Elements of Consumer Behavior, and Defining the Market HierarchyConsumer BehaviorSlide 3Slide 4Slide 5Slide 6Slide 7Hierarchy of MarketsSlide 9Census InformationSlide 11Segmentation RequirementsBases of SegmentationElements of Consumer Behavior, and Defining the Market HierarchyBA396 SupplementConsumer BehaviorEKB ModelNeed RecognitionInformation SearchInformation EvaluationPurchase DecisionPost-purchaseAttitude FormationConsumer BehaviorEKB ModelNeed RecognitionInformation SearchInformation EvaluationPurchase DecisionPost-purchaseAttitude FormationNeeds: * Functional - product related * Psychological - stimulation - social - status/power - self-rewardInformation: * Amount of information * Sources - internal/external * Reduce search?Consumer BehaviorBuying Process and Decision MakingNeed RecognitionInformation SearchInformation Evaluation & TrialPurchase DecisionPost-purchaseAttitude FormationAdoptionConsumer BehaviorBuying Process and Decision MakingNeed RecognitionInformation SearchInformation Evaluation & TrialPurchase DecisionPost-purchaseAttitude FormationAdoptionHabitual Decision MakingLimited Problem SolvingExtended Problem SolvingConsumer BehaviorWho are your competitors, and how do customers end up selecting your product?Hierarchy of Markets»Competition at different ‘levels’»Try to understand consumer’s decision process»Within a household competition regarding the importance of different generic marketsthis will increase when resources are limited -- transportation will compete with food or housingConsumer BehaviorHierarchy of Markets»Desireall products and services that compete for the consumer’s dollars»Generic Leveldemand for broadly defined need»Specific Product Levelcar, bicycle, single family dwelling, apt.»BrandHonda, Chevrolet, Schwinn, Trek, BikEEHierarchy of MarketsExample 1Diet FoodDiet FoodEntrEntrééeeSupplementSupplementfrozenfrozenfreshfreshpreparedpreparedStouffersStouffersWeightWeightWatchersWatchersfrozenfrozenfreshfreshrestaurantrestaurantStore DeliStore DeliunpreparedunpreparedHierarchy of MarketsExample 2FoodFoodpreparedpreparedunpreparedunpreparedEntrEntrééeeSupplementSupplementSSEE‘‘Fast’Fast’Sit-downSit-downAmericanAmericanMexicanMexicanAsianAsianAmericanAmericanAsianAsianCensus Informationhttp://www.census.gov/dmd/www/products.html Click on “intro to Census 2000 data products”  United States (PDF)Click on the Public Use Presentation Library and browse through the different presentationsAbout ½ way down the list, there is presentation on the geographic concepts discussed in class. Look for:Title: Census 2000: Geographic Concepts and Products (September 2002) Number of slides: 36Description: This presentation gives an overview of Census 2000 geographic concepts and products and the various geographic units for which Census 2000 data are available.Census Informationhttp://www.census.gov/dmd/www/products.html Click on the Public Use Presentation Library and browse through the different presentationsAbout the sixth presentation on the list, there is presentation that covers the short form and long form information. Look for:Title: Census 2000: and Its Data Products (September 2002)Number of slides: 41Description: An overview of the Census 2000 questions, the data sets, and the products released and the released media.Segmentation RequirementsCustomers have different response elasticitiesSalesx1=Advx.5 x SalesPrx.2 x Distrx.3Salesx2=Advx.2 x SalesPrx.4 x Distrx.2Response differences can be identified and matched with customer descriptionsKnowledge of market segments must be translatable to retail mix combinationsSufficient demand in at least one segmentCharacteristics stable over timeBases of SegmentationGeographicNations, regions, statesDemographicAge, gender, family size, incomePsychographicSocial class, lifestyle, personality, AIO inventoriesBehavioralUsage rate, occasion for use, benefits,