So How do We Define Consumer Behavior?
The activities directly involved in obtaining, consuming, and disposing of products and services, including the decision processes that precede and follow these actions
What does this mean in terms of real business decisions? What tools can be used?
Consumer Benefits
People do not buy products or services, they buy benefits
We make purchases not for the products themselves, but for the problems they solve or the opportunities they offer
e.g., a watch offers different benefits to different people
Tangible (attributes of the watch) and intangible (such as reputation of the brand)
 

Consumer Benefits
People do not buy products or services, they buy benefits
We make purchases not for the products themselves, but for the problems they solve or the opportunities they offer
 

The Total Product Concept
Total product: refers to the sum of benefits offered by a product
Basic core: bundle of utilitarian benefits (e.g., design, features, etc.)
Accessory ring: added-value benefits (e.g., store reputation, manufacturer prestige, convenience, etc.)
Psychological ring: benefits resulting from the consumer’s feelings associated with the product (e.g., belongingness, recreation, etc.)
Time: time-saving benefits (e.g., fast food versus convention restaurant)
 

Paradigms: Positivism vs. Interpretivism (Postmodernism)
Rigorous, empirical study to discover generalizeable laws (statistical tests) vs.
Understanding consumer behavior in itself, what is the experience, the feelings, (photos, focus groups, depth interviews) etc.
Both are useful to the manager, however, it is important to determine whether one is more relevant to your purpose
Exploratory (hunch) vs. problem-solving
 

Exploratory Research
Focus groups
Projective techniques
Drawings, sentence and story completion
Bubble drawings (cartoons)
Sketch pictures of likely users, describe the typical user
Autodriving, interpretive studies, hermeneutics, semiotics, ethnography
e.g. Labor Day traditions - what are they? Have they changed? How do consumers behave? What does this mean for business?
 

Careful! What about Ethics?
Many topics will address psychological information processing
Is this a course in consumer deception???
Do companies create needs?
Do we sell things which people don’t need?
Do our businesses put unfair pressure on consumers to overspend?
Borrowing from psychology, sociology, etc to determine how to stimulate buying decisions
 

Market Analysis: Consumer Environment
Includes demographic trends, personal and group influences, motivation, attitudes, knowledge, changing needs, consumption patterns, and consumer lifestyles
Changes in the consumer environment can lead to changes in packaging, positioning, product design, and advertising methods
 -Mitsubishi
 -Healthy Choice
 

Changing Consumer Health Trends
 

Market Analysis: Corporate Strengths and Resources

Market Analysis: Current and Potential Competitors

Market Segmentation

Market Segmentation

Criteria for Choosing Segments - discussion

More Criteria
Congruity: how similar segment members are in characteristics or behaviors
Responsive:  will they respond to your efforts?
 

Segment Potential
Can we measure the characteristics of the segment?  E.g. senior citizens? Left-handed persons? Disabled shoppers?
Can we reach the people in the segment?  E.g. persons in the Philadelphia area? Persons with blue eyes?
How large is the segment in relation to our goals?  Families with children?  Color-deficient people?
Will the segment be responsive to our efforts? Young adults?  Hispanics? Will it depend on our product or service?
 

What Demographic Trends Can Affect Health Care Choices?
Suppose we were trying to build a network of family practices in the Delaware valley
Fertility rate and household formation
Cognitive vs. Chronological Age
Transgenerational families
Ethnicity of households
Income level, insurance coverage
 

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
 

Segmentation at The Limited
 

Consumer Benefits and  Product Positioning
Product positioning is the means through which marketers seek the right fit between a product and desired benefits
Three different ways of positioning products for targeted segments are:
On perceived benefits or image
Against competitors
Combination of the above
Repositioning: re-educating the consumer about changes in important product, price, distribution, and promotional and/or personal selling benefits.
Page 17 text – pain relievers
 

Domestic Consumer Behavior vs. Worldwide Consumer Behavior?
Often, texts are developed in terms of US studies, which are really generalizeable to consumers in the US
This text is deliberately global – e.g. Russian Market discussion
Emphasizes the general concept
Useful in subcultural studies
Ethical questions can differ throughout the world
 

Cross-Cultural Analysis of Consumer Behavior
What needs exist in the culture? What needs does the product fill?  How are the needs presently filled? How much behavioral change would be needed to use the product?
Can we abstract away what “is best” for them?
Who recognizes a need? decides? buys? uses the product?  How much is purchased? How often?  Where? E.g often gender differences, servants
Any cultural values related to the product?
 

Cross-Cultural Consumer Behavior
Comparative marketing:  similarities and differences in consumer behavior
Reaction to new products?  What is the decision process like? How much and what kinds of info are needed?
Promotion?  Kinds? Importance? Taboos?       Mistranslations? Slogans? Pictures?  Appropriate signs and symbols?
Distribution?  How are things usually sold in Country X? Retailers?  Assistance? Transportation?
Prices?  What is traded?  How much?
 

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.
A model shows the causes or antecedents of a particular behavior and each of its results or consequences.
The EKB Model has been a standard in Consumer education. Let’s take it apart.
 

Stages in Consumer Decision Making
Need Recognition: ideal vs. actual
Search for Info:  internal, external, word of mouth
Pre-purchase alternative evaluation
Purchase (including decision NOT to buy)
Consumption
Post-purchase alternative evaluation
Divestment
 

Decision Making
Do you always make rational decisions?
Do you sometimes decide based on your environment?  E.g. long lines, crowdedness, advice of salesperson, your own mood
Experiential perspective - not necessarily rational, based on how you experience it - purchasing a painting which “feels right”
Brand or company loyalty -“I always buy Ford vehicles.”
Impulse buying, Variety seeking
Involvement (level of perceived personal importance evoked by a stimulus) (PII)