Introduction to Consumer Behavior

Transcription

1 This example illustrates the fascinating subject matter Behavior of consumers Many find behavior of consumers to be intricate difficult to influence often mystifying

2 Introduction to Consumer Behavior

3 Why consumer behavior requires serious study? Behavior of consumers can be quite subtle in nature, making it difficult to understand fully Consumer behavior is so prevalent, it significantly affects our lives through either our own actions or those of other consumers

4 Coverage Definition Why we should study consumer behavior Developing a framework for studying consumer behavior

5 Definition The decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services

6 Certain Terms Customers and consumers The ultimate consumer The individual buyer The decision process A subset of human behavior

7 Why study consumer behavior? Significance in daily lives Application to decision making Micro perspective Societal perspective

8 Why study consumer behavior? The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as psychology of consumers like how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; How limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

9 Course Objectives Better understand why people do what they do in the marketplace when they do it Better understand yourself as a shopper, buyer, and consumer Improve yourself as a shopper, buyer, and consumer Improve your current/future job performance Better understand marketer communications and behaviors in the marketplace

10 Framework for studying Consumer Behavior Consumer benefits Total product concept Market segmentation and segmentation strategies Positioning Consumer decision-making

11 Consumer Benefits People do not buy products or services, they buy benefits Hence we make purchases not for the products themselves, but for the benefits of the problems they solve or the opportunities they offer e.g., always late so a watch helps solve problem; has stopwatch feature so now can keep track of work out times

12 The Total Product Concept The broader view of goods and services as a sum of their benefits Psychological ring Accessory Ring Basic Core T I M E

13 The Total Product Concept Total product: : refers to the sum of benefits offered by a product, service, outlet, etc. Basic core: bundle of utilitarian benefits (e.g., design, features, etc.) Accessory ring: added-value benefits with no apparent extra cost (e.g., store reputation, store reputation, manufacturer prestige, convenient location, friendliness of sales staff, parking ease, quick service etc.) Psychological ring: benefits resulting from the consumer s feelings associated with owning/using the product (e.g., belonging, youthful, powerful, sexy, etc.) Time: products/service give or take time; this can be good or bad (e.g., fast food versus conventional restaurant)

14 Market Segmentation Market segmentation is the study of the marketplace in order to discover already existing viable groups of consumers who are similar or homogeneous in their approaches to choosing and/or consuming goods and services.

15 Segment Bounding Segment bounding is a means by which marketers differentiate among consumers and among market segments, is simply a method of setting conditions whereby consumers qualify as part of a segment Determine the descriptors of the consumers/units in the segment (e.g., demographics, psychographics, benefits sought, product usage rate, type of retail outlet, etc.) Determine specific geographic location of segment Bound segments in time to ensure that all data is relevant and up to date for the time of use.

16 Segment Viability Four factors are used to assess segment viability. Viable segments are: Of sufficient size Measurable Differentiated Reachable

17 Segmentation Strategies Mass marketing (undifferentiated marketing): offering the same product to the entire consumer population Concentrated marketing (focused or niche marketing): selecting one market segment, even though the product may also appeal to others Differentiated marketing: selecting two or more different segments

18 Differentiated Marketing Additional brands are introduced to cater to the different segments

19 Positioning Product positioning is the placement of a product, service, outlet, etc. in the mind of the consumer

20 The Consumer Decision-Making Process A consumer decision model is a means of describing the processes that consumers go through before, during, and after making a purchase (choice).

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