Consumer Behavior Lecture2

Consumer behaviorsecond session

Lecture notes are available at:http://Arash-management.blogspot.com

Reference book for this session:

Consumer behavior by:Roger D. Blackwell

Paul W. Miniard James F. Engel

Consumer behavior (CB)

Arash Najmaei

[email protected]@yahoo.com

H/P : 0172116875

Outline of the session

1. Review of the previous notes2. Pre-purchase behavior3. Purchase behavior4. Purchase decision making model and process5. Consumer resources involved in purchase6. IMC 7. consumption behavior8. Consumption experiences

Pre-purchase Evaluation

• Having prior knowledge facilitates decision making and accelerates formation of evoked set.

• Without prior knowledge consumer start asking from friends and going through external materials.

Constructing the Consideration Set Primarily from Memory

•Retrieval set: consideration set that depends on recall of alternatives from memory

•Not all alternatives retrieved from memory will be considered

•Consumers limit their consideration to those alternatives toward which they are favorably predisposed

Constructing the Consideration Set Without Prior Knowledge

•Consumers may talk to others or consider all brands in the store

•External factors have greater opportunity to affect consideration set with less knowledgeable consumers than when search is from memory

•Recognition of brands or products at point of sale is important to get into consumers’ consideration set

Deciding How to Evaluate Choice Alternatives

Rely on preexisting product evaluations stored in memory

Construct new evaluations based on information acquired through internal or external search

Direct Experience: prior purchase or consumption experiences with product

Indirect Experience: experiences or impressions gained second-hand-through word of mouth.

Constructing New Evaluations

The Categorization Process: the evaluation of a choice alternative based on the evaluation of the category to which it is assignedCategories may be general (drinks) orspecific (colas). Evaluation of a category can be transferred to a new product assigned to that category

Brand extensions allow firms to use categorization to their advantage

Constructing New Evaluations

The Piecemeal Process: constructing an evaluation of a choice alternative by considering its advantages and disadvantages along important product dimensions

Constructing New EvaluationsThe Piecemeal Process:

Determine the particular criteria or product dimensions to be used in evaluation

Evaluate each considered alternative based on the identified criteria

Cutoff: restriction or requirement for acceptable performance

Signals: product attributes used to infer other product attributes (e.g., using high price to infer higher quality)

How Good Are We at Evaluating Alternatives?

Consumers are often not very good at figuring out which alternative is best for them

•- Tend to rely on certain signals (e.g., price, brand name, warranty, package) to make inferences about a product quality; however, such signals may be inaccurate

•- Often possess limited abilities to accurately evaluate choice alternatives

The Purchase Process

Consumers decide:

•Whether to buy

•When to buy

•What to buy (product type/brand)

•Where to buy

•How to pay

•Many factors influence their shopping decisions, including in-store promotion, store ambience and cleanliness, level of service, price, value, logistics and retail experience.

•For some purchases consumer may never enter a store, but rather purchase from internet, a catalog or direct persons.

The Purchase Process

Fully Planned Purchase: both the product and brand are chosen in advance

Purchase planning is more likely to occur when product involvement is high with purchase affected by in-store factors and marketing efforts

It might be influenced by marketing tactics like product sample, price reductions, point of purchase or promotional activities.

The Purchase Process

Partially Planned Purchase: intent to buy the product exists, but brand choice is deferred until shopping.

When involvement is low, consumers resort to buying a brand they know and like but may also be influenced by price reductions or special displays

The Purchase ProcessUnplanned Purchase: both the product and brand are chosen at point of sale.

In-store influences can guide product and brand choices made by consumers reminding them of a need and triggering a purchase of something they have seen on TV or website.

The Purchase FactorWhen and if purchase occurs is affected by timing factors such as seasonality-Umbrella, A.C, Seasonal apparel.

Timing also affects the price and the likelihood of a purchase-Airlines ticket at peak season.

When making a purchase, consumer must also decide how to pay—cash, checks, or plastic (credit/debit card)

The Purchase Decision Process

Consumer Resources: What People Spend When They Purchase

Money

TimeAttention

Integrated Marketing Communications (IMC)

A systematic, cross-organizational marketing communication process that is customer-centric, data-driven, technically anchored, and branding effective

Integrated Marketing Communications (IMC)

1. IMC programs are comprehensive

2. IMC programs are unified

3. IMC programs are targeted

4. IMC programs have coordinated

execution of all the communications components of the organization

IMC programs emphasize productivity in reaching targets when selecting communication channels and allocating resourcesto media

Post purchase and consumption

• Consumption is :Consumers’ usage of the acquired product.

• In this phase we are trying to know how many and which consumers fall into the user and nonuser categories

• Size of user market is one indicator of market attractiveness

• Size of nonuser group speaks to future growth opportunities

• Characterized along many dimensions

Consumption Behavior

Consumption Behavior

When does Consumption Occur?•How much time passes between purchase and consumption?

•What time of day is product used?

•When in the year or during which season is product consumed?

The situation in which consumption occurs can affect product choice—e.g., beers sales for in-home versus on-premise consumption

Would Consumers Pour the SameAmount into Each Glass?

Consumption Behavior

The Influence of Package Size

Consumption Experiences

How Does It Feel?

Positive or negative things you feel when using a product

Firms can position products based on:

- Positive feelings resulting from consumption - Elimination of negative feelings resulting from consumption

Consumption Experiences

How Rewarding or Punishing Was the Experience?

Positive reinforcement: when consumer receives positive outcome from product usageNegative reinforcement: when consumption helps person avoid negative outcome

Punishment: when consumption leads to negative outcome

Purchase Purchase NeedNeed

Product Purchase

Product Consumption

Avoiding Negative

Outcomes

Negative Reinforcement

Purchase Purchase NeedNeed

Product Purchase

Product Consumption

Receiving Negative

Outcomes

Punishment

Purchase Need

Product Purchase

Product Consumption

Receiving Positive

Outcomes

Positive Reinforcement

Summary…

1. Pre-purchase behavior2. Purchase behavior3. Purchase decision making model and process4. Consumer resources involved in purchase5. IMC and its importance and roles6. consumption behavior7. Consumption experiences