consumer behavior
...nd demographics, values, and lifestyles, how they are influenced, and how they make their decisions o Are customers satisfied with existing offerings? • Selecting the target market o Which consumer group will represent the best target for marketing tactics. • Positioning: desired image should reflect what the product is and how it is different from the competition o How are competitive offerings positioned? This info gives marketers perspective on how their offering should be positioned Use “perceptual map” o How should our offerings be positioned? o Should our offerings be repositioned? Change their image? • Developing products or services o What ideas do customers have for new products? Design something that has benefits desired by target consumers o What attributed can be added or changed in an existing offering? Marketers use research to determine when and how to modify a product to meet the needs of new or existing groups of consumers o What should our offering be called? Easily understood, easy to remember , and suggests brands’ benefits o What should our package and logo look like? Should convey images that relate or associated with your product/company o What about guarantees? Desirability of guarantees – can it enhance your image? • Making promotion (marketing communication) decisions o What are our advertising objectives? May reveal that very few people have heard of a new brand or that consumer have heard of the brand but don’t know anything about it • Enhance brand knowledge o What should our advertising look like? Use visuals that consumers will remember Different groups will respond differently o Where should advertising be placed? Use mediamark to find info on demographic and lifestyle data o When should we advertise? Seasonal variations, variations in the amount of discretionary money consumers have, holiday buying patterns. o Has our advertising been effective? Advertising copy testing (pretesting): test ads for their effectiveness before they are placed in the media. o What about sales promotion objectives and tactics? Use research about advertising objective to suggest sales promotion objectives and identify appropriate tactics to achieve them. o When should sales promotions happen? Use consumer research to test for slow sales o Have our sales promotions been effective? Use consumer research; look at how many people purchased the product during the promotions. o How many sales people are needed to serve customers? Tracking store patronage at different times of the day o How can sales people best serve customers? Use research to match sales people with their potential customers • Making pricing decisions o What price should be charged? Consumers consider how much they must in relation to the price of other relevant brands or the price previously paid for it. o How sensitive are consumers to price and price changes? o When should certain price tactic be used? When are consumers most responsive to various pricing tactics? • Use historical data • Making distribution decisions o Where are target consumers likely to shop? Understand the value consumers place on time and convenience, then develop distribution channels that allow consumers to acquire good whenever and wherever it is most convenient for them. o How should stores be designed? Ethical Issues in Consumer Research • The positive aspect of consumer research o Better consumption experiences Helps marketers become more customer focused Consumers get better design products Better customer service More satisfying post purchase experiences. o Potential for building customer relationships Helpful for identifying ways of establishing and enhancing relationship with customers. • The negative aspect of consumer research o Tracking consumer behavior in different countries Focus groups are not appropriate in all countries Literacy rate Secondary data in other countries cannot be compared to secondary data in U.S. o Potentially higher marketing costs Process of researching behavior leads to higher marketing costs, which in turn raises higher prices on products o Invasions of consumer privacy Database marketing invades consumer’s privacy o Deceptive research practices. Lying about the sponsor of the research Promising that respondents’ answers will remain anonymous Chapter 3: Need Recognition and Search Consumer Motivation and its Effects: Motivationinner state of arousal that denotes energy to achieve a goal. These are its effects: • Goal related behavior: when motivation is high, people are willing to do things that make it more likely they will achieve their goals. (ex: if you want a good car, you will visit dealerships) • High-effort information processing and decision making: when people are motivated to achieve a goal, they are more likely to pay careful attention to it, think about it, attempt to understand or comprehend information presented about it, evaluate that information critically, and try to remember it for later use. • Felt involvement: the psychological experience of the motivated consumer. Four kinds: o Enduring involvement: when we show interest in an offering or activity over a long period of time. (ex: car enthusiasts) o Situational involvement: temporary interest in an offering or activity, often caused by situational circumstances. (ex: non car enthusiasts only interested when buying new car) o Cognitive involvement: consumer is interested in thinking about and processing information related to their goals. (ex: sports fanatic interested in anything related to Jordan.) o Affective involvement: consumer is willing to expend emotional energy in or has heightened feeling about an offering or activity. (ex: we cry during a sad scene in movie) • Objects of involvement: o Involvement with product categories: consumers may exhibit cognitive or affective involvement in a certain product category (ex: cars, computers) o Involvement with brands: brand loyalty o Involvement with ads: consumers are motivated to attend to and process information contained in the ad, especially if the ad is relevant to them. o Involvement with a medium: television or print media o Involvement with decisions and behaviors: experience response involvement when they are involved in certain decisions and behaviors. (ex: deciding between brands) o Specifying the object of involvement: consumers can be involved with many different entities, so it’s important to specify the object of involvement. What Affects Motivation? • Personal Relevance: the extent to which it has a direct bearing on and significant consequences or implications for your life. o Extent it bears on our self-concept: our views of who we are and they way we think others view us o Marking implications: ads geared toward consumers special concerns. Positive outcomes: consumers looking toward the positive outcome Negative outcomes: consumer avoid negative outcome will find ads that explain how to avoid this negative outcome the best. • Values, Goals, and Needs o Values: beliefs that guide what people regard as important or good. o Goals: objectives that we would like to achieve o Needs: internal state of tension caused by disequilibrium from an ideal/desired physical or psychological state. Maslow’s hierarchy of needs: physiological, safety, social, egoistic, self-actualization o Types of needs: social and nonsocial AND functional, symbolic, and hedonic needs Social needs: externally directed and related to other individuals, thus requires the presence or actions of other people Non social needs: achievement is not based on other people. (ex: physical well being, safety) Functional needs: motivate the search for products that solve consumption-related problems. (ex: buy airbags because you have safety need) Symbolic need: affect how we perceive ourselves and how we are perceived by others (ex: achievement, independence, self control) Hedonic need: needs that related to sensory pleasure (ex: sex) Needs for cognitive and stimulation: o Characteristics of needs Needs are dynamic: needs are never fully satisfied because daily life is a constant process of need fulfillment Needs exist in a hierarchy: some needs assume more importance than others. Needs can be internally or externally aroused: smell Needs can conflict: • A given behavior can be seen as both desirable and undesirable if it satisfies some needs but fails to satisfy others, called approach-avoidance conflict because we want to engage in the behavior and want to avoid it. • Approach-approach conflict: occurs when someone must choose between two or more equally desirable options that fulfill different needs • Avoidance-avoidance conflict: occurs when the consumer must choose between two equally undesirable options. o Identifying needs The same need can be exhibited in various and diverse behaviors, and the same behavior can reflect various needs. o Marketing implications Segmenting markets based on needs Creating new needs Developing need-satisfying offerings. Managing conflict: treat male baldness, but reduces sex drive Appealing to multiple goals and needs: bundle offerings Enhancing communication effectiveness: suggesting that the product fulfills a need, value, or goal. (ex: head and shoulders depicts dandruff as social rejection) • Perceived risk: reflects the extent to which the consumer is uncertain about the consequences of buying, using, or disposing of an offering. PR is higher when: we know little about the product, if the product is new, expensive, technologically complex, etc o Types of perceived risk Performance risk: reflects the uncertainty about whether the product will perform as expected Financial risk: product is expensive Physical (safety) risk: potential harm a product might pose to one’s safety Social risk: potential harm to one’s social standing that may arise from buying, using, or disposing of an offering. Psychological risk: reflects consumers concern about the extent to which a product fits with the way they perceive themselves. Time risk: uncertainties over the length of time that must be invested in buying, using, or disposing of the product o Risk and involvement: high risk is uncomfortable To reduce risk, consumers can collect more information, comparative shopping, talking to friends or sales, or by being brand loyal. o Marketing implications Reducing risk perceptions by reducing uncertainty or perceived consequences of failure Enhancing risk perceptions: make their promotional appeal more compelling (medicine) • Inconsistency with attitudes: consumers are motivated to process messages that are moderately inconsistent with our existing knowledge or attitudes because they are perceived as moderately threatening or uncomfortable. (ex: when we see something bad about our car we drive) Consumer Ability: extent to which consumers have the necessary resources to make the outcome happen. Resources to act: • Product knowledge and experience: gain knowledge from product experiences such as ad exposures, interactions with sales, information from friends or the media, previous decision making or product usage, or memory. • Cognitive style: consumer preference for ways information should be presented. o Cognitive complexity: the extent to which consumers prefer information to be presented in a simple or complex manner. • Intelligence, education, and age: consumers who are more intelligent and more educated can better process more complex information and make decisions. • Money • Marketing implications o Understand consumers’ knowledge and processing styles: be sure that target consumers have sufficient prior knowledge to process marketing communications o Match communications with knowledge and processing styles: need to be sensitive to the potentially different processing styles, educations levels, and ages of target consumers o Facilitate ability: providing monetary aid to first-time or repeat users. Consumer Opportunity • Time: time pressure allows for limited information processing • Distraction: anything that diverts consumers attention • Amount of information: can affect consumers’ opportunity to process a message • Complexity of information: more complex, more difficult to process information • Repetition of information: if consumers are repeatedly exposed to information, they can more easily process it because they have more chances to think about, scrutinize, and remember the information. • Control of information: consumers remember and learn more when they can control the flow of information by determining what information is presented, for how long, and in what order. • Marketing implications: enhance consumer opportunities to process information. o Repeat marketing communications and make them easy to process o Reduce distraction and time-pressured decisions making o Reduce purchasing/using/learning time o Provide information Chapter 9: Need Recognition and Search Cont’d Problem Recognition: the perceived difference between an ideal and actual state. • Ideal state: where we want to be o Ideal state: the way consumers would like a situation to be, function of our future goals. o Stimulated by our own personal motivations, self image, social class (want to be accepted by others), reference groups, and major changes in personal life (having a baby) • Actual state: where we are now o Actual state: real situation as consumers perceive it now o Influenced by: physical factors (product is broken), needs, external stimuli • Marketing implication: techniques to try to stimulate problem recognition o Attempt to create a new ideal state (athletic shoes, now $150+) o Marketing can try to create dissatisfaction with the actual state Internal Search: process of recalling stored information from memory, (1) the extent of the search, (2) the nature of the search, (3) the process by which consumers recall information, feelings, and experiences, and enter them in the decision process • How much do we engage in internal search? o The effort consumers devote to internal search depends on their MAO to process information, thus consumers will attempt to recall more information when felt involvement, perceived risk, or need for cognition are high. • What kind of information is retrieved form internal search? o Recall of brands: consumers tend to recall a subset of 2 to 8 brands known as a consideration or evoked set. Prototypicality: recall brands that are closest to the prototype or that most resemble other category members, making these more likely to be included in the consideration set than brands that are not typical of the category. Brand familiarity: well known brands are more easily recalled during internal search than unfamiliar brands because the memory links associated with these brands tend to be stronger. Goals and usage situations: consumers have goal-derived and usage-specific categories in memory, such as drinks to being to the beach, and the activation of these categories will determine which brands they recall during internal search Brand preference: brands for which the consumer has positive attitudes tend to be recalled more easily and be included in the consideration set more often than brands that evoke negative attitudes Retrieval cues: by strongly associating the brand with a retrieval cue, marketers can increase the chance that the brand will be included in the consideration set. o Recall of attributes Accessibility or availability: information that is more accessible or available—having the strongest associative links—is the most likely to be recalled and entered into the decision process Diagnosticity: helps us distinguish objects from one another Salience: consumers can recall very salient (prominent) attributes even when their opportunity to process is low. • Attribute determinence: attributes that are both salient and diagnostic Vividness: vivid information is presented as concrete words, pictures, or instructions to imagine Goals: consumer’s goals will determine which attribute is recalled from memory. o Recall of evaluations Evaluations are more likely to be recalled by consumers who are actively evaluating the brand when they are exposed to relevant information Online processing: the ability of consumers to process and ad as they are viewing it. o Recall of experiences From autobiographical memory, in the form of images and the effect associated with them If you have positive experience with a product, it will be easier to recall these experiences • Marketing implications o Marketers often deliberately associate their products with common positive experiences or images to increase their recall from memory. • Is internal search always accurate? o Confirmation bias: our tendency to recall information that reinforces or confirms our overall beliefs rather than contradicting them, thereby making our judgment or decision more positive than it should be. o Inhibition: the recall of one attribute inhibiting the recall of another o Mood: consumers are most likely to recall information, feelings, and experiences that match their mood. • Marketing implications o Confirmation bias creates a problem when consumers search internally for only positive information about the competition. To counter this, they draw attention to negative aspects of competitive brands o Inhibition is important because (1) consumers may not always consider key aspects of a brand when making a decision because they recall other more accessible attributes (2) marketers can sometimes offset the effect of their brand’s disadvantages and/or their competitors’ advantages by drawing attention to more vivid or accessible attributes. External Search: collecting information from outside sources (ex: magazines). Key aspects of the external search process (1) the source of info, (2) the extent, (3) the content, (4) search typologies, (5) the process or order of the search. • Two Types of external search o Prepurchase search: occurs in response to the activation of problem recognition o Ongoing search: occurs on a regular and continual basis • Where can we search for information? o Retailer search: visits or calls to stores or dealers o Media search: advertising, online ads, manufacturer-sponsored websites o Interpersonal search: advice from friends, relatives, neighbors o Independent search: contact with independent sources of information, such as books o Experiential search: product samples, product trials o Internet sources: Yahoo! & Google o Information overload: searching online can return 100,000+ results o Simulations: Lands End virtual model o The online community: people with common interest related to a product can converse with each other via chat rooms • Marketing implications o Not all products are experiencing success on the internet o Key to success online: super selection, ultra convenience, and competitive pricing. • How much do we engage in external search? o Motivation to process information: 6 factors that increase motivation Involvement and perceived risk: higher situational involvement will generally lead to greater prepurchase search, whereas enduring involvement related to ongoing search regardless of whether problem recognition exists Perceived costs and benefits: perceived benefits are high relative to its costs • Consumers who search will benefit by reducing uncertainty, increasing the likelihood of making a better decision, obtaining a better value and enjoying the shopping process. Consideration set: if the consideration set contains a number of attractive alternatives, consumers will be motivated to engage in external search to decide which alternative to select. Relative brand uncertainty: when consumers are uncertain which brand is the best, they are likely to search more Attitudes toward search: experienced searchers (see searching as fun) vs moderate and light searchers (see searching as a source of info) Discrepancy of information: if a stimulus does not fit into an existing category, consumer will try to resolve this incongruity by engaging in formation search, especially when incongruity is at a moderate level and the consumer has limited knowledge about the product category. o Ability to process information: 3 variables that affect the extent of external search Consumer knowledge: common sense suggests that expert consumers search less because they already have more complex knowledge stored in memory. • Subjective knowledge: consumer’s perception about what he knows relative to others • Objective knowledge: actual information stored in memory that can be measured with a formal knowledge test. Cognitive abilities: consumers with higher IQ are more likely to acquire more info and also able to process info in complex ways Demographics: certain types of consumers search more than others (consistent patterns) o Opportunity to process information: situational factors that might affect the search process Amounts of information available: consumers do more searching as the amount of available information increases Information format: the format in which the info is presented can influence the search process Time availability: consumers who face no time restrictions have more opportunity to search Number of items being chosen: when buying multiple items, consumers conduct a more extensive search • Marketing implications o Make info readily available and easily accessible at the lowest cost and with least consumer effort Look into design of their product packaging, web sites, ads o Segment the market for any product ...