Marketing Management 3 assigment 750-900 words each assigment

MarketingManagement_ch2_week2.pdf

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Customer Behavior

2. 2

Marketing Framework

Discussion Question

• Describe the process you used when you decided which college to attend.

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 & learn, become motivated, form attitudes, and make decisions

• The cultural differences that influence consumers

The Purchase Process

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

Discussion Questions

1. What need/desire drove you to consider “purchasing” college?

2. How did you search for information?

3. Which colleges were in your consideration set?

4. What criteria did you utilize to form this set?

Purchase Phase

• Customers narrow the consideration set • Customer may delay the purchase

• Customer may decide not to purchase

• Customers decide on retail channel

Post-Purchase Phase

• Customers determine satisfaction • Did the customer get what he expected?

• Customers’ level of satisfaction leads to • Negative or positive word-of-mouth

• Repeat purchases

• Product returns, etc.

Discussion Questions

1. Are you satisfied with your college decision? Why or why not?

2. Could your level of satisfaction affect the college? If so, how?

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.

Three Types of Consumer Purchases

• Convenience purchases • Standard, frequently consumed goods

• Low involvement

• Consumers don’t spend much time thinking or planning the purchase

• Shopping purchases • Not as frequently purchased; Medium

involvement

• Consumers will spend time and effort prior to purchase

Three Types of Consumer Purchases

• Specialty purchases • Occasional purchases, often more

expensive, require more thought; High involvement

• Customers put much effort into the purchase

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

Types of Purchases

Low Involvement Purchases

• Low involvement purchases • Have higher price sensitivity

• Usually go well with price discounts

• Generally don’t generate word-of-mouth

• Are usually distributed intensively

• Marketers should focus on how to capture consumers’ attention

High Involvement Purchases

• High involvement purchases • Have lower price sensitivity

• Usually go well with events

• May generate word-of-mouth

• Are usually distributed selectively

• Marketers should focus on providing consumers with information

Sensation and Perception

• Utilize senses to convey information

• Consumers have selective attention; they block out what is not relevant

• Visual: colors can • Convey a brand identity (Tiffany’s aqua blue)

• Make products stand out (Ipod’s white)

• Convey meaning (black = mourning)

Sensation and Perception

• Hearing can • Increase spending

• e.g., Quick tempo music = increased spending

• Convey a brand • e.g., Harley-Davidson’s distinctive sound

• Taste can • Distinguish one brand from another

• e.g., Coke vs. Pepsi

Sensation and Perception

• Smell can • Get attention (Smelling the Cinnabon store)

• Allow product sampling (Perfume in magazines)

• Touch can • Can convey brand imagery

• e.g., Well designed products compared to value designed products

• e.g., Ergonomics, clean lines, simplicity, beauty, sensual experiences, etc.

Sensation and Perception

• Subliminal advertising • An ad that is

shown so quickly that is doesn’t meet the threshold of liminal recognition

• Has been debunked by research

Sensation and Perception

• 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

Learning and Memory

• Sensory and perceptual impressions become brand associations • Brand associations: brands are attached to

specific attributes in consumers’ memory

• Learning is the process that creates brand associations • Classical and operant conditioning

Classical Conditioning

• Pavlov’s dogs • Stage 1: a dog drools at site 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

Discussion Question

• Use classical conditioning theory to explain this advertisement.

Learning

• 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

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 varies

• Subject will engage in the behavior more often if rewarded on the variable schedule

Discussion Questions

• Discuss how a deli could utilize operant conditioning to design a loyalty program under 1. fixed ratio reward, and

2. variable ratio reward

• Which reward ratio do you think would be more effective and why?

Maslow’s Hierarchy of Needs

• Maslow suggests that people must have their basic needs met before moving onto 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

Maslow’s Hierarchy of Needs

• 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

Distinguishing Motivations

• Utilitarian vs. hedonic • e.g., A Honda Civic vs. a Mercedes

• Conformity vs. individuality • e.g., Conformity is high in high school, but

not later in life

• Risk-seeking vs. risk-averse • Risk tolerance may vary with product

knowledge

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.

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

Decision Making

• Decision making: • With a few choices, consumers easily

compare brands to make decision

• With many choices, consumers use 2 stages:

• Stage 1: Determine consideration set

• Stage 2: Determine brands in detail

Decision Making

• 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 & cut, etc.

Decision Making

• 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

Cultural Differences

• Socio-cultural differences influence consumers and produce shopping patterns • Social class, age, ethnicity, gender, country

culture, etc. • e.g., Old monied people seek exclusivity;

nouveaus indulge in conspicuous consumption

• e.g., Young people buy furniture; as they get older they need diapers and minivans; then college and finally healthcare

Discussion Question

• How can a marketer capitalize on the Baby Boomer segment?

Managerial Recap

• 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 determine class

Managerial Recap

• 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