderator.
a) The groups may be conducted in person, by telephone, or by use of a computer.
3. Interviews are one-on-one sessions and are appropriate for sensitive, confidential, or
emotionally charged topics.
4. Consumers are sometimes asked to tell stories about products, respond to pictures or
photographs, or keep diaries.
The information helps marketers to understand consumers’ needs, identify product
attributes that will meet these needs, determine what consumers think of a
particular store and/or purchase situation.
Experiments help marketers determine whether a marketing phenomenon affects
consumer behavior.
a) By controlling variables and randomly assigning consumers to “treatments,”
researchers are able to determine whether there is a cause-and-effect relationship
among phenomena.
b) Experiments may be conducted in a controlled laboratory setting or in the field
(real-life situation).
Researchers sometimes observe consumers to learn about their product decisions.
a) Consumer researchers may use ethnographic research, by unobtrusively observing
consumers in real-world situations.
b) Web-tracking software allows researchers to observe consumer behavior on-line.
c) Purchase panel data can keep track electronically of the buying behaviors of large
numbers of consumers.
a) Marketers use panel data to determine who is buying particular products and under
what circumstances.
Database marketing melds various types of information (demographics, media habits,
coupon use, etc.) into a common database.
a) Marketers can use database marketing information to tailor their targeting and
positioning strategies.
b) Data mining is a technique that searches consumer databases for patterns in the
frequency, recency, and monetary value of consumer purchases to help identify
likely consumers.
a)
5.
6.
7.
II.
Types of Consumer Researchers
A. Many different types of organizations utilize consumer research and have different motivations
for conducting research.
1. Some organizations use consumer research to make decisions about marketing specific
products or services.
a) These types of researchers include in-house marketing research departments,
external marketing research firms, ad agencies, syndicated data services,
government data sources, and retailers.
2. Other organizations use research to protect consumers or simply understand more about
how and why consumers behave as they do.
a) These types of researchers include government, consumer organizations,
academics, and academic research centers.
3. Some organizations fall between these two groups on the continuum.
a) These types of researchers include research foundations and trade groups.
III. Primary Versus Secondary Data
A. Primary data are used by researchers to collect data from consumers in order to develop their
own marketing strategies and tactics.
B. Secondary data are created by one entity and used by another entity at a later date for a
different purpose than it was originally intended.
IV. Marketing Implications of Consumer Behavior
A. Developing a Customer-Oriented Strategy
1. Marketing research helps marketers design marketing activities that fulfill consumer
needs. It allows them to pinpoint various segments and target offerings so as to meet that
segment’s needs.
2. Consumer-oriented strategy guides strategic and tactical decisions regarding:
a) How the market is segmented
b) How profitable each segment of the market is
c) The characteristics of consumers in each segment
d) How satisfied customers are with existing offerings
B. Selecting the Target Market
1. Understanding consumer behavior helps marketers determine the most viable targets for
marketing tactics.
C. Positioning
1. Consumer research can be used to determine product positioning in respect to the
competition, customers’ needs, and changes in the marketplace.
D. Developing Products and Services
1. Consumer research can be used to develop products and services by providing
information about:
a) Consumers’ ideas for new products
b) Attributes that can be added or changed
c) What to name the offering
d) How to design the package and logo
e) What type of warranty to include?
E. Making Promotion Decisions
1. Consumer research can provide helpful information about advertising and sales
promotion issues:
a) What the advertising objectives should be; what the advertising should look like;
where ads should be placed; when ads should be run; and has advertising been
effective.
b)
V.
How to achieve sales promotion objectives and tactics, when sales promotions
should happen; whether sales promotions have been effective; how many sales
people are needed to serve customers; and how salespeople can better serve
customers.
F. Making Pricing and Distribution Decisions
1. Consumer research aids in pricing and distribution decisions by providing useful
information about:
a) The price that should be charged, how sensitive customers are to price and price
changes, and when certain pricing tactics should be used.
b) Where target customers are likely to shop and how stores should be designed.
Ethical Issues in Consumer Research
A. The Positive Aspects of Consumer Research
1. The positive benefits that result from consumer behavior include better consumption
experiences for consumers, and the potential for building relationships, between
marketers and their customers.
B. The Negative Aspects of Consumer Research
1. Tracking consumer research in other countries is challenging. Because of the differences
in norms and attitudes, the primary source techniques may work differently in other
countries. In addition, secondary sources may differ from those in the United States.
2. Research can result in higher marketing costs that, in turn, are passed on to the customer.
3. Some consumers fear that collecting marketing data results in an invasion of their
privacy.
4. Unscrupulous researchers may engage in deceptive practices.
QUESTIONS FOR REVIEW AND DISCUSSION
1.
How do experiments differ from field experiments?
2.
How is primary data different from secondary data?
3.
What are some of the positive and negative aspects of consumer research?
4.
What are the advantages and disadvantages of using secondary data?
5.
What are the advantages and disadvantages of focus groups?