Activity 2
Shravan
Chapter2.CustomerBehavior1.pptx© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2018 Cengage Learning.® May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Customer Behavior
© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Marketing Framework
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Discussion Question #1
Describe the process you used when you decided which college to attend.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Science of Consumer Behavior
There are known, reliable patterns that comprise consumer behavior, including:
The phases consumers go through when making a purchase
The different kinds of purchases that consumers make
How consumers sense and perceive, become motivated, form attitudes, and make decisions
The cultural differences that influence consumers
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Purchase Process
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Pre-Purchase Phase
Customers recognize a need/desire
Some are heavily marketer influenced; some are not
e.g., Having trendy clothes vs. needing to eat
Customers search and evaluate products that address their need
e.g., Conduct online search, ask friends, etc.
Customers create a consideration set
All brands considered as candidates for purchase
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Discussion Questions #2
What need/desire drove you to consider “purchasing” college?
How did you search for information?
Which colleges were in your consideration set?
What criteria did you utilize to form this set?
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Purchase Phase
Customers narrow the consideration set
Customer may delay the purchase
Customer may decide not to purchase
Customers decide on retail channel
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Post-Purchase Phase
Customers assess the purchase and the purchase process
Customers determine satisfaction
Did the customer get what he expected?
Customers’ level of satisfaction leads to
Repeat purchases
Negative or positive word of mouth
Product returns, etc.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Discussion Questions #3
Are you satisfied with your college decision? Why or why not?
Could your level of satisfaction affect the college? If so, how?
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Who Utilizes the Purchase Process?
Business-to-Consumer (B2C) and Business-to-Business (B2B) both utilize the buying process
The amount of time spent on a stage depends upon what is being bought
A business customer is an agent buying something on behalf of an organization
e.g., Administrative assistants, operations department, etc.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Three Types of Consumer Purchases (slide 1 of 2)
Convenience purchases
Low involvement; standard, frequently consumed goods or impulse purchase
Consumers don’t spend much time thinking or planning the purchase
Shopping purchases
Medium involvement; not as frequently purchased
Consumers spend time and effort prior to purchase
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Three Types of Consumer Purchases (slide 2 of 2)
Specialty purchases
High involvement; occasional purchases, often more expensive, require more thought
Customers put much effort into the purchase
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Types of Business Purchases
Straight rebuy
Low involvement; purchase what was purchased last time with little or no thought
Modified rebuy
Medium involvement; something about the purchase is altered requiring some thought
New buy
High involvement; purchase something that hasn’t been purchased before requiring much thought and planning
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Types of Purchases
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Low-Involvement Purchases
Low-involvement purchases
Have more price sensitivity
Use price discounts
Generally don’t generate word of mouth
Are usually distributed intensively
Marketers should focus on how to capture consumers’ attention
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High-Involvement Purchases
High-involvement purchases
Have less price sensitivity
Use brand communities and events
May generate word of mouth
Are usually distributed selectively
Marketers should focus on providing consumers with information
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Anatomy of a Grocery Store
Layout of a grocery store encourages purchases
Group similar products
Group complementary products
Place common purchases far from the entrance
Group products to form consideration sets
Place high-profit and impulse-purchase items at end of aisles and checkout lanes
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sensation and Perception (slide 1 of 5)
Utilize senses to convey information
Consumers have selective attention; they block out what is not relevant
Visual: colors can convey
Product characteristics (white for freshness for toothpaste)
Brand identity (Tiffany’s aqua blue)
Meaning (affected by culture)
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sensation and Perception (slide 2 of 5)
Hearing can
Increase spending
e.g., Quick tempo music = increased spending
Convey a brand
e.g., Harley-Davidson’s distinctive sound
Smell can
Get attention
e.g., Smelling the Cinnabon store
Allow product sampling
e.g., Perfume in magazines
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sensation and Perception (slide 3 of 5)
Taste can
Distinguish one brand from another
e.g., Coke vs. Pepsi
Touch can
Convey brand imagery
e.g., Well-designed products compared to value designed products
e.g., Ergonomics, clean lines, simplicity, beauty, and sensual experiences
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sensation and Perception (slide 4 of 5)
Subliminal advertising
An ad that is shown so quickly that is doesn’t meet the threshold of liminal recognition
Has been debunked by research
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sensation and Perception (slide 5 of 5)
Mere exposure
Repeated exposure to an ad brings familiarity and a positive feeling
Perceptual fluency
Customers may pay the most attention to the content of a message
However, the colors, font, etc. make a brand impression as well
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Learning, Memory, and Emotions
Sensory and perceptual impressions can become brand associations
Learning is the process by which associations get past the sensory and perception stages into short-term memory and then, with repetition and elaboration, into long-term memory
Classical and operant conditioning
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Classical Conditioning (slide 1 of 2)
Pavlov’s dogs
Stage 1: a dog drools at sight of food
Stage 2: a dog doesn’t respond to a bell
Stage 3: ringing a bell while placing food in front of the dog elicits drool
Stage 4 (occurs over time): a bell rung in front of the dog elicits drool
A similar process can be used in advertising and jingles
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Classical Conditioning (slide 2 of 2)
Companies may have negative brand associations in customers’ memories
Some companies change names to help create new associations
e.g., Philip Morris is now Altria
e.g., ValuJet is now AirTran
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Discussion Question #4
Use classical conditioning theory to explain this advertisement.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Operant Conditioning
Skinner used pigeons to show that learning occurs by positively reinforcing behavior
Fixed ratio reward: reward is given every time or every 4th time, etc.
Variable ratio reward: reward timing varies unpredictably
Subject will engage in the behavior more often if rewarded on the variable schedule
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Discussion Questions #5
Discuss how a deli could utilize operant conditioning to design a loyalty program under
fixed ratio reward, and
variable ratio reward
Which reward ratio do you think would be more effective and why?
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Motivation: Hierarchy of Needs
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Maslow’s Hierarchy of Needs (slide 1 of 2)
Maslow suggests that people must have their basic needs met before moving on to more abstract needs
Marketers may identify their product with one of Maslow’s needs
e.g., Volvo and safety needs
Many brands are associated with a sense of belonging, social acceptance, and respect
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Maslow’s Hierarchy of Needs (slide 2 of 2)
Marketers may identify products with aspiration groups
Marketers may offer an extended brand line for customers at different levels in Maslow’s hierarchy
e.g., Mercedes has a lower-end C model, then upward to E, S, and finally CL models
Marketers use hierarchy for positioning
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Distinguishing Motivations
Utilitarian vs. hedonic
e.g., Suit for interviews vs. Armani suit
Conformity vs. individuality
May vary over lifetime or in different situations
Risk seeking vs. risk averse
Risk tolerance may vary with product knowledge
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Attitudes and Decision Making
Attitudes and decision making influence whether consumers
Will buy a brand
Repeatedly purchase it
Become loyal
Recommend it to others, etc.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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What Are Attitudes?
Attitudes are a mix of beliefs and importance weights
Beliefs
e.g., I think Sprite has caffeine
Importance
e.g., I think having caffeine is important
Customer may differ on both importance and beliefs
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Decision Making (slide 1 of 3)
Decision making:
With a few choices, consumers easily compare brands to make decision
With many choices, consumers use two stages:
Stage 1: Determine consideration set
Stage 2: Compare brands to make a purchase decision
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Decision Making (slide 2 of 3)
Stage 1
Non-compensatory method: if a brand doesn’t have important attributes, it is cut
Lexicographic method: compare all brands on most important attribute; cut brands that don’t have it; move on to next important attribute and compare and cut, etc.
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Decision Making (slide 3 of 3)
Stage 2: Compare brands in detail
Compensatory model (cost/benefits)
One excellent attribute can compensate for a poor attribute
Some websites aid this process by allowing users to view a side-by-side comparison of attributes
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Cultural Differences
Socio-cultural differences influence consumers and produce shopping patterns
Social class
e.g., Old-monied people seek exclusivity; nouveaus indulge in conspicuous consumption
Age
e.g., Young people buy furniture; as they get older they buy diapers and minivans; then college and finally healthcare
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Discussion Question #6
How can a marketer capitalize on the Baby Boomer segment?
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Managerial Recap (slide 1 of 2)
Three major phases of consumption
Pre-purchase, purchase, post-purchase
Three major classes of purchases
B2C: convenience, shopping, specialty
B2B: straight rebuy, modified rebuy, new buy
Involvement determines class
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Managerial Recap (slide 2 of 2)
How do consumers think?
Sensing and perceiving information that is learned and stored in memory
Motivations help marketers understand what consumers are seeking to satisfy
Attitudes and decision making are subject to influence by good information and biases
Social norms define consumers
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© 2018 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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