Consumer Behavior Exam

Demographic Segmentation

-Age, gender, ethnicity, occupation, -Marital status, socio-economic group etc.

Self Image (4 Types)

1. Actual self-image is the way consumers see themselves 2. Ideal self-image is how consumers would like to see themselves 3. Social self-image is how consumers feel others see them 4. Ideal social self-image is how consumers would like others to see them

Principle of Cognitive Consistency

Consumers value harmony among their thoughts, feelings or behaviors to be consistent with other experiences

It is important to understand the role of customer expectations in customer satisfaction. If you fall below the consumer's expectations, then the consumer is not satisfied, but if you exceed expectations then you can create (BLANK)

Customer Delight

Personality

The inner psychological characteristics (the specific qualities, attributes, traits, factors, and mannerisms that distinguish one individual from other individuals) that both determine and reflect how we think and act.

Development of the Marketing Concept

The marketing concept was developed over time through three other important business orientations: 1. the production concept 2. the product concept 3. the selling concept

Absolute threshold of sensation

The point at which a person can detect a difference between "something" and "nothing" is that person's absolute threshold for that stimulus.

Marketing Mytopia

When there's focus on the product rather than the needs of the market.

Consumer Touchpoints

have the ability to influence a consumers buying or intent to purchase, all throughout the five stages of the buyer purchasing decision-making process: Problem recognition, information search, the evaluation of alternatives, purchase decision, and post-purchase behavior

To be effective at targeting, segments must be

-Identifiable -Sizeable -Stable and Growing -Reachable -Congruent with the Marketer's Objectives and Resources

Although research does not agree regarding the role of heredity and early childhood experiences on personality development vs. the role of broader social and environmental influences or on whether personality should be viewed ad a unified whole or as specific traits, researchers agree that the Three Principles of personality are:

(1) personality reflects individual differences (2) personality is generally consistent and enduring (3) although it is enduring, personality can sometimes change.

Millennial Consumers

-1980-2000 -Largest group of consumers -spending habits projected to increase while baby boomers decrease -technologically collectors (this is the catalyst that starts trans). Many Generations look to them on how to use tech. to shop or market. -more likely to share stories about buying experiences on Social Media. -Peer Review: more likely to give reviews -Generation of Researchers: will compare benefits, strengths, weakness, and prices across various brands and products before purchasing (Limits brands charing a price premium).

Traits that Affect the New Adoption of Products

1. Dogmatism 2. Social Character 3. Need for Uniqueness

Congruent with the Marketer's Objectives and Resources-

companies must be interested in and have the means to reach the segment(s) they select.

Modern Brand Identity

-One that is flexible, -can adapt to the changing needs of businesses and to the various touchpoint (e.g. social media and retail. This changes everyday). -Think about: what is the business, where are the key touch points in this business, how to extend touch points. Example Creating the CVS Heart for Health. the Heart is about engagement, your health, and the ability to see further. This is carried out visually. UNDERSTAND the ORGANIZATION (Strategy + Background). Understand customers needs before making a brand identity.

Formation of Consumer attitudes

-Personal Experience -Family and Friends -Social Media/Internet

What are the Three Theories of Personality

1. Freudian Theory 2. Neo-Freudian Theory 3. Trait theory Psychologists created personality theories to help us understand, explain and predict how personality will impact consumer behavior.

3 Types of Trait Theory

1. Verbalizers prefer promotional messages containing a lot of written, textual, and verbal information. VS. Visualizers are more receptive to pictorial images, and include: 1. Object visualizers, who encode and process images as a single perceptual unit. 2. Spatial visualizers, who process images piece by piece. 2. Materialism gauges the extent to which an individual is preoccupied with purchasing and showing off physical possessions that are mostly nonessential and often conspicuous luxury goods. 3. Ethnocentrism is the consumer's willingness to buy or not buy foreign-made products. *Innovativeness: how receptive a person is to new consumer-related experiences

The deeply ingrained characteristics that we call personality influence...

1. individuals' product choices 2. they affect the way consumers respond to marketers' promotional efforts 3. when, where and how they consume products or services.

Altering Consumer Attitudes

1.Changing beliefs about products-changing beliefs about the brand itself (advertising) 2.Changing brand image-to alter consumers' overall assessment of the brand, this approach is used by marketers by using promotional statements such as "this is the largest-selling brand" 3.Changing beliefs about competing brands-changing beliefs about competitors' brands or product categories (ex. Aleve ad) "More pills doesn't mean more pain relief.

The positioning process:

1.Defining the market in which the product or brand competes, who the relevant buyers are, and the offering's competition. 2.Identifying the product's key attributes and researching consumers' perception regarding each of the relevant attributes. 3.Researching how consumers perceive the competing offerings on the relevant attributes. 4.Determining the target market's preferred combination of attributes. 5.Developing a distinctive, differentiating, and value-based positioning concept that communicates the applicable attributes as benefits. 6.Creating a positioning statement focused on the benefits and value that the product provides and using it to communicate with the target audiences.

Experiential Marketing

Allows customers to engage and interact with offerings in sensory ways in order to create emotional bonds between consumers and marketing offerings

ALTERING THE SELF:

Consumers use self-altering products to express their new selves or take on the appearances of particular types of people (e.g., a military person, physician, business executive, or college professor).

Benefits Segmentation

Customer needs, loyalty, customer experience

Segmentation

Group with a common need. This can be based on consumers' demographics, product usage, geography, lifestyle, and many other characteristics and needs.

Usage Rate Segmentation

Heavy, medium, light usage

Consumer Stereotypes (Part of Perceptual Interpretation)

Often, individuals carry biased pictures in their minds of the meanings of various stimuli. Sometimes, when presented with sensory stimuli, people "add" these biases to what they see or hear and thus form distorted impressions of the stimuli around them.

Ambush Marketing

Placing ads in places where consumers do not expect to see them and cannot readily avoid them

Trait Theory

Quantitative approach to personality as a set of psychological traits characteristics that combine to make individuals unique. Trait theorists use personality tests that show high and low scores on specific traits.

Media-Based Segmentation

Social media, radio, newspaper, target audience

Neo-Freudian Personality Theory (& 3 types):

Social relationships are fundamental to the formation and development of personality o Compliant individuals move toward others and wish to be loved, wanted and appreciated o Aggressive individuals: move against others and desire to excel and win admiration o Detached individuals: move away from others and seek independence, self-reliance and self-sufficiency

Usage Occasion Segmentation

Specific occasions, birthdays etc.

Marketing Concept

The essence of marketing consists of satisfying consumers' needs, creating value, and retaining customers. Example Classico's sauce ad with the ingredients.

Differential Threshold

The minimal difference that can be detected between two similar stimuli is called the differential threshold or the just noticeable difference (JND). Weber's Law suggests the minimum amount of change that can be detected depends on the size of the initial stimulus.

Consumer Behavior

The study of individuals, groups or organizations and the processes they use to select, secure, and dispose of products, services, experiences or ideas to satisfy needs and the impacts that these processeshave on the consumer and society

How do McDonald's communicate this value?

They communicate this value through television ads, in-store signage, and their website.

How does McDonald's create value for the consumer?

They create bundled meals and dollar menus to create value for price-conscious consumers. In addition, they create value to the health-conscious consumer by offering salads, fruit, and healthy options for Happy Meals.

Customer Value

This occurs by offering a product which has benefits that the consumer values. Value = Benefit - Cost

Trait Theory: Consumption Behavior

Traits can define patterns of consumer behaviors, both individually and by groups of similar individuals. Traits define behaviors around product categories and are not brand specific.

Trait Theory: Individual Uniqueness

Traits represent those Psychological characteristics that combine to make individuals unique

Freudian Personality Theory

Unconscious needs or drives are at the heart of human motivation and personality. Freud created the theory with the premise that unconscious needs or drives, especially sexual and other biological drives, are at the heart of human personality.

Identity Loyalty

When Buying is Being. Why do these communities within a brand happen? How to harness and leverage this. This brand allows us to become something we'd like to become. -loyalty does not = repeat purchases -Identity loyalty moves beyond repeat purchases. Allows consumers to associate brand with who they are. 1. causes them to defend the brand just like they defend themselves 2. tell people about the brand, engage in advertising, and become a marketer because it's apart of your story and build a community.

post-purchase dissonance

When cognitive dissonance occurs after a purchase. marketers must ensure consumers resolve conflict conflicts by changing their attitudes to conform to behaviors.

Umbrella Positioning

a statement or slogan that describes the universal benefit of the company's offering. Example: At times, this statement does nor refer to specific products. Campbell's slogan, "Soup is good food," promotes all soups without any reference to the Campbell's brands.

Reachable

also known as accessible; marketers must be able to communicate with the consumers in the segment effectively and economically. Magazines and their websites can help with this, as shown in Table 2.1.

Mercenaries

are satisfied but are not really considered loyal and will move from company to company.

Transactional bonds

are the mechanics and structures that facilitate exchanges between consumers and sellers.

Value

as the consumers' perception of what they gained vs. what they gave up to purchase a product or use a service.

TARGETING

consists of selecting the segments that the company views as prospective customers and pursuing them

under The production concept

consumers are mostly interested in product availability at low prices and the implicit marketing objectives are cheap, efficient production and intensive distribution. This concept was popular when demand was higher than the supply so consumers were content to get a product and were not focused on product variation.

The product concept assumes that

consumers will buy the product that offers them the highest quality, the best performance, and the most features. A company that drives marketing through a product concept strives for continuous quality improvement and adds new features if feasible, but sometimes consumers may not want the features. This causes marketing myopia.

When customers are disappointed, they can become

defectors and move to the competition or terrorists, who spread negative word-of-mouth. or hostages and stay with the company but are very unhappy.

Social Character

describes an individual's inner or other-directedness. -Inner-directed consumers rely on their own inner values or standards in evaluating new products and are likely to be consumer innovators. -Conversely, other-directed consumers look to others for guidance as to what is appropriate or inappropriate and are unlikely to be consumer innovators.

How consumer behavior can be applied to Product Management

focus on building products, services and solutions managers believe will meet the needs of their consumers. Consumer behavior is the cornerstone of product management as successful product managers design and build new products based on unmet consumer needs.

Stable and Growing

ideal segments should be stable in terms of consumption patterns and likely to grow larger in the future.

Rentention

is an important strategy to all marketers. Single most important for growth. -Loyal customers buy more products -Long-term customers who are thoroughly familiar with the company's products -Loyal customers are less price-sensitive and pay less attention to competitors' advertising -Servicing existing customers, who are familiar with the firm's offerings and processes, is cheaper -Loyal customers spread positive word-of-mouth and refer -Marketing efforts aimed at attracting new customers are expensive -Increased customer retention and loyalty make the employees' jobs easier and more satisfying

Need for Uniqueness

is defined as an individual's pursuit of differentness relative to others that is achieved through the acquisition of consumer goods in order to enhance one's personal and social identity. -People who have a need to stand out will seek those products that are new, innovative and out of the norm. "When I travel, I seek unusual gifts for myself" -They are the Early Adopters and have a tendency to stop using a product when a market mainstream begins to use the product. "I stop buying brands when everyone else starts to buy them"

Positioning

is how the consumer thinks about a marketer's product versus the competitor's product. The positioning is ultimately in the mind of the consumer but the marketer helps form the positioning through effective advertising and communication, which clearly tells the consumer how it will fulfill their needs better than other products on the market.

Dogmatism

is one's degree of rigidity—the opposite of being open-minded—toward information and opinion contradictory to one's beliefs and views (i.e., closed-mindedness). Dogmatic individuals are less likely to be innovators. -Highly dogmatic users respond to ads with authority figures -Low dogmatic users respond to specifics of features & differences

POSITIONING

is the process by which a company creates a distinct image and identity for its products, services and brands in consumer's mind

MARKET SEGMENTATION

is the process of dividing a market into subsets of consumers with common needs or characteristics

When customers are highly satisfied, they can become

loyalistswho continue to purchase or apostles, who provide very positive word-of-mouth.

Identifiable-

marketers divide consumers into separate segments on the basis of common or shared needs by using demographics, lifestyles, and other factors named "bases for segmentation." Some segmentation factors (e.g. demographics) are easier to identify than others (e.g. lifestyles).

Need for cognition (NFC)

measures a person's craving for or enjoyment of thinking, product-related information vs. background or peripheral aspects of an ad.

Behavioral Segmentation

o Consumer-intrinsic: age, gender, income etc. o Consumption-based: quantity, frequency of buying a product

Cognitive dissonance

occurs when a consumer holds conflicting thoughts about a belief or an attitude object.

Brand Personifiction (Example: Mr. Clean)

occurs when consumers attribute human traits or characteristics to a brand. It provides an emotional identity for a brand, which produces sentiments and feelings toward the brand among consumers. It is a form of anthropomorphism, which refers to attributing human characteristics to something that is not human.

Emotional bonds

represent a customer's high level of personal commitment and attachment to the company.

The societal marketing concept

requires marketers to fulfill the needs of the target audience in ways that improve, preserve, and enhance society's well-being while simultaneously meeting their business objectives. Ex: not-for-profit advocacy organizations like PETA (People for the Ethical Treatment of Animals) are driven by a mission to encourage actions that are ethically and morally right.

The selling concept creates a focus on

selling the products that the marketer has decided to produce. The selling concept assumes that consumers are unlikely to buy the product unless they are aggressively persuaded to do so - and the approach does not consider customer satisfaction or customer retention.

The relationship between attitudes and behavior can be misinterpret unless we consider

the context of the situation.

Freud's studies revealed that the human personality consists of three interacting systems:

the id - is the "warehouse" of primitive drives, basic physiological needs such as hunger, thirst, and sex. the superego - drives the individual to fulfill their needs in a socially acceptable function. the ego - is the internal monitor that balances the needs of the id and the superego.

Product Quality

the overall ability of the product to satisfy customer expectations. 1. Intrinsic cues—physical characteristics of the product itself, (size, color, shape, flavor) 2. Extrinsic cues— characteristics that are not inherent in the product (brand image, price, manufacturer's image)—to judge quality.

How consumer behavior can be applied to acquisition marketing:

the process of driving customers into a company's purchase funnel, pushing them through that funnel until they make a purchase, and doing so in a cost-effective way

Selection of the correct target market is critical to

the success of the product since the marketer has assumed that this group of consumers has a similar need with respect to their product or service and they will respond similarly to marketing action.

Sizeable-

to be a viable market, there must be enough consumers in a segment to make it profitable to target the segment.

Geographic Segmentation

•Customer location, region etc. •PRIZM, socioeconomic ranking, consumer behavior, media exposure patterns

Psychographic Segmentation

•Personality, Attitudes •Lifestyles, Class

Types of Extended Self

1. Actually, by allowing the person to do things that otherwise would be very difficult or impossible to accomplish (e.g., problem solving by using a computer). 2. Symbolically, by making the person feel better (e.g., being considered the "best dressed" at work). 3. Conferring status or rank, for example, among collectors of rare works of art because of the ownership of a particular masterpiece). 4. Feelings of immortality because of leaving valuable bequests after death.

Requirements of Marketing Concept

1. All companies must continually conduct research to understand the needs and priorities of their market segments. 2. . Marketers perform segmentation by looking for groups with common needs. When a marketer chooses the segments that they will pursue, they have chosen a target market. Then Positioning. 3. The Marketing Mix

Tri-Component attitude Model

1. Cognitive component: consists of a person's cognitions, knowledge and perceptions of the features of an attitude object, commonly expressed as beliefs. 2. Affective component: represents the consumer's emotions and feelings regarding the attitude object or evaluations 3. Conative Component: reflects the likelihood that an individual will behave in a particular way with regard to the attitude object, treated as an expression of the consumer's intention to buy in consumer research.

Consumer Attitude

A learned predisposition to behave in a consistently favorable or unfavorable manner with respect to a given object. Consumers learn attitudes. They form new attitudes and change existing ones.

Identify Types of Consumer Positioning

-Attribute: positioning is based on a brand's superiority on relevant attributes. Some marketers have repositioned their products from focusing on functional attributes to focusing on how the products fit into a consumer's lifestyle -Competitive: positioning statements acknowledge competing brands, contrasting one's brand with competitors is very effective in positioning and differentiation -Premium/Premier: a strategy that focuses on the brand's exclusivity, sometimes, the higher the product's price, the higher its exclusivity. -Umbrella: a statement or slogan that describes the universal benefit of the company's offering. -Un-Owned: a perception that is not clearly associated with a brand or product, not a physical object and cannot be owned

Bases for segmentation

-Behavioral -Cognitive -Demographic -Geographic -Psychographic

Examples of Brand Personification

-Character Driven M&M Candies -Imagery Driven Disney -Endorsement Driven Lincoln MKX -Slogan Driven Fly the Friendly Skies

Cognitive Segmentation

-Consumer-intrinsic: personality traits, culture -Consumption-specific: shopping attitudes and product preferences

Knowing Your Customer's Identities

-Consumers have more than one identities. -When you are in each identity, you are a different person. -Cause us to prefer different stuff. -Active at different times. Look at identities as a multiple segments. Have the ability to create a product that can identify with me in a much deeper way. -companies need to figure these identities out in your target segment. and determine how to make meaningful connections with these dinettes. 1. identify sense of who they are, try to cluster this and create products that benefit these relevant identities. What is the strongest attribute that I can speak to. Choose the right identity dimension. or else you'll mess up BIC for HER pens.

Successful Relationshis

1. Customer Value 2. Customer Satisfaction 3. Customer Retention

Five Steps to Identity Loyalty:

1. Know your customer and brand. Not about demographics or psychographics. It's about learning who they are (desires, goals, and identity. Matching brand identity to this identity.. 2.Actively create a brand that matches the values and images of the consumer. (example, apples and windows). If you don't then your computers will do it for you, which is really hard to undo. 3. Strive to be genuine and authentic. The identity of your brand has to have credibility. Need to know you care or they'll shy away. 4. co-create and co-reinforce the brand with the brand community. I think of Fashion Nova. Consumers have power to choose. Allows both parties to actively create the brand together. Nike ID example 5. Constantly Monitor the community and its relevance to the brand. Proactively monitoring and understanding how people react to the brand within a community.

Ways to reduce post-purchase dissonance

1. Rationalize decision 2. Seek advertisements that support choices (avoid competitive ads). 3. "Sell" friends on the positive features of the purchase. 4. Seek reassurance from satisfied owners

The Marketing Mix

1.Product or service: The features, designs, brands, and packaging offered, along with post-purchase benefits such as warranties and return policies. 2. Price: The list price, including discounts, allowances, and payment methods. 3. Place: The distribution of the product or service through stores and other outlets. 4. Promotion: The advertising, sales promotion, public relations, and sales efforts designed to build awareness of and demand for the product or service.

Customer Retention

A company with strong customer relationships will be able to achieve a high level of (BLANK) - their customers will not defect to the competitor or stop using their product. They will retain these customer over time and will be more profitable due to these valuable loyal customers.

The goal of all marketers is to build and maintain (BLANK) with their consumers.

A successful Relationship

Customer Satisfaction

If a product delivers value, the company is likely to have a high level of (BLANK). They will tell others about the product and speak highly of it when asked or when reviewing the product online.

How consumer behavior can be applied to Brand Marketing

In order to successfully launch experiential marketing events, engage consumers on social, or create content that resonates with consumers, brand marketers have to understand the types of topics that would truly interest their consumer base.

Trait Theory: Marketing Impact

Marketing responds to Traits through messages and imagery that is tailored to fit Dominant traits of individuals and market segments to elicit a response.

Subliminal Perception

Stimuli that are too weak or too brief to be consciously seen or heard. They may be strong enough to be perceived by one or more receptor cells. Extensive research has shown no evidence that subliminal advertising can cause behavior changes.