Consumer Behavior BMGT 451 Fall 2013 Midterm Review 10 23 2013 Consumer Behavior BMGT 451 Fall 2013 Midterm Review Course Framework The Consumer Decision Making Process Need recognition Information search Evaluation of alternatives Choice purchase Post choice evaluation Chapter 1 Marketing Strategy and 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 Why study consumer behavior To improve marketing research methodology To plan effective marketing strategies Segmentation targeting e g based on consumer motivation The 4 Ps e g apply principles to pricing package design distribution and communications Intuition and introspection do not always provide real insight To survive in a competitive environment an organization must provide more value Customer Value the difference between all the benefits derived from a total product and all the costs of acquiring those benefits firm must consider value from the customer s perspective must do a better job at anticipating and responding to consumer s needs Determine market segment Formulate marketing strategy analysis of consumers DDB Lifestyle CD on Demographics shown in class demographics are part of consumers external influences in behavior Market Segmentation Market segment a portion of a larger market whose needs differ somewhat from the larger market 1 identify product related need sets 2 group customers with similar need sets 3 describe each group 4 select attractive segment s to target Overall Model of Consumer Behavior including Decision Process with External and Internal Influences of consumer behavior Consumer Decision Process 1 Need recognition 2 Information Search 3 Evaluation of Alternatives 4 Choice purchase 5 Post choice evaluation External Influences internal and external interact with each other Culture maybe most pervasive influence on consumer behavior Internal Influences Subculture Demographics Social status Reference groups Family Marketing Activities Perception Learning Memory Motives Personality Emotions Attitudes Self Concept the totality of an individual s thoughts and feelings about himself and Lifestyle Organizations and Regulation Three Articles Consuming Rituals of the Suburban Tribe Observing women using soap products American families people flossing Anthropological approach to observing consumer behavior their teeth Ethnography Mimicry Prosocial Behavior 3 experiments done about mimicry Study suggests that mimicry increases prosocial behavior Other people can also benefit from a mimicked person s more prosocial orientation participants in Experiment 3 who were mimicked were more inclined to donate money to a charity Being mimicked can alter the way people perceive their environment and interact with others Experiment 1 17 people 9 men 8 women paid 2 euros shown ads pretended to record responses half of the group was mimicked Proctor mimicked body language then got pens 100 of those mimicked helped pick up dropped pens of those not mimicked help pick up pens Took mood No change in mood when mimicked Experiment 2 When mimicked more likely to be helpful 42 test subjects 31 women 11 men paid 2 euro half of the group was mimicked second part of experiment conducted by someone new who dropped the pens use of second experimenter is the difference w Experiment 1 the pens helped pick up pens Proctor mimicked people left room and someone new entered and dropped pens found that if participant was mimicked they were more likely to pick up 84 of those mimicked helped pick up pens 48 of those not mimicked Questions Concerns with study Did not comment about sample size or gender maybe women are naturally more helpful than men don t know gender of experimenter who dropped pens Experiment 3 Donations people mimicked were more likely to donate 41 people 7 men 34 women don t drop pens study new phenomenon at end can go but ask participants to fill out a form and donate money to charity anonymous donation in a sealed box No one with them so not testing who they are like testing helpfulness after mimicked 84 of those mimicked donate 48 of those not mimicked donate What did experimenters prove Pro social behavior nicer if mimicked How Companies Learn Target Figuring how when customers were pregnant and when they were due before they knew Women purchase a particular set a of items while pregnant Target figured out those were and send them coupons promotional items etc Some brief periods in a person s life when old routines fall apart and buying habits are suddenly in flux right around the birth of a child major life Identified 25 products that were a pregnancy predictor when analyzed events together Cues and rewards Can match products bought with lifecycles Major life events change buying habits want to capture market Oreo movie segments and international strategy Change product and promotional strategy based on location of the product Change packaging sometimes too Change company who distributes product to create trust Grandparents teaching kids in US opposite in Asia because not traditional product younger generation show older Different brand names Kraft vs Nabisco Different taste Reduce sugar in Korea Vignette at beginning Chinese marketing and OLPC China has a unique teen market adapt to chinese culture by identifying trends Coke partnership with popular girl band in China S H E athletes and video game hits OLPC one laptop per child is a non profit created by Nicholas Uses social marketing to empower the children of developing Negroponte countries to learn by providing one connected laptop to every school age child promotional activities to obtain donations giving each donor one free year of access to TMobile HotSpot Appendix A and Consumer Research Methods Conduct research in order to generate consumer insights rather than relying on intuition Draw from both basic and applied research findings to generate marketing implications Incorporate multiple methods to analyze target consumers behavior Basic Research Addresses theory independent of specific products brands etc Search for general knowledge Behavior how people react to certain circumstances What affects your perception of taste What makes a spokesperson credible How do peer groups exert influence How do consumers respond to choice sets of varying