CONSUMER BEHAVIOR

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 2

Why does Staples
sell Starbucks
coffee?
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 3

CONSUMER
PERCEPTION/
SENSATION
COGNITION
AFFECT
BELIEFS
SOCIAL AND
OTHER INFLUENCE
INFO
SEARCH
CHOICES
PREFERENCES
COMMUNICATION
MARKET
RESEARCH
STRATEGY
Influences on and of Consumer Behavior
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 4

Learning Outcome Objectives
Understand how consumer
cognitive (thinking) processes and
limitations, affect, beliefs, social
influences, and other contextual
factors influence consumer
decision making, choices, and
behavior
Appreciate how these insights can
be used to design and implement
effective marketing strategies
Appreciate individual and segment
differences in process and
outcome
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 5

True or False?
1. If you have bad breath, you cannot smell it
yourself.
2. If you eat a balanced diet, you do not need
vitamin supplements.
3. Using a razor with five blades will reduce the
likelihood of cutting yourself and will result in
less skin irritation.
4. Dell Computers tend to be of higher quality
than those made by HP and Sony.
5. Rust stains on clothes can be removed with
the use of lemon juice. Bleach actually
makes these stains worse.

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 6

Questions Faced By
Consumers
Are veggie burgers actually healthy?
What makeup should you use to get an
even skin tone?
Do I get any useful benefits from spending
more than $125 on a digital camera?
Should I get a make-over? What am I
looking for? What should I do?
Is my mechanic honest?
Which tie should I wear for a job interview?
Should I give my wife roses, chocolate, or
software?
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 7

Consumer Problems and
Recognition
Consumer problem:
Discrepancy between ideal and
actual state--e.g., consumer:
Has insufficient hair
Is hungry
Has run out of ink in his or
her inkjet cartridge
Problems can be solved
in several ways--e.g., stress
reduction <----- vacation, movie, hot
bath, medication
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 8

CONSUMER DECISIONS:
Theory and Reality in Consumer Buying
INFORMATION
SEARCH
PROBLEM
RECOGNITION
EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS
Theory

Complications
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 9

Approaches to Search for
Problem Solutions
INTERNAL
EXTERNAL
Memory
Thinking
Word of mouth, media,
store visits, trial
CATALOG
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 10

Options Identified and Considered
UNIVERSAL SET
RETRIEVED SET
EVOKED SET
All possible options
Options that readily
come to mind
Options that will be
considered by the
consumer
Note: Retrieved and
evoked sets will vary
among different
consumers
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 11

REMINDER
For low involvement
products, efforts aimed at
affecting internal search
tend to be more
effectivethe consumer
is usually not willing to
expend energy on
external search.
External search is more
likely for higher
involvement products.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 12

Decision Making Issues
Involvement level
Temporary
Enduring
Consumer locus of control
Internal
External
Product category complexity
Consumer knowledge
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 13

Evaluation Type

Compensatory: Decision based on overall
value of alternatives (good attribute can
outweigh bad ones)
Non-compensatory: Absolutely must meet
at least one important criterion (e.g., car
must have automatic transmission)
Hybrid: Combination of the two (e.g., one
non-compensatory measure, then
compensatory tradeoffs on other attributes
Abandoned strategy: Consumer finds initial
criteria unrealistic and proceeds to less
desirable solution
IMPORTANT
LESS
IMPORTANT
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 14

HeuristicsLow Involvement
Decision Rules
If either Coke or Pepsi is on
sale, buy that brand;
otherwise, buy Coke
The larger the navels, the
better the orange
The larger package is likely to
offer a lower unit price (not
true in reality)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 15

Attitudescomponents
BELIEFS
AFFECT
(FEELING)
BEHAVIORAL
INTENTIONS
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 16

Attitude Components
Beliefs
Can be positive,
negative, or neutral
May or may not be
accurate
May contradict other
beliefs held by the other
person
Affect
May be positive or
negative
May take on specific
dimension (e.g.,
pleasure, disgust)
Behavioral
Intentions
An individuals plan or
expectations of what he
or she will do
May appear inconsistent
with beliefs
May not predict well what
the individual will do in
reality
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 17

Generating Beliefs Through
Advertising
Statements must be
Perceived
Comprehended
Remembered
Believed (at least in part)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 18

Positioning Through Creating
Beliefs
Its not delivery; its De Journo!
Wal-Mart. Always low prices.
Always.
I just saved a bunch of money on
my auto insurance.
U-um Good! (Campbells Soup)
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 19

Multiattribute Models of
Attitude
Attitude computed as a
function of multiple attributes
weighted for importance:


A
b
= attitude toward brand b
W
i
: weight of attribute I
X
i
b: belief about brand bs
performance on attribute I
Model assumes rationality

n
i
ib iX W A
1
b
Calculations will not be required on the
exam. You should know conceptually what
this involves conceptuallyi.e., weighing
importance and intensity of feeling.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 20

Multiattribute Models
Caveats
Different segments exist that will weight
factors differentlythus, overall
averages can be misleading. Separate
analyses should be done for different
segments of interest. (Segments can be
identified by certain statistical
techniques).
Individual differences exist in scale
intensityfor some, it is much easier to
be extremely good or extremely bad.
Prior research may be needed to identify
issues (dimensions) to be weighted.
Some factors may be intangibleWhat
are the substantive differences between
Windows and Apple computers?
Non-compensatory factorsmust-
havesmay determine final result.


Applications
Determining
Overall performance
Areas of strength and weakness
Comparison to competitors
Overall
Areas of strength and weakness
REMINDER:
PERCEPTIONS ARE NOT
NECESSARILY ACCURATE. We
are looking to work with what
consumers believe.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 21

Affect
Based on
past emotional
associations of product
emotional effect of beliefs
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 22

Attitude Characteristics
Availability/
accessibility


Constructed
vs. natural


Strength

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 23

Measurement of Attitude
Components
Beliefs
Semantic Differential Scales
Good -------------------Bad
Fast --------------------Slow
Reliable-----------------Unreliable
Feelings
Likert Scales (Strongly agree Strongly Disagree)
This product makes me happy.
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 24

Measurement
Behavioral Intention
Rating of likelihood of
purchase
May need projection if
social desirability affects
willingness to admit to
product use
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 25

Attitude Change Strategies, Part I
Change Affect
Classical conditioning
Pairing the brand or product
with desired stimuluse.g., a
car with a beautiful woman
Attitude toward the ad
A likable ad for a brand in a
mundane product category
e.g.,
Energizer Bunny
Snuggles (fabric
softener)
Mere exposure

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 26

Attitude Change Strategies II
Change behavior (e.g.,
sampling)
Attitudes are inferred from
behavior (e.g., I buy the product
I must like it or It must be
good)
Change Belief Component
Change existing beliefs
Difficult
Advertisers motives are suspect
Change importance of attributes
Add beliefs
Change ideal (fashion)


BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 27

Adding Beliefs (True or Not):
Examples
Brushing and flossing do
not reach all areas of the
mouth
People under stress need
more vitamins
Baking soda will reduce
odor of refrigerators
Fragmented hard drives
may cause computer
errors

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 28

REMINDER
Changing currently held
beliefs tends to be
difficultpeople know the
marketer has an ulterior
motive
Adding new beliefs that
are not inconsistent with
what is already believed
may be more effective
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 29

One-sided vs. two sided
appeals
One-sided: only saying
what favors your side
Two-sided: stating your
case but also admitting
points favoring the other
side
Why is this effective?
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 30

Potential Family Life Cycle
Stages
YOUNG
SINGLE
BLENDED
SINGLE
PARENT
FULL NEST
I/II/III
EMPTY NEST
I/II
OLDER
SINGLE
YOUNG
COUPLE
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 31

Economic/Marketing Implications of
Household Cycles
Income tends to
increase with time
But children/
obligations add cost
Divorce
increases costs
may change
income
distribution
marriage
Product demand
due to
singles with low
expenses
new couples
divorced
families
children
empty nesters
--> more income
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 32

Household Decision Making
Roles/influence
Information gatherers/holders
Influencers
Decision makers
Purchasers
Users
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 33

The Means-End Chain
Large engine
Fast acceleration
Performance
Feeling of power
Self-esteem
Aim promotion/
positioning at higher
levels of chain!
Attributes
Consequences
Values
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 34

Subliminal Perception: A
Diabolical Marketing Tool?
Subliminal messages in ads
are illegal in U.S.
Some research support for
modest effects
Probably limited to one
syllable words
Complex messages can
probably not be
processed subliminally
BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 35

Message Framing
Many tradeoffs
can be stated in
two,
mathematically
equivalent
wayse.g.,
80% lean vs.
20% fat
$49.00 per
person per night
based on double
occupancy

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 36

Some Consumer Behavior Issues That Will
Come Up Elsewhere in the Course
Demographics
(segmentation)
Lifestyle (segmentation)
Culture/subculture
(segmentation, international
marketing)
Diffusion of innovation
(product)
Attention (promotion)

BUAD 307 CONSUMER BEHAVIOR Lars Perner, Instructor 37

Organizational Buyers
Types
Industrial
Reseller
Government and
non-profit
organizations
Purchase types
Straight rebuy
Limited decision
making
Extended decision
making

Characteristics
Greater involvement
Bureaucracy
Long term
relationships
Price is important but
may not be the most
important factor