Consumer)Behaviour)(MKTG201)!
The Foundations of Consumer Behaviour
What is consumer behaviour?
♥ The behaviour that consumers display in searching for, purchasing, using, evaluating
and disposing of the products and services that they expect will satisfy their needs
♥ Advertiser vs. consumer
Consumer types – Personal vs. Organisational
Personal consumers
♥ The personal consumer buys goods and services for:
o His or her own use
o Use by the whole household, or a household member
o A gift for someone else
♥ In all contexts, the products are bought for final use by individuals (end-users)
Organisational consumers
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Commercial for profit businesses
Non-profit businesses
Public sector agencies (government depts.)
Institutions (e.g. schools, churches, sports clubs)
♥ Organisational consumers buy products to help run their organisations
End-use consumption is perhaps the most pervasive type of consumer behaviour, since it
involves everyone in the role of the buyer, payer or consumer, or all three.
Consumers as buyers, payers and users
♥ The marketplace activities of individuals entail three functions:
1. The consumer (user) – Who consumes or uses the product
2. The buyer – Who undertakes activities to procure or obtain the product
3. The payer – Who provides the money (or other value) to obtain the product
Why study consumer behaviour?
Reasons to better understand consumers:
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Evolving consumer preferences
Increasing environmental concerns
Growth of services marketing
Growth of global marketing
Growth of non-profit marketing
Need for consumer protection
Changing lifestyles
Changing technology
Shorter product life cycles
Development of the marketing concept
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Production concept
Product concept
Selling concept
Marketing concept
Social marketing concept
Social marketing concept:
♥ A restructured definition of the marketing concept
♥ Seeks to fulfil the needs of the target audience in ways that improve society as a whole
while also fulfilling the objectives of the organisation
♥ Marketers should adhere to principles of social responsibility in the marketing of their
goods and services and satisfy the needs and wants of their target markets in ways that
preserve and enhance the well-being of consumers and society
Why consumer research is used
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To gain a better understanding of consumption behaviour
To identify and locate appropriate target markets, and to understand their media habits
To identify both felt and unfelt (latent) needs
To determine how consumers perceive products, brands and stores
Identify attitudes before and after promotional campaigns
Identify how and why they make their consumption decisions.
The marketing mix
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Product/service – features, designs, brands, packaging, augmentation.
Place – distribution via stores and non-store outlets
Promotion – advertising, sales promotion, public relations and sales efforts
Price – list price, discounts, payment methods.
Drivers of successful relationships between markets and customers
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Providing customer value
Customer satisfaction
Building customer trust
Customer retention
What is customer value?
♥ Customer’s perceived benefits (economic, functional and psychological)
♥ Customer’s resources used (money, time, effort and psychological)
Customer satisfaction
♥ Consumer’s perception of performance compared to consumer’s expectation of
performance … if exceeded, very satisfied; if equalled, satisfied; and if not met,
dissatisfied.
Customer trust
♥ Challenge of establishing and maintaining consumer trust in a company and its
products
♥ Word of mouth and recommendations from other consumers are highly rated
measures of trust
♥ Trust is the foundation for maintaining long-term relationships with customers
Customer retention
♥ Strategy of retention is to make it in the best interest of customers to stay rather than
switch
♥ Research shows small reductions in customer defections product significant profit
increases due to the fact that:
1. Loyal customers buy more products
2. Loyal customers are less price-sensitive
3. Cheaper to service existing customers
4. Loyal customers spread positive word-of-mouth and refer other customers to
the company
In(his(study(he(paired(the(sound(of(a(bell(with(meat.(Over(time(the(dogs(associated(
the(bell(with(food(
In(a(consumer(behaviour(context,(conditioned(stimuli(consist(of(consumption(objects(such(as(
wellHknown(brands(and(symbols,(and(the(conditioned(response(would(be(purchases(or(store(
patronage.((
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Marketing)applications)of)classical)conditioning)
Repetition'
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Repetition(increases(the(strength(of(association(between(a(conditioned(stimulus(and(the(
unconditioned(stimulus(
The(relationship(between(repetition(and(memory(is(complex(however(
Repetition(beyond(what(is(necessary(is(what(aids(consumer(retention.((
However,(with(a(greated(number(or(repetitions,(retention(may(decline(
This(is(known(as(advertising(wear(out(and(this(can(be(avoided(by(varying(aspects(of(the(
message(
(
Stimulus(generalization!
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Making(the(same(response(to(slightly(different(stimuli!
Pavlov(also(found(that(the(dogs(would(salivate(at(the(thought(of(food(not(only(to(the(ringing(
of(the(bell,(but(to(the(jangling(of(keys(etc!
Some(marketers(apply(this(by(introducing(‘meHtoo’(products(which(use(similar(packaging(and(
aim(to(evoke(a(similar(response(to(the(stimuli(of(the(original(product.(!
Market(challengers(encourage(stimulus(generalization!
Family(branding(is(another(stimulus(generalization(strategy,(by(which(a(whole(line(of(
company(products(go(under(the(same(brand(name!
This(capitalizes(on(the(consumers(ability(to(generalize(favourable(brand(associations(from(
one(product(to(the(others.(!
Campbell’s(originally(started(with(just(soup,(and(satisfied(consumers(were(willing(to(try(new(
Campbell’s(products(based(on(their(response(to(the(original(Campbell’s(products.(!
Licensing(is(the(practice(of(renting(names(of(designers,(celebrities,(cartoon(characters(for(
products(for(a(fee!
This(enables(the(manufacturers(and(marketers(to(receive(instant(recognition(and(implied(
quality(for(the(licensed(product.(!
Versace(for(example(has(extended(itself(and(licensed(its(name(to(a(hotel(on(the(Gold(Coast.(!
Corporations(also(license(their(names(and(trademarks,(usually(for(some(form(of(brand(
extension,(where(the(name(is(licensed(to(the(maker(of(a(related(product(and(thereby(enters(
a(new(product(category((Godiva(chocolates(licensed(its(name(to(Godiva(liqueur)!
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Stimulus(discrimination!
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The(selection(of(one(stimulus(from(among(similar(stimuli!
Consumer’s(ability(to(discriminate(is(the(basis(of(a(positioning(strategy(which(seeks(to(
establish(a(unique(image(for(a(brand(in(the(consumer’s(mind!
Market(leaders(want(to(retain(the(top(spot(by(persuading(consumers(to(discriminate!
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IN(REVIEW:(