Consumer Behavior

Perception, Learning, Personality, Social Class

MEET THE NEW CONSUMER and smile when you do because she is your boss. It may not be the person you thought you knew. Instead of choosing from what you have to offer, she tells you what she wants. You figure it out how to give it to her. -Fortune Editor

Dominant forces shaping Consumer Research

Factors that move an economy from Productiondriven to Market-driven Level of sophistication with which human behaviour is understood in psychology and other behavioural sciences

What is 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 Behaviour? Consumer behaviour theory provides the manager with the proper questions to ask Marketing practice designed to influence consumer behavior influences the firm, the individual, and society All marketing decisions and regulations are based on assumptions about consumer behaviour.

The advice to footwear salesmen should be Dont sell shoes sell lovely feet
Marketers must contend with small changing segments of highly selective buyers intent on receiving genuine value at the lowest price

All managers must become astute analysts of Consumer motivation and Behaviour

Three foundations for marketing decisions Experience Intuition Research

Enhancing Consumer Value-added

Marketers have to constantly innovate after understanding their consumers to strip out costs permanently by focusing on what adds value for the customer and eliminating what doesnt.

Individualised Marketing

A very personal form of marketing that recognises, acknowledges, appreciates and serves individuals who become or are known to the marketer. Data based marketing; DM Customized marketing

Variables involved in understanding consumer behaviour

Stimulus ads, products, hungerpangs Response physical/mental reaction to the stimulus Intervening variables mood, knowledge, attitude, values, situations, etc.

Marketing Strategy & Consumer Behaviour

Marketing Strategy

Providing superior customer value to our target marketMarketing Mix The Product Communications Price Distribution Service

Outcomes
Firm: Product positioning Sales Customer Satisfaction Individual: Need Satisfaction Injurious Consumption Society: Economic Physical Environment Social Welfare

Creating Satisfied Customers

Consumer Behavior is Product Person Situation Specific

Personal Characteristics

Product Characteristics

Consumer Behavior

Marketing Strategy

Consumption Situation

Consumer Lifestyles and Consumer Decisions

Needs/Attitudes That Influence Consumption Decisions

Consumer Lifestyle

Consumer Choices

Behavior/Experiences That Influence Consumption Decisions

Overall Model Of Consumer Behavior

Perception
The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world How we see the world around us

Informa tion Proces sing for Consu mer Decisio n Making

The Nature of Perception

Exposure: when a stimulus comes within range of our sensory receptor nerves Random vs. Deliberate Attention: when the stimulus activates one or more sensory receptor nerves and the resulting sensations go to the brain for processing Low vs. High Involvement Interpretation: the assignment of meaning to sensations Low vs. High Involvement

Use of Isolatio n and Contrast

Elements of Perception
Sensation Absolute threshold Differential threshold Subliminal perception

Sensation
The immediate and direct response of the sensory organs to stimuli Sensitivity to stimuli varies with the quality of an individuals sensory receptors Sensation itself depends on energy change within the environment where the perception occurs (i.e. the differentiation of input) As sensory input decreases , our ability to detect changes in input increases, to the point that we attain maximum sensitivity under conditions of minimal stimulation

The absolute threshold

The lowest level at which individual can experience a sensation is called the absolute threshold. ( the distance at which a driver can note a specific billboard on a highway is that individuals absolute threshold) sensory adaptation-Under conditions of constant stimulation , the absolute threshold increases. (apple computer once bought all the advertising space in an issue of Newsweek magazine to ensure that readers would note its ads)

Differential Threshold
Minimal difference that can be detected between two similar stimuli Also known as the just noticeable difference (the j.n.d.)

Webers Law
The j.n.d. between two stimuli is not an absolute amount but an amount relative to the intensity of the first stimulus Webers law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.
(Increase in price of the product with high amount like 50%)

Marketing Applications of the J.N.D.

Marketers need to determine the relevant j.n.d. for their products so that negative changes are not readily discernible to the public (Biscone biscuits decrease the quantity of half roll) so that product improvements are very apparent to consumers (updated packing, larger size or lower price)

Subliminal Perception
Stimuli that are too weak or too brief to be consciously seen or heard may be strong enough to be perceived by one or more receptor cells.

Is Subliminal Persuasion Effective?

Extensive research has shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may influence affective reactions

Aspects of Perception
Selection Organization Interpretation

Aspects of Perception
Selection Organization Interpretation

Perceptual Selection
Consumers subconsciously are selective as to what they perceive. Stimuli selected depends on two major factors
Consumers previous experience Consumers motives

Selection depends on the

Nature of the stimulus Expectations Motives

Stimulus Factors SIZE

Size and Intensity influence the probability of paying attention Larger stimuli are more likely to be noticed than a small one
SPREAD 1 PAGE

NO. OF RESPON SES 107 76

TWO 68 THIRDS PAGE ONE HALF 56 PAGE ONE THIRD 47

 INSERTION FREQUENCYTHE NUMBER OF TIMES THE SAME AD APPEARS IN THE SAME ISSUE OF A MAGAZINE, HAS AN IMPACT SIMILAR TO AD SIZE

 Color and Movement serve to attract attention

Position
Placement of the object in a persons visual field

Perceptual Selection
Concepts
Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking Consumers seek out messages which:

Are pleasant They can sympathize Reassure them of good purchases

Marketing Applications of the J.N.D.

Marketers need to determine the relevant j.n.d. for their products
so that negative changes are not readily discernible to the public so that product improvements are very apparent to consumers

Subliminal Perception
Stimuli that are too weak or too brief to be consciously seen or heard may be strong enough to be perceived by one or more receptor cells.

Is Subliminal Persuasion Effective?

Extensive research has shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may influence affective reactions

Aspects of Perception
Selection Organization Interpretation

Aspects of Perception
Selection Organization

Interpretation

Perceptual Selection
Consumers subconsciously are selective as to what they perceive. Stimuli selected depends on two major factors
Consumers previous experience Consumers motives

Selection depends on the

Nature of the stimulus Expectations Motives

Stimulus Factors
Size and Intensity influence the probability of paying attention Larger stimuli are more likely to be noticed than a small one
SIZE NO. OF RESPONSE S 107

SPREAD

1 PAGE
TWO THIRDS PAGE ONE HALF PAGE ONE THIRD PAGE

76
68 56 47

 INSERTION FREQUENCYTHE NUMBER OF TIMES THE SAME AD APPEARS IN THE SAME ISSUE OF A MAGAZINE, HAS AN IMPACT SIMILAR TO AD SIZE

 Color and Movement serve to attract attention

Position

Placement of the object in a persons visual field

Perceptual Selection
Concepts
Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking Consumers seek out messages which:

Are pleasant They can sympathize Reassure them of good purchases

Perceptual Selection
Concepts
Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking Heightened awareness when stimuli meet their needs Consumers prefer different messages and medium

Perceptual Selection
Concepts
Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking Screening out of stimuli which are threatening

Perceptual Selection
Concepts
Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking Consumers avoid being bombarded by:
Tuning out TiVo

Aspects of Perception
Selection Organization

Interpretation

Organization Principles
Figure and ground Grouping Closure People tend to organize perceptions into figure-and-ground relationships. The ground is usually hazy. Marketers usually design so the figure is the

Organization
Principles
Figure and ground Grouping Closure People group stimuli to form a unified impression or concept. Grouping helps memory and recall.

Organization
Principles
People have a need for closure and organize perceptions to form a complete picture. Will often fill in missing pieces Incomplete messages remembered more than complete

Figure and ground Grouping Closure

Aspects of Perception
Selection Organization

Interpretation

Interpretation
Perceptual Distortion
Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect Positive attributes of people they know to those who resemble them Important for model selection Attractive models are more

Interpretation
Perceptual Distortion
Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect People hold meanings related to stimuli Stereotypes influence how stimuli are perceived

Interpretation
Perceptual Distortion
Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect First impressions are lasting The perceiver is trying to determine which stimuli are relevant, important, or predictive

Interpretation
Perceptual Distortion
Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect People tend not to listen to all the information before making conclusion Important to put persuasive arguments first in advertising

Interpretation
Perceptual Distortion
Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect Consumers perceive and evaluate multiple objects based on just one dimension Used in licensing of names Important with spokesperson

Issues in Consumer Imagery

Product Positioning and Repositioning Positioning of Services Perceived Price Perceived Quality Retail Store Image Manufacturer Image Perceived Risk

Positioning
Establishing a specific image for a brand in the consumers mind Product is positioned in relation to competing brands Conveys the concept, or meaning, of the product in terms of how it fulfills a consumer need Result of successful positioning is a distinctive, positive brand image

Positioning Techniques
Umbrella Positioning Positioning against Competition Positioning Based on a Specific Benefit Finding an Unowned Position Filling Several Positions Repositioning

Perceived Quality
Perceived Quality of Products
Intrinsic vs. Extrinsic Cues

Perceived Quality of Services Price/Quality Relationship

Perceived Quality of Services

Difficult due to characteristics of services
Intangible Variable Perishable Simultaneously Produced and Consumed

SERVQUAL scale used to measure gap between customers expectation of service and perceptions of actual service

Price/Quality Relationship
The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product.)

LEARNING DEFINED IT IS RELATIVELY PERMANENT CHANGE IN BEHAVIOUR OCCURING AS A RESULT OF EXPERIENCE. TYPES OF LEARNED BEHAVIOUR PHYSICAL BEHAVIOUR SYMBOLIC LEARNING AND PROBLEM SOLVING AFFECTIVE LEARNING

PRINCIPLE ELEMENTS OF LEARNING MOTIVE- they arouse individuals ,thereby increasing their
readiness to respond CUES- It is a weak stimulus not strong enough to arouse consumers, but capable of providing direction to motivated activity RESPONSE- mental or physical activity the consumer makes in reaction to a stimulus situation. REINFORCEMENT- anything that follows a response and increases the tendency of response to reoccur in a similar situation.

THEORIES OF LEARNING CLASSICAL CONDITIONING

UNCONDITIONED STIMULUS MEAT PASTE CONDITIONED STIMULUS BELL AFTER REPEATED PAIRINGS

UNCONDITIONED RESPONSE SALIVATION

CONDITIONED STIMULUS BELL

CONDITIONED RESPONSE SALIVATION

CREATION OF A STRONG ASSOCIATION BETWEEN CS AND US REQUIRES

1. FORWARD CONDITIONING (i.e. CS should precede US) 2. Repeated pairings of CS and US 3. A CS and US that logically belong to each other 4. A CS that is novel and unfamiliar 5. A US that is biologically or symbolically salient

STRATEGIC APPLICATIONS OF CLASSICAL CONDITIONING 1. REPETITION

ADVERTISING WEAROUT

COSMETIC VARIATIONS

SUBSTANTIATIVE WEAROUT

THREE HIT THEORY

STIMULUS GENERALISATION 1. PRODUCT LINE,FORM AND CATEGORY EXTENSIONS 2. FAMILY BRANDING 3. LICENSING STIMULUS DISCRIMINATION

1. POSITIONING
2. PRODUCT DIFFERENTIATION

INSTRUMENTAL CONDITIONING TRY BRAND A STIMULUS SITUATION NEED NEW SHOES TRY BRAND B UNREWARDED BAD FIT

UNREWARDED LIMITED STYLES UNREWARDED NOT COMFORTABLE

TRY BRAND C

TRY BRAND D

REWARD PERFECT FIT

REPEAT BEHAVIOUR

What Is Personality

The inner psychological

characteristics that both determine and reflect how a person responds to his or her environment

The Nature of Personality

Personality reflects individual differences Personality is consistent and enduring Personality can change

Theories of Personality Freudian theory

Unconscious needs or drives are at the heart of human motivation

Neo-Freudian personality theory

Social relationships are fundamental to the formation and development of personality

Trait theory
Quantitative approach to personality as a set of psychological traits

Freudian Theory
Id
Warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction

Superego
Individuals internal expression of societys moral and ethical codes of conduct

Ego
Individuals conscious control that balances the demands of the id and superego

A Representation of the Interrelationships Among the Id, Ego, and Superego

Freudian Theory and Product Personality

Consumer researchers using Freuds personality theory see consumer purchases as a reflection and extension of the consumers own personality

Neo-Freudian Personality Theory

We seek goals to overcome feelings of inferiority We continually attempt to establish relationships with others to reduce tensions Karen Horney was interested in child-parent relationships and desires to conquer feelings of anxiety. Proposed three personality groups
Compliant move toward others, they desire to be loved, wanted, and appreciated Aggressive move against others Detached move away from others

Trait Theory
Personality theory with a focus on psychological characteristics Trait - any distinguishing, relatively enduring way in which one individual differs from another Personality is linked to how consumers make their choices or to consumption of a broad product category - not a specific brand

Consumer Innovators And Noninnovators

Innovativeness Dogmatism Social character Need for uniqueness Optimum stimulation level Variety-novelty seeking The degree to which consumers are receptive to new products, new services, or new practices

Consumer Innovators And Noninnovators

Innovativeness Dogmatism Social character Need for uniqueness Optimum stimulation level Variety-novelty seeking A personality trait that reflects the degree of rigidity a person displays toward the unfamiliar and toward information that is contrary to his or her own established beliefs

Consumer Innovators And Noninnovators

Innovativeness Dogmatism Social character Need for uniqueness Optimum stimulation level Variety-novelty seeking
Ranges on a continuum for inner-directedness to otherdirectedness Inner-directedness
rely on own values when evaluating products Innovators look to others less likely to be innovators

Other-directedness

Consumer Innovators And Noninnovators

Innovativeness Consumers who avoid appearing to Dogmatism conform to Social character expectations or Need for uniqueness standards of others Optimum stimulation level Variety-novelty seeking

A Sample Items from a Consumers Need for Uniqueness Scale

1. I collect unusual products as a way of telling people Im different 2. When dressing, I have sometimes dared to be different in ways that others are likely to disapprove 3. When products or brands I like become extremely popular, I lose interest in them 4. As far as Im concerned, when it comes to the products I buy and the situations in which I use them, custom and rules are made to be broken 5. I have sometimes purchased unusual products or brands as a way to create a more distinctive personal image

Cognitive Personality Factors

Need for cognition (NC)
A persons craving for enjoyment of thinking Individual with high NC more likely to respond to ads rich in product information

Visualizers versus verbalizers

A persons preference for information presented visually or verbally Verbalizers prefer written information over graphics and images.

From Consumer Materialism to Compulsive Consumption

Consumer materialism
The extent to which a person is considered materialistic

Fixated consumption behavior

Consumers fixated on certain products or categories of products

Compulsive consumption behavior

Addicted or out-of-control consumers

Sample Items to Measure Compulsive Buying

1. When I have money, I cannot help but spend part or the whole of it. 2. I am often impulsive in my buying behavior. 3. As soon as I enter a shopping center, I have an irresistible urge to go into a shop to buy something. 4. I am one of those people who often responds to direct mail offers. 5. I have often bought a product that I did not need, while knowing I had very little money left.

Consumer Ethnocentrism

Ethnocentric consumers feel it is wrong to purchase foreign-made products They can be targeted by stressing nationalistic themes

Brand Personality
Personality-like traits associated with brands Examples
Nike and athlete BMW is performance driven Levis 501 jeans are dependable and rugged

Brand personality which is strong and favorable will strengthen a brand but not necessarily demand a price premium

Product Personality Issues

Gender
Often used for brand personalities Some product perceived as masculine (coffee and toothpaste) while others as feminine (bath soap and shampoo) Actual locations names used Color Color combinations in packaging and products denotes personality

Geography

The Personality-like Associations of Colors

Americas favored color IBM holds the title to blue Associated with club soda Men seek products packaged in blue Houses painted blue are avoided Low-calorie, skim milk Coffee in a blue can perceived as mild Eyes register it faster Coffee in yellow can perceived as weak Stops traffic Sells a house Good work environment Associated with vegetables and chewing gum Canada Dry ginger ale sales increased when it changed sugar-free package from red to green and white

BLUE

Commands respect, authority

Caution, novelty, YELLOW temporary, warmth Secure, natural, relaxed or easyGREEN going, living things

RED

Human, exciting, hot, passionate, strong

Powerful, affordable, informal BROWN Informal and relaxed, masculine, nature Goodness, purity, WHITE chastity, cleanliness, delicacy, refinement, Sophistication, BLACK formality power, authority, SILVER, mystery Regal, wealthy, GOLD
ORANGE

Makes food smell better Coffee in a red can perceived as rich Women have a preference for bluish red Men have a preference for yellowish red Coca-Cola owns red Draws attention quickly

Coffee in a dark-brown can was too strong Men seekreduced products packaged in brown Suggests calories Pure and wholesome food Clean, bath products, feminine Powerful clothing High-tech electronics Suggests premium price

Self and Self-Image

Consumers have a variety of enduring images of themselves These images are associated with personality in that individuals consumption relates to self-image

Issues Related to Self and SelfImage

One or multiple selves Makeup of the self-image Extended self Altering the selfimage

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 a particular self

Issues Related to Self and SelfImage

One or multiple selves Makeup of the self -image Extended self Altering the self- image

Contains traits, skills, habits, possessions, relationships and way of behavior Developed through background, experience, and interaction with others Consumers select products congruent

Actual SelfImage

Ideal Self-Image

Ideal Social Self-Image

Social Self-Image

Expected Self-Image

Different Self-Images

Issues Related to Self and SelfImage

One or multiple selves Makeup of the self-image Extended self Altering the self- image

Possessions can extend self in a number of ways:

Actually Symbolically Conferring status or rank Bestowing feelings of immortality Endowing with magical powers

Issues Related to Self and SelfImage

One or multiple selves Makeup of the self-image Extended self Altering the self -image

Consumers use selfaltering products to express individualism by

Creating new self Maintaining the existing self Extending the self Conforming

Social Stratification
Social Class System
Hierarchical division of society into relatively permanent and homogeneous groups with respect to attitudes, values and lifestyles.

Criteria for a Social Class System: Individual Classes Must Be:

Bounded Ordered Mutually Exclusive Exhaustive Influential

Social Standing Influences Behavior

Not All Behaviors within a Social Class are Unique

Behaviors associated with a particular social class Behaviors not Engaged in

Unique Behaviors

Excluded Shared Behaviors Behaviors

Behaviors shared With other Social Classes

WorkingClass Aristocrats

Disdain

Prefer
WorkingClass Products And Brands

Positioning
Working-class Symbolism for Working-class Products

UpperMiddle Class

Positioning Within Social Class

Upward-Pull Strategy

Measuring Social Status

Single-Item Indexes
Education Occupation (e.g., Socioeconomic Index: SEI) Income (e.g., individual, family, before or after tax)

Advantage: Allow estimation of the impact of specific status dimensions on the consumption process. Disadvantage: Less accurate at predicting an individuals overall position in a community.

Measuring Social Status

Multi-Item Indexes Hollingshead Index of Social Position Warners Index of Status Characteristics Census Bureaus Index of Socioeconomic Status Advantage: More accurate at predicting an individuals overall position in a community. Disadvantage: Overall status may mask useful associations between individual status dimensions and the consumption process for particular products.

Positioning and Social Class Segments

What Is a Group?
Two or more people who interact to accomplish either individual or mutual goals A membership group is one to which a person either belongs or would qualify for membership A symbolic group is one in which an individual is not likely to receive membership despite acting like a member

Indirect Reference Groups

Individuals or groups with whom a person identifies but does not have direct face-to-face contact, such as movie stars, sports heroes, political leaders, or TV personalities.

Major Consumer Reference Groups

Positive Influences on Conformity

Group Characteristics Attractiveness Expertise Credibility Past Success Clarity of Group Goals

Personal Characteristics Tendency to Conform Need for Affiliation Need to be Liked Desire for Control Fear of Negative Evaluation

GROUP EXERT INFLUENCES

1.

ATTITUDE TOWARDS THE GROUP

VIEWS THE REFERENCE GROUP AS A CREDIBLE SOURCE OF INFORMATION VALUES THE VIEWS AND REACTIONS ACCEPTS THE REWARDS AND SANCTIONS

NATURE OF THE GROUP

COHESIVE FREQUENTLY INTERACTING DISTINCTIVE AND EXCLUSIVE VISIBLE EXCLUSIVE

NATURE OF THE PRODUCT

Selected ConsumerRelated Reference Groups

Friendship groups Shopping groups Work groups Virtual groups or communities Consumer-action groups

Wild Planet Video

SITUATION
A FRIEND MENTIONS THAT STORE X HAS A GOOD COLLECTION OF SUITS

Behavioral

Type of influence

response
NEEDING A NEW SUIT A DECIDES TO VISIT THE STORE INFORMATIONAL

AN AD STRESSES THATEVEN YOUR FRIENDS WONT TELL YOU IF YOU HAVE BAD BREATH-THEY WILL IGNORE YOU

A BUYS THE RECOMMENDED MOUTHWASH

NORMATIVE

IDENTIFICATION
OVER TIME.A NOTICES THAT SUCCESSFUL EXECUTIVES DRESS CONSERVATIVELY

A DEVELOPS A CONSEVATIVE WARDROBE

CONSUMPTION

NECESSITY
(WEAK REFERENCE GROUP INFLUENCE ON PRODUCT)

NONNECESSITY
(STRONG REFERENCE GROUP INFLUENCE ON PRODUCT)

VISIBLE
(STRONG REFERENCE GROUP INFLUENCE ON BRAND)

PUBLIC NECESSITIES PRIVATE NECESSITIES

PUBLIC

PRIVATE
(WEAK REFERENCE GROUP INFLUENCE ON BRAND)

PRIVATE

Visible usage High relevance of product to group

Low individual purchase confidence

Strong individual commitment to group Nonnecessary item

HIGH DEGREE OF REFERENCE GROUP INFLUENCE

Consumer Socialization

The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers.

A Simple Model of the Socialization Process - Figure 10.11

Table 10.7 Eight Roles in the Family Decision-Making Process

ROLE Influencers DESCRIPTION Family member(s) who provide information to other members about a product or service Family member(s) who control the flow of information about a product or service into the family Family member(s) with the power to determine unilaterally or jointly whether to shop for, purchase, use, consume, or dispose of a specific product or service Family member(s) who make the actual purchase of a particular product or service Family member(s) who transform the product into a form suitable for consumption by other family members Family member(s) who use or consume a particular product or service Family member(s) who service or repair the product so that it will provide continued satisfaction. Family member(s) who initiate or carry out the disposal or discontinuation of a particular product or service

Gatekeepers
Deciders

Buyers

Preparers
Users Maintainers Disposers

The Family Life Cycle

Traditional Family Life Cycle
Stage Stage Stage Stage Stage I: Bachelorhood II: Honeymooners III: Parenthood IV: Postparenthood V: Dissolution

Modifications - the Nontraditional FLC

By Muhammad Khalid Khan

Thank You