MKT 351 Consumer Behavior

consumer behavior
the study of individuals, groups, or organizations and the processes they use to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
Marketing Strategy, Regulatory Policy, Social Marketing, Informed Individuals
The Four Applications of consumer behavior…
Social Marketing
Is the application of marketing strategies and tactics to alter or create behaviors that have a positive effect on the targeted individuals or society as a whole.
Consumer Value (benefits – total cost)
is the difference between all the benefits derived form a total product and all the costs of acquiring those benefits.
Market analysis- consumers
Stage where you try to anticipate and react to customers by doing research.
-what are the customers needs
Market analysis- Company
stage where the firm has to fully understand its own ability to meet customer needs, involves- evaluating all aspects of a firm (financial, managerial skills, production capabilities, channel strength, ect.)
-identify strength and weaknesses
Market analysis- Competition
Understanding how your success or failure will effect other companies and understanding their ability to meet customers needs.
-key ones and their capabilities and strategies
Market analysis- Conditions
economy, technology, government regulations, physical environment affect consumer needs and expectations as well as company competitor capabilities
Market Segment
is a portion of a larger market whose needs differ somewhat form the larger market.
1. Identifying product-related needs
2. Grouping customers with similar needs profitable
3. Describing each group
4. Selecting an attractive segments
Four steps of Market Segmentation
Segment size, segment growth rate, competitor strength, customer satisfaction with existing products,
fit with company image, fit with company objectives, fit with company resources, distribution available, investment required, stability/predictability, cost to serve, sustainable advantage available, communications channels available, risk, segment profitability, and other
What are the criteria on the Market Segment Attractiveness worksheet?
Target market
The segment of a larger market that will be the focus of the companies marketing efforts.
Marketing Strategy
is basically the answer to the question- “How will we provide superior customer value to our target market”
Marketing mix
Product, Price, Communications, distribution, and services provided to the target market
Anything a consumer acquires or might acquire to meet a perceived need
Marketing Communications
this includes the advertising, the sales force, public relations, packaging, and any other signal that the firm provides about itself and its products.
The amount of money one must pay to obtain the right to use a product.
Consumer Cost
Everything the consumer must surrender in order to receive the benefits of owning/using a product
Having the product available where target customers can buy it. It is essential to success.
Refers to auxiliary or peripheral activities that are performed to enhance the primary product or primary service.
Product Position
an image of the product or brand in the consumers mind relative to competing products and brands.
Injurious Consumption
occurs when individuals or groups make consumption decisions that have negative consequences for their long-run well-being.
is the totality of an individual’s thoughts and feelings about himself
how one lives
is the complex whole that includes knowledge, belief, art, law, morals, customs, and any other capabilities and habits acquired by humans as members of society.
norms, sanctions
_______ are rules or guidelines to culture, and when they are broken you can receive a punishment called_______.
Post Modernism, positivism, motivation
Three techniques for studying human behavior
who has the largest database in the world
time and money
what are the two budgets
learning the culture form which you are born
what percent of our society is a collectivist society.
non verbal communications
system that are the arbitrary meanings a culture assigns actions, events, and things other than words.
nonverbal communication systems
Time, Space, Symbols, Relationships, Agreements, Things, Etiquette
monochromic time perspective
this is physical object, it can be wasted, used up. Cultures who think this way have a strong orientation toward present or short term
polychromic time perspective
time is less discrete and less subject to scheduling .
a population in terms of its size, structure, and distribution
cause-related marketing
marketing that ties a company and its products to an issue of cause with the goal or improving sales or corporate image while providing benefits to the cause.
Mass customization
The process of delivering wide-market goods and services that are modified to satisfy a specific customer need.
-External Influences (part 2)
-Internal Influences (part3)
-Self-Concept and Lifestyle
-Consumer Decision Process (part 4)
-Organizations (Part Five)
-Regulation (Part 6)
What are the main parts of the Consumer Behavior Model?
Culture, Subculture, Demographics
Social Status, Reference Groups, Family, and Marketing Activities
What is included in the external influences in the CB Model?
Perception, Learning, Memory, Motives, Personality, Emotions, and Attitudes
What is included in the internal influences in the CB Model?
Problem Recognition>
Information Search> (or to OSP)
Alternative Evaluation and Selection>
Outlet Selection and Purchase>
Postpurchase Evaluation
What is included in the Decision Process of the CB Model?
-International threats and opportunities
-increased diversity
-technology challenges- online shopping
-marketers and regulators struggle with tough ethical and social aspects
What are the for main challenges for marketers as internal and external forces drive and shape consumer behavior?
-multiple factors
Consumer Behavior is ________ and influenced by ______ _______ such as demographics, lifestyle, culture and it is more ___________ when looking at families and groups
Understanding Consumer Behavior is critical to ______ (for Ind. and not for profits and for profits and regulatory agencies)
Continual research
Understanding Consumer Behavior requires ____ _____
Ethical Issues
Marketing decisions designed to influence consumer behavior involve _____ ______ that affect the firm, individuals, and society. Ex: ______
customer value
the difference between all the benefits derived from a total product and all the costs of acquiring those benefits
1. Problem Recognition
2. Information Search
3. Alternative evaluation
4. Purchase decision
5. Evaluation (Post-purchase)
What are the 5 steps of the consumer decision process in order?
beliefs about what is desirable
the applications of CB involve the development, regulation, and effects of marketing strategy
How does Consumer Behavior help develop marketing strategy?
1. Homogeneous versus Heterogeneous with Respect to Culture?(laundry by hand vs powder in NE vs SE Brazil)
2. What Needs Can the Product Fill in this Culture (physical labor)
3. Can Enough People Afford the Product?
4. What Values are Relevant to the Purchase and Use of the Product? Cleanliness, sustainability
5. What are the Distribution, Political and Legal Structures for the Product? Access to hot water – Unilever responded in India with “Surf Excel”
6. In What Ways Can We Communicate About the Product? Had to promote that hot water isn’t only way to kill germs
7. What are the Ethical Implications of Marketing This Product in This Country? help reduce water usage for machines
What are the 7 key dimensions in entering a foreign market that need to be asked? Read on pg 67 for example
cultural values
widely held beliefs that affirm what is desirable
this dimension is important and complex in marketing to third world and developing countries
per capita income
when looking at global demographics it is better to look at PPP than ___________ when looking at income in countries
age cohort
a group of persons who have experienced a common social, political, historical, and economic environment
cognitive age
one’s perceived age, a part of one
s self-concept
other-oriented values
– reflects society’s view of the appropriate relationships between individuals and groups – i.e. if society values collective activity then peer influence is more important than appeal to “be an individual”
-Individual/Collective: Are individual activity and initiative valued more highly than collective activity and conformity
-Youth/Age: do we meet the needs more of the youth or adults? Who is involved in the decisions and what roles do they play?
-Extended/Limited Family: lifelong family obligations?
-Masculine/Feminine: where does power go? to males?
-Competitive/Cooperative: is it better to be competitive or cooperative and creating alliances?
-Diversity/Uniformity: does society value variation in religious beliefs, ethnic backgrounds, political views, and other important behaviors and attitudes?
What are some things to look at in other-oriented values?
environment-oriented values
a society who focuses on the economic, technical and physical environmental (i.e. you would market differently to a society that stresses a problem-solving, risk-taking performance oriented approach to its environment versus a fatalistic, security and status- oriented society)
-Cleanliness – how important is it beyond what is needed for good health?
-Performance/Status – Is the cultural climate rewarded based on performance or inherited factors like social class?
-Tradition/Change – which is valued more?
-Risk taking/Security – who is admired more risk-takers or conservatives?
-Problem solving/Fatalistic – do you accept what is or challenge and solve problems? Research shows those who have more of a “take what comes” value do not complain and challenge companies with complaints.
-Nature – do you admire or overcome nature? Americans see nature as something to overcome or improve.-
What are some things to look at in environment-oriented values?
self-oriented values
reflect the objectives and approaches to life that the individual members of society find desirable
Active/Passive – is physically active approach to life valued more than passive?
Sensual gratification/Abstinence – how acceptable is it to enjoy sensual pleasures?
Material/Nonmaterial – how much importance is placed on material wealth?
Hard work/Leisure – is one who works harder valued more than one who does not?
Postponed gratification/Immediate gratification – cash versus credit; live for today?
Religious/Secular – to what extent is behavior based on religious teaching?
What are some things to look at in self-oriented values?
-Do many things at once
-are highly distractible and subject to interruptions
-consider deadlines and schedules secondary
-are committed to people and relationships
-base promptness on the relationship
-prefer long-term relationships
What are 6 characteristics individuals in polychronic culture have?
subjective discretionary income
an estimate by the consumer of how much money he or she has available to spend on nonessentials
Cohort Analysis
the process of describing, and explaining attitudes, values and behaviors of an age group as well as predicting its future
one segmentation approach to the mature market that incorporates aging processes and life events related to the physical health and mental outlook of older consumers
-baby boom
-gen x
-gen y
-gen z
What are the 6 major american generations?
Born before 1930 they grew up in traumatic times (kids in depression and young adults during WWII Concerned with personal & financial security
– Born 1930-1945. Small kids during Depression/WWII. Matured during prosperoius 50’s and 60’s.Most have/will retire. Accumulated wealth, spoil grandkids
Baby Boom
– Born during surge of birth rates between WWII and 1964.Remebers JFK assaination and grew up with TV. High education, high incomes, dual career HHs. Tech savy, 80% use internet and 2/3s of them use internet for purchases (Yesterday, 25%, life was better in the 50’s (Today, 30%, Exciting times today we live in) (Tomorrow, 45% Positive outlook)
Gen x
Born between 1965-1976. Remembers the Space Shuttle disaster. First group to experience high divorce rate of their parents. But also have a broad view of family. More open to diversity than years past.
Gen Y
Born between 1977-1994. Strong sense of independence. AIDS, Gangs, Columbine shootings, OK City bombing all key events. this generation is diverse and embraces tolerance of diversity more than any prior group. College is a given but may not know what area. A lot of how and where they shop is determines on how the store makes them feel.
Gen Z
1995-2002. Digital Natives. Generation @, Net Generation. Global unrest, global warming, terrorists and uncertainty. YES EVEN THE 11 YEAR OLDS ALREADY HAVE SMART PHONES, INSTAGRAM & SNAP CHAT ACCOUNTS. SELFIES ARE THE NORM.
-upper-upper class
-lower-upper class
-upper-middle class
-middle class
-working class
-upper-lower class
-lower-lower class
What are the 7 social class segmentations?
-higher executives of large concerns, proprietors, and major professionals
-business managers, proprietors of medium-sized businesses, and lesser professionals
-administrative personnel, owners of small business and minor professionals
-clerical and sales workers, technicians, and owners of little businesses
-skilled manual employees
-machine operators and semiskilled employees
-unskilled employees
-Four-year college graduate
-1-3 years of college
-high school grad
-10-11 years of school
-7-9 years of school
-less than 7 years of school
What are some things that determine social class?
Purchasing Power Parity
– Marketers increasingly use this rather than average or median income to evaluate markets. It is based on the cost of a standard market basket of products bought in each country.
-the per capita based on the products bought in each country

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