OBSERVING CONSUMER BEHAVIOR: PAST, PRESENT, AND FUTURE

Observing Consumer Behavior: Past, Present, and Future

John Cimino L&E Research

Client Relationship Manager

Introduction

Observing Consumer Behavior: Past, Present, and Future

Abbe H. Macbeth, PhD Noldus Information Technology

July 17, 2015

Overview

» Who is the consumer? » Why study consumer behavior? » How do we study consumer behavior

– Surveys, forums, focus groups – Observational / Ethnographic studies – Rational thinking vs. emotional reaction

Past methods Current focus Future technologies

Who is the consumer?

Individual, or group, who selects, secures, uses, and disposes of products, services, experiences or ideas to satisfy a need(s).

» What do we want to know?

What is purchased?

Why? How is it

used? How often purchased?

When and where?

Satisfaction?

Segmenting the consumer

» Why is this important? – You must know who to recruit/observe in order to:

Meet the needs of a specific market

Accurately target that market

Get your message to that market

Be appealing to that market

Continue to appeal to that market

Why study consumer behavior?

» Today, more than ever, consumers are presented with MANY options.

27%

18%

6%2% 7%

3%

37%

January 2015: Top Apple and Samsung Phone Models (based on web traffic)

Apple iPhone 5

Apple iPhone 1-4S

Apple iPhone 6

Apple iPhone 6 Plus

Samsung Galaxy S5

Samsung Galaxy Note 3

Other

» How do you stand out from the crowd?

Fill a need! » Maslow’s Hierarchy of Needs

Products

Hobbies, travel

Cars, Credit cards

Clothing, grooming

Insurance, Retirement

Medicine, Groceries

Examples

Army: “Be all that you can be”

Lexus: “The pursuit of perfection”

Venus razors: “Reveal the goddess in you”

Allstate: “You’re in good hands with Allstate”

Cheerios: “Bee Heart Healthy”

Self- Actualization:

Achieving one’s full potential, including creative activities

Esteem Needs: prestige, feelings of

accomplishment

Belongingness & Love Needs: Intimate relationships, friends

Safety Needs: Security, safety

Physiological Needs: Food, water, warmth, rest

» Marketers can focus advertising appeal on specific needs shared by large target markets

» A product can fill more than one need

How do we know what the consumer wants?

» Need to study behavior!

Consumer Behavior: ALL activities undertaken when obtaining,

consuming, and disposing of products and services

Obtaining Consuming Disposal

What factors affect the consumer?

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How do we know what the consumer wants?

» Need to study behavior…. Modified.

3 aspects of consumer behavior

1. Thought processes/reaction 2. Intended behavior 3. Affect/emotion

Cognition – The Buying Process

Problem/need recognition

Information Research

Evaluation of alternatives

Purchase Decision

Post-Purchase Behavior

» Why do we care what people think?

− They can tell us

− Cheap and easy

» Empirical knowledge

» Conjoint / Discrete Modeling

» Implicit Association Test (IAT)

» Data – numbers!

» Survey

Why do we measure consumer thinking?

Coke = bad

Pepsi = good

Coke = good

Pepsi = bad

How do we measure consumer thinking?

How do we gather data on consumer thinking?

» Are you measuring opinions or behavior?

Can the respondent answer accurately?

Interviews

Focus Groups

Surveys

Can the relevant behavior be observed naturally?

YES YES NO

Scanner Data

Observation Physiological

Experimentation

Measuring opinions

» Surveys

Often, people do not know why they feel the way they feel!

Surveys – Focus Groups - Interviews

Pros

• Gather a lot of data

• Reach many respondents

• Inexpensive

Cons

• What do you do with the data?

• Need a lot of respondents

• Low response rates

• Very susceptible to bias

Measuring opinions

» Focus Groups

Ideal for very specific purposes, but not all

Surveys – Focus Groups - Interviews

Pros

• Excellent for getting at broad issues

• Allows for elaboration

• Consumers can play off of one another

• Target a very specific demographic

Cons

• Represent a small sample size

• Worry over what others in the group may think

• Need to remain aloof from discussion

Measuring opinions

» Interviews

Useful, but very difficult to carry off effectively

Surveys – Focus Groups - Interviews

Pros

• Very in-depth • Personal

interest stories

Cons

• Costly • Inherent bias

from researcher

Measuring opinions » Surveys, Focus Groups, and Interviews

Consumer thinking Consumer behavior

» Purchase Intent is the extent to which a consumer will categorically estimate a purchase decision for some time in the future

» Which is most true about product X?  I definitely would use product X

 I probably would use product X

 I might use product X

 I probably would not use product X

 I definitely would not use product X

Consumer thinking Consumer behavior

» Tap into consumers’ reasoning and logic – Numbers (sales, discounts) – Options (choices) – Visualization

» So… we’ve figured out consumers!

» But wait…

Measuring Consumer Behavior » Why do we measure

consumer behavior? – Because actions speak

louder than words – Behavior does not always

match what people think they will do

» Observation / Ethnography – Allows the consumer to act

naturally – Technological advances =

new research

Can the relevant behavior be observed naturally?

YES NO

Observation Experimentation

Measuring consumer behavior » How do we measure consumer behavior?

– Record, watch, and note the consumers’ behaviors

» Reduce subjectivity and make research more objective

Collect videos of consumers in a natural

environment

Watch for and note events of interest

Data on how the consumer

used the product

Synchronize other data (Eye tracking,

EEG, screen capture)

Using The Observer XT: In-home Study

» Observe refrigerator usage in the home, over a 2 week period – Option 1: Survey – Option 2: Observe actual behavior

Who is in contact with refrigerator (father/mother/child)

What compartment (freezer/refrigerator)

What part (door/shelf 1/drawer…)

What is the posture of the person (squat/deep bend)

Type of interaction (open/close/load products/clean…)

What product is loaded/taken from the refrigerator

What package is the product in (bottle/plastic box…)

Using The Observer XT: Laboratory Study » Observe consumers in a naturalistic restaurant; experiment with food

presentation and how it impacts food choice – Option 1: Survey

– Option 2: Observe actual behaviors

» Question: – Does presentation at the salad bar affect selection and buying behavior?

» Method: – Present buffet with different chicken sandwiches labeled:

» Results: – Men preferred those labeled “New”

– Women preferred those labeled “Healthy”

NEW Lower Price Healthy

Using The Observer XT

» Which yogurt does a target demographic prefer? – Option 1: Survey – Option 2: Observe actual behaviors

Conclusion: Customers like yogurt A better

than yogurt B

Measuring behavior: Direct observation

For certain questions, this is the only real way to measure consumer behavior

Pros

• Very in-depth • Note exactly what the

consumer does • Note many activities • Little bias by

researcher • Easily analyze large

data sets

Cons

• Can be costly • Requires time • A lot of data is

gathered • Requires a priori

knowledge of anticipated outcomes

» So… we’ve figured out consumers!

» But wait…

Why study affect/emotion? » What is it about emotions that are worth studying?

– Universally expressed – Unconscious, Non-declarative – Powerful

» We know that tapping into emotion works! – Branding/logos – Conditioning (jingles!) – Messaging – Feeling (color, cuteness)

How is emotion typically measured?

» Neuromarketing » Storytelling » Reaction time

But what about…. » The face!!

Coke = bad

Coke = good

Pepsi = good

Pepsi = bad

The face: a window into the mind

» Are human emotions learned or innate? – Charles Darwin – Neuroscience: fusiform face gyrus – Paul Ekman

“His dress told her nothing, but his face told her things which she was glad to know.”

― A.A. Milne, Once on a Time

Automatic analysis of Facial Emotion

» FaceReader: Automatically analyze facial emotion » Classify 7 basic emotions:

– Happy – Sad – Angry – Surprised – Disgusted – Scared – Contempt (plus a neutral)

Automatic analysis of Facial Emotion

A facial emotion case study

» A fragrance company uses FaceReader to study:

Immediate reaction

Emotion displayed when the odor is

first smelled

Habituation

How emotion changes with

continued exposure to the odor

Multiple ways to measure facial emotion

FaceReader

In person

User Experience

Product Research

Online

Ad Testing

FaceReader validation for ad testing

» As hypothesized, ads that perform(ed) well showed significantly higher levels of Happy and a trend towards lower Anger than average- and low-performing ads.

» Average ads elicit less emotion in general

0.56 0.19

0.08 0.030.010.000.02

0.33

High

0.56

0.05

0.13 0.31

Low 0.68

0.03

0.09

0.07 0.010.000.01

0.21

Average

So… NOW we’ve figured out consumers?

» We’re getting there…

Surveys, focus groups, interviews

Coding software: observation &

experimentation

Automated facial analysis

Demographic data

Scanner data

Tracking studies

Physiology/eye tracking

Noldus Information Technology: Human Observation. Clear results.

Abbe H Macbeth, PhD Noldus Information Technology Regional Sales Manager [email protected] 703-840-2458