ACKNOWLEDGEMENT

Wed like to extend our appreciation to our parents for they have provided the financial that we needed for this research paper, our friends who supported us morally and encouraged us to finish it, our classmates who inspired us and helped us what to do, and lastly, our professor. We could have not done this if not because of him.

TABLE OF CONTENTS
I. II. Introduction -----------------------------------------------------------------1-3 Content ----------------------------------------------------------------------

THE MOST POWERFUL CONSUMER BEHAVIOR TRAIT IN THE WORLD---------------------4-6

CONSUMER NEEDS-------------------------------------------------------------------------------------7-8

PURCHASE PATTERNS----------------------------------------------------------------------------------9-11

INTERPRETING CONSUMER BEHAVIOR------------------------------------------------------------12-13

INFLUENCING CONSUMER BEHAVIOR--------------------------------------------------------------14-15

III. IV. V. VI.

Methods/procedures --------------------------------------------------------------16-17 Results ------------------------------------------------------------------------------18-29 Conclusion---------------------------------------------------------------------------30 Recommendation-------------------------------------------------------------------31

VII. Bibliography-------------------------------------------------------------------------32

Introduction
The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products, and retailers);

The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);

The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;

How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." Although it is not necessary to memorize this definition, it brings up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.

There are four main applications of consumer behavior:

The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices.

A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers.

Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.

As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain.

The Most Powerful Consumer Behavior Trait in the World

Of course, there isnt just one aspect of consumer behavior that will make the difference between success and failure. But there IS one aspect that is more powerful than all the others. Where a good piece of direct mail might produce a 3% rate of return, this can produce a 50% rate of return, or even higher. Refer to the best consumer behavior reference material money cant buy children. Childrens behavior around products and marketing is exactly the same as adults, just without the social window-dressing we all acquire through the years to avoid showing openly what were really feeling. Have you noticed that when a child really gets excited about a new toy they

behave in ways that shout to the world around them that they think its the best, most captivating thing in the world, ever? With very young children this new item appeal can be focused on the box or wrapping paper around the toy that you paid so much for. If youve seen this happen when a child of a similar age is present too, you may also have witnessed how such an item can become the sole point of attention; both of them want it and nothing else will do. Even the same item in the wrong colour can be deemed inferior to whichever item got fussed over first. Previously pleasant kids can turn positively venomous over an apparently innocuous piece of plastic, whose sole endearing quality appears to be that one child has it in his or her possession and is totally enamored with it.

Whilst this is most easily observed when it happens with children, its not something the rest of us grow out of. Adults too are very quick to be enthusiastic about products theyve recently acquired, and their enthusiasm can understandably be interpreted by those around them as an honest endorsement of the product, and not one that is just driven by novelty. This enthusiasm can be highly infectious. Studies show that people who had just been given an item so they had no sentimental attachment to it valued it far more highly than people who hadnt; recipients of a university mug thought that it was worth twice as much as people who hadnt been given one. In another experiment students were divided into two groups of fifty: one group was told to imagine they had a ticket for an important college basketball game and asked what the minimum they would take for it would be; and the others that they had the chance to buy one. The average selling price was TEN TIMES the average buying price!

The opportunity for leveraging this aspect of consumer behavior lies in the social interaction of consumers. Let me put that another way: people like to talk. If people simply felt this way and kept it to themselves their over-valuing would be an irrelevance: all that would happen is fewer things would get sold than might otherwise be the case because people considering selling them would over-estimate their value and ask for too much.

Of course people dont keep their purchases to themselves and if they enthuse about their purchases other people will want to purchase too. One of the reasons such conversations can be so effective is that people like to be friends with people like them. So by definition your customers friends are likely to be your target market too. Another reason is that people often seek reassurance that their friends ARE like them and that they have made a good decision, by encouraging their friend to make the same one. There really is emotional safety and reassurance in numbers. So the most powerful consumer behavior trait available to you is the enthusiastic endorsement of one customer to someone else they know. If you can create an aspect or dimension to your product that your consumers WANT to share with their friends, particularly when theyve first receive it and novelty value is at a maximum, you will dramatically increase your sales.

CONSUMER NEEDS
Consumers adjust purchasing behavior based on their individual needs and interpersonal factors. In order to understand these influences, researchers try to ascertain what happens inside consumers' minds and to identify physical and social exterior influences on purchase decisions. On some levels, consumer choice can appear to be quite random. However, each decision that is made has some meaning behind it, even if that choice does not always appear to be rational. Purchase decisions depend on personal emotions, social situations, goals, and values. People buy to satisfy all types of needs, not just for utilitarian purposes. These needs, as identified by Abraham Maslow in the early 1940s, may be physical or biological, for safety and security, for love and affiliation, to obtain prestige and esteem, or for self-fulfillment. For example, connecting products with love or belonging has been a success for several wildly popular campaigns such as "Reach Out and Touch Someone," "Fly the Friendly Skies," and "Gentlemen Prefer Hanes." This type of focus might link products either to the attainment of love and belonging, or by linking those products with people similar to those with whom people would like to associate.

Prestige is another intangible need, and those concerned with status will pay for it. However, goods appealing to this type of need must be viewed as high-profile products that others will see in use. One benefit of targeting this type of market is that

the demand curve for luxury products is typically the reverse of the standard; highstatus products sell better with higher prices. Some equate the type of need to be met with certain classes of goods. For instance, a need for achievement might drive people to perform difficult tasks, to exercise skills and talents, and to invest in products such as tools, do-it-yourself materials, and self-improvement programs, among others. The need to nurture or for nurturing leads consumers to buy products associated with things such as parenthood, cooking, pets, houseplants, and charitable service appeals.

Personality traits and characteristics are also important to establish how consumers meet their needs. Pragmatists will buy what is practical or useful, and they make purchases based more on quality and durability than on physical beauty. The aesthetically inclined consumer, on the other hand, is drawn to objects that project symmetry, harmony, and beauty. Intellectuals are more interested in obtaining knowledge and truth and tend to be more critical. They also like to compare and contrast similar products before making the decision to buy. Politically motivated people seek out products and services that will give them an "edge," enhancing power and social position. And people who are more social can best be motivated by appealing to their fondness for humanity with advertising that suggests empathy, kindness, and nurturing behavior. One successful way an insurance company targeted this market was through its "You're in good hands with Allstate" campaign.

PURCHASE PATTERNS
While all of this information might be helpful to marketers, it is equally important to understand what compels the consumer to actually make a purchase, as opposed to just generating interest. For example, some consumers respond based on how they are feeling, or more emotionally, while some are focused on making the wisest economic decision. Knowing the different elements that stimulate consumer purchase activity can help marketers design appropriate sales techniques and responses. A study conducted by Susan Powell Mantel focused on analyzing the roles of "attribute-based processing" and "attitude-based processing" when analyzing consumer preference. According to the study, product attributes (qualities such as price, size, nutritional value, durability, etc.) are often compared disproportionately, i.e., one is the more focal subject of comparison, thus eliciting more consideration when the consumer decides which brand is the "best." The order of brand presentation in these cases is particularly important. Adding to the complexity of the issue is the fact that purchase decisions are not always made on the basis of an "attribute-by-attribute" comparison (attributebased processing). Consumers also make decisions based on an overall evaluation of their impressions, intuition, and knowledge based on past experience, or attitude-based processing. Learned attitudes also influence these decisions. For example, parents who drank Kool-Aid as children often buy it for their kids, either because they associate it with fond memories or just because of brand familiarity or loyalty.

There is time and effort associated with each of these strategies, though attribute-based processing requires significantly more effort on the consumer's part. To dedicate the time required for an attribute-by-attribute comparison, consumers need the combination of motivation and the time or opportunity to use such a strategy. Other contributing factors were discussed in Mantel's study, such as personality differences and each individual's "need for cognition." Need for cognition reflects to what extent individuals "engage in and enjoy thinking." People with a high need for cognition tend to evaluate more and make more optimal in-store purchase decisions. This is in part because they do not react to displays and in-store promotions unless significant price reductions are offered. Low-need cognition people react easily when a product is put on promotion regardless of the discount offered. Consumers are also affected by their perceived roles, which are acquired through social processes. These roles create individuals' needs for things that will enable them to perform those roles, improve their performance in those roles, facilitate reaching their goals, or symbolize a role/relationship, much in the way a woman's engagement ring symbolizes her taking on the role of a wife. Other factors that influence purchase decisions include the importance attributed to the decision. People are not likely to take as much time doing brand comparisons of mouthwash as they are a new car. The importance of the purchase, as well as the risk involved, adds to how much time and effort will be spent evaluating the merits of each product or service under consideration. In cases of importance such as the purchase of a car or home appliance, consumers are more likely to use rational, attribute-based comparisons, in order to make the most informed decision possible.

In some cases, consumers make very little effort to evaluate product choices. "Habitual evaluation" refers to a state in which the consumer disregards marketing materials placed in a store, whether because of brand loyalty, lack of time, or some other reason. Indeed, evaluating all relevant marketing information can become time consuming if it is done every time a person shops. On the opposite side of the coin, "extensive evaluation" is the state in which consumers consider the prices and promotions of all brands before making a choice. There are also in-between states of evaluation, depending again on the importance of the purchase and the time available to make a decision (some consumers, usually those who earn higher incomes, value their time more than the cost savings they would incur). Decisions on whether to compare various products at any given time may be a factor of the anticipated economic returns, search costs or time constraints, and individual household purchasing patterns.

INTERPRETING CONSUMER BEHAVIOR

When market researchers begin evaluating the behavior of consumers, it is a mistake to rely on conventional wisdom, especially when it is possible to study the actual activity in which consumers are engaged when using a product or service. Where are they when they buy certain items? When do they use it? Who is with them when they make the purchase? Why do they buy under certain circumstances and not others? Researchers need to determine the major needs being satisfied by that good or service in order to effectively sell it. There are two principal ways to evaluate the motivation behind consumer purchases. These are by direction (what they want) and intensity (how much they want it). Direction refers to what the customer wants from a product. For example, if a customer is selecting pain reliever, they may like the idea is one pain reliever is cheaper than another, but what they really want is fast pain relief, and will probably pay more if they think the more expensive brand can do that more effectively. Marketers need to understand the principal motivation behind each type of product to correctly target potential customers. The other way to evaluate consumer behavior, intensity, refers to whether a customer's interest in a product is compelling enough that they will go out and make the purchase. Good marketing can create that kind of intensity. A successful example of such a campaign was Burger King's "Aren't You Hungry?" campaign, which aired on

late-night television and was compelling enough for people to leave their homes late at night to go out and buy hamburgers. Understanding consumer motivation is the best way to learn how to increase buyer incentive, as well as a better alternative to the easy incentive-decreasing the price. While it is easy to speculate on all these elements of consumer motivation, it is much harder to actively research motivating factors for any given product. It is rare that a consumer's reasons for buying a product or service can be accurately determined through direct questioning. Researchers have had to develop other ways to get real responses. These include asking consumers "How do you think a friend of yours would react to this marketing material?" While consumers do not like to admit that marketing affects them at all, they are often willing to speculate on how it would affect someone else. And most often they answer with what would be their own responses. Another tactic that has proven successful is to ask consumers "What kind of person would use this type of product?" By asking this question, market researchers can determine what the consumer believes buying the product would say about them, as well as whether or not they would want to be seen as that type of person.

INFLUENCING CONSUMER BEHAVIOR

One of the best ways to influence consumer behavior is to give buyers an acceptable motive. This is somewhat related to the idea of asking what type of person would buy a certain product in evaluating consumer behavior. Consumers want to feel they're doing something good, being a good person, eating healthy, making contacts, keeping up appearances, or that they just deserve to be spoiled a little bit. If marketers can convince consumers that they need a product or service for some "legitimate" reason, customers will be more likely to make a purchase. In addition, sensory stimuli are important to marketing. When food packages are appealing or associated with other positive qualities, people often find that they "taste" better. For example, people often "taste" with their eyes, discerning differences in products where they do not see any difference during a blind taste test. One of the best examples of this was a test of loyal Coca-Cola customers who were totally unwilling to concede that any other soda was its equal. While able to see what they were drinking, they maintained this position. But during blind testing, some were unable to tell the difference between Coke and root beer. Finally, another alternative for influencing customer behavior is by offering specialized goods. While commonality was once popular, more and more people are seeking diversity in taste, personal preferences, and lifestyle. Some successful

campaigns touting the way their products stand out from the crowd include Dodge's "The Rules Have Changed" and Arby's "This is different. Different is good." In fact, marketers are quite successful at targeting "rebels" and the "counterculture," as it is referred to incommodity Your Dissent. As Thomas Frank writes, "Consumerism is no longer about 'conformity' but about difference. It counsels not rigid adherence to the taste of the herd but vigilant and constantly updated individualism. We consume not to fit in, but to prove, on the surface at least, that we are rock 'n' roll rebels, each one of use as rule-breaking and hierarchy-defying as our heroes of the 60s, who now pitch cars, shoes, and beer. This imperative of endless difference is today the genius at the heart of American capitalism, an eternal fleeing from 'sameness' that satiates our thirst for the New with such achievements of civilization as the infinite brands of identical cola, the myriad colors and irrepressible variety of the cigarette rack at 7-Eleven."

METHODS/PROCEDURES SURVEY (CONSUMER BEHAVIOR)

NAME: GENDER: AGE:

When buying a product such as: a. Foods (which do you prefer?) o Quality o Quantity o Specify _______________ b. Clothes o Quality o Quantity o Specify _______________ c. Appliances o Quality o Quantity o Specify _______________ d. Personal things o Quality o Quantity o Specify _______________ e. Medicines o Quality o Quantity o Specify _______________

Where is the best place to buy products? Foods __________________________________________________ Clothes __________________________________________________ Personal things __________________________________________________ Appliances __________________________________________________ Medicines __________________________________________________

You buy products every: o o o o o Month Mid-year Sale Annually Seasonal

Which is more convincing? o Advertisement o Sales talk o Promos Why do you buy a certain product? _________________________________________ _________________________________________________

CONCLUSION

RECOMMENDATION

BIBLIOGRAPHY

Graves, Philip, The Consumer Behavior Resource The Psychology of Shopping, http://www.philipgraves.net,2008

Lars Perner, Consumer behavior: the psychology of marketing USC Marshall, http://www.consumerpsychologist.com/, 1999-2010 Alex L. Brown, Chapter 6 Consumer Behavior http://www.udel.edu/alex/