2013 Decision Behavior in Marketing_Week 1_BB

7/29/2019 2013 Decision Behavior in Marketing_Week 1_BB

1/65

DecisionBehaviorinMarketingDr.MengZhu

WEEK1:

DeterminingWhatConsumersWant

1

1. CourseOverview&Requirements

2. Objectivesof

Consumer

Behavioral

Decision

Research

3. MethodsofConsumerBehavioralDecisionResearch


2/65

Administrivia IamMengZhufacultyinstructorforthiscourse.

Email:

[email protected]

Phone:410.234.9452

Myoffice:Room1344,100InternationalDrive

MyOfficehours Wed12:302pmorbyappointment

*OpenDoorPolicy:OnalldaysoftheweekIobserveanopendoorpolicystudents

are

welcome

to

see

me

when

they

come

by

my

office

(and/or

makeanappointment).


3/65

ACurtain

RaiserWhatwillIknowbetterafterthiscourse& whyisitimportant?

Marketingbeginsandendswiththeconsumer fromdeterminingtheir needstoensuringtheirsatisfaction.

Inthiscourse,wewillexplorethemostrecentscientificresearchinmarketing,psychology,andbehavioraleconomicsonconsumerjudgmentanddecisionmaking.Wewilldevelopyourabilitytounderstandandinfluence whatpeoplewant

howpeople

decide

what

and

when

to

buy

whetherpeoplewillbesatisfiedordissatisfiedwiththeirdecisions

Thesepsychologicalinsightsareusefulformarketingmanagementdecisionmaking,butalsoyieldinsightintocommondecisionbiases beyondmarketing.

Inaddition,wewillexaminethemethodologyofmarketresearchtobuildthetoolsyouwillneedtointerpretconsumerbehaviorandbasedecisionsonit.


4/65

CourseAdministration

Announcementsandupdates,ifany,willbepostedto

Blackboardperiodically.

Thecoursewillbeadministeredusingacombinationoflectures,casediscussions,andinteractivediscussions.

AsfaraspossibleIwilltrytoadministeradditionalreadingmaterialselectronically.

LectureslidesforanygivenclasswillbepostedonBlackboardimmediately

afterclass.

Pleasebringyournamecardstoclass.


5/65

CourseDelivery

Wewilluseacombinationof:

Lectures

Videoandaudiomaterial

CaseStudies&CaseDiscussions

InClasspresentationsanddiscussionsinitiatedbystudents/instructor

Webelievethatdiscussion,debate,questioning and

interaction whencombined

offer

an

effective

means

oflearningadvancedconceptsandideas.


6/65

ReadingsOptional(notrequired)Textbook

Hoyer&MacInnis(2008).Consumerbehavior,5thEdition.Mason,OH:SouthWestern

RecommendedSupplementaryBooks

Ariely,D.(2008).PredictablyIrrational:TheHiddenForcesThatShapeOurDecisions,NewYork:HarperCollins.

Thaler,R.H.,&Sunstein C.R.(2009).Nudge:ImprovingDecisionsaboutHealth,Wealth,andHappiness.NewYork:Penguin.

RequiredCases Case1:PluggingIntheConsumer:The

Adoption

of

Electrically

Powered

Vehicles

in

theU.S.

Case2:PatientslikeMe:AnOnlineCommunityofPatients

ScientificArticlesBlackboard/CourseDocuments

Ladderingtheory

Tryit,

you'll

like

it

Mismatchesbetweenintentionand

outcome

Lexicographicchoicemodel

Defaults

save

lives Whenismorebetter

Decidingadvantageously

Yieldingtotemptation

Centralandperipheralroutesto

advertisingeffectiveness

Thescienceofpersuasion

Thetyrannyoffreedom

Seethesyllabusforthelinktothecoursepack.

6


7/65

CourseDesign

Date Topic

Week1 ObjectivesandMethods

Week2 CognitiveArchitecture

Week3 Judgment&DecisionMaking

Week4 ConstructingPreferences

Week5 MotivationandEmotion

Week6 Forming&ChangingOpinions

Week7 Term

Project

Week8 ConsumerSatisfaction Preferences&Decisions

Cognitive

Architecture

Motivation

Emotions

Attitudes

Consumption&

Satisfaction

SocialandCulturalInfluences

7


8/65

Assignments&

Grading

Attendance&Classparticipation(15%)

Interview(10%)

CaseAnalysis(2*10%)

GroupProjectPresentation&Report(30%)

OpenbookFinalExam(25%)

W1 W2 W3 W4 W5 W6 W7 W8

Groups

&InterviewProject

ProposalPresentation

&WriteupCASE

1 CASE

2 Final

Exam

8

CourseTimeline


9/65

ClassParticipation=15%ofyourfinalgrade

Yourinsightfulcommentsinanalyzingcasesandcontributionstoclassdiscussions.

Yourresponses

to

questions

asked

in

class

by

the

instructor

oryourclassmates includingyouranalysisofcases.

Materialsof

interestto

the

course

that

students

identify

and

makeavailabletotheclass

E.g.,articles,pointerstoitemsinthepress,demoofinterestingartifacts,bookexcerptsthatyoumakeavailabletotheclasselectronicallyorotherwise.

ClassParticipation


10/65

1. Raiseyourhandbeforetalking.

2.

Usebullet

points

(back

up

your

points

later).

3. Whycoldcall?

Jobinterview

Boss

Thinkingonyourfeet Synthesize Whenyoudonthaveananswer

4. If youarestillnotquitesureaboutCP,comeandtalktomeandwewillworkitout.

ClassParticipation

Additional

points


11/65

IndividualAssignment

Interview

ConsumerInterview=10%ofyourfinalgrade

Conductanindepthinterviewwithsomeoneinthisclassaboutarecentpurchase.

Seethesyllabusforspecificinterviewinstructions.

11

W1 W2 W3 W4 W5 W6 W7 W8

Consumer

Interview


12/65

GroupAssignments

Group

Project

GroupProject(groupsof46people)=30%ofyourfinalgrade

Identifyacurrentmarketingproblem&Analyzetheconsumerbehavior

Collectdata

from

students

in

this

class

*

Developmarketingrecommendationsbasedonyouranalysis

W1 W2 W3 W4 W5 W6 W7 W8

Group

Formation

Project

Proposal

Presentation

&Writeup

ProjectTimeline

Seethesyllabusfordetailedinstructionsforthegroupproject.

12

IMPORTANTNOTE*:

Following

the

policies

set

by

the

Homewood

Institutional

Review

Board

(HIRB),

(1)

you

canONLYintervieworsurveythestudentsinthisclass(2)youcanONLYreportthedatatotheinstructorof

thiscourse (3)youcanONLYpresenttheresultstotheinstructorandfellowclassmatesinthisclass.

Otherwise,youneedtosubmitanapplicationforHIRBapprovalhttp://web.jhu.edu/Homewood

IRB/applications.html andeachmemberinyourgroupmustcompletetrainingintheprotectionofhuman

researchparticipantshttp://web.jhu.edu/HomewoodIRB/investigators.html priortosubmissionof

applicationfor

HIRB

approval.


13/65

GroupAssignments

Case

Analysis

CaseAnalysis(thesamegroupsof46people) =20%ofyourfinalgrade

CASE1:PluggingIntheConsumer:TheAdoptionofElectricallyPowered

VehiclesintheU.S.

CASE2:PatientslikeMe:AnOnlineCommunityofPatients

CasediscussionquestionswillbepostedonBlackboard/Assignments.

Thecasewriteupsshouldnotexceed4doublespaced(12 pointfont)pages.

A1pageexecutivesummaryofyouranswersisalsorequired.

13

W1 W2 W3 W4 W5 W6 W7 W8

Groups

&Interview

Project

ProposalDue

Presentation

&Writeup

Case1 Case2


14/65

PeerEvaluation

Form

PeerEvaluationisduewiththefinalprojectreport

Createyourowncontractandsignthat!

Iwilladjustindividualgradeswhen1) Therearerelativelylargediscrepanciesinratings

2) Thediscrepanciesareconsistent(i.e.,aparticularpersonisratedlow

by

all

others).

14


15/65

FinalExam=25%ofyourfinalgrade

FinalExam:2hour,openbook,inclass.

Theexamwillbecomprehensive.

Theexam

will

be

in

short

answer

and

essay

formats.

FinalExam

W1 W2 W3 W4 W5 W6 W7 W8

Groups

&Interview

Project

ProposalDue

Presentation

&Write

up

Case1 Case2 Final

Exam


16/65

Expectation ClassPreparation:Iexpectyoutohavethoroughlyread

anycasesandreadingsassignedforclassdiscussion.

Deadlines:Deadlineswillalwaysbestrictlyenforcedand

noexceptionsofanykindwillbemadewithoutprior

approval.

Punctuality:Iexpectyoutobeontimeforclasses.

16


17/65

Feedback

Pleasedonothesitatetocontactmeforfeedback,

concerns,questions

17


18/65

TodaysAgenda


2. Objectivesof

Consumer

Behavioral

Decision

Research


18


19/65

Whatis

Marketing?

19


20/65

Abrief

history

of

marketing

ProductionOrientation

(18501920)

SaleOrientation

(19301950)

MarketingOrientation

(19502010)

Demandoutstripssupply

Mostlygenericproducts

Littleemphasisonvariation

Supplybeginstooutstrip

demand

Focusonsellingwhatwas

produced

Companiesbegintofocus

onconsumer

preferences

Whatconsumerswant;

notwhatismost

profitabletomake

20


21/65

Acquisition

Buying

LeasingTrading

Sharing

Finding

Usage

Whether

Why

How

PostUsage

Disposition

Sell

TradeGive

Trash

Recycle

Reuse

Whatis

consumer

behavioral

decision?

21

DEFINITION: Thetotalityofconsumers

decisionswithrespecttotheacquisition,

consumption,and

disposition

of

offerings

(goods,services,activities,experiences,

people,andideas)overtime.

RelevantDisciplines:Marketing

Psychology

(Cognitive,Social,

Developmental)

NeuroscienceSociologyAnthropologyDemography

Economics


22/65

WhyStudy

Consumer

Behavioral

Decision?

Preferencesare:

discovered

transitive

timeconsistent

Nocapacityconstraints

Preferencesare

constructed

notnecessarily

transitive

canbetimeinconsistent

Informationprocessingis

constrained

NeoclassicalEconomics BehavioralDecisionTheory

Thorstein Veblen HerbertSimon

RationalAgentModelGiventherightinformation,peoplewillmaximizealwayschoosetheproductthat

bestmatches

their

(stable)

preferences

BoundedrationalityPeoplewillsatisficechooseproductsbeyondasufficientthreshold,areinconsistent,

ineffective,and

often

require

help

making

choices

RoleofMarketing:

InfluenceconsumerchoicesProvideinformationtofacilitate

preferencematching

22


23/65

WhyStudy

Consumer

Behavioral

Decision?

RoleofMarketing:

Provideinformationto

facilitatepreferencematching

Segmentation

Advertisingeffectivenessin

termsofinformationtransfer

Howtocreateopportunities

fordiscoveryofpreferences

23

Oneofthesemarketsisabetteruseof

advertisingdollars


24/65

WhyStudy

Consumer

Behavioral

Decision?

RoleofMarketing:



Segmentation Advertisingeffectivenessin

termsofinformation

transfer

Howto

create

opportunities


24

Whatinformationdoconsumersneed,andhowtopresentiteffectively


25/65

WhyStudy

Consumer

Behavioral

Decision?

RoleofMarketing:



Segmentation


termsof

information

transfer



25

Discoverpreferences


26/65

WhyStudy

Consumer

Behavioral

Decision?

RoleofMarketing:

Provideinformationto Influenceconsumerchoices


Segmentation


termsof

information

transfer



Discoverfactorsthat influence

choices,including

Perception/Attention

Memory Motivation

Socialinfluence/Identity

BrandImage

HeuristicsandDecisionBiases

26


27/65

Examples:Perception/Attention

27


28/65

Wansink&VanIttersum2003

0

1

2

3

4

5

6

7

8

Tall,SlenderGlass Short,WideGlass

ActualVolumePoured&Consumed

PerceivedVolumePoured

Elongation&

Juice

Consumption

28


29/65

Wansink&VanIttersum2003

0

0.5

1

1.5

2

2.5

Tall,"Highball"Glass Short,"Tumbler"Glass


30/65

Examples:Memory

How many hours of television do you watch on an averageweek day? Please choose the category from the list below that

best describes your behavior.

A. Uptoanhour

B.

to

1

hourC. 1to1hours

D. 1to2hours

E. More

than

2

hours

A. Upto2hours

B. 2to

2

hours

C. 2to3hours

D. 3to3hours

E. Morethan

3

hours

What%ofclasswatchesmorethan2hrs ofTV?

30


31/65

Examples:Motivation/Social

Influences

31

32


32/65

Examples:Brand

Images

32

33


33/65

Examples:Heuristics

&

Biases

Higherquality

Lessgreasy

Bettertasting

75%

Lean

25%

Fat

When

is

dinner

over?

33

34


34/65

Consumer

Behavioral

Decision:

An

integrated

Approach

Segmentation


termsofinformationtransfer

Howto

create

opportunities


Discoverwhatfactors

influencechoice:

Perception/Attention

Memory

Motivation

Socialinfluence

identity

BrandImage

Heuristicsand

Biases


facilitatepreference

matching

InfluenceConsumerChoice

Preferences&Decisions

Cognitive

Architecture

Motivation

Emotions

Attitudes

Consumption&

Satisfaction

SocialandCulturalInfluences

34

35


35/65

TodaysAgenda


2. Objectivesof

Consumer

Behavioral

Decision

Research


35


36/65

Determiningwhat

consumer

wants

Developthebestmarketingmixtofulfillconsumersneedsanddesires.

Marketingmix:Acompanysserviceand/orproductofferingstoconsumersandthemethodsandtoolsitselectstoaccomplishtheexchange;comprisedof

1. Product Features,designs,brands,andpackagingofagoodorserviceoffering,alongwith

postpurchasebenefitssuchaswarrantiesandreturnpolicies

2. Price Listprice,includingdiscounts,allowances,andpaymentmethods

3. Place Distributionoftheproductorservicethroughspecificstoreandnonstoreoutlets

4. Promotion Advertising,salespromotion,publicrelations,andpersonalsellingeffortsdesignedto

buildawarenessofanddemandforthegoodsorservice


37/65

Productdevelopment

Whatideasdoconsumers

havefor

new

products?

Whatattributescanbeadded

toorchanged?

Whatshouldourofferingbe

called?

Whatshouldourpackageand

logolooklike?

Guaranteesor

warranties?


38/65

Pricingdecisions

Whatpriceshouldbe

charged? Howsensitiveare

consumerstopriceand

pricechanges?

Whenisitokfordynamic

pricingto

be

used?


39/65

Distributiondecisions

Wherearetargetcustomerslikelytoshop?

Howshouldstoresbedesigned?

Howimportant

is

it

to

be

close

to

the

consumerorthesourceofyourproduct?

Howdoesshippingspeedinfluence

propensitytopurchase?


40/65

Promotiondecisions

Whatareadvertisingobjectives?

Whatshould

advertising

look

like?

Whereshouldadvertisingbeplaced?

Whenshouldweadvertise?

Hasadvertising

been

effective?

41


41/65

Howdofirmsdesignproducts,setprices,determinedistribution

(place),andpositionpromotionstobestsatisfytheconsumersneeds

anddesires?

Determiningwhatconsumerswant

42


42/65

Where

to

start? HypothesisGeneration

Ahypothesis is

atestable

theoretical

relationship

betweentwoormorevariables(e.g.,xandy).

Ahypothesisisonlytestable if thevariablesaremeasurable

therelationbetweenthevariablesispreciselyspecified[xincreasesy]

IndependentVariables(X)

Variablesyou

manipulate

Allelseisheldconstant

DependentVariables(Y)

Variableyou

measure

and

record

PresumablyaffectedbytheIVs

43


43/65

Testable

hypothesis?

IfStarbucks poststhenumberofcalories

ineach

of

the

foods

that

they

serve,

patronswillbecomehealthier.

IfStarbucks postthenumberofcaloriesin

eachof

the

foods

that

they

serve,

the

total

numberofcaloriesconsumedbyeach

patronpervisitwilldecrease.

44


44/65

Testable

hypothesis?

Has

The

Most

Interesting

Man

in

the

World

campaign

been

effective?

DoesviewingacommercialfromTheMostInterestingManintheWorld

campaignincreasetheperceivedsophisticationofthebrandidentityofDos

Equis?

DoesviewingacommercialfromTheMostInterestingManintheWorld

campaignincreasethelikelihoodthatmenbetweentheagesof21and55will

buyDosEquis inbars?

45


45/65

Testable

hypothesis?

Between20062010s,salesofDosEquis increasedby22%atatimewhensaleof

otherimportedbeerfell4%intheU.S.

Irealizedhowsuccessfulthecampaignhadbeenwhenamancameuptomeinarestaurant,tellingmethathehadaskedhisyoungsonwhathewantedtobewhenhegrewup,andtheboyreplied:IwanttobeTheMostInterestingManInTheWorld...

JonathanGoldsmith

46


46/65

What,

exactly,

will

you

measure?Variable Operational Definition

Enjoyment Selfreportedenjoyment

Willingness toforgootherdesirable

experiences

Amountconsumed

Value Willingness topay$tobuy

Willingnesstoaccept$tosell

Sales Numberof

units

sold

Quarterly incomefromsalesofa

product

47


47/65

Typeof

Data

PRIMARYDATA

Originated

from

researcher

and

collected

to

provide

relevantinformationtospecificproject

SECONDARYDATA

Collectedby

an

entity

for

one

purpose

and

subsequentlyusedbyanothersomeotherpurpose

48


48/65

Ruleof

Thumb:

Collectsecondarydatafirst,thenturntoprimarydata

Advantagesofsecondarydata

Timesavings,Lowcosts

Disadvantagesof

secondary

data

Maybeoutofdate

Definitionsorcategoriesmightnotbewhatyourelookingfor

Mightnot

be

specific

enough

for

your

project

49


49/65

Observeconsumersinreal(storeorhome)andsimulated

settings

Qualitative:Observational

Research

50


50/65

Qualitative:

Focus

Groups Aformofindepthinterviewinvolving6to12consumers

Ledbyamoderatorwhoasksparticipantstodiscussa

product,

concept

or

other

marketing

stimulus.

51


51/65

Qualitative:Interviews

Conductedbyatrainedinterviewer

Moreappropriatethanfocusgroupsforsensitive,

confidential,orembarrassingtopics

Oftenvideotaped

so

non

verbal

behaviors

can

be

analyzed

Oftencangetmoredepthofinformation

52


52/65

Qualitative:

laddering Anindepth,onetooneinterviewingtechniqueusedto

developanunderstandingofhowconsumerstranslatethe

attributesof

products

into

meaningful

associations

with

respecttoself.

Reynolds,T.J.,&Gutman,J.(1988).Ladderingtheory,method,analysis,andinterpretation.

JournalofAdvertisingResearch, February/March, 1131.

Attributes

Physicalandsymboliccharacteristics, features

Consequences

Functionalconsequencesofproduct

use/consumption

Value

Howdoesconsumptionexperiencehelpme

becomewhoIwanttobe?

53


53/65

Qualitative:

laddering

54


54/65

Quantitative

Research1. NonExperimental

Perceptualmaps,Eyetracking

2. Experiments

Labstudies,Fieldstudies,Surveys

3. Quasiexperiments

Testmarkets

55


55/65

Quantitative:Perceptual

Maps

Ameansofdisplayingorgraphingintwodimensionsthelocationofproductsorbrandsinthemindsofconsumers.

Brand

Name Deodorant

Rating Moisturizing

RatingTone 2 9

Dove 3 8

Lava 3 2

Lux 4 5.5

Coast 7 6

Lifebuoy 8 3

Lever2000 8.5 8

Dial 9 3.5

Zest 9 8.8

Safeguard 9.5 7

56


56/65

PerceptualMap

of

Soaps

12

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7 8 9 10

MoisturizingRating

DeodorantRating

57


57/65

PerceptualMap

OF

Automobile

Brands

58


58/65

EyeTracking

CAMPARIRedPassion (SalmaHayek) CAMPARIEyeTracking(SalmaHayek)

d l l

59


59/65

1. Controlvs.TreatmentGroup(s)

2. Lookateffectofindependentvariableondependentvariable

ARETHESEAPPROPRIATECONTROLS?

Experiments:FundamentalElements

TREAMENTGROUP

i d l l

60


60/65

1. Controlvs.TreatmentGroup(s)

2. Lookateffectofindependentvariableondependentvariable

3. Randomization

Randomlyassignparticipantstothecontrolandtreatmentgroup(s)

WHY

IS

RANDOMIZATION

ESSENTIAL?

Wouldbuyanyway. Wouldneverbuy. Tooyoungtobuy.

Experiments:FundamentalElements

61


61/65

QuasiExperiments

SimilartoExperiments

Alsohavetreatmentsanddependentvariables

KeyDifferences

Lowerinternalvalidity;norandomassignmentsocausalitycannotbe

determined.

Higherexternalvalidity;testingadoptionandconsumptionof

productinamarketplace.Greaterifyouusearepresentativesample.

TestMarkets

IV:

Vary

one

or

more

elements

of

the

marketing

mix

(i.e.,

product,

price,

place,

promotion)

DV:Evaluatesalesoftheproductinanactualmarket(e.g.,aspecificcity)

62


62/65

Consumer

Behavioral

Decision

Research

Methods

Qualitative Research Quantitative Research

Purpose DiscoverIdeas,Usedinexploratory

researchwith

general

research

objects

Testhypotheses orspecificresearch

questions

MostOftenUsed ExploratoryResearchDesigns Descriptiveandcausalanalysis

Approach Observeandinterpret Measure andTest

DataCollection

ApproachUnstructured,

Free

forms Structured response

categories

provided

Researcher

Independence

Researcherisintimately involved,

resultsaresubjective

Researcheruninvolved observer.

Resultsareobjective

Samples Smallsamplesofteninnatural

settings

Largesamplestoproduce

generalizableresults

(that

apply

to

othersituations)

63


63/65

TodaysAgenda

CourseOverview&

Requirements

Objectivesof

ConsumerBehavioral

DecisionResearch

MethodsofConsumer

Behavioral

Decision

Research

KeyTakeaways

1. Consumerssatisfice,notmaximize!

2. Westudyconsumerbehavioraldecisiontolearnwhatpeople(includingourselves)

want,how

people

think

and

howtoshapepeopleschoices.

3. Usethe

method

most

appropriatetoyourquestionofinterest;startbroadandgetspecific.

64


64/65

NextClass:

1. GroupFormation(Createyourowncontractandsignit!)

2. Interview

Write

up

Due3. CognitiveArchitecture:Attention,Knowledge,Memory

4. Case1(PluggingintheConsumer)Out

Interview Assignment

65


65/65

InterviewAssignment Conductanindepthinterviewwithsomeoneintheclassabout

arecentpurchase.

Discoverthe

decision

making

process

that

led

up

to

the

purchase.

Whatledthisconsumertorealizethatoneneeded/wantedtobuyinthiscategory?

How

many

alternatives

(if

any)

did

the

consumer

consider? Howdidthepersondecidetobuythealternativethatheorshechose?

Whichproductattributeswereimportanttothisconsumer?(Important: Usetheladderingtechniquetoprompttheconsumertotellyouthekeybenefits/valuesthattheyassociatewithproductattributes.)

PleasesubmittheassignmentthroughBlackboardbyclasstimenextweek. Writeupshouldnotexceedonepage.