Consumer Behavior Assgnment 1

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What Is CB and Why should I Care?

What Is CB and Why Should I Care?

Learning Outcomes

Understand the meaning of consumption and consumer behavior

Describe how competitive marketing environments lead to better outcomes for consumers

Explain the role of consumer behavior in today’s business and society

LEARNING OUTCOMES

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CB8 | CH1

Learning Outcomes (continued)

Be familiar with basic approaches to studying consumer behavior

Appreciate how dynamic the field of consumer behavior continues to be, particularly with respect to technological advances such as big data analytics and the sharing economy

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LEARNING OUTCOMES (continued)

CB8 | CH1

Consumer Behavior (CB)

Set of value-seeking activities that take place as people go about addressing their real needs

Involves multiple psychological events like:

Thinking

Feeling

Behaving

Entire process culminates in value

LO 1

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1.1 The Basic Consumption Process

LO 1

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Exhibit

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Consumption

Process by which consumers use and transform goods, services, or ideas into value

Involves interaction between the marketer and consumer

Outcomes affect the consumer’s well-being and quality of life

LO 1

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Consumer Behavior as a Field of Study

Science of studying how consumers seek value in an effort to address real needs

CB shares strong interdisciplinary bonds with:

Economics

Psychology, particularly social psychology

Marketing

Anthropology

LO 1

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1.2 Relationships of CB with Other Disciplines

LO 1

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Exhibit

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Economics and Consumer Behavior

Economics: Study of production and consumption

Economists focus on the macro perspective of CB bounded by broad assumptions

Data is derived from historical sales records

Studies involve:

Commodity consumption of nations over time

Tracking changes in consumption with different price levels

LO 1

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1.3 The Big Mac Index

LO 1

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Exhibit

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Consumer Psychology

Study of human reactions to their environment

Psychology

Study that focuses on the thoughts, feelings, and behaviors that people have as they interact with other people

Social psychology

Study of the intricacies of mental reactions involved in information processing

Cognitive psychology

LO 1

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Consumer Behavior and Marketing

Marketing: Multitude of value-producing seller activities that facilitate exchanges between buyers and sellers, including:

Production

Pricing

Promotion

Distribution

Retailing

LO 1

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CB and Other Disciplines

Sociology: Study of groups of people within a society

Consumption is affected by group dynamics

Anthropology: Field of study involving interpretation of relationships between consumers and:

Things they purchase

Products they own

Activities in which they participate

LO 1

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Firm Orientations and Consumers

Competition drives companies toward a high degree of consumer orientation

Firm's actions and decision making prioritize consumer value and satisfaction above all other concerns

Key component of a firm with market orientation

Culture that embodies importance of creating value for customers among all employees

LO 2

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Firm Orientations and Consumers (continued)

Stakeholder marketing: Firms recognize that more than just the buyer and seller are involved in the marketing process

Primary stakeholders

Customers, employees, owners, suppliers, and regulating agencies

Secondary stakeholders

Mass media, communities and trade organizations

LO 2

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Relationship Marketing

Activities based on the belief that the firm’s performance is enhanced through repeat business

Touchpoints: Direct contacts between the firm and a customer

Channels of making contact

Phone, email, text messaging, online social networking, and face-to-face contact

LO 2

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Importance of CB

CB provides an input to business/marketing strategy

CB provides a force that shapes the society

CB provides an input to making responsible decisions as a consumer

LO 3

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CB and Marketing Strategy

Resource-advantage theory: Prominent theory that explains why companies fail or succeed

Success is attained by acquiring more resources and using them to gain physical and intellectual capital advantages

Product: Potentially valuable bundle of benefits

Attribute: Tangible feature of a product that potentially delivers a benefit of consumption

LO 3

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Characteristics of Successful Innovations

Relative advantage

Simplicity

Observability

Trialability

Consistency

LO 3

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1.5 Different Ways of Doing Business

LO 3

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Exhibit

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Effects of Consumer Behavior

CB and society

CB creates the society one lives in and serves as an essential source of input for public policy

CB topics that can enlighten customers

Consequences of poor budget allocation

Role of emotions in decision making

Social influences on decision making

Environmental effects on CB

Avenues for seeking redress for unsatisfactory purchases

LO 3

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Interpretive Research

Seeks to explain the inner meanings and motivations associated with specific consumption experiences

Falls into the broader category of qualitative research

Qualitative research tools: Means for gathering data in a relatively unstructured way

Include case analysis, clinical interviews, and focus group interviews

LO 4

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Interpretive Research Orientations

Study of consumers that relies on interpretation of their lived experience associated with some aspect of consumption

Phenomenology

Study of consumers that relies on interpretation of artifacts to draw conclusions about consumption

Ethnography

LO 4

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Quantitative Consumer Research

Addresses questions about consumer behavior using numerical measurement and analysis tools

Measurement is structured

Data are not researcher dependent

Enables researchers to better test hypotheses

Doesn't require deep interpretation

LO 4

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1.6 Comparing Quantitative and Qualitative Research

LO 4

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Exhibit

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Consumer Behavior Is Dynamic

Internationalization

Companies are required to deal with geographical and cultural distances

People from different cultures interpret products and behaviors differently

Consumer perception will determine the success or failure of the product

Technological advances have made geographical distance a nonissue

LO 5

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Big Data

Represents massive amounts of data available to companies that can be used to predict customer behaviors

Predictive analytics: Application of statistical tools in an effort to discover patterns in data that allow prediction of consumer behavior

LO 5

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Changing Economy

Factors contributing to stagnant income

Unemployment

Limited prospects in the workforce

Decreased opportunity to work at an acceptable wage

Consumers are cautious about expenses and react favorably to price-cutting policies

LO 5

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Key Terms

Consumer behavior

Want

Exchange

Costs

Benefits

Consumption

Consumer behavior as a field of study

Economics

Psychology

Social psychology

Cognitive psychology

Neuroscience

Marketing

Sociology

Anthropology

Consumer (customer) orientation

Market orientation

Stakeholder marketing

Relationship marketing

Touchpoints

Resource-advantage theory

KEY TERMS

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Key Terms (continued)

Attribute

Product

Undifferentiated marketing

Product orientation

Differentiated marketers

One-to-one marketing

Niche marketing

Interpretive research

Qualitative research tools

Researcher dependent

Phenomenology

Ethnography

Netnography

Quantitative research

Big data

Predictive analysis

Sharing economy

Collaborative consumption

KEY TERMS

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Summary

Consumer behavior is a set of value-seeking activities

Provides inputs for marketing strategies and shapes society

Studied by using qualitative and quantitative approaches

Varies with dynamicity in technology, demography, and the sharing economy

Competition drives firms toward a high degree of customer orientation

SUMMARY

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