Professor S.J. Grant

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Overview Marketing and Consumers

• Professor S.J. Grant
• Spring 2007

BUYER BEHAVIOR, MARKETING 3250
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Outline

• What is strategy?
• Strategy starts with analysis
• 3 Cs
• SWOT
• What is consumer behavior?
• How does consumer behavior impact marketing?
• STP
• 4Ps

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Marketing Strategy

• What is the goal of strategy?
• To develop and maintain strategic fit between the
  companys abilities and changing market
  opportunities
• Strategy positions the firm to optimize
• Strategy must consider alignments of internal,
  external factors
• Internal company
• External competitors, consumers

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Marketing Management
Competition
Market Opportunity
Consumers
Company
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SWOT Analysis

• Basic approach starts with evaluating
• Internally
• Strengths
• Weaknesses
• Externally
• Opportunities
• Threats

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What is Consumer Behavior?
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What Affects Consumer Behavior?
Psychological Core
Process of Making Decisions
Consumers Culture
Consumer Behavior Outcomes
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What Affects Consumer Behavior?

• Having motivation, ability, and opportunity
• Exposure, attention, and perception
• Categorizing and comprehending information
• Forming and changing attitudes
• Forming and retrieving memories

Psychological Core
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What Affects Consumer Behavior?
Psychological Core

• Problem recognition and search for information
• Making judgments and decisions
• Making post-decision evaluations

Process of Making Decisions
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What Affects Consumer Behavior?
Psychological Core

• External processes
• Regional and ethnic influences
• Age, gender, and household influences
• Reference groups

Process of Making Decisions
Consumers Culture
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What Affects Consumer Behavior?
Psychological Core

• Consumer behaviors can symbolize who we are
• Consumer behaviors can diffuse within a market

Process of Making Decisions
Consumers Culture
Consumer Behavior Outcomes
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Implications Segmentation

• Developing a customer-oriented strategy starts
  with a segmentation scheme
• What is known about the market?
• How is the market segmented?
• Different types of consumers
• Different needs
• Perception of value
• Willingness to pay

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Implications Targeting

• Choose a target
• How profitable is each segment?
• What are the characteristics of consumers in each
  segment?
• Are customers satisfied with existing offerings?

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Implications Positioning

• Positioning
• How are competitive offerings positioned?
• How should our offerings be positioned?
• Should our offerings be repositioned?

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Implications Product

• Developing products or services
• What are consumers ideas for new products?
• What attributes can be added to or changed in an
  existing offering?
• What about guarantees? Post-purchase service?
  Repeat-buying opportunities
• Any consumer trends that can inspire development?

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Implications Promotion

• Making promotion decisions
• Sales promotion objectives and tactics (push)
• When should sales promotions happen?
• Have our sales promotions been effective?
• How many salespeople are needed to serve
  customers?
• How can salespeople best serve customers?
• Advertising (pull)
• What should our advertising look like?
• Where should advertising be placed?
• When should we advertise?
• Has our advertising been effective?

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Implications Price

• Making pricing decisions
• What price should be charged?
• How sensitive are consumers to price and price
  changes?
• What is price elasticity?
• When should certain price tactics be used?
• How do price changes affect the firm?

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Implications Place

• Making distribution decisions
• Where are target consumers likely to shop?
• How should stores be designed?

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Perception, Memory Learning

• Professor S.J. Grant
• Spring 2007

BUYER BEHAVIOR, MARKETING 3250
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Outline

• Perception
• A model of memory
• What are the types of memory?
• Organization of memory
• How memory works
• Storage
• Retrieval
• Learning

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Perception
Hemispheric lateralization
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Perception

• When do we perceive stimuli?
• Absolute and differential thresholds
• Just noticeable difference
• Webers law
• Selective cocktail party
• Subliminal perception
• Does subliminal perception affect consumer
  behavior?

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Perception

• Does subliminal messaging make people buy?
• 1956 N.J. movie theater flashed subliminal
  messages, Hungry? Eat popcorn. Drink Coca-Cola.
• Increased popcorn sales 58 and Coca-Cola sales
  18, but results were not replicated
• Erotic stimuli and sexual symbols in ads
  purported to increase receptivity to suggestions
  in the ad

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A Model of Memory

• Perceived information is encoded
• Explicit
• Implicit
• Then stored in memory
• Short-term store
• Long-term store
• Retrieval involves calling up stored bits from
  memory

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A Model of Memory
Stimulus
Short-Term Memory
Recall
Consolidation
Retrieval
Long-Term Memory
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A Model of Memory

• Sensory
• Short-term
• Long-term

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A Model of Memory

• Sensory
• Echoic
• Iconic
• Characteristics of sensory memory

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A Model of Memory

• Short-term memory (STM)
• Imagery processing
• Discursive processing
• Characteristics of short-term memory
• Short-term memory is limited (72)
• Short-term memory is short-lived

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A Model of Memory

• Long-term memory (LTM)
• Autobiographical (episodic) memory
• Semantic memory
• Characteristics of long-term memory
• Stable memory of events of more distant past
• Unlimited capacity
• Organized by nodes

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A Model of Memory

• Converting short-term memories to long-term store
  is physically located in the hippocampus
• Elaboration, or rehearsal, of information
  increases consolidation
• Recall from long-term storage is a function of
  recency and availability
• Availability is aided if memory is organized into
  a well-defined associative network of nodes
• Categories
• Hierarchies

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A Model of Memory
Beverages
Carbonated
Non-carbonated
Mixers
Colas
Juices
Water
Pepsi
Coke
Evian
Poland Spring
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A Semantic (or Associative) Network
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How Memory Is Enhanced

• Chunking
• Rehearsal
• Recirculation
• Elaboration

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What Is Retrieval?

• Semantic network
• Trace strength
• Accessibility
• Spreading of activation
• Priming
• Retrieval failures
• Decay
• Interference
• Primacy and recency effects
• Retrieval errors

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What Are the Types of Retrieval?

• Explicit memory
• Recognition
• Recall
• Judgments
• Implicit memory
• Judgments

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Retrieval

• Perceptual
• His name started with a J . . .
• Conceptual
• A brand of personal computers that competes with
  IBM . . .

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How Retrieval Is Enhanced

• Characteristics of the stimulus
• Salience
• Prototypicality
• Redundant cues
• The medium in which the stimulus is processed

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How Retrieval Is Enhanced

• What the stimulus is linked to
• Retrieval cues
• Where do retrieval cues come from?
• The brand name as a retrieval cue
• Other retrieval cues
• Consumer implications
• Consideration set

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How Retrieval Is Enhanced

• How a stimulus is processed in short-term memory
• Dual coding
• Consumer characteristics affecting retrieval
• Network of associations
• Expertise
• Mood

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Information Processing Selective
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A Model of Learning