MKTG2112: Consumer behaviour AWS
MKTG2112 Notes
MKTG2112: Consumer behaviour Textbook used: Quester, P., Pettigrew, S., Kopandis, F. and Rao Hill, S. and Hawkins, D. (2014). Consumer Behaviour: Implications for Marketing Strategy 7th Edition. McGraw Hill: North Ryde, Australia Lecture 1: Introduction to consumer behaviour Textbook Ch.1 Consumer behaviour: a discipline dealing with how and why consumers purchase (or do not purchase) goods and services
1
MKTG2112 Notes •
The consumer decision process;
Consumer behaviour and marketing strategy
• •
•
Consumer behaviour tends to be person- product and situation specific To survive in a competitive environment an organisation must provide its target customer with more value that its competitor do o Customer value: the difference between all the benefits derived from the total product and all the cost of acquiring these benefits. Aspects of marketing strategy o Market segmentation: developing specific marketing programs targeted at consumer groups with unique needs and/or purchasing processes
2
MKTG2112 Notes
• •
o Positioning strategy: the way a product or brand compares to its competitors as perceived by consumers New market applications (i.e. Japanese redesigned the refrigerator to a compact size) Global marketing: a form of international marketing that aims to target particular consumer segments, regardless of where they are located in the world, using standardised marketing mixes The marketing mix: product, price, distribution and promotion
• Consumerism, ethics, non profit marketing and consumer behaviour • Consumerism: the activities of governments, businesses, independent organisations and concerned consumers aimed at protecting and enhancing the rights of consumers • Regulations o Injurious consumption: individual or group in engage in consumption behaviour that has negative consequences for their long term well being i.e. gambling
Section 1: Decision processes
Lecture 2: Decision process I: Situation and problem recognition Textbook Ch.2, 3 Learning objectives • Establish context for thinking about consumer decisions • Know & understand the situational influences on consumer behaviour • Recognise & develop marketing applications of ‘situation’ • Understand the nature & types of problem recognition • Consider the implications of creating problems? Situational influences: all those factors particular to a time and place of observation – other than the consumer and the product – that have a demonstrable and systematic effect on consumer behaviour • It involves the influence of situation factors; o Actually purchased as planned o Purchase more or other than planned o Do not purchase • Influences on situation
3
MKTG2112 Notes •
The consumption process occurs within 4 broad situation; The communication Ø Situation in which consumers receive situation information about a good or service (i.e. watching an ad) The purchase Ø Situation in which product selection and situation purchase occurs The usage situation Ø Situation in which purchased good or service will be used (or consumed) i.e. travel size range The disposal Ø The situation in which the product and/or situation product packaging is discarded before or after use (i.e. consumers may need to dispose of their old bed before they can use a new one)
•
The classification of situational influence Physical Material environment surrounding the consumer at the surrounding time of communication, purchase or consumption e.g., location, decor, sounds, aromas, lighting, weather, other merchandise Ø Store atmosphere: the sum of all physical features of a retail environment Ø Servicescape: the physical environment of service delivery
Social The influence of others are present (or not) in the surroundings environment i.e. family, sales staff, crowds Temporal Influence of time, i.e. time of day, seasons, occasion, time perspective constraints Task The individual’s reason for the purchase and/or definition consumption i.e. the intent or requirement to select, shop for or get information about a general or specific product (i.e. personal shopping versus buying a present) Antecedent Momentary moods (such as anxiety, pleasantness, hostility or excitation) or momentary conditions (such as cash on hand, fatigue or illness) as opposed to long- term
4
MKTG2112 Notes individual traits. i.e. television program content can influence mood and arousal level which inturn influence information processing activities •
The marketing implications of situational influences o Often these situation influence or problem can form the basis of an entire marketing campaign i.e. “what to bring a thing what you are told not to bring a thing” o Situation influence matrix: useful in identifying where potential situation influence may be felt and would acquire further examination (i.e. determine which products or brands are most likely to be purchased when a particular situation arises)
o Person-situation segmentation:
Purchase involvement + introduction to decision making process • Purchase involvement: level of concern or interest in the purchase process triggered by the need (and associated with the level of risk of making the wrong decision) o Note: purchase involvement is not the same as product involvement
5
MKTG2112 Notes
•
•
Habitual decision making (also called routinized purchase behaviour) o Properties; § Very love involvement with repeat purchase § Limited attention likely to be given to alternative § Product location and availability is critical (i.e. making sure product is stocked up) § Reminder advertising to reinforce wisdom of choice o Brand loyalty decisions: decisions made by a consumer who displays a high degree of product involvement and emotional attachment to that brand (and low degree of purchase involvement) o Repeat purchase decisions: a pattern of consumer behaviour that involves the purchase of the same good or service over time, with or without loyalty to that good or service Limited decision making: o Moderately low involvement, limited information search and selection from small set of alternative o Consumers may consider external information, unlikely to integrate information from multiple sources 6
MKTG2112 Notes o (Consumers not exposed to competitor messages) Entry into evoked set and keeping brand at top of consumer’s mind is critical • Extended decision making; o High involvement with extensive information search and complex evaluation of alternatives o Provide detailed cognitive information (i.e. providing details about price, available and etc...) o Anticipate consumers seeing and comparing brands (need to address key differences, weakness and strengths) o Consumers with limited background may be learning how to shop in the product category § Need to balance between providing a lot of information and to prevent information overload The process of problem recognition
•
Problem recognition: the recognition of a problem was the result of a discrepancy between a desired state and an actual state; this discrepancy is sufficient to arouse and activate the decision process. o Actual state: the way an individual perceives their situation and feelings to be at the present time o Desired state: the way an individual wants to feel or be at the present time
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MKTG2112 Notes The desire to resolve recognise problem (2); o The magnitude of discrepancy between the desired state and the actual state o The relative importance of the problem • Type of consumer problem o Active problem: a problem the consumer is aware of, or will become aware of, in the normal course of events o Inactive problem: a problem of which the consumer is not aware • Aim of marketer: to create problem recognition by 1. Influencing desired state or 2. Influencing perception of actual state Uncontrollable determinants of problem recognition •
Market strategy in relation to problem recognition • Strategy 1: Measuring problem recognition • Strategy 2: Responding to consumer problems o i.e. developing or altering products, modifying channels of distribution, changing pricing policy or revising advertising strategy. • **Strategy 3: Activating problem recognition o Generic versus selective problem recognition § Generic problem recognition: the recognition of a discrepancy that a variety of brands within a product category could resolve, used when; • the problem is latent or of low importance • it is early in the product life cycle • the firm has very high market penetration • an external search after problem recognition is likely to be limited • an industry-wide cooperative effort is being made. § Selective problem recognition: the recognition of a discrepancy that only one brand in the product category can resolve i.e. A2 • Strategy 4: Suppressing problem recognition (when it means decreasing the consumption of their product)
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MKTG2112: Consumer behaviour Textbook used: Quester, P., Pettigrew, S., Kopandis, F. and Rao Hill, S. and Hawkins, D. (2014). Consumer Behaviour: Implications for Marketing Strategy 7th Edition. McGraw Hill: North Ryde, Australia Lecture 1: Introduction to consumer behaviour Textbook Ch.1 Consumer behaviour: a discipline dealing with how and why consumers purchase (or do not purchase) goods and services
1
MKTG2112 Notes •
The consumer decision process;
Consumer behaviour and marketing strategy
• •
•
Consumer behaviour tends to be person- product and situation specific To survive in a competitive environment an organisation must provide its target customer with more value that its competitor do o Customer value: the difference between all the benefits derived from the total product and all the cost of acquiring these benefits. Aspects of marketing strategy o Market segmentation: developing specific marketing programs targeted at consumer groups with unique needs and/or purchasing processes
2
MKTG2112 Notes
• •
o Positioning strategy: the way a product or brand compares to its competitors as perceived by consumers New market applications (i.e. Japanese redesigned the refrigerator to a compact size) Global marketing: a form of international marketing that aims to target particular consumer segments, regardless of where they are located in the world, using standardised marketing mixes The marketing mix: product, price, distribution and promotion
• Consumerism, ethics, non profit marketing and consumer behaviour • Consumerism: the activities of governments, businesses, independent organisations and concerned consumers aimed at protecting and enhancing the rights of consumers • Regulations o Injurious consumption: individual or group in engage in consumption behaviour that has negative consequences for their long term well being i.e. gambling
Section 1: Decision processes
Lecture 2: Decision process I: Situation and problem recognition Textbook Ch.2, 3 Learning objectives • Establish context for thinking about consumer decisions • Know & understand the situational influences on consumer behaviour • Recognise & develop marketing applications of ‘situation’ • Understand the nature & types of problem recognition • Consider the implications of creating problems? Situational influences: all those factors particular to a time and place of observation – other than the consumer and the product – that have a demonstrable and systematic effect on consumer behaviour • It involves the influence of situation factors; o Actually purchased as planned o Purchase more or other than planned o Do not purchase • Influences on situation
3
MKTG2112 Notes •
The consumption process occurs within 4 broad situation; The communication Ø Situation in which consumers receive situation information about a good or service (i.e. watching an ad) The purchase Ø Situation in which product selection and situation purchase occurs The usage situation Ø Situation in which purchased good or service will be used (or consumed) i.e. travel size range The disposal Ø The situation in which the product and/or situation product packaging is discarded before or after use (i.e. consumers may need to dispose of their old bed before they can use a new one)
•
The classification of situational influence Physical Material environment surrounding the consumer at the surrounding time of communication, purchase or consumption e.g., location, decor, sounds, aromas, lighting, weather, other merchandise Ø Store atmosphere: the sum of all physical features of a retail environment Ø Servicescape: the physical environment of service delivery
Social The influence of others are present (or not) in the surroundings environment i.e. family, sales staff, crowds Temporal Influence of time, i.e. time of day, seasons, occasion, time perspective constraints Task The individual’s reason for the purchase and/or definition consumption i.e. the intent or requirement to select, shop for or get information about a general or specific product (i.e. personal shopping versus buying a present) Antecedent Momentary moods (such as anxiety, pleasantness, hostility or excitation) or momentary conditions (such as cash on hand, fatigue or illness) as opposed to long- term
4
MKTG2112 Notes individual traits. i.e. television program content can influence mood and arousal level which inturn influence information processing activities •
The marketing implications of situational influences o Often these situation influence or problem can form the basis of an entire marketing campaign i.e. “what to bring a thing what you are told not to bring a thing” o Situation influence matrix: useful in identifying where potential situation influence may be felt and would acquire further examination (i.e. determine which products or brands are most likely to be purchased when a particular situation arises)
o Person-situation segmentation:
Purchase involvement + introduction to decision making process • Purchase involvement: level of concern or interest in the purchase process triggered by the need (and associated with the level of risk of making the wrong decision) o Note: purchase involvement is not the same as product involvement
5
MKTG2112 Notes
•
•
Habitual decision making (also called routinized purchase behaviour) o Properties; § Very love involvement with repeat purchase § Limited attention likely to be given to alternative § Product location and availability is critical (i.e. making sure product is stocked up) § Reminder advertising to reinforce wisdom of choice o Brand loyalty decisions: decisions made by a consumer who displays a high degree of product involvement and emotional attachment to that brand (and low degree of purchase involvement) o Repeat purchase decisions: a pattern of consumer behaviour that involves the purchase of the same good or service over time, with or without loyalty to that good or service Limited decision making: o Moderately low involvement, limited information search and selection from small set of alternative o Consumers may consider external information, unlikely to integrate information from multiple sources 6
MKTG2112 Notes o (Consumers not exposed to competitor messages) Entry into evoked set and keeping brand at top of consumer’s mind is critical • Extended decision making; o High involvement with extensive information search and complex evaluation of alternatives o Provide detailed cognitive information (i.e. providing details about price, available and etc...) o Anticipate consumers seeing and comparing brands (need to address key differences, weakness and strengths) o Consumers with limited background may be learning how to shop in the product category § Need to balance between providing a lot of information and to prevent information overload The process of problem recognition
•
Problem recognition: the recognition of a problem was the result of a discrepancy between a desired state and an actual state; this discrepancy is sufficient to arouse and activate the decision process. o Actual state: the way an individual perceives their situation and feelings to be at the present time o Desired state: the way an individual wants to feel or be at the present time
7
MKTG2112 Notes The desire to resolve recognise problem (2); o The magnitude of discrepancy between the desired state and the actual state o The relative importance of the problem • Type of consumer problem o Active problem: a problem the consumer is aware of, or will become aware of, in the normal course of events o Inactive problem: a problem of which the consumer is not aware • Aim of marketer: to create problem recognition by 1. Influencing desired state or 2. Influencing perception of actual state Uncontrollable determinants of problem recognition •
Market strategy in relation to problem recognition • Strategy 1: Measuring problem recognition • Strategy 2: Responding to consumer problems o i.e. developing or altering products, modifying channels of distribution, changing pricing policy or revising advertising strategy. • **Strategy 3: Activating problem recognition o Generic versus selective problem recognition § Generic problem recognition: the recognition of a discrepancy that a variety of brands within a product category could resolve, used when; • the problem is latent or of low importance • it is early in the product life cycle • the firm has very high market penetration • an external search after problem recognition is likely to be limited • an industry-wide cooperative effort is being made. § Selective problem recognition: the recognition of a discrepancy that only one brand in the product category can resolve i.e. A2 • Strategy 4: Suppressing problem recognition (when it means decreasing the consumption of their product)
8
