Consumer Behavior

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Consumer Behavior
November 2008

• Domen Bajde
• http//bajde.net

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Course INFO
Content, readings, requirements,
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Course content
I.
The wheel of consumer analysis Consumer behavior
traditions Interpretative consumer research
Group project introduction II. Consumer
perception sensation Application to retail
spaces Group project shopping/packaging Consumer
culture meanings and relations Application to
value and branding Group project communication
brands Prosumption Group project presentations
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Course readings
Peter Olson Consumer Behavior and Marketing
Strategy, 8th ed., Irwin McGraw-Hill, 2008. (ch.
1,2,4,5,12,19) Supplements. (Hollbrook, Schmitt,
papers)
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Course requirements
Group project (20 points) Class participation
(10 points) Final exam (20 points)
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Lecture concept
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Introduction to Consumer Behavior
Peter Olson, p. 1-33
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What is Consumer Behavior?
Everything?

• The dynamic interaction of affect and cognition,
  behavior, and the environment by which human
  beings conduct the consumption aspects of their
  lives
• (PeterOlson)

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THINK FEEL ACT
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What does CONSUMPTION mean anyway?
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What is the opposite of consumption and
consumer?
Social image of consumption?
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consumption experience, consuming information ?
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What Is Consumer Behavior?

• Involves the thoughts and feelings people
  experience and the actions they perform in
  respect to consumption

• Includes the interaction of the environment
  (social in particular) and the individual

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The Wheel of Consumer Behavior(Peter Olson)

• 3 elements of consumer analysis ?

Consumer environment
MS
Consumer behavior
Consumer affect and cognition

• Critical for developing a complete understanding
  of consumers and selecting strategies to
  influence them

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The Wheel of CB

• Environment Everything external to consumers
  that influences what they think, feel and do

• Behavior Physical actions of consumers that can
  be directly observed and measured by others
  (overt behavior)

• Affect and Cognition Two types of consumer
  responses

1. Affect feeling responses
2. Cognition mental responses
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Consumer Behavior
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Consumer Behavior
Involves INTERACTIONS

• Among peoples thinking, feelings and actions,
  and the environment

• Marketers need to understand

• what products and brands mean to consumers

• what consumers do when purchasing them

• what influences shopping, purchase, and
  consumption

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Reciprocal System

• Any of the three elements can be either a cause
  or an effect of a change in the other element

• Implications to viewing consumer processes as a
  reciprocal system

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Consumer Behavior Marketing
Marketing

• Marketing strategy is about

Design, implementation, and control of a plan to
influence CB to achieve organizational objectives

• Developing and presenting marketing stimuli at
  selected target markets to influence

• what they think

• how they feel

• what they do

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Marketing Strategy CB
Marketing
A set of stimuli placed in a consumers
environment designed to influence their affect,
cognition, and behavior
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CB knowledge as a sustainable competitive
advantage
Marketing

• In an environment of

• Increasing competition

• Fast-changing, complex environment

• Dramatic increase in the quality of consumer
  research

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Diversity of Consumer Studies
Discipline

• A multidisciplinary field
• Psychology
• Sociology
• Anthropology
• Economics

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Approaches to Consumer Studies
Approach
1. Psychological (traditional)

• Focus the individual

• Based on theories and methods from cognitive,
  social, and behavioral psychology

• Objective is to explain consumer decision making
  and behavior

• Methods of study involved experiments, surveys

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Approaches to Consumer Studies
Approach
2. Interpretive (Socio-Cultural)

• Focus culture social context

• Based on theories and methods from cultural
  anthropology sociology, linguistics,

• Objective is to understand consumption and its
  meanings in context

• Methods of study involved qualitative
  (etnography, in-depth)

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Approaches to Consumer Behavior Research cont.
3. Economic

• Focus rules

• Based on theories and methods from economics and
  math/statistics

• Objective is to predict (model) consumer choice
  and behavior

• Methods of study involved math-modeling,
  simulation (variables, functions and equations)

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Marketing is the activity, set of institutions,
and processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large. (AMA 2007)

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Zakljucna misel
DISCUSSION
Take 5 minutes to individually answer these two
questions (max 1 sentence for each question)
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The story of shoes
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The traditional take on VALUE
CONSUMPTION is destruction. Businesses create
value, consumers destroy it.
Measuring vs. understanding the creation of
value. Consumption holds little interest (it is
underrated).
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A redefinition of VALUE
CONSUMERS are the ultimate element of the value
chain.

• Value does not reside in the product alone
• It appears when consumers interact with the
  product
• The cultural value experience

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Consumer VALUE
Hoolbrooks axiology (philosophy of
value). Value at the center of consumer behavior
VALUE interactive relativistic preference
experience
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Consumer VALUE
Consumer value is
Experiential
Consumption experience products provide
experiences.
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Consumer VALUE
Consumer value is
Relativistic
Preferential
Comparative, personal and situational (CONTEXT!)
Embodies a preference judgement.
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Consumer VALUE
Consumer value is
Interactive
A meeting of subject AND object (interpretation
of the object/situation)
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The interpretative take
CONSUMPTION is an act of producing meaningful
experiences.
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Interpretative tradition CCT recap
Arnould Thompson (JCR, 2005) sociocultural,
experiential, symbolic, and ideological aspects
of consumption
culture as the very fabric of experience,
meaning, and action
the full cycle of consumption practices
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Group project energy drinks
Marketing-charged category. Culturally rich
stimulating. Useful in our context (glocal
brands). Fun! (unique marketing
approaches) Learning from problems and mistakes
as well as from best practices
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Group project code DRAGON
The local underdog losses its wings Learning
from problems and mistakes as well as from best
practices.
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(No Transcript)
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4 groups 4 projects
CONSUMER PERCEPTION
Packaging product design
Shopping process
Marketing communication
CONSUMER MEANINGS
Branding
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4 groups 4 projects
What do the PPD communicate to consumers? What
role do they play in consumer choice making? How
do consumer percieve the physical product? Is
the PPD suited to consumption practices and the
market situation?
Packaging product design
CONSUMER PERCEPTION
How do consumers search for and acquire this
product? What is the role of the acquisition
context? (shelf position space, product
displays etc.) How do the brands compete within
the store/bar setting?
Shopping process
Marketing communication
CONSUMER MEANINGS
Branding
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4 groups 4 projects
Packaging product design
CONSUMER PERCEPTION
Shopping process
What is the role of m. communication in competing
in this market? How do the brands compete in
terms of m. communication? (spending choice of
media, choice of target audience, comm. tone
appeals used) What are the specifics of
communicating this product? (e.g., think of Red
Bulls strategy) Can Dargon compete with the big
guns? How?
Marketing communication
CONSUMER MEANINGS
Branding
What is the importance of branding in this market
setting relative to other marketing mix elements
? What are the relevant cultural meanings
brand stories used by the major players? (think
Red Bull Burn) Can Dargon compete with the
leading brands? How?
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Collective efforts

• INTRODUCTION
• Country profile (basics, media, economy, retail
  beverage industry)
• Company profile (history, current status,
  project Dragon)
• Market situation (energy drink brands, m. share,
  4Ps)
• Consumer profile (who, how much, where)

0.5 - 1 page for each heading (appendix unlimited)
http//energydrink.wikispaces.com/