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Consumer Behavior

by: Mr. Raheem Shields

Consumer Behavior ADV 375

Mr. Raheem Shields
GPA 3.65

A. McAlister

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A. McAlister
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This 15 page Class Notes was uploaded by Mr. Raheem Shields on Saturday September 19, 2015. The Class Notes belongs to ADV 375 at Michigan State University taught by A. McAlister in Fall. Since its upload, it has received 56 views. For similar materials see /class/207354/adv-375-michigan-state-university in Advertising at Michigan State University.


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Date Created: 09/19/15
Personal Consumer Buy5 goods or services for home use or their own use For yourself or your family Organization consumer You are buying on behalf ofa business MSU buy5 furniture for a new classroom Development of the marketing concept Production orientation from the 18505 to 19205 companies were focused on production Consumer demand exceeded supply Ford assembly line Company focuses on product capabilities Sales orientation From 19305 to mid 19505 Supply exceeded consumer demand Heavy focus on selling how to get people to push the product People don t like being sold to Marketing concept Focu5 on the cu5tomer 19505 to current Focus on exact needs and wants of target markets Deliver 5ati5faction better than competition Any 5uccefful company does a good job of this Coca cola Social Marketing Concept Con5ider5 con5umer5 long run best interest Good corporate citizenship take care of the consumer now and the future Embracing the marketing concept Consumer research the process and tools used to study the consumer behavior Segmentation process of dividing the market into subsets of consumers with common needs or characteristics McDonald5 Market targeting the selection of one or more 5egment5 identifie5 to pursue Positioning Developing a distinct image for the product in the mind of the consumer Communicating benefits of the product and a unique selling proposition Successful relationships Costumersvalue the ration between the customers perceived benefits and the resources used to obtain those benefits Relative and subjective Develop a value proposition High level of satisfactionthe individuals perception of the performance of the product or service in relation to his or her expectations Good Loyalists apostles Bad defectors and terrorist Strong sense of customer trustEstablishing and maintains trust is essential Trust is the foundation for marinating a longstanding relationship with customers Retain customers When customers return they buy more products They are less price sensitive Servicing them is cheaper The spread word of mouth Consumer Research Process Marketers must understand customers to design effective marketing strategies products and promotional messages Secondary research Already exists Already been done Find it and look for answers Primary research conducted for answering the specific research question Qualitative and quantitative Internal data Data generated in house May include analysis of customer files Useful for calculating customer lifetime value External Data data collected by an outside organization Includes federal government periodicals newspapers books search engines Commercial data is also available form market research firms Qualitative Research depth interview focus gtroup s projective techinqiues metaphor analysis Validitywhether or not you have tested what you have said you would test Reliability Same questions similar people and produce the same findings Likert scalesasked to agree or disagree Easy to prepare and interpret Simple Semantic differential scales includes bipolar adjectives Easy Behavior intention scales measures likelihood customers will act a certain way Easy Rank order scales items ranked in order ofpreference in terms of some criteria Chapter 3 Segmentation Consumer needs differ Differentiation helps products compete Segmentation helps identify media Positioning the value proposition expressed through promotion stating the products or services capacity to deliver specific needs Effective Targeting identifiable sizeable stable accessible congruent with the company s objectives and resources Consumer rooted segmentation bases Demographics age gender marital status family life cycle income education and occupation Geodemographic Personality traits People often do not identify these traits because they are guarded or don t consciously recognized OCEAN Lifestyles psychographics Includes activities interests and opinions They explain buyers purchase decisions and choices Sociocultural cultural values sub cultural membership cross cultural affiliations Consumption Specific Segmentation Bases Usage Rate how much of something like toilet paper ifI live alone vs large family Usage Situation take on a trip or use at home Resealable package of 20 or small pack Benefit Segmentation Older people can check email Teens can listen to music Perceived brand loyalty tailor your communications to loyal people Brand Relationship some people are just going for convenience some may life for a certain thing Implementing Segmentation Strategies Concentrated Marketing One segment for your brand Sometimes you only have one segment sometimes you only have the budget for it Differentiated several segments with individual marketing mixes Motivation A psychological force It is the driving force within individuals that impels them to action Needs the essence of the marketing concept Marketers do not create needs but can make consumers aware ofneeds Motivation Process Unfulfilled needs wants and desires 9 Tension 9 Drive 9 Personality perception learning attitudesBehavior9 Goal or need fulfillment tension reduction Innate Needs physiological or biogenic needs that are considered primary needs or motives Acquired Needs learned in response to our culture or environment Are generally psychological and considered secondary needs Positive Motivation Driving forces toward some object or condition Approach goal a positive goal toward which behavior is directed Negative Motivation A driving force away from some object or condition Avoidance goal a negative goal from which behavior is directed away Dynamics of Motivation Needs are never fully satisfied New needs emerge as old needs are satisfied People who achieve their goals set new and higher goals for themselves Substitute goals Are used when a consumer cannot attain a specific goal heshe anticipates will satisfy a need The substitute goal will dispel tension Substitute goals may actually replace the primary goal over time Defense Mechanism Aggression may resort to aggressive behavior in attempt to protect their self esteem Rationalization inventing plausible reasons for being unable to attain their goals Regression childish or immature behavior Withdrawal withdrawal from situation Maslow s Hierarchy of needs Selfactualization ego needs social needs safety and security needs physiological needs Measurement of motives Researchers rely on a combination of techniques Qualitative research is widely used Projective techniques are often very successful in identifying motives Personality Inner psychological characteristics that both determine and re ect how a person responds to his or her environment The nature of personality re ects individual differences consistent and enduring can change Theories of personality Freudian theory unconscious needs or drives that are deep seated and we are not aware of them Neo Freudian personality theory social relationships depend on how your personality will evolve Trait theory Big Five quantitative approach to personality as a set of different psychological traits A trait is any distinguishing relatively enduring way in which one individual differs from another Personality is linked to broad product categories and not specific brands Freudian Theory Id warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction Devil on the shoulder Superego internal expression of society s moral and ethical codes of conduct Angel on shoulder Ego Conscious control that balances the demands of the id and superego Personality and understanding consumer behavior Ranges on a continuum of inner directedness to other directedness Inner directedness rely on own values when evaluating products innovators Other directedness look to others less likely to be innovators Optimum stimulation level A personality trait that measures the level or amount ofnovelty or complexity that individuals seek in their personal experiences High OSL consumers tend to accept risky and novel products more readily than low OSL consumers Sensation seeking the need for varies novel and complex sensations and experience And the willingingness to take social and psychical risks for the sensations Variety Novelty Seeking exploratory purchase behavior use innovativeness vicarious exploration Cognitive Personality Factors Needs for cognition NFC A persons craving for enjoyment of thinkingHigh NFC more likely to respond to ads rich in product info Materialistic people acquire and show off possessions self centered and selfish seek lifestyle full ofpossessions do not get greater personal satisfaction from possessions Product Anthropomorphism attributing human characterizes to objects Tony the tiger Brand personification consumer perceptions of brands attributes for human like character Mr coffee is seen as a dependable friendly efficient intelligent and smart Product Personality Issues Gender some products perceived as masculine while others as feminine Geography actual locations like Philadelphia cream cheese and Arizona iced tea Fictitious names also used such as hidden valley ranch and bear creek Color color combinations in packaging and products denotes personality One or multiple selves A single consumer will act differently in different situations or with different people We have a variety of social roles Marketers can target products to particular self Actual selfimage how consumers see themselves Ideal selfimage how consumers would like to see themselves Social Selfimage how consumers feel others see them Ideal Social selfimage how consumers would like others to see them Expected selfimage how consumers expect to see themselves in the future Out to self traits and individual believes are in her duty to possess Altering selfimage consumers use self altering products to express individualism Creating new self Maintain the existing self Extending the self Conforming Perception Process by which an individual selects organizes and interprets stimuli into a meaningful and coherent picture of the world Elements of perception Sensation the immediate and direct response Do I smell that smell Absolute threshold the lowest level at which an individual can experience a sensation Differential threshold minimal difference that can be detected between to similar stimuli Webers law the IND between to stimuli8 is not an absolute amount but an amount relative to the intensity of the first stimulus The stronger the initials stimulus the greater the additional intensity needed for the second stimulus to be perceived as different Marketers need to determine the relevant IND for their products So that negative changes are not readily discernible to the public That the product improvements are very apparent to consumers Subliminal perception Stimuli that are too weak or too brief to be consciously seen or heard They may be strong enough to be perceived by one or more receptor cells Is it effective Extensive research shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may in uence affective reactions Perceptual Selection Nature of the stimulus products physical attributes package design brand name advertising Expectations based on familiarity previous experience or expectations Breaking thought the clutter Motives needs or wants for a product of service Ifyou are moving you may suddenly feel like you are seeing a lot of ads for packing tape and UHaul Interpretation Stereotype people hold meanings to related stimuli Physical appearances positive attributes of people they know to those who resemble them Important for model selection Descriptive terms verbal messages re ect stereotypes First Impressions Lasting The perceiver is trying to determine which stimuli are relevant important or predictive Halo effect consumers perceive and evaluate multiple objects based on just one dimension Assuming that multiple things will be good based on one attribute the brand Price Quality Relationship The perception of price as an indicator of product quality and the relationship is important seen throughout the world Perceived Risk the degree of uncertainty perceived by the consumer as to the consequences ofa specific purchase decision Types functional risk physical risk financial risk social risk psychological risk time risk How consumers handle risk Seek info stay brand loyal select brand image rely on store image buy the most expensive model seek reassurance Learning the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior Elements of learning theories Motivation unfilled needs lead to motive Cues stimuli that direct motives Response consumer reaction to drive or cue Reinforcement increases the likelihood that a response will occur in the future in a response cue Behavioral Learning based on observable behaviors that occur as the result of expose to stimulus Classical conditioning Paired associate learning Dog bell Salivate Repetition increases association Stimulus generalization having the same response to slightly different stimuli Useful in product extensions family branding and licensing Stimulus discrimination selection ofa specific stimulus from similar stimuli Tell the difference between one brand products to another Instrumental operant conditioning operates Via reward and punishment Positive reinforcement positive outcome Strengthen Likelihood Negative reinforcement Removes negatives encourages behavior that removed the negatives Cognitive learning learning based on mental info processing Often in response to problem solving Attitude A learned predisposition to behave in a consistently favorable or unfavorable manner with response to an object Attitudes are learned predisposition Have consistency occur within a situation Tricompenent Model Cognitive the knowledge that perceptions that are acquired by a combination of direct experience with the attitude object and related info from various sources Affective a consumers emotions or feelings about a particular product or brand Conative the likelihood or tendency that an individual will undertake a specific action of behave in a particular way with regard to the attitude object Mulitattribute attitude models attitude models that examine the composition of consumer attitudes in terms of selected product attributes or beliefs Attitude toward object model attitude is function of presence of certain beliefs or attributers Useful Attitude toward behavior model corresponds closely with behavior Attitude toward object model attitude toward mcdonalds not the behavior Strategies of attitude change Resolve con icting attitudes Changing the basic motivational function Associating the product with an admired group or event Altering components of the multiattribute model Changing beliefs about competitor s brands Informal sources opinion leaders Word of mouth and eWOM two way communications social networks brand communities message boards and blogs Credibility of formal sources endorser effectiveness Effectiveness is related to the message and its ease of comprehension Synergy between the endorser and the product type Endorsers demographic characteristics should be similar to target Endorser credibility is not a substitute for corporate credibility Endorsers words must be realistic for them Vendor Credibility the reputation of the retailers Medium Credibility the credibility of the magazine website or the radio station Effect of time the sleeper effect phenomenon when the consumer does not remember the source Overcoming psychological noise Repeating expose to advertising messages Contrast to break through clutter Customized promoting messages Effective p ositionin g Offering unique value propositions Message framing Positive get out be more active Negative framing don t sit at home don t be a couch potato One sided versus twosided message depends on nature of the audience and nature of competition Order effects primacy recency order ofbenefits brand name Advertising appeals Comparative Fear Humor Abrasive Sex Audience participation Timely Celebrities Feedback determining effectiveness Expose effects how any consumers revived the message Persuasion effects was the message received and interpreted correctly Sales effects did the ads increase sales Culture the sum total of learned beliefs values and customers that serve to regulate the consumer behavior ofmembers ofa particular society Culture satisfies needs Culture is learned Culture is dynamic Evolves because it fills needs Certain factors change culture technology population shift resource shortages wars changing values customs from other countries Issues enculturation and acculturation enculturation the learning of ones own culture Acculturation the learning of a new foreign culture Language and symbols without a common language shared meaning could not exist marketers must choose appropriate symbols in advertising Marketers can use known symbols for associations Ritual a ritual is a type of symbolic activities consisting of a series of steps Menorah Rituals extend over the human life cycle Marketers realize that rituals often involve products or artifacts Sharing of culture to be a cultural characterizes a belief value or practice must be shared by a significant portion of the society Culture is transferred through family schools houses ofworship and media Content analyiss a method for systematically analyzing the conten ofverbal and pictorial communicaitron The method is frequently used to determine prevailing social values ofa society The percentage of clothing ads that have skinny models What we find is that the vast majority of ads are underweight models Consumer fieldwork field observation natural setting subject unaware focus on observation of behavior Participant observation survey participants they are aware American core values for value selection Value must be pervasive Value must be enduring Value must be consumer related American core values Achievement Activity Efficiency Progress Material comfort Individualism Freedom External conformity Humanitarianism Youthfulness Subcultural interaction marketers should strive to understand how multiple sub cultural memberships jointly in uence consumer behavior Cross cultural consumer analysis the effort to determine to what eXtent the consumers of two or more nations are similar or different Issues Similarities and differences among people the greater the similarity between nations the more feasible to use relatively similar marketing strategies Marketers often speak the same types of consumers globally The growing global middle class growing in Asia south America eastern Europe Marketers should focus on these markets The global teen market there has been growth in an af uent global teenage and young adult market They appear to have similar interests desires and consumption behavior no matter where they live World Brand products that are manufactured packaged and positioned the same way regardless of the country in which they are sold Global brands have Quality signal quality because they are popular Global Mythfeel like a citizen of the world because they are using a global brand Social Responsibility Diffusion process the process bywhich the acceptance of an innovation is spread by communication to members of a social system over a period of time Cd players everyone has had one but over what period of time did it spread Elements of diffusion Process The innovation firm oriented definitions product is new to the company Product oriented definitions continuous small change dynamically continuous changes in method or style more disruptive discontinuous ipod replaces cd players Relative advantage degree to which consumers consider it superior to existing substitutes Compatibility degree to which consumers fee it is consistent with their present needs values and practices Complexity the degree to which it is difficult to understand or use Trialability the degree to which it can be tried on a limited basis Observability the degree to which its benefits can be observed imagines or described The channels of communication Marketer to consumer Consumer to consumer In uential impersonal sources The social system modern social systems accept more innovation due to their Positive attitude toward change Advanced technology and science Respect for education and science Emphasis on rational and ordered social relationships An outreach perspective where members interact with outsiders A system where members can see themselves in different roles Time Purchase time Adoptercategories Rate of adoption Adopter categories Innovators first to buy Early adaptors will buy shortly after intro Early majority 1St 12 of the mass market Late majority second half of the mass market Laggards very last Adoption process Awareness consumer is first exposed to the product innovation Interest consumer is interested in the product and searches for additional info Evaluationconsumer decides whether or not believe that this product or service will satisfy the need a king ofmental trial Adoption or rejection The consumer innovator Perceived risk and venturesomeness Purchase and consumption characteristics Media habits Levels of consumer decisionmaking Extensive problem solving buying a car A lot ofinformation needed Must establish a set of criteria for evaluation Limited problem solving buying an expensive moisturizer Criteria for evaluation is established Fine tuning with additional info Routinized response behavior buying toilet paper Usually review what they already know There are many factors that increase search Product factor Situational factors Social acceptability Consumer factors Evoked set Acceptable brand Inept set unacceptable brand Inert set indifferent brands and overlooked Compensatory rule I selected the netbook that come out best when I balanced the good ratings against the bad ratings Conjunctive rule I selected the netbook that had no bad features Disjunctive rule I picked the netbook that excelled in at least one attribute Lexographic rule I looked at the feature that was most important to me and chose the netbook that ranked highest on that attribute Affect referral rule I bought the brand with the highest overall rating Coping with missing info Delay decision until missing info is obtained Ignore missing info and use available info Change the decision strategy to one that better accommodates for the missing info Infer the missing info Exploitive Targeting Marketing to children children are inexperienced Guidelines by children s advertising review unit No misleading claims about products performance or benefits Must not exploit children s imaginations Cannot create unrealistic expectations Products must be shown in safe situation no encouragement ofinappropriate behavior Overaggressive promotion Selling pharmaceuticals directly to consumers The perils of precision targeting Narrowcasting Directed messages to small audiences Data providers support the marketers with info GPS Cell phones and cars givers marketers your location Posers actors or salespeople who pretend to be ordinary people or researchers conducting a survey to explain product benefits and give potential consumers the chance to examine sample or use the product Buzz or viral recruitment ofpeople to talk about product through free samples or discounts before the product is available to the general public Advertorials advertisements that appear to be information from an independent source such as prepared television news stories infomercials that appear to be consumer television shows and print advertisements that appear to be c Disguised monitoring queries via search engine use of invisible metags by a marketer or the sale of priority by a search engine of the results form a particular query when the results are not indentified as biased Urgent ad formation advertisements that appear in the form ofimportant account information from firms with an existing business relationship government notices sweepstakes prize notices or checks that are simply discount coupons Advertainment Product and advertising placement in television shows at sporting events and in video games Cause related marketing


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