1 Consumer Behavior Spring 2010 Spring 2010 Dr. Abdullah Sultan Dr. Abdullah Sultan.

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Consumer BehaviorConsumer Behavior

Spring 2010Spring 2010 Dr. Abdullah SultanDr. Abdullah Sultan

What consumer behavior is all about?

What is Marketing?

AMA defines marketing as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its shareholders.

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What is Consumer Behavior?What is Consumer Behavior?

Why did you decide to take this course?Why did you decide to take this course? What influenced where you sat today?What influenced where you sat today? How did you decide what shoes to wear How did you decide what shoes to wear

today?today? What impacted what you had for breakfast What impacted what you had for breakfast

this morning?this morning?

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Consumer Behavior…Consumer Behavior…

……reflects the totality of the consumers’ decisions reflects the totality of the consumers’ decisions with respect to the acquisition, consumption, and with respect to the acquisition, consumption, and disposition of goods, services, time, ideas and/or disposition of goods, services, time, ideas and/or experiences to satisfy needs and desires.experiences to satisfy needs and desires.

What three broad categories of consumer activity do What three broad categories of consumer activity do marketers and researchers study in consumer marketers and researchers study in consumer behavior?behavior?

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So, it is more than So, it is more than justjust acquiringacquiring

AcquiringAcquiring Buying, leasing, trading, borrowing, gift-giving, finding, stealingBuying, leasing, trading, borrowing, gift-giving, finding, stealing

UsingUsing FunctionalFunctional SymbolicSymbolic

DisposingDisposing Throw away Throw away Give awayGive away Recycle Recycle EbayEbay

Dino Dung

Dinosaur dung sold to Ohio man at auction for nearly $1,000 to motivate his employees and using it as a marketing tool in his pet store

Washington State University - kreWashington State University - kre 88

More than just More than just “goods”“goods”

Offering Offering A product, service, activity, or idea offered by a A product, service, activity, or idea offered by a

marketing organization to consumersmarketing organization to consumers

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Important characteristics of Important characteristics of consumers consumers

Classified by demographics and Classified by demographics and psychographicspsychographics Market segmentation strategiesMarket segmentation strategies

Heavily influenced by the opinions and Heavily influenced by the opinions and behaviors of othersbehaviors of others Cultural valuesCultural values Consumption communitiesConsumption communities

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Segmenting ConsumersSegmenting Consumers

Why do we need segmentation?Why do we need segmentation?

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Segmenting ConsumersSegmenting Consumers

Gather Knowledge and data Gather Knowledge and data about customers…about customers… ……Help to define the marketHelp to define the market ……Identify threats/opportunities Identify threats/opportunities

to a brandto a brand Group similar consumersGroup similar consumers

Example: “Heavy Users”Example: “Heavy Users” of fast-of fast-food industryfood industry

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Segmenting Consumers: Segmenting Consumers: DemographicsDemographics

AgeAge GenderGender Family Structure & Marital StatusFamily Structure & Marital Status Social Class & IncomeSocial Class & Income Race & EthnicityRace & Ethnicity GeographyGeography

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Why do new product fail at the launch?Why do new product fail at the launch?

Failure rate is as high as 50%.Failure rate is as high as 50%.

Gerber's SinglesGerber's Singles: Small servings of fruits, : Small servings of fruits, vegetables, and entrees intended for adults vegetables, and entrees intended for adults that came in the same jars used for baby food. that came in the same jars used for baby food.

Heinz's Funky Fries: Heinz's Funky Fries: chocolate, cinnamon, chocolate, cinnamon, sour cream and blue-colored frozen fries sour cream and blue-colored frozen fries

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Why Study CB?Why Study CB?

Who benefits from studying CB?Who benefits from studying CB? Managers – strategic marketing plans are Managers – strategic marketing plans are

consumer focusedconsumer focused Ethicists – advocacy groups, co-opsEthicists – advocacy groups, co-ops Public policy makers – FDA, nutrition information, Public policy makers – FDA, nutrition information,

investigation of misleading ads investigation of misleading ads ConsumersConsumers

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Why would Why would youyou study CB? study CB?

Have you ever made a purchase that made Have you ever made a purchase that made no sense?no sense?

Have you ever felt cheated or misled by Have you ever felt cheated or misled by marketing?marketing?

Have you ever paid too much for something?Have you ever paid too much for something? Do you ever hold (even a glimmer of) hope Do you ever hold (even a glimmer of) hope

that a purchase will make you more that a purchase will make you more interesting/glamorous?interesting/glamorous?

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More Why’s…More Why’s…

It is fun and entertaining to learn about It is fun and entertaining to learn about yourself and your friends and familyyourself and your friends and family

It might even be beneficial to be a well-It might even be beneficial to be a well-educated, informed consumer! Why do we educated, informed consumer! Why do we do what we do??do what we do??

WARNING: You will never be the same WARNING: You will never be the same again…again…

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Organization of CourseOrganization of Course