Blackwell Ch01

COPYRIGHT © 2006 Thomson Learning Australia

Roger D. Blackwell Clare D’Souza Mehdi TaghianPaul MiniardJames Engel

Consumer Behaviour

Requests for permission to make copies of any part of the work should be addressed to:

ThomsonLevel 7, 80 Dorcas StreetSouth Melbourne Victoria

Australia 3206

COPYRIGHT © 2006 Thomson Learning Australia

Consumer behaviour and consumer research

CHAPTER 1

What is consumer behavior?

Activities people undertake when obtaining, consuming, and disposing of products and services

A field of study that focuses on consumer activities

Scope goes beyond just why and how people buy to include consumption analysis

ObtainingObtaining ConsumingConsuming DisposingDisposing

ConsumerConsumerinfluencesinfluences

OrganisationalOrganisationalinfluencesinfluences

Consumer behavior

Consumer Consumer influencesinfluences

Organisational Organisational influencesinfluences

Culture EthnicityPersonality FamilyLife-stage ValuesIncome Available resourcesAttitudes OpinionsFeelingsMotivations Past experiencesPeer groupsKnowledge

Brand Product featuresAdvertising Word of mouthPromotions Retail displaysPrice QualityService Store ambianceConvenience Loyalty programsPackaging Product availability

ObtainingObtaining ConsumingConsuming DisposingDisposing

How you decide you want to buy

Other products you consider buying

Where you buy

How you pay for product

How you transport product home

How you use the product

How you store the product in your home

Who uses the product

How much you consume

How product compares with expectations

How you get rid of remaining product

How much you throw away after use

If you resell items yourself or through a consignment store

How you recycle some products

Consumption analysis

Why and how people use products in addition to why and how they buy

The marketing concept

The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives

Satisfaction with an exchange depends on satisfaction with consumption of product and the exchange of money

Why Study Consumer Behavior?

Consumer Behavior Determines the Economic Health of a Nation

Why study consumer behaviour?

Consumer behavior determines the success of marketing programs

Marketing can be used to influence brand choice and purchase, while de-marketing can influence people to stop harmful consumption

‘The Customer is King’:Organisation influenced by consumer needs and wants

Why study consumer behaviour?

Organisations that are customer-centric use a total marketing approach to focus their resources on satisfying customers

Marketing is the process of transforming or changing an organisation to have what people will buy

Why study consumer behaviour?

Consumer behavior determines everyone’s economic health:

The individual’s decisions as a consumer determine their economic health by making more effective consumption decisions while avoiding deceptive practices harmful to them

Public policy leaders and social commentators study consumer behavior to alleviate over-consumption and under-consumption by educating consumers about problems and providing assistance

Consumer behaviour helps to formulate public policy

Understanding consumers’ issues or problems and developing methods to reach and educate consumers

Educating consumers about health

Understanding consumers’ needs to formulate public policy and predicting behavioral changes that follow

Studying consumer behaviourhelps formulate public policy

Interest rates

Warning

labels

EconomicsSocial Welfare Family

Planning

Government

Regulations

Government Protection and Education

Protection from Competitive Markets

Personal policy includes how you behave towards others and in buying situations, your values and beliefs, and how you live your life

A person’s economic quality of life is determined by personal policy

Consumer behaviour affects personal policy

Evolution of consumer behavior

Supply chain:all the organisations involved in taking a product from inception to final consumption

- Manufacturers- Wholesalers- Retailers- Facilitating organisations

Consumers’ increased influence on business

Evolution of consumer behaviour

Wholesaler Manufacturer Retailer Consumer

ManufacturingOrientation

ConsumerOrientation

SellingOrientation

MarketingOrientation

US 1750-1850 1850-WWII 1970-2000 2000+

Europe 1750-1850 1760-WWII 1970-2000 2000+

Consumers’ increasing influence

Manufacturing orientation

Selling orientation

Marketing orientation:- Motivation research- Positivism- Postmodernism

Consumer orientation

Evolution of consumer behaviour

Consumer orientation

Beyond a marketing focus

How all organisations in a demand chain adapt to changing consumer lifestyles and behaviors bringing product design, logistics, manufacturing, and retailing together

Role of consumers in shaping many aspects of life – society, government, social programs, health cares, and other areas

Studying consumer behaviour: Consumer research methodsObservationObserving consumer behaviors in different situations such as natural or artificial settingsIn-home observation: examining how and when consumers use and consume products in their households

Shadowing: following and observing consumers in the shopping and consumption processes. Researchers may ask questions about reasons for behaviors

Physiological methods: techniques borrowed from medicine, psychology and other sciences including cameras to measure eye movement, galvanic skin response, and MRI

Consumer research methods

Interviews and surveys

Surveys: efficient method for gathering information from a large sample of consumers by asking questions and recording responses (telephone and Internet surveys, mall intercepts, and mail questionnaires)

Focus groups: a group discussion led by a moderator skilled in persuading consumers to thoroughly discuss a topic of interest

Longitudinal studies: repeated measures of activities over time to determine changes in opinions, buying, and consumption behaviors

Consumer research methods

Experimentation

Measuring cause-and-effect relationships by manipulating independent variables to determine the effects of changes on dependent variables

- Laboratory experiment- Field experiment

Independent variables might include number of advertisements and package design

Dependent variables might include purchase intent or behavior

Consumer research methods

Consumption research builds on the three primary research methods to examine how people use products and services rather than how they buy them

May use ethnographic tools to under-stand how values and culture influence usage of products and other behaviors

May identify new uses for existing products or new product to satisfy unmet or changing consumer needs

Understanding how consumers use products

Underlying principles of consumer behaviour

The consumer is sovereign

The consumer is global

Consumers are different

Consumers are alike

Consumers appear different but respond in similar ways to brands

The Underlying Principles of Consumer Behavior

The Consumer Is Sovereign

The Consumer Is Global

Consumers Are Different; Consumers Are Alike

The Consumer Has Rights

Consumer Bill of Rights

Refer to DOCEP (Department of Consumer and Employment Protection) in Western Australia for information on consumer rights. Remember that consumer rights may vary across countries in the South East Asian region.

Challenges for the future

Gathering and interpreting information that organisations need to meet changing needs of consumers

Developing effective consumer research methods to capture changes in trends and lifestyles

Understanding consumer behaviour from a broader perspective as an important part of life