MKTG 420

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CONSUMER BEHAVIOR

• MKTG 420
• Professor Frank Pons
• Spring 2005

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What is CONSUMER BEHAVIOR ?
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Definition

• Consumer behavior reflects the totality of
  consumers decisions and reactions with respect
  to the acquisition, consumption, and disposition
  of goods, services, time, and ideas made by
  decision making units over time.

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Exhibit 1.2 What is Consumer Behavior?
back
Info 1
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Consumer Behaviors??

• Spring Break Trip to Cancun.
• Listening to your favorite band live in a
  concert hall? Downloaded on the internet through
  KAZAA?
• Playing Basket Ball with your University team?
• Adopting a Child from a different country?
• Selling counterfeit products on e-bay?

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Consumer Behavior Course Framework
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Consumer Behavior as an Academic Discipline and
an Applied Science

• Factors that contributed to the growing interest
  in consumer behavior
• accelerated rate of new product development
• consumer movement
• public policy concerns
• environmental concerns
• the opening of national markets throughout the
  world

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Who Benefits from the Study of Consumer
Behavior?

• Marketing Managers
• Public Policy Makers and Regulators
• Consumers

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Educating Consumers About Cancer
Understanding consumers issues or problems and
developing methods to reach and educate consumers
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Tums educates consumers about the importance of
calcium and increases awareness of its calcium
content
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Marketings Impact on Consumers

• Marketing and Culture
• Popular Culture
• Music, movies, sports, books, celebrities, and
  other forms of entertainment consumed by the mass
  market.

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Popular Culture

• Companies often create product icons to develop
  an
• identity for their products. Many made-up
  creatures and
• personalities, such as Mr. Clean, the Michelin
  tire man and
• the Pillsbury Doughboy, are widely recognized
  figures in
• popular culture.

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Marketing Implications of Consumer Behavior

• Developing a Customer-Oriented Strategy
• How Profitable Is Each Segment?
• What Are the Characteristics of Consumers in Each
  Segment?
• Are Customers Satisfied with Existing Offerings?

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Marketing Implications of Consumer Behavior

• Selecting the Target Market
• Positioning
• How Are Competitive Offerings Positioned?
• How Should Our Offerings Be Positioned?
• Should Our Offerings Be Repositioned?

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Market Segmentation

• Finely-tuned marketing
• segmentation strategies
• allow marketers to
• reach only those
• consumers likely to be
• interested in buying
• their products.

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Repositioning
How are you perceived NOW? How do you
WANT to be perceived?
Convenient Convenient

High Low
High Low

Inconvenient Inconvenient
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Marketing Implications of Consumer Behavior

• Developing Products or Services
• What Ideas Do Consumers Have for New Products?
• What Attributes Can Be Added to or Changed in an
  Existing Offering?
• What Should Our Offering Be Called?
• What Should Our Package and Logo Look Like?
• What About Guarantees?

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Marketing Implications of Consumer Behavior

• Making Promotion (Marketing Communications)
  Decisions
• What Are Our Advertising Objectives?
• What Should Our Advertising Look Like?
• Where Should Advertising Be Placed?
• When Should We Advertise?
• Has Our Advertising Been Effective
• What About Sales Promotion Objectives and
  Tactics?
• 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?

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Marketing Implications of Consumer Behavior

• Making Pricing Decisions
• What Price Should Be Charged?
• How Sensitive Are Consumers to Price and Prices
  Changes?
• When Should Certain Price Tactics Be Used?

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Marketing Implications of Consumer Behavior

• Making Distribution Decisions
• Where Are Target Consumers Likely to Shop?
• How Should Stores Be Designed?

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The Underlying Principles of Consumer Behavior
The Consumer is Sovereign Consumers are
Different Consumers are Alike The Consumer has
Rights Everyone Needs to Understand Consumers
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Challenges for the Future
Gathering and interpreting information that
organizations need to meet changing needs of
consumers Developing effective consumer research
methods to capture changes in trends and
lifestyles Understanding consumer behavior from a
broader perspective as an important part of life
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The Merchants of Cool (Video)

• How would you describe the teen market
  (importance, characteristics, homogeneous)?
• Why do you think some companies in the video
  (Sprite, MTV) have been so successful in
  marketing to teens?
• How are culture and marketing related? Which one
  influences the other in this video?
• Consumer Research represents a key feature in
  this video. What types of research are presented
  in this video? What kind of information do they
  provide? How have marketers use this information.

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Consumer Research
Methodology used to study consumer behavior.
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Definition

• The variable is the entity that is studied or
  that varies in a research project.
• Importance of the RESEARCH QUESTION ?

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Primary Versus Secondary Data

• Primary Data Data originating from a researcher
  and collected to provide information relevant to
  a specific research project.
• Secondary Data Data collected for some other
  purpose that is subsequently used in a research
  project.

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Exhibit 2.5 Who Conducts Consumer Research?
Direct Marketing Association
Nielsen
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Consumer Behavior Research Methods

• Surveys
• Focus Groups
• Interviews
• Storytelling
• Use of Photography and Pictures

• Diaries
• Experiments
• Field Experiments
• Observations
• Purchase Panels
• Database Marketing

Key words Valid and Reliable
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Qualitative Versus Quantitative Research

• Quantitative studies
• Many data points (consumers) Quantity of
  information.
• Statistical Analysis
• Able to Quantify and forecast
• All companies money saver.
• Qualitative studies
• Few data points (consumers) Quality of
  information.
• Interpretation Subjectivity
• Able to Qualify and understand
• Fewer companies more and more important.
• Beware of underestimation Importance and
  Difficulty.

What about Multi-method and Bias?
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Ethical Issues in Consumer Research

• The Negative Aspects of Consumer Research
• Tracking Consumer Behavior in Different Countries
• Potentially Higher Marketing Costs
• Invasion of Consumer Privacy
• Deceptive Research Practices