Consumer Behaviour
Lecture 1-4/Lecture Four.pptx
Lecture 4
Consumer perception (Sciffman et al Ch. 5 )
BUS299 - Consumer Behaviour
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Lecture summary
To understand the sensory dynamics of perception.
To learn about the three elements of perception.
To understand the components of consumer imagery and their strategic applications.
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Sensory dynamics of perception
Perception is defined as the process by which an individual receives, selects and interprets stimuli to form a meaningful and coherent picture of the world.
(A stimulus is any unit of input to any of the senses.)
Two individuals can be exposed to the same stimuli under the same conditions, but can react differently based upon their own needs, wants and expectations.
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Sensation
Sensation is the immediate and direct response of the sensory organs to simple stimuli (such as an ad or packaging).
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Option here to discuss all the sensory inputs when you walk into a store. Imagine walking off the street into a clothing store . The feel of the air conditioning, the sound of the music, the display signs and products, the smell of the clothing (charity stores for example often smell of mothballs), the touch of the fabrics.
Companies are still looking for ways to get consumers to experience the sensation of touch while shopping online, with one project working on apps which will synthesise the movement when a material is stroked or pinched: http://www.newscientist.com/article/mg21128205.500-online-clothes-shopping-gets-the-human-touch.html#.UpSaiMRQKm4.
The passing test is a video to test students’ awareness: http://www.youtube.com/watch?v=Ahg6qcgoay4 (1min 10secs).
Used to promote awareness for drivers looking for cyclists. (Possible some students may have seen this before, however they tend to remain quiet).
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Sensory receptors
(human organs)
Eyes
Ears
Nose
Mouth
Skin
Absolute threshold
The lowest level at which we can experience a sensation is called the absolute threshold.
Under conditions of constant stimulation, the absolute threshold increases. As our exposure to a stimulus increases, we notice it less.
Known as sensory adaptation and is a problem for TV advertisers as viewers get used to stimulus.
Techniques to combat adaptation include changing the ad, using silence, loud noises and contrasting colours, use of stimuli that conflicts with expectations
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Video from Gruen Transfer showing a ‘Shouty ad’ and discussing the application: http://www.youtube.com/watch?v=HGhyyKddovY (stop at end of segment at 4mins 30secs).
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Application of increased sensory input
Marketers use a variety of approaches to increase sensory input:
experiential marketing
sophisticated scent ads
ambush advertising
product placements
magazine inserts
point-of-sale displays.
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The differential threshold
Weber observed that the just noticeable difference between two stimuli was relative to the intensity of the first stimulus.
The minimal difference that can be detected between the two stimuli is called the differential threshold, or the just noticeable difference (j.n.d.).
This is now known as Weber’s law, and it holds true for all the senses and at almost all intensities.
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Marketing applications of the j.n.d
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Try to make any negative changes in the product not readily discernible.
Examples: reducing quality or packaging size.
Changes should be minor and fall below the j.n.d.
Try to make any improvements in the product readily discernible.
Examples: new packaging, larger sizes.
Changes should exceed the j.n.d.
Gradual change in brand below the j.n.d. over time
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Subliminal perception
Subliminal perception is where consumers are stimulated below their level of conscious awareness.
The stimulus is below the threshold of awareness or ‘limen’.
Despite many studies since, there is no evidence that subliminal persuasion has an effect on consumers towards products and consumption behaviour.
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While there is no evidence to support the use of subliminal perception, some interesting techniques are employed by ‘mind magician’ Derren Brown in this video: http://www.youtube.com/watch?v=YQXe1CokWqQ (6mins 45secs). He uses a priming technique to create the outcome he desires.
Always interesting to pause around 6mins 8secs to see how many students spotted the cues. You may consider playing this before the slide or even at the start of the lecture.
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Elements of Perception
Selective perception
Consumers subconsciously exercise selectivity about which aspects of the environment they perceive.
This helps them cope with the enormous quantities of stimuli that they are exposed to during the day.
Which stimuli gets selected depends on:
Consumers’ previous experience as it affects their expectations
Nature of the stimulus
Consumers’ motives at the time
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Motives
People tend to perceive things they need or want.
The stronger the need, the greater the tendency to ignore unrelated stimuli.
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Important selective perception concepts
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Selective attention
Consumers exercise a great deal of selectivity in the amount of attention they give to stimuli.
Perceptual defence
Consumers screen out stimuli that are important for them not to see, even though exposure has taken place.
Perceptual blocking
Consumers protect themselves from being bombarded with stimuli by simply ‘tuning out’.
Selective exposure
Consumers seek out messages they find pleasant and avoid painful or threatening ones.
Perceptual organisation
Consumers organise stimuli into groups and perceive them as unified wholes.
This principle of perceptual organisation is often referred to as Gestalt (meaning ‘pattern’) after the school of psychology that developed the concept.
The three basic principles of perceptual organisation are:
figure and ground
grouping
closure.
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Perceptual interpretation - Distorting influences (perceptual distortion)
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The Carlsberg ad applies the principles of perceptual interpretation to see how patrons would react when confronted with a cinema full of bikers:
http://www.youtube.com/watch?v=RS3iB47nQ6E .
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Physical appearance
Physical appearance of products affects consumer judgements.
Descriptive terms
Description of product influences consumer judgements.
Stereotypes
Expectations of what specific situations or people might be like.
Irrelevant cues
When required to form a difficult judgement, consumers respond to irrelevant stimuli.
First impressions
Tend to be lasting but the perceiver doesn’t yet know which stimuli are important.
Halo effect
An evaluation based on only one of many dimensions available.
Major positioning strategies
| Umbrella positioning | Positioning against the competition | Positioning based on a specific benefit |
| Finding an ‘unowned’ position | Filling several positions | Packaging as a positioning element |
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Product repositioning
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Old Spice needed to reposition its brand, as it was viewed as a brand ‘your dad would wear’ and was perceived as old fashioned. A creative ad with a charismatic actor helped reposition the brand. Later this was followed by a 48 hour social media campaign across Twitter and Youtube: http://www.youtube.com/watch?v=owGykVbfgUE (30secs).
Blog with brief summary of execution: http://www.rohitbhargava.com/2010/07/why-the-old-spice-guy-might-be-the-perfect-branding-campaign.html
http://www.brandengineers.com/storage/positioning_tips/Quirks_28Mar2011_Brand_Engineers.pdf
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Reasons to reposition
New competitors
Too close to competitor position
Changes in market needs
Poor implementation of positioning goals
Perceptual mapping
Technique to determine how products or services appear to consumers in relation to competitive brands, on one or more characteristics.
Allows marketers to see gaps in the positioning of brands and identify areas of unmet consumer need.
Perceived image is important to service firms because the product is intangible, meaning image can be a key factor in differentiating the service from its competitors.
Study of banks found the following factors are important in a service environment: privacy, efficiency, ambient background, social conditions and aesthetics.
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Perceptual map for an Australian iced coffee study
Copyright ©2014 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442561533/Schiffman/Consumer behaviour/6e
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Perceived price
Should reflect the value that the customer receives from the purchase.
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Perceived quality of products
Consumers judge the quality of a product or service from a variety of informational cues that they associate with the product
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Country-of-origin cues can be especially important to consumers when purchasing cars. German cars have established a reputation for build quality and engineering, whilst Italian motor vehicles are considered as a style and sport archetype. Audi use the tagline Vorsprung Durch Techniq to reinforce their German build standards http://www.youtube.com/watch?v=p8N83Ex_bN0 (5mins).
A rather risqué Dick Smith advert working on Australian country of origin, brand, and characteristics: http://www.youtube.com/watch?v=h7y6iE0aB5s (1min).
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Intrinsic cues
Extrinsic cues
Physical characteristics of product (includes size, flavour, colour, aroma)
External to the product (includes price, store image, brand, country of origin)
Perceived quality of services
Services are more difficult to evaluate because of their:
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Intangibility
Simultaneous production and consumption
Perishability
Variability
SERVQUAL
Measures the gap between the customers’ expectations and the actual service delivered along five dimensions:
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Reliability
Providing the service as promised
Responsiveness
Prompt service, willing to help
Assurance
Instilling confidence in customers
Empathy
Caring, understanding and individual attention
Tangibility
Equipment, facilities, appearance
Price/quality relationship
Research suggests consumers rely on price as an indicator of product quality.
Consumers attribute different qualities to identical products that carry different prices.
Perception of value differs according to segment, such as age and income.
Consumers use price as a surrogate indicator of quality if they have little other information.
The form in which products are sold may alter perceived value (e.g. selling in bundles may reduce quality perception).
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What is store image affected by?
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Frequency of price advantage
Magnitude of price advantage
Width of product assortment
Service levels
Physical appearance
Location
Manufacturer’s image
Manufacturers who enjoy a favourable image generally find new products accepted more readily.
Pioneer brands (first in product category) tend to have favourable images.
Advertising plays an important role in establishing favourable brand image.
Manufacturers use exhibits and sponsorship of community events to enhance their image.
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Types of perceived risk
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Functional
Risk the product won’t work as expected
Physical
Risk to self and others the product may pose
Financial
Risk the product isn’t worth the cost
Psychological
Risk the product will hurt the consumer’s ego
Time
Risk of the time wasted if the product doesn’t perform
Social
Risk the product may be socially embarrassing
Perception of risk varies
The amount of risk perceived depends on the specific consumer.
High-risk perceivers:
described as narrow categorisers as they limit product choices to safe alternatives
less likely to buy new products.
Low-risk perceivers:
broad categorisers as they select from a wider range of products
more likely to buy new or innovative products.
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How consumers handle risk
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Seek information
Brand loyal
Select by brand image
Rely on store image
Buy the most expensive model
Seek reassurance
Summary
The definition of perception, sensation, and absolute and differential thresholds (Weber’s law or ‘just noticeable difference’)
Subliminal perception
Principles of selective perception, perceptual organisation and interpretation
Consumer imagery, positioning and perceptual mapping
Perceived price and the price/quality relationship
Perceived risks and how consumers handle them
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Lecture 1-4/Lecture One.pptx
Lecture 1
The foundations of consumer behaviour (Sciffman et al Ch. 1 )
BUS 299 Consumer Behaviour
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Lecture summary
To understand what consumer behaviour is and the different types of consumers.
To understand why marketers study consumer behaviour.
To understand the relationship between consumer behaviour and the societal marketing concept.
To understand the importance of consumer research for firms and their brands, as well as for consumers.
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To understand the steps in the consumer research process and the imperatives to conduct research.
To understand the types of consumer research.
To understand the relationship between consumer behaviour and customer value, satisfaction, trust and retention.
To understand the make-up and composition of a model of consumer behaviour.
Lecture summary
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What is consumer behaviour?
Consumer behaviour is the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of the products and services that they expect will satisfy their needs.
The study of consumer behaviour includes:
how consumers think
what they buy
why they buy it
how often they buy it
how often they use it
how they dispose of it.
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Lecture 1-4/Lecture Three.pptx
Lecture 3
Consumer needs and motivation (Sciffman et al Ch. 3 )
BUS 299 Consumer Behaviour
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Lecture summary
To understand the types of human needs and motives and the meaning of goals.
To understand the dynamics of motivation, arousal of needs, setting of goals, and interrelationship between needs and goals.
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What is motivation?
Motivation is defined as the driving force within individuals that impels them to action.
This driving force is produced by a state of tension that exists as the result of an unfulfilled need.
Individuals strive both consciously and subconsciously to reduce the tension they feel by addressing the need.
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Guiness Evolution Advert, winner of Lion d’Or 2006 in the Advertising category: http://www.youtube.com/watch?v=_N7UjAsBe90 (1min).
Illustrates a potential subconscious motivator to fulfil a need in a humourous way.
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Model of the motivation process
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Possible point for discussion: What motivated Lance Armstrong to cheat? http://www.thesportinmind.com/articles/what-could-have-motivated-lance-armstrong-to-cheat/
Can discuss in relation to tension, drive, behaviour, and goals – beliefs that he could not win without doping, and not being caught as part of learning etc.
Learning: the process by which individuals acquire the knowledge and experience they apply to future purchase decisions.
Tension: a force which results because of a state of an unfilled need.
Drive: an internal force that impels a person to engage in an action designed to satisfy a specific need.
Cognitive process: a part of an attitude model that represents the knowledge, perception and beliefs that a consumer has with respect to an idea or object.
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Needs
Every individual has needs.
Needs underlie all human actions.
A need becomes a motive when it is aroused to a sufficient level of intensity.
Two types of needs are:
| Innate or biogenic (primary) | Acquired or psychogenic (secondary) |
| Needs that sustain life, such as food, water, shelter etc. | Needs we learn in response to our culture, such as prestige, affection and learning |
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Goals
Goals are the sought after results of motivated behaviour.
Can be considered to be internal representations of desired states.
All behaviour is goal oriented.
Marketers are concerned with consumers’ product-specific goals:
That is, the branded products that they select to fulfil their needs.
Needs and goals are interdependent.
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Selection of goals
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Four factors that goal selection is dependent upon. Textbook example cites tanning (p. 78).
Alternative for discussion – consumer wants a motorcycle and loves the idea of a cruiser like a Harley. Have to weigh up physical capacity, skills etc. of handling the bike. What are the cultural norms towards bikers? Possible connotations of criminal behaviours associated. Is it accessible?
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Goal Selection
Personal experiences
Physical capacity
Cultural values and norms
Accessibility in physical and social environment
Interdependence of needs and goals
Needs and goals are interdependent.
Needs cannot exist without goals.
Can sometimes be difficult to identify needs:
physiological needs are generally easily identified – hungry, thirsty, cold, hot
psychological needs are not generally easy to identify – self-esteem, status, social.
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Positive and negative motivation
Motivation can be positive or negative in direction.
One consumer may join a gym in order to get fit (an approach object).
Whereas another consumer may join a gym to stop getting fat (an avoidance object).
| Positive goal | Negative goal |
| Referred to as an approach object | Referred to as an avoidance object |
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Nike Plus ‘Need motivation?’ advert – illustrates the approach/avoidance concept: http://www.youtube.com/watch?v=UfWTQA6QPk4 (1min).
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Rational versus emotional motives
Considered to be two types of motives:
Rational – consumers select goals based upon objective criteria.
Emotional – consumers select based upon personal or subjective criteria.
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Potential for discussion – can consider the emotional decisions that drive the purchase of a car, versus the rational motivations.
Does the price or type of product make a difference to them?
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Motivation is a dynamic construct: needs and goals are ever changing
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Needs are never fully satisfied
Success and failure influence goals
Substitute goals may be pursued
(if another goal is unattainable)
New needs emerge as old needs are satisfied
Frustration
Failure to achieve a goal often results in feelings of frustration.
People often mentally redefine the frustrating situation in order to protect their self-image.
People adopt defence mechanisms to protect their egos from feelings of failure when they don’t attain their goals.
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Defence mechanisms
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Aggression
To protect self esteem
Rationalisation
Inventing plausible reason for not attaining goal
Regression
Displaying childish behaviour
Withdrawal
Withdrawing from situation
Projection
Projecting blame for failure on others
Daydreaming
Fantasising to achieve imaginary gratification
Escapism
Seek to live out a fantasy
Identification
Identifying with other people or situations
Repression
Repressing the unsatisfied need
Needs and goals vary among individuals
It is not possible to accurately infer motives from behaviour.
Different needs may be met through selection of the same goals.
OR
Same needs, through different goals.
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The Hybrid Yaris advert focuses on look and money aspect: http://www.youtube.com/watch?v=NH5YbgocqYg (40sec).
Whilst the Prius advert focuses on the environment: http://www.youtube.com/watch?v=oKhUDiDNU8c (1min).
Demonstrates different needs or different goals.
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Arousal of motives
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Arousal
Physiological
Emotional
Cognitive
Environmental
Hierarchy of needs
Abraham Maslow formulated a theory of human motivation based on a universal hierarchy of needs in 1943.
He identified five basic levels of needs.
There is some overlap between levels, so that no need is ever completely satisfied.
His theory suggests that we seek to satisfy lower needs first.
As lower level needs are satisfied, higher level needs emerge.
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Animated video discusses motivation – rewards and performance: http://www.youtube.com/watch?v=u6XAPnuFjJc (11mins).
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Maslow’s hierarchy of needs
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Has been widely accepted in social science disciplines.
Criticisms are that the concepts are too general and it can’t be tested empirically.
However can be a useful tool for understanding consumer motivations as consumer goods often serve to satisfy a need level.
Offers a framework for developing advertising appeals on a need level and product positioning.
An evaluation of Maslow’s needs hierarchy
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Marketing applications of the needs hierarchy
Segmentation applications:
used as a basis for segmentation strategies in advertising campaigns
e.g. soft drink ads targeting the youth market and stressing social appeal by showing a group of young people having and sharing good times.
Positioning applications:
determining how the product should be perceived by the target market
the key is to find an unsatisfied need (niche) that is not being used by a competitor
e.g. Volvo promoting the safety appeals of their vehicles.
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The measurement of motives
Motives are hypothetical constructs making them difficult to identify and measure.
Additionally, consumers are not always aware of motives or are unwilling to disclose them.
Measurement is usually a combination of observation, self-reports and projective techniques.
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Summary
Definition of motivation
A model of the motivation process
Use of positive and negative motivation
How consumers deal with frustration
How motives are aroused and measured
Development of needs models
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Lecture 3
Personality and self-concept (Sciffman et al Ch. 4 )
BUS 299 Consumer Behaviour
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Lecture summary
To understand how personality reflects consumers’ inner differences.
To understand how Freudian, neo-Freudian and trait theories each explain the influence of personality on consumers’ attitudes and behaviour.
To understand how personality reflects consumers’ responses to product and marketing messages.
To understand how the products and services that consumers use enhance their self-images.
To understand how marketers seek to create brand personality-like traits.
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Personality is the unique dynamic organisation of characteristics of a particular person, physical and psychological, which influence behaviour and responses to the social and physical environment. Of these characteristics, some will be entirely unique to the specific person and some will be shared with others.
What is personality?
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The nature of personality
In the study of personality, three properties are important:
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Personality reflects individual differences
Personality is consistent and enduring
Personality can change
No two people are exactly alike, but many will be similar in terms of a single personality characteristic.
A consistent pattern of behaviour should endure over time.
Personality may alter due to major life events, and by the gradual maturing process.
Theories of personality
These are three streams of research and theoretical development that have contributed to our understanding of personality and its application in marketing:
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Freudian theory
Neo-Freudian theory
Trait theory
Freudian theory
Based on Sigmund Freud’s psychoanalytic theory of personality.
Built on the premise that unconscious needs are at the heart of human motivation and personality.
Freud believed human personality contained three interacting systems:
The id - warehouse of primitive and impulsive drives, operates on the pleasure principle
The superego - individual expression of moral and ethical codes of conduct
The ego - individual’s conscious control, attempts to balance the id and the superego.
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The ego, the superego, and the id: http://www.theguardian.com/lifeandstyle/2009/mar/07/ego-superego-id-sigmund-freud. Brief article from The Guardian that touches on the idea of the horse and chariot, and how we incorrectly describe someone as being egoistic.
Advert for T Mobile (although barely features the phone) but demonstrates id (motorbike and pleasure of riding), superego (traditional moral codes) and the ego (balancing the idea and giving into the id): http://www.youtube.com/watch?v=5OIWfmjnJPs (1min).
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Interrelationships between the id, superego and ego
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Neo-Freudian personality theory
Neo-Freudians believe social relationships are fundamental to the formation and development of personality.
Alfred Adler viewed humans as seeking to obtain rational goals (‘style of life’) and striving for superiority.
Harry Stack Sullivan stressed people continuously attempt to establish significant and rewarding relationships with others by reducing tension, such as anxiety.
Karen Horney also focused on anxiety, classifying individuals into three groups:
compliant individuals
aggressive individuals
detached individuals.
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Compliant individuals are those who move towards others (they desire to be loved, wanted and appreciated).
Aggressive individuals are those who move against others (they desire to excel and win admiration).
Detached individuals are those who move away from others (they desire independence, self-reliance, self-sufficiency, and individualism or freedom from obligations).
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Trait theory
A trait is any distinguishing, relatively enduring way in which each individual differs from another.
Trait theory focuses on quantitative measurements of personality.
They describe personality as a combination of particular traits.
Trait theorists use personality tests (or inventories) to identify differences in traits.
This approach assumes people have many dimensions to their personality.
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One of the most influential trait theories is the ‘Big Five’ model.
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Big Five personality video - good explanation of Big Five test for Trait Theory: http://www.youtube.com/watch?v=pcvYlZDniKM&feature=related (1min 10secs).
Big Five personality test available here: http://www.bbc.co.uk/science/humanbody/mind/surveys/personality/ or here http://personality-testing.info/tests/BIG5.php.
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Neuroticism
Extroversion
Openness to experience
Agreeableness
Conscientiousness
tendency to fear, sadness and embarrassment
tendency to interact with the world
tendency to seek variety and novel ideas
tendency to move towards people
tendency to control impulses and pursue goals
The five-factor theory of personality
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The ‘Big Five’ and single-trait personality tests
Marketers use the ‘Big Five’ test to create products to appeal to us.
Single-trait personality tests are increasingly being developed to measure one trait of consumers.
Includes many types, such as: romanticism, self-monitoring, consumer ethnocentrism.
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News article related to Trott’s departure from Ashes 2013 series – touches on goals (conscientiousness), vulnerability (neuroticism):
Article linking to employers using personality tests to recruit, promote and divest themselves of staff:
http://www.theatlantic.com/magazine/archive/2013/12/theyre-watching-you-at-work/354681/.
Pepsi ad demonstrating conscientiousness (pursuit of goals) http://www.youtube.com/watch?v=DFkPZ8GRImo (1min).
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Personality and consumer behaviour
This section examines specific personality traits that influence behaviours, such as:
consumer innovativeness, dogmatism and social character
need for uniqueness
consumer susceptibility to interpersonal influence
optimum stimulation level
variety seeking
cognitive personality factors
fixated and compulsive consumers
consumer ethnocentrism.
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Consumer innovativeness
The success of new products often depends on adoption of the product by innovators.
Researchers have developed measurement scales to assess the level of consumer innovativeness.
The questionnaires collect responses to statements such as:
‘I am usually among the last of my friends to buy a new product.’
‘Compared with my friends, I own many of this type of product.’
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Consumer dogmatism
The degree of rigidity people display towards unfamiliar information or towards information contrary to their beliefs.
Consumers who are low in dogmatism are considered open-minded (and more innovative).
Consumers high in dogmatism (close-minded) are more likely to choose established products.
They will also be responsive to ads that contain an authoritative appeal (ads employing experts and celebrities).
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Consumer social character
Social character is a trait that ranges on a continuum from inner-directness to outer-directness.
Inner-directed consumers rely on their inner values in evaluating new products and are likely to be innovators.
Outer-directed consumers look to others for direction and are followers.
These two types of individuals are likely to be attracted to different styles of promotional messages.
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Need for uniqueness (NFU)
Some people seek to be unique.
These people are unconcerned about criticism from others.
Researchers have developed an inventory to identify NFU. Here are some sample items from this scale:
‘When products or brands become extremely popular, I lose interest in them.’
‘I avoid brands that are purchased by the average consumer.’
‘I like to create a style that is all my own.’
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Range Rover Evoque personalisation – vehicle can be personalised to suit individual consumer preferences: http://www.youtube.com/watch?v=35YKFhhaZEE (2mins). Range Rover offer a variety of options for consumers.
Range Rover Autobiography is another product from Land Rover that offers personalisation options for consumers to express their uniqueness: http://www.landrover.com/au/en/lr/range-rover-vogue/explore/autobiography/.
Nike personalised training shoes: http://www.nike.com/us/en_us/c/nikeid.
Can personalise shoes to suit the individual consumer’s style. They also have a free return policy.
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Consumer susceptibility to interpersonal influence (CSII)
Defined as the need to enhance one’s image in the opinions of others.
These consumers have a willingness to conform to the expectations of others and gather information by observing others.
Studies have shown those high in CSII use specific brands to either fit into their social groups or stand out.
By identifying CSII, a marketer can create persuasive communications that identify the product or brand’s value in helping the individual fit into his/her social group.
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Optimum stimulation level
High optimal stimulation level
Willing to take more risks and try new products, services and retailers.
May feel bored by their current lifestyle and seek out exciting services and activities, such as a holiday and entertainment.
Low optimal stimulation level
May seek relaxation and stress relief.
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Variety seeking
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Exploratory purchase behaviour
Vicarious exploration
Use-innovativeness
Switching brands just to experience new (and possibly better) alternatives.
Gaining information and then contemplating (or daydreaming about) the alternative.
Using a product in a new or novel way.
Cognitive personality factors – visualisers versus verbalisers
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Visualisers: Those who prefer visual information.
Verbalisers: Those who prefer written or verbal information.
Need for cognition
An individual’s tendency to desire, engage in and enjoy effortful cognition.
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Consumers who are high in NFC are more likely to be responsive to the part of an ad that is rich in product-related information or description, and unresponsive to the contextual or peripheral aspects of the ad, such as the presence of a celebrity endorser.
In contrast, those consumers who are relatively low in NFC are more likely to be attracted to the background or peripheral aspects of an ad, such as an attractive model or well-known celebrity.
H&M advert featuring David Beckham advertising his new range: http://www.youtube.com/watch?v=il21FZu-IUY (1min 40secs). Appeals to low NFC consumers.
Blackmores provide lots of information on their websites and in print ads to assist consumers: http://www.blackmores.com.au/.
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Low need for cognition
Rely on background or peripheral aspects of an ad
High need for cognition
More responsive to ads rich in product-related information or description
Locus of control
Internal locus of control
Individuals believe they can control outcomes by their own actions and personal abilities.
Consumers with an internal locus of control are more likely to engage in complex information search.
External locus of control
Individuals believe that external factors, such as luck and chance, control their destiny.
Consumers with an external locus of control rely on past experiences to guide them.
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Self-monitoring
Some people are more aware of external environmental cues and will adjust their behaviour to be more socially appropriate.
High self-monitors are preoccupied with what other people think of their appearance and their actions.
Low self-monitors prefer functionality over style in their product choices.
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Students should be very familiar with this concept. Some will be high in self-monitoring themselves and will be steered towards certain brands and products as a result.
Consumers in China seem to be currently very driven by what other people think of their appearance. From JBR: http://www.sciencedirect.com/science/article/pii/S0148296311003547. Purchase intention for luxury brands: a cross cultural comparison. Discusses the importance of self-monitoring for brands.
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Uncertainty orientation
Typical items used to measure UO are:
‘I believe it is important for us to challenge our beliefs.’
‘If I don’t understand something, I find out about it.’
Uncertainty-oriented
Those who seek out new information, situations and ideas.
Certainty-oriented
Those who prefer stability and avoid new information and situations.
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Fixated and compulsive buying and consumption
Fixated consumption behaviour:
within realm of socially acceptable behaviour
passion is open and they frequently display their objects and share with other like-minded enthusiasts
have a deep interest in a product category, willingness to go to great lengths to secure items, and spend a lot of time and money searching.
Compulsive consumption behaviour:
within realm of abnormal behaviour
have an addiction which damages themselves and those around them
may buy products they don’t need, or in excessive amounts, and buy things they can’t afford.
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Interesting video from Catalyst on computer game addiction: http://www.abc.net.au/catalyst/stories/3488130.htm (11mins).
Can be downloaded. Website also includes transcript. 90% of children game, 8% have damaging gaming addictions.
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Consumer ethnocentrism: responses to foreign-made products
Used to identify market segments receptive to foreign-made products.
Highly ethnocentric consumers are more likely to purchase locally produced products.
Qantas use this as a strong theme for their marketing.
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Qantas heavily uses the Australian ‘made’ aspect of its product as a key selling point and has done for years: http://www.youtube.com/watch?v=3yAnN3lXnZg (2mins).
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Consumer self-concept
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Self-concept is the totality of the individual’s thoughts and feelings in reference to themselves as an object.
Behaviour is often directed towards supporting their self-concept through consumption of products as symbols of their self-concept.
Self and self-images
Consumers
Consumers have a number of enduring images of themselves.
Consumers tend to buy products and services that closely respond to their own self-image.
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Dove self-concept – forensic sketch artist drew individuals based upon how they described themselves, and then a sketch based upon how a stranger saw them: http://www.youtube.com/watch?v=litXW91UauE (6mins 40secs).
Aardman Animation animated Creature Comforts on self-image: http://vimeo.com/934258 (9mins).
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One self or multiple selves?
Consumers
People act differently when alone, or with different people, in different situations.
Marketers can therefore target products and services to consumers within the context of a particular self.
Different circumstances
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The make-up of the self-image
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Actual self-image
How consumers see themselves
Ideal self-image
How consumers would like to see themselves
Social self-image
How consumers feel others see them
Ideal social self-image
How consumers would like others to see them
A fifth type of self-image?
Researchers have identified a fifth type of self-image expected self-image.
This is how consumers expect to see themselves in the future.
Useful in developing and promoting products.
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Actual self-image
Use of products and services
Expected self-image
Altering the self
Consumers wish to change or ‘improve’ themselves.
Common examples are cosmetics, piercings, hair colouring or undergoing cosmetic surgery.
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Dove Hair Colour ad: http://www.youtube.com/watch?v=t7aQdIh0K0o (1min).
Features a woman talking about colours and how they reflect her personality. Ends with her revealing she is blind.
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Brand personality
Researchers have found inanimate objects such as brands can be associated with human characteristics.
Consumers tend to ascribe ‘personality-like’ traits to different brands.
The traits of the people associated with the brand are transferred to the brand.
Brand personality is also inferred by advertising style, price, brand name and logo.
Research has found a strong, positive brand personality leads to more favourable attitudes towards the brand, brand preference, high purchase intentions and brand loyalty.
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Cadbury has worked to imbue a sense of joy in their brand personality in order to have consumers connect: http://vimeo.com/2944140 (1min).
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A brand personality framework
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Brand personality – anthropomorphism and personification
Product anthropomorphism
The attribution of human characteristics to something that is not human.
Brand personification
Used by marketers to create consumer perceptions of the product or service into a human-like character.
For example, Jeep as a ‘rugged’ product exhibiting strong, bold and confident behaviours.
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Summary
Definition of personality
Exploration of Freudian, Neo-Freudian and trait theories
How personality reflects consumers’ responses to product and marketing messages
How products and services enhance self-image
How marketers create brand personalities
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Lecture 1-4/Lecture Two.pptx
Lecture 2
The foundations of consumer behaviour (Sciffman et al Ch. 1 )
BUS 299 Consumer Behaviour
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Lecture summary
To understand what consumer behaviour is and the different types of consumers.
To understand why marketers study consumer behaviour.
To understand the relationship between consumer behaviour and the societal marketing concept.
To understand the importance of consumer research for firms and their brands, as well as for consumers.
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To understand the steps in the consumer research process and the imperatives to conduct research.
To understand the types of consumer research.
To understand the relationship between consumer behaviour and customer value, satisfaction, trust and retention.
To understand the make-up and composition of a model of consumer behaviour.
Lecture summary
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What is consumer behaviour?
Consumer behaviour is the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of the products and services that they expect will satisfy their needs.
The study of consumer behaviour includes:
how consumers think
what they buy
why they buy it
how often they buy it
how often they use it
how they dispose of it.
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What is consumer behaviour (cont.)
When acting as consumers, individuals have one goal in mind:
To obtain goods and services that meet their needs and wants.
This requires solutions to problems, and the process is often complex.
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Advertiser versus consumer video: http://www.youtube.com/watch?v=heSudg-tfIk&feature=related (2mins 5secs).
Advert that parodies the relationship between the advertiser (always talking, never listening) and the consumer (trying to be heard).
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Personal consumers and organisational consumers
The personal consumer buys goods and services for:
his or her own use
use by the whole household, or a household member
a gift for someone else.
In all contexts, the products are bought for final use by individuals (end-users).
Examples of websites targeted at personal users:
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Personal consumers and organisational consumers
The organisational consumer includes:
commercial for-profit businesses
non-profit businesses
public sector agencies (government departments)
institutions (e.g. schools, churches, sports clubs)
Organisational consumers buy products to help run their organisations.
Websites targeting organisational users:
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Why marketers study consumer behaviour
To better understand:
changing product life cycles
changing environmental views and concerns
changing consumer protection and public policy
the growing role of services marketing
the growing role of not-for-profit and social marketing
the growing role of global marketing
changing technology
the impact of constant change.
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Changing product life cycles
Many product categories, and changes in them, are driven by product life cycle.
Shorter life cycles arise due to the pace of new product introductions and changes in technology.
Life cycles are increasingly shortened.
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The next big thing SII: http://www.youtube.com/watch?v=GWnunavN4bQ (1min 25secs).
The next big thing SIII: http://www.youtube.com/watch?v=QR8A3T6sPzU (1min 30secs).
The next big thing SIV: http://www.youtube.com/watch?v=K4flaIp411E (30secs).
The first two videos compare to Apple (queues), while the third promotes features. All are annual releases promoting the next big thing and short(er) product life cycles.
Discussion opportunity: Do any of the students replace their phones annually? Or would they like to? What drives their behaviour to do so? Who do they think benefits?
Can there truly be a ‘next big thing’ every year (an evolution or advancement)?
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Adoption and diffusion process
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LO4
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Changing environmental views and concerns
Marketers and public policy makers are aware of the potentially negative impact of products and packaging.
Many consumers are socially aware and favour products that address environmental concerns.
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Planet Ark promotes the behaviour of encouraging printer cartridge recycling. There is a prominent use of personalities in this video: http://www.youtube.com/watch?v=KhcapnYmYPQ (30secs). Here they use Sir Richard Branson; they have also used Kylie Minogue.
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Changing consumer protection and public policy
As a result of consumer research and lobbying, marketers have become more aware of their responsibility to protect consumer interests.
The ACCC ensures that companies act responsibly and ethically in their dealings with consumers.
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ACCC takes Apple to court over iPad3 – ABCNews: http://www.youtube.com/watch?v=fsjkWmDWIgs (25secs).
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Growing role of services marketing
Australia’s service sector forms a large part of the economy.
Marketing service offerings can be difficult as services are:
intangible
perishable
inconsistent.
A knowledge of consumer needs and interests is recognised as being essential to develop effective marketing strategies.
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Growing role of not-for-profit and social marketing
Organisations in both the public and private non-profit sectors recognise the need for marketing strategies that target groups.
Not-for-profit organisations use consumer research to gain a better understanding of their target market.
This allows them to develop more effective marketing.
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Impact upon awareness and education: http://www.youtube.com/watch?v=UMFSfwXoFsI (3mins). This is a video discussing the impact of conversations that come out of Movember, the global movement every November to raise awareness of men’s health issues.
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Growing role of global marketing
Australian companies recognise the need to move beyond domestic markets.
By marketing globally, they can achieve economies of scale and increase sales.
This assists in their bid for survival.
The federal government encourages small and medium sized businesses to export.
Cultural needs have to be recognised though.
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Changing technology
Companies that are responsive to changing technology, and advances in the way that consumers interact with companies through technology, are able to leverage greater relationships.
This technology ranges from websites, to electronic or mobile ordering.
Consumers have access to more information than ever before and can easily find, or provide, reviews quickly.
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Fox Business video discussing McDonald’s fast food on a phone option: http://video.foxbusiness.com/v/2669650145001/fast-food-on-a-phone/ (1min 30secs).
Article about a Danish app called Zerved, which lets consumers order and pay for drinks on their phones:
http://www.drinksmeister.co.uk/cocktail-product-news/zerved/.
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Impact of constant change
Due to continual social, economic and technological changes, marketers need to know which markets to target.
Marketers seek to identify key similarities and differences and then segment their markets accordingly.
This is done by identifying common characteristics among groups of consumers.
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Embracing the marketing concept
Consumer research is used to:
gain a better understanding of consumption behaviour
identify and locate appropriate target markets, and to understand their media habits
identify both felt and unfelt (latent) needs
determine how consumers perceive products, brands and stores
identify attitudes before and after promotional campaigns
identify how and why they make their consumption decisions.
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Consumer research
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Primary research
Quantitative
Observational research
Experimentation
Survey research
Qualitative
Focus groups
In depth interviews
Combination
Uses both qualitative and quantitative methods
Customer value, satisfaction, trust and retention
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Customer value – value pack (bundling) – Australian McDonald’s Advert from the 1980s: http://www.youtube.com/watch?v=KXtquftvL1U (30secs).
Customer satisfaction – ANZ Barbara: http://www.youtube.com/watch?v=vC58URpEqn4 (45secs).
Customer trust – Dairy Farmers – most trusted dairy brand: http://www.youtube.com/watch?v=gFglq1oSanA (30secs).
AAMI Customer Charter - seeks to create a set of rules for the company to work by, thereby creating a level of trust between them and the customer: http://www.aami.com.au/insurance-services/customer-charter.
Customer retention – Qantas frequent flyer – companies use loyalty programs to retain customers and increase the ongoing connection: http://www.youtube.com/watch?v=xWIMQBe47vM (1min).
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What is customer value?
Customer’s perceived benefits
(economic, functional and psychological)
Customer’s resources used (money, time, effort and psychological)
Developing a value proposition is central.
Go to http://content.dell.com/au/en/corp/about-dell.aspx and read Dell’s value proposition.
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Customer satisfaction
Consumer’s perception of performance
Consumer’s expectation of performance
compared to
If exceeded:
If equalled:
Satisfied
If not met:
Dissatisfied
Very satisfied, delighted
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Building customer trust
Challenge of establishing and maintaining consumer trust in a company and its products.
Word of mouth and recommendations from other consumers are highly rated measures of trust.
Trust is the foundation for maintaining long-term relationships with customers.
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Customer retention
The strategy of retention is to make it in the best interest of customers to stay rather than switch.
Research shows small reductions in customer defections produce significant profit increases due to the fact that:
loyal customers buy more products
loyal customers are less price-sensitive
it is cheaper to service existing customers
loyal customers spread positive word-of-mouth and refer other customers.
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A simplified model of consumer behaviour - three interlocking stages
Input stage
| Input stage |
| Firm’s marketing activities + external sociocultural influences |
| Process stage |
| Decision steps + internal psychological factors (modified by experience) |
| Output stage |
| Post-decision behaviour (trial, repeat purchase and evaluation) |
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Summary
Defining consumer behaviour
Why to study consumer behaviour
The societal marketing concept
The types and importance of consumer research
Customer value, satisfaction, trust and retention
A simplified consumer behaviour model
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Lecture 2
Market segmentation: segmenting, targeting and positioning for diverse consumer markets (Sciffman et al Ch. 2 )
BUS 299 Consumer Behaviour
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Lecture summary
To understand why market segmentation is essential.
To understand who uses market segmentation.
To understand how market segmentation operates.
To understand the criteria for targeting selected segments effectively.
To understand the bases for segmenting consumers into markets.
To understand how segmentation and strategic marketing are carried out and strategies implemented.
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What is market segmentation, and why is it important?
Consumers all have similar biological needs:
food
water
Shelter.
Consumers also have acquired needs.
Many people develop similar needs.
This creates a market segment – a group of consumers all with the same or similar needs.
The marketer may then decide to target that segment.
In doing so, they will adapt the image of the product – position it – so that it will appeal to the consumers in the segment.
Market segmentation is the process of dividing a market into distinct subsets of consumers with common needs and selecting one or more segments to target with a distinct marketing strategy.
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Who uses market segmentation?
Most, if not all, consumer goods manufacturers use segmentation.
It can also be used to expand a market, or enter a new one, by more effectively satisfying the specific needs or wants of particular consumers.
Retailers have also adopted segmentation to target different markets.
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How market segmentation operates
Used to guide the positioning of a new product, or the repositioning of an existing product.
Marketers have to consider the different segmentation variables.
Segmentation research also aids in the identification of appropriate media vehicles.
Research can identify profiles of readers of different magazines, viewers of different TV programs and listeners of different radio stations.
Marketers can then match their message to the correct magazine, TV or radio station to best effect.
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Criteria for effective targeting
Identifiable
Able to identify and measure the characteristic
Sizeable
Segment is stable in terms of needs, demographics and psychological factors
Accessible
Able to access and reach the segment in an economical way
Congruent with company objectives and resources
Stable
In terms of lifestyles and consumption patterns
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Bases for segmentation
All consumers are not alike, so marketers need to differentiate appeals for different segments.
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Market segmentation bases and selected variables – geographic and demographic
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Geographic segmentation
The market is divided by location.
Consumers living in the same area are assumed to share the same needs and wants.
Marketers are divided on this approach:
some reject and advocate a global approach due to the rapid dissemination of information
others develop highly regional strategies.
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Demographic segmentation
Segmentation based upon the identifiable and measurable statistics of a population:
age
gender
marital status
income, education and occupation.
Used to locate a target market.
Most accessible and cost-effective means of identification.
Census data is often utilised.
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Demographic profiles
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Psychographic segmentation
Closely aligned with psychological research.
Commonly referred to as lifestyle analysis.
Considered a valuable marketing tool.
Psychographic segmentation employs a series of statements designed to identify relevant elements of a consumer’s:
personality
buying motives
interests
attitudes
beliefs
values.
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Psychographic statements – TV viewership
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Sociocultural segmentation
Sociocultural variables (group and cultural) can be used to subdivide markets.
Division is based upon:
family life cycle – HIF Australia
social class – Four’N Twenty
core cultural values
subcultural memberships
cross-cultural affiliation.
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User related segmentation
User-related segmentation categorises consumers in terms of product, brand or service-usage.
Characteristics include:
rate of usage (heavy, medium, light and non-users)
awareness
degree of brand loyalty (highly brand loyal to brand switchers).
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Benefit segmentation
Benefit segmentation, also known as needs-based segmentation, examines the major benefits consumers look for in the product class.
Changing lifestyles play a major role in determining important product benefits.
Can be used very effectively for niche market segmentation.
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Hybrid segmentation approaches
A hybrid segmentation approach allows the marketer to combine individual approaches to define and identify segments more accurately.
Demographic/psychographic profiling – highly complimentary.
Very useful to segment mass markets.
Geodemographic segmentation – assumes that similar financial means, tastes etc. will come together in proximity.
Most useful when best prospects can be isolated in terms of where they live.
VALS – segments the population on the basis of attitudinal and demographic questions. Defined in three primary motivations: Ideals, Achievement, Self-expression.
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VALS
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Implementing segmentation strategies
Behavioural targeting and microtargeting enable marketers to deliver personalised advertising messages.
Behavioural targeting – based upon usage behaviour.
Microtargeting – applies narrowcasting to deliver personalised messages to individuals following extensive use of hybrid segmentation techniques.
Concentrated marketing – targets one segment with a unique marketing mix.
Differentiated marketing – involves targeting several segments with individualised marketing mixes.
Countersegmentation – the marketer combines two or more smaller segments and targets based upon a generic need.
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Summary
Market segmentation, what it is, and who uses it
The criteria for targeting selected segments effectively
The bases for segmenting consumers into markets
Application and strategies of segmentation and strategic marketing
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