2. Discussion Questions
1. How do consumer characteristics influence
buying behavior?
2. What major psychological processes influence
consumer responses to the marketing
program?
3. How do consumers make purchasing
decisions?
4. In what ways do consumers stray from a
deliberative, rational decision process?
3. True or False?
If you have bad breath, you cannot smell it
yourself.
If you eat a balanced diet, you do not need
vitamin supplements.
Using a razor with five blades will reduce the
likelihood of cutting yourself and will result in
less skin irritation.
Dell Computers tend to be of higher quality than
those made by HP and Sony.
Rust stains on clothes can be removed with the
use of lemon juice. Bleach actually makes these
stains worse.
4. Consumer Behavior
The study of how individuals, groups, and organizations
select, buy, use, and dispose of goods, services, ideas, or
experiences to satisfy their needs or wants.
Consumer behaviour refers to the mental
and emotional processes and the
observable behaviour of consumers
during searching, purchasing, and post
consumption of a product or service.”
5. TYPES OF CONSUMER BUYING BEHAVIOR
Routine Response/Programmed Behavior
Limited Decision Making
Extensive Decision Making
Impulse Buying
6. ROUTINE RESPONSE / PROGRAMMED
BEHAVIOR
Frequently purchased low cost items.
Low involvement required.
Little search and decision effort
Purchased almost automatically.
Examples
7. LIMITED DECISION MAKING
Occasional buying.
When information is needed for a
unfamiliar brand in a familiar product
category.
Requires a moderate amount of time for
information gathering.
Loyalty to a brand
Example
8. EXTENSIVE DECISION MAKING
Complex process- requires high involvement
unfamiliar, expensive, infrequently bought
products.
High degree of economic / performance /
psychological risk.
Lot of time spent seeking information and
deciding.
Examples
9. IMPULSE BUYING
Basis - purchase of the same product does not always
elicit the same Buying Behavior.
Reason determines the extent of decision-making.
THIS or THIS ??
going for the dinner- reason can be an anniversary
celebration, or a meal with a couple of friends.
Examples
10. FACTORS INFLUENCING CONSUMER
BEHAVIOR
Social Factors
Culture and Subculture Roles
and Family Social Class
Reference Groups
Psychological Factors
Motivation Perception
Learning Attitudes
Personality
Personal
Factors
Demographic Factors
Lifestyle Situational factors
Involvement Level
Problem
Recognition
Information
Search
Alternatives’
Evaluation
Purchase
Action
Post purchase
Actions
Consumer Decision-Making Process
12. Cultural Factors
Culture
Subculture
Culture is the fundamental determinant of a
person’s wants and behavior.
Marketers must closely attend to cultural
values in every country to understand
how to best market their existing products
13. Cultural Factors
• Culture influences consumers through the
norms and values established by the society in
which they live.
• The sum total of knowledge, beliefs, art, morals,
laws, customs, and any other capabilities and
habits required by humans as members of
society.
• Perceptions, wants & behavior learnt by an
individual, influence his buying behavior.
• Culture reflects what to eat, what we wear, the
code of conduct, buying habits
• E.g., Kellogg’s
14. Sub- Culture
• Subcultures exist within a given dominant culture.
• The group have similar habits, behavior patterns, shared
value system, buying behavior on basis of
– Nationality
– Religion
– Region
– Ethnicity
– Age
– Gender
– …and many more.
• Advertisement strategies of a firm are also affected by
subculture differences
16. Reference Groups
• Groups are many like clubs, friends, schools colleges which influences
consumer socialization& learning
• Two types of reference groups
• Primary reference Groups
– Membership reference – club – regular & informal contact
– Aspiration reference group – copy the attitude & behaviour
– Disclaimant reference group – holds membership but does not belong &
opposed to group
– Avoidance group – reset the values & beliefs
• Secondary Reference Groups
– Religious group, professional & trade unions
– Opinion leaders are perceived as people with skills, knowledge
17. Roles and Status
• Groups often are an important source of information and
help to define norms for behavior.
• A role consists of the activities a person is expected to
perform.
• Each role in turn connotes a status.
• People choose products that reflect and communicate
their role and their actual or desired status in society.
• Marketers must be aware of the
status-symbol potential of products
and brands.
18. Joint Decision Making process
Initiator Influencer Gatekeeper
Decision-
maker Buyer User
two or more persons related by
blood, marriage or adoption and
reside together
19. Social Class
• ‘Social class defines the ranking of people in a society into
a hierarchy of distinct status classes;
• Upper, upper-middle, middle and lower classes, so that the
members of each class have relatively the same status
based on their power and prestige.’
• Socio economic factor – social class – Unique behaviors
• The things what consumers buying become symbols which
tell others who they are
20. Personal Factors
Age
Life Cycle Stage
Personality
Personal factors include those aspects that are unique to a person and
influence purchase behaviour.
These include demographic factors, lifestyle, and situational factors.
22. Psychological factors
• Psychological factors are internal to an individual
and generate forces within that influence her/his
purchase behaviour.
• The major forces include
– Motives ,
– Perception ,
– Learning ,
– Attitude , and
– Personality.
23. MOTIVATION
This refers to driving forces within an individual produced by a state of
tension caused by unfulfilled needs, wants, and desires.
Motivation Process
Learning
Unfulfilled
Needs, Wants
and Desires
Felt
Tension
Drive
Appropriate
Behaviour
Goal or Need
Fulfillment
Cognitive
Processes
Tension
Reduction
26. MOTIVATION RESEARCH
Some of the methods used to probe the subconscious mind include:
In-depth interviews
– Talk freely by asking questions
Association tests
– With a stimulus such as word, picture to check the first thing
comes to their mind
Projective techniques
– Pictures & designs are used
Focus group
– Small group brought together
27. PERCEPTION
Selective Distortion
Selective Retention
Selective Attention
Subliminal Perception
Perception is the process by which an individual selects, organizes, and
interprets stimuli into a meaningful and coherent picture of the world.
People tend to remember
information that supports our
attitudes and beliefs
allocation of
processing capacity
to some stimulus
tendency to interpret
information in a way that
fits our preconceptions
are not consciously
aware of them
28. LEARNING
Driver
Cues
Discrimination
Learning is viewed as a relatively permanent change in behaviour
occurring as a result information or experience, both direct and indirect.
strong internal stimulus
how a person responds
adjust our responses accordingly
29. LEARNING
• There are two basic approaches to learning:
(1) Behavioral approach
• Stimulus – response
• Classical conditioning (Respondent conditioning)
• Favorable association with product or service
• Operant conditioning (instrumental conditioning)
• Positive or negative reinforcement
• If positive use to purchase regular, negative results in decrease
(2) Cognitive learning approach.
• Learning takes place as a result of consumer thinking & problem solving
• Consumers need to exercise some control over environment
30. ATTITUDES
“An attitude is an enduring organization of motivational, emotional,
perceptual, and cognitive processes with respect to some aspect of
our environment.”
• Feeling, action & beliefs
• Research will be conducted to study consumer attitudes
38. EVALUATION OF ALTERNATIVES
Attitudes
Beliefs
No single process is used by all consumers
trying to satisfy a need.
looking for certain benefits
product as a bundle of attributes
with varying abilities
that a person holds about
something
person’s enduring favorable, emotional feelings
39. Attribute
Memory
Capacity
Graphics
Capacity
Size and
Weight
Price
Model Weight: 40% Weight: 30% Weight: 20% Weight: 10%
A 8 9 6 9
B 7 7 7 7
C 10 4 3 2
D 5 3 8 5
EXPECTANCY-VALUE MODEL
Model A = 0.4 (8) + 0.3(9) + 0.2(6) + 0.1(9) = 8.0
Model B = 0.4 (7) + 0.3(7) + 0.2(7) + 0.1(7) = 7.0
Model C = 0.4(10) + 0.3(4) + 0.2(3) + 0.1(2) = 6.0
Model D = 0.4 (5) + 0.3(3) + 0.2(8) + 0.1(5) = 5.0
by combining their brand beliefs — the positives and negatives —
according to importance
41. POST-PURCHASE BEHAVIOR
Post-purchase Satisfaction
Post-purchase Actions
Defect
Loyal
Dissatisfied
Satisfied
Delighted
Stay or Go
public action by complaining to the company,
going to a lawyer, stop buying the product
closeness between expectations and the
product’s perceived performance
42. How Customers
Use or Dispose of Products
consumption rate—the more quickly buyers consume a product,
the sooner they may be back in the market to repurchase it.
44. Types of Decision Situations
New Task
Item purchased for 1st time
Straight Re-buy
Inventory reaches par level
Modified Re-buy
Repurchase with some minor
modifications
46. Discussion Questions
1. What constitutes good marketing research?
2. Use of marketing research
3. What are the best metrics for measuring
marketing productivity?
4. How can marketers access their return on
investment of marketing expenditures?
48. Marketing Research
It is the process of finding a solution to a
problem or a answer to question
through the use of scientific tools &
techniques
The systematic design, collection, analysis,
and reporting of data and findings
relevant to a specific marketing
situation facing the company.
50. BUSINESS RESEARCH
Three major forms of business research are
Market research
– Understanding & examining the marketplace in which company
operates
– Helps to device effective business policies & strategies
Operations research
– Use of mathematical. Logical & analytical methods to find optimal
solutions to business problems
– Used for forecasting demand, optimizing production & investment
plans etc.,
Motivational research
– Analyzing the reasons & motives behind people’s behavior
– Used to understand consumer behavior
51. Marketing Research process
Identifying & defining problem / opportunity
Planning the research design
Selecting a research method
Selecting a sampling procedure
Data collection
Evaluating the data
Preparing & presenting the research design
52. DEFINE THE MARKETING PROBLEM & SET OBJECTIVE
Problem definition
– The statement clearly defines the specific & measurable problem
that the research project has to address
– This will facilitate the company to develop appropriate marketing
plan
Research objectives
– Who are our customers?
– Who are the customers of competing brands
– What do these customers like & dislike
– How are we currently perceived among customers
– What must we do clarify & improve the customers existing
perceptions
Focused inquiry
53. CATEGORIES OF RESEARCH
Exploratory research
– Carried out to make problem suited to more precise investigation or to frame a
working hypothesis
– It is not used in cases where a definite result is desired
– Rely upon secondary data’s
Descriptive studies
– Comes under formal research where objectives are clearly defines
– May range general survey of consumers age, education, market potential etc.,
Casual Research (Experimental)
– To establish cause & effect relationship between different variables
– Possible relationship can arise may be – symmetrical (Fluctuate each other),
reciprocal (mutually influence each other) & Asymmetrical (changes in one variable
are responsible for changes in another variable)
Discotheques & parties is depend on lifestyle, Ads vs. sales, & price increases sale
increase
54. DEVELOP THE RESEARCH PLAN
Sampling plan
Contact method
Data Sources
• Secondary data
• Primary data
Research Approaches
• Observation
• Focus groups
• Surveys
• Behavioral data
• Experiments
Research instrument
• Questionnaires
• Qualitative measures
• Technological devices
55. SAMPLING DESIGN
Who is to surveyed (Sampling Unit)
Define the target population (universe)
How many to survey (Sampling Size)
The needed amount of data
How should the respondents be chosen (Sampling procedure)
56. DEFINITION
Sample
Is a part of total population
It can be an individual or groups of elements
Sample size is represented by “n”
Sampling
Process of selecting a sample from a
population using special techniques
57. SAMPLING APPROACH
Probability Sampling
If the purpose of a research is to arrive at conclusion or make
predictions affecting the population as a whole
Non – Probability Sampling
Research purpose is directed towards evaluating how a small
representative group, is doing for purposes of illustration or
explanation
58. PROBABILITY SAMPLING
Simple random sampling
Each element in the target population has an equal chance of inclusion in the sample
Randomly generated or picked out of a box
Systematic sampling
Selection of every kth element from a sampling
Population size / Sample size
Stratified random sampling
Process of grouping members of the population into relatively homogeneous subgroups
like age, gender & samples are selected randomly
Multistage cluster sampling
Grouping the elements in a population into various clusters & then selecting a few
clusters randomly like cities, villages etc.,
60. NON – PROBABILITY SAMPLING
Convenience Sampling
Based on their easy availability & accessibility of the researcher
Quota Sampling
The entire population is segmented into mutually exclusive groups or categories
The number of respondents to be drawn from each categories is specified in
advance
15 males & 15 females
Judgment sampling
Selection of unit on judgment of an experienced researcher. Mumbai
Snowball sampling
Involve the selection of additional respondents based on referrals of initial
respondents
Chain system may be used when samples are not available
61. COLLECT THE INFORMATION
Online surveys
Telephone surveys
Interviews In-home surveys
Most expensive step
Most prone to errors
62. DATA COLLECTION INSTRUMENT
Depends on type of research
Mainly they use questionnaire for
quantitative study
Questionnaire
Set of questions to be asked from respondents
with appropriate instructions indicating which
questions to be asked
63. Tips to prepare Effective questionnaire
Clear objectives
Should be short to maintain interest
Should be clear & understanding
Opening statement should be minimized
Structure questions logically like general first & important
followed by
No suggestive type of questions
Questions which Cross checks previous answer
Pretest the questionnaire & then sharpen it & polish it
64. Nominal scale
– Uses numbers or letters to identify different objects
– 1) 5-10, 2)11-15, 3) 16-20, 4) 21-25 etc.,
Ordinal scale
– Used to arrange objects to some particular order
– Airtel ____ Hutch____ Idea____ BSNL____ Reliance____
Interval scale
– Similar to ordinal but they also arrange objects in a particular objects
– Between the points on the scales are equal
– 10_____ 9______ 8_______ 7____ 6_____ 5______.......... So on
– The value of difference can be identified
Ratio scale
– Fixed zero point & have equal intervals
– Used to calculate yards, meters, height, weight, money
Types of Measurement Scales
65. Attitude Measurement scales
Open ended
The respondents is free to express
Dichotomous (Closed ended)
Choose only one from yes or no
Multiple item scale
The respondent can make two or more choices
Semantic Differential scales
The respondent can rate on the scale divided between 1 & n
where “n” be the excellent & “1” poor
66.
67. Other Measurement Scales
Comparative scales
Between X & Y product
Pictorial scales
Constant sum scales
Respondents are asked to divide the given numbers
among various attributes
Likert scale
Series of statements where the respondents provide
answer in the form of degree of agreement or
disagreement
70. Analyze the information
Raw data does not serve the purpose of research
Data need to be analyzed based on requirement to extract the data
satisfying objectives
Stages of data analysis
– Validation
• Helps to confirm if the interview was really conducted
– Editing
• Checking for mistakes by respondent & interviewer
– Coding
• Assigning numbers or other symbols to answers in order to group
– Data entry
• Consistency checks & treatment of missing response
– Tabulation & analysis
• One-Way frequency tabulation & cross tabulation
72. Present the Findings
Prefatory Information
– Letter of transmittal
– Title page
– Authorization statement
– Executive summary
– Table of contents
Introduction
– Problem statement
– Research objectives
Methodology
– Sampling design
– Research design
– Data collection
– Data analysis
– Limitations
Findings
Conclusions & recommendations
Appendices
Bibliography
Components of research findings
73. Types of presentation
Written presentation
Oral Presentation
– Initial planning
– Preparation
– Making The Presentation
– Delivery
• Vocal problems
• Physical behaviour
• Handling Questions
Visual Aids
– Tables
• Title & number
• Foot notes
• Source
– Charts & graphs
• Line graphs
• Pie charts
• Bar charts
74. MAKE THE DECISION
Research Decisions
Research should guide decisions, not be used
to support decisions already made.
76. Discussion Questions
1. What are the components of a modern marketing information
system?
2. What are useful internal records for such a system?
3. What makes up a marketing intelligence system?
4. What are some influential macroeconomic developments?
5. How can companies accurately measure and forecast
demand?
77. Introduction
What is MKIS?
‘MKIS (MIS) is a set of procedures and methods for the regular, planned
collection, analysis and presentation of information for use in marketing decisions
Information about Factors that affect marketing
Changing marketing environments
Expanding business boundaries
Shifts in income,
Changing lifestyles
By the use of technology also companies fail to gain the information that
required
79. Marketing Information System -
consists of
People
Equipment
Procedures
to gather, sort, analyze,
evaluate, and distribute
information that is
needed, timely and
accurate.
81. provide managers with up-to-date information
on the current sales
Internal Records
Order-to-Payment Cycle
Databases / Data Mining
Sales Information Systems
the process that orders go through once
Includes invoices and shipping documents
such as purchase history,
product preferences
82. Marketing Intelligence
News and Trade Publications
Meet with customers,
suppliers, distributors,
and other managersMonitor social
media sites
a set of procedures and sources that managers
use to obtain everyday information about
developments in the marketing environment
84. Marketing Intelligence & the Internet
Independent Online Forums
Distributor or sales agents feedback sites
Customer review and expert opinion sites
Customer complaint sites
85. Using Marketing Intelligence
Share Information
Quickly
should be gathered and shared with decision
makers quickly in order to effectively use the
information.
86. Analyzing the Macro Environment
Elements that can
impact a company,
but cannot be
controlled
88. Attributes of good
marketing information
Relevance to decision
making
Confidentiality
Cost reasonable
Reliability
Clarity
Timeliness
Objectivity (unbiased)
Completeness
Accuracy
Strategic value
89. Needs and Trends
Fad
Megatrend
Trend
Unpredictable, short-lived, and
without social, economic, and
political significance
Offer a view of the future due to their
momentum and durability
Changes that are slow to
form but once established
last for 7 – 10 years
Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means understanding customers— gaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes so the right products are always marketed to the right customers in the right way.
Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must fully understand both the theory and reality of consumer behavior. A consumer’s buying behavior is influenced by cultural, social, and personal factors. Of these, cultural factors exert the broadest and deepest influence.
Cultural Factors
Culture, subculture, and social class are particularly important influences on consumer buying behavior. Culture is the fundamental determinant of a person’s wants and behavior. Through family and other key institutions, a child growing up in the United States is exposed to values such as: achievement and success, activity, efficiency and practicality, progress, material comfort, individualism,
freedom, external comfort, humanitarianism, and youthfulness. A child growing up in another country might have a different view of self, relationship to others, and rituals. Marketers must closely attend to cultural values in every country to understand how to best market their existing products and find opportunities for new products.
Social Factors
In addition to cultural factors, social factors such as reference groups, family, and social roles and statuses affect our buying behavior.
REFERENCE GROUPS
A person’s reference groups are all the groups that have a direct (face-to-face) or indirect influence on their attitudes or behavior. Groups having a direct influence are called membership groups. Some of these are primary groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbors, and coworkers. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction. Reference groups influence members in at least three ways. They expose an individual to new behaviors and lifestyles, they influence attitudes and self-concept, and they create pressures for conformity that may affect product and brand choices. People are also influenced by groups to which they do not belong. Aspirational groups are those a person hopes to join; dissociative groups are those whose values or behavior an individual rejects.
FAMILY
The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. There are two families in the buyer’s life. The family of orientation consists of parents and siblings. From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love. Even if the buyer no longer interacts very much with his or her parents, parental influence on behavior can be significant. Almost 40 percent of families have auto insurance with the same company as the husband’s parents.
ROLES AND STATUS
We each participate in many groups—family, clubs, organizations. Groups often are an important source of information and help to define norms for behavior. We can define a person’s position in each group in terms of role and status. A role consists of the activities a person is expected to perform. Each role in turn connotes a status. A senior vice president of marketing may be seen as having more status than a sales manager, and a sales manager may be seen as having more status than an office clerk. People choose products that reflect and communicate their role and their actual or desired status in society. Marketers must be aware of the status-symbol potential of products and brands.
Personal Factors
Personal characteristics that influence a buyer’s decision include age and stage in the life cycle; occupation and economic circumstances; personality and self-concept; and lifestyle and values. Because many of these have a direct impact on consumer behavior, it is important for marketers to follow them closely.
AGE AND STAGE IN THE LIFE CYCLE
Our taste in food, clothes, furniture, and recreation is often related to our age. Consumption is also shaped by the family life cycle and the number, age, and gender of people in the household at any point in time. U.S. households are increasingly fragmented—the traditional family of four with a husband, wife, and two kids makes up a much smaller percentage of total households than it once did. The average U.S. household size in 2008 was 2.6 persons.
Marketers should also consider critical life events or transitions—marriage, childbirth, illness, relocation, divorce, first job, career change, retirement, death of a spouse—as giving rise to new needs. These should alert service providers—banks, lawyers, and marriage, employment, and bereavement counselors—to ways they can help.
PERSONALITY AND SELF-CONCEPT
Each person has personality characteristics that influence his or her buying behavior. By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including buying behavior).We often describe personality in terms of such traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. Personality can be a useful variable in analyzing consumer brand choices. Brands also have personalities, and consumers are likely to choose brands whose personalities match their own. We define brand personality as the specific mix of human traits that we can attribute to a particular brand.
OCCUPATION AND ECONOMIC CIRCUMSTANCES
Occupation also influences consumption patterns. Marketers try to identify the occupational groups that have above-average interest in their products and services and even tailor products for certain occupational groups: Computer software companies, for example, design different products for brand managers, engineers, lawyers, and physicians.
As the recent recession clearly indicated, both product and brand choice are greatly affected by economic circumstances: spendable income (level, stability, and time pattern), savings and assets (including the percentage that is liquid), debts, borrowing power, and attitudes toward spending and saving. Luxury-goods makers such as Gucci, Prada, and Burberry are vulnerable to an economic downturn. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and reprice their products or introduce or increase the emphasis on discount brands so they can continue to offer value to target customers.
LIFESTYLE AND VALUES
People from the same subculture, social class, and occupation may lead quite different lifestyles. A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions. It portrays the “whole person” interacting with his or her
environment. Marketers search for relationships between their products and lifestyle groups. A computer manufacturer might find that most computer buyers are achievement-oriented and then aim the brand more clearly at the achiever lifestyle. Lifestyles are shaped partly by whether consumers are money constrained or time constrained. Companies aiming to serve money-constrained consumers will create lower -cost products and services. By appealing to thrifty consumers, Walmart has become the largest company in the world.
Its “everyday low prices” have wrung tens of billions of dollars out of the retail supply chain, passing the larger part of savings along to shoppers in the form of rock-bottom bargain prices.
Consumers who experience time famine are prone to multitasking, doing two or more things at the same time. They will also pay others to perform tasks because time is more important to them than money. Companies aiming to serve them will create convenient products and services for this group.
Freud – Psychological forces that shaped peoples behavior are unconscious.
Maslow – People are driven by different needs at different times. According to Maslow, human needs are arranged in a hierarchy from most to least pressing.
Herzberg – Developed two-factor theory that distinguishes dissatisfiers (factors that cause dissatisfaction) from satisfiers (factors that cause satisfaction).
Selective retention – People tend to remember (forget) information that supports (differs) our attitudes and beliefs.
A motivated person is ready to act—how is influenced by his or her perception of the situation. In marketing, perceptions are more important than reality, because perceptions affect consumers’ actual behavior. Perception is the process by which we select, organize, and interpret information inputs to create a meaningful picture of the world. It depends not only on physical stimuli, but also on the stimuli’s relationship to the surrounding environment and on conditions within each of us. One person might perceive a fast-talking salesperson as aggressive and insincere; another, as intelligent and helpful. Each will respond to the salesperson differently.
SELECTIVE ATTENTION
Attention is the allocation of processing capacity to some stimulus. Voluntary attention is something purposeful; involuntary attention is grabbed by someone or something. It’s estimated that the average person may be exposed to over 1,500 ads or brand communications a day. Because we cannot possibly attend to all these, we screen most stimuli out—a process called selective attention. Selective attention means that marketers must work hard to attract consumers’ notice.
SELECTIVE DISTORTION
Even noticed stimuli don’t always come across in the way the senders intended. Selective distortion is the tendency to interpret information in a way that fits our preconceptions. Consumers will often distort information to be consistent with prior brand and product beliefs and expectations. For a stark demonstration of the power of consumer brand beliefs, consider that in “blind” taste tests, one group of consumers samples a product without knowing which brand it is, while another group knows. Invariably, the groups have different opinions, despite consuming exactly the same product.
SELECTIVE RETENTION
Most of us don’t remember much of the information to which we’re exposed, but we do retain information that supports our attitudes and beliefs. Because of selective retention, we’re likely to remember good points about a product we like and forget good points
about competing products. Selective retention again works to the advantage of strong brands. It also explains why marketers need to use repetition—to make sure their message is not overlooked.
SUBLIMINAL PERCEPTION
The selective perception mechanisms require consumers’ active engagement and thought. A topic that has fascinated armchair marketers for ages is subliminal perception. They argue that marketers embed covert, subliminal messages in ads or packaging.
Consumers are not consciously aware of them, yet they affect behavior. Although it’s clear that mental processes include many subtle subconscious effects, no evidence supports the notion that marketers can systematically control consumers at that level, especially enough to change moderately important or strongly held beliefs.
When we act, we learn. Learning induces changes in our behavior arising from experience. Most human behavior is learned, although much learning is incidental. Learning theorists believe learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement. Two popular approaches to learning are classical conditioning and operant (instrumental) conditioning. A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds. Suppose you buy an HP computer. If your experience is rewarding, your response to computers and HP will be positively reinforced. Later, when you want to buy a printer, you may assume that because it makes good computers, HP also makes good printers. In other words, you generalize your response to similar stimuli. A countertendency to generalization is discrimination. Discrimination means we have learned to recognize differences in sets of similar stimuli and can adjust our responses accordingly.
Brand associations consist of all brand related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand node in the brain.
Consumers don’t always pass through all five stages—they may skip or reverse some. When you buy your regular brand of toothpaste, you go directly from the need to the purchase decision, skipping information search and evaluation. The model in Figure 6.4 provides a good frame of reference, however, because it captures the full range of considerations that arise when a consumer faces a highly involving new purchase
Smart companies try to fully understand customers’ buying decision process—all the experiences in learning, choosing, using, and even disposing of a product. Marketing scholars have developed a “stage model” of the process. The consumer typically passes through five stages: problem recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. Clearly, the buying process starts long before the actual purchase and has consequences long afterward.
An internal stimulus is triggered by a person’s normal needs – hunger, thirst – when the need rises to a threshold level.
A need can also be aroused by an external stimulus, such as seeing a commercial for a vacation. A person then begins to consider the possibility of taking a vacation.
Information Search Surprisingly, consumers often search for limited amounts of information. Surveys have shown that for durables, half of all consumers look at only one store, and only 30 percent look at more than one brand of appliances. We can distinguish between two levels of engagement in the search. The milder search state is called heightened attention. At this level a person simply becomes more receptive to information about a product. At the next level, the person may enter an active information search: looking for reading material, phoning friends, going online, and visiting stores to learn about the product.
By gathering information, the consumer learns about competing brands and their features. The first box in Figure 6.5 shows the total set of brands available. The individual consumer will come to know a subset of these, the awareness set. Only some, the consideration set, will meet initial buying criteria. As the consumer gathers more information, just a few, the choice set, will remain strong contenders. The consumer makes a final choice from these.
No single process is used by all consumers, or by one consumer in all buying situations. It is important that marketers understand that:
The consumer is trying to satisfy a need.
The consumer is looking for certain benefits from the product solution.
The consumer sees each product as a bundle of attributes with varying abilities to deliver the benefits.
-- The attributes of interest will vary based on the product.
A belief is a descriptive thought that a person holds about something. Attitudes are a person’s enduring favorable, or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea.
The consumer arrives at attitudes toward various brands through an attribute evaluation procedure, developing a set of beliefs
about where each brand stands on each attribute. The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs—the positives and negatives—according to importance.
After a consumer has reached a purchase intention, up to five subdecisions may need to be made. The brand, the dealer (where), quantity, timing (when), and payment method.
With noncompensatory models of consumer choice, positive and negative attribute considerations don’t necessarily net out. Evaluating attributes in isolation makes decision making easier for a consumer, but it also increases the likelihood that she would have made a different choice if she had deliberated in greater detail. We highlight three choice heuristics here.
1. Using the conjunctive heuristic, the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes. For example, if Linda decided all attributes had to rate at least 5, she would choose laptop computer B.
2. With the lexicographic heuristic, the consumer chooses the best brand on the basis of its perceived most important attribute. With this decision rule, Linda would choose laptop computer C.
3. Using the elimination-by-aspects heuristic, the consumer compares brands on an attribute selected probabilistically—where the probability of choosing an attribute is positively related to its importance—and eliminates brands that do not meet minimum acceptable cutoffs.
After the purchase, the consumer might experience dissonance from noticing certain disquieting features or hearing favorable things about other brands and will be alert to information that supports his or her decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer’s choice and help him or her feel good about the brand. The marketer’s job therefore doesn’t end with the purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses and disposal.
POSTPURCHASE SATISFACTION
Satisfaction is a function of the closeness between expectations and the product’s perceived performance. If performance falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted. These feelings make a difference in whether the customer buys the product again and talks favorably or unfavorably about it to others. The larger the gap between expectations and performance, the greater the dissatisfaction. Here the consumer’s coping style comes into play. Some consumers magnify the gap when the product isn’t perfect and are highly dissatisfied; others minimize it and are less dissatisfied.
POSTPURCHASE ACTIONS
A satisfied consumer is more likely to purchase the product again and will also tend to say good things about the brand to others. Dissatisfied consumers may abandon or return the product. They may seek information that confirms its high value. They may
take public action by complaining to the company, going to a lawyer, or complaining to other groups (such as business, private, or government agencies). Private actions include deciding to stop buying the product (exit option) or warning friends (voice option).
Marketers should also monitor how buyers use and dispose of the product ( Figure 6.7). A key driver of sales frequency is product
consumption rate—the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it.
Consumers may fail to replace some products soon enough because they overestimate product life. One strategy to speed replacement is to tie the act of replacing the product to a certain holiday, event, or time of year.
The manner or path by which a consumer moves through the decision-making stages depends on several factors, including the level of involvement and extent of variety seeking, as follows. LOW-INVOLVEMENT CONSUMER DECISION MAKING The expectancy-value
model assumes a high level of consumer involvement, or engagement and active processing the consumer undertakes in responding to a marketing stimulus.
VARIETY-SEEKING BUYING BEHAVIOR
Some buying situations are characterized by low involvement but significant brand differences. Here consumers often do a lot of brand switching. Think about cookies. The consumer has some beliefs about cookies, chooses a brand without much evaluation, and evaluates the product during consumption. Next time, the consumer may reach for another brand out of a desire for a different taste. Brand switching occurs for the sake of variety, rather than dissatisfaction.
Managers use market research to help them better understand the customers and markets. These insights are the how’s and why’s certain things happen in the market.
The text gives an example of how Gillette conducted market research on the woman’s shaver market and how this research led the company to develop the Venus razor, which now has more than 50% of the global market.
Marketers must not focus too broadly or too narrowly on the research question.
Transform raw data into insight
Present information in clear and compelling fashion
Research should guide decisions, not be used to support decisions already made.
Marketers are in position to collect information from customers, competitors, and other external factors/group that can help to identify market changes.
A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute information that is needed, timely and accurate.
A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute information that is needed, timely and accurate.
The order-to-payment cycle entails the process that orders go through once they are received by the company. Includes invoices and shipping documents. Customers prefer firms that can get orders processed quickly and accurately.
Sales information systems provide managers with up-to-date information on the current sales of individual products.
Databases store and organize information that can be retrieved based on a number of criteria such as purchase history, product preferences, and can even contain demographic and psychographic information on customers.
A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. This information can come from reading books and trade journals; talking to customers, distributors, suppliers, etc; monitoring social media; and talking to other managers in the company.
Companies can improve marketing intelligence through the methods listed on the slide as well as through channel members, government data sources, and the purchase of information through secondary data sources.
Epinions.com, Bizrate.com, or ConsumerReview.com
Marketing intelligence should be gathered and shared with decision makers quickly in order to effectively use the information.
Where the microenvironment refers to those elements closest to the company, customers, competitors, suppliers, etc., the macroenvrionment refers to those elements that can impact a company, but cannot be controlled. These include things such as the economy, culture, demographics, politics, technology, and the natural environment.
Fad – Hula Hoop; Trend – Diet/exercise; Megatrend – Electric automobiles
FAD: Unpredictable, short-lived, and without social, economic, and political significance. Fads are measured in months, rather than years.
Wham-0 sold 25 million Hula Hoops in its first 4 months. Pet rocks were launched in the mid-1970’s and sold 1 million units in a matter of months. Five month’s later sales were almost non-existent.
TRENDS: Offer a view of the future due to their momentum and durability. The fitness/diet trend is an example, although there have been many fads within this trend, the overall movement toward healthier living has remained.
MEGATRENDS: Changes that are slow to form but once established last for 7 – 10 years (or more). Megatrends influence all factors of life that impact business, culture, economics, society, and personal lives.
