Consumer behavior

Accidental & intentional exposure to marketing information

- Accidental exposure to marketing information means that occur as consumers move through their environments and "accidentally" encounter marketing information. For instance, browsing ("just looking") in stores is a common source of accidental exposure to marketing information. Consumers may discover new products, sales promotion, or new retail outlets when browsing. Some retailers design their store environments to encourage browsing and maximize the amount of time consumers spend in the store, which increases the likelihood they will be exposed to products and make a purchase - Consumers are seldom intentionally seeking information about products or services when they watch television, yet they are accidentally exposed to many commercials during an evening of TV viewing at home - Intentional exposure to marketing information means that consumers are exposed to some marketing information because of their own intentional, goal directed search behavior. Consumers search for relevant marketing information to help solve a purchasing problem. Before buying a camera, for instance, a consumer might read product evaluations of 35mm cameras in Consumers Reports or photography magazines. Another consumer might ask a friend or a salesperson for advice about which brand of earphones to buy for her Walkman radio

Elaboration Likelihood Model (ELM)

- The Elaboration Likelihood Model is part of the persuasion process which changes in beliefs, attitudes and behavioral intentions caused by a promotion communication - ELM identifies two cognitive processes by which promotion and communication can persuade consumers. It also distinguishes between two types of information in the promotion communication

Three elements of the wheel of consumer

1. Consumer affect & cognition - affect refers to feelings about stimuli & event which leads to responses being favorable/unfavorable -> vary in intensity - cognition refers to thinking meaning mental structures & processes involved in thinking, understanding stimuli & events -> conscious and automatic 2. Consumer behavior - psychological actions that can be directly observed & measured - sales made & profits earned via marketing strategy 3. Consumer environment - everything external to consumers that influences what they do, think & feel - social & physical stimuli

Two types of knowledge stored in memory

1. General knowledge - relevant information in consumers environments - either episodic or semantic 2. Procedural knowledge - how to do things - "if.....then" links a a concept or an event with an appropriate behavior Example 1. Nikon cameras are expensive Example 2. Not satisfied with service -> don't leave a tip

Elements of the communication model

1. Source 2. Encode (using words, pictures, sounds, actions) 3. Transmit (television show, website, direct mail etc) 4. Receiver 5. Decode 6. Action - very important stages: encoding and decoding - The goals of promotion communications - consumers must have recognized need for the product category or product form - consumers must be aware of the brand - consumers must have a favorable brand attitude - consumers must have an intention to purchase the brand - consumers must perform various behaviors to purchase the brand

5 approaches of product positioning

1.Attribute - Associating a product with an attribute, a product feature, or a customer feature - A new product can be positioned with respect to one attribute ignored by competitors - Sometimes a product can be positioned in terms of two or more attributes simultaneously - The price/quality attribute dimension is commonly used for positioning products as well as stores EXAMPLE: KFC: Finger lickin' good -> focuses on the enjoyable taste of the product 2.Use or application Products can have multiple positioning strategies, although increasing the number involves difficulties and risks - Often a positioning-by-use strategy represents a second or third position designed to expand the market EXAMPLE: American Express: Don't leave home without it -> states that the product is vital when you are traveling 3.Product user Products can have multiple positioning strategies, although increasing the number involves difficulties and risks - Often a positioning-by-use strategy represents a second or third position designed to expand the market EXAMPLE: Adidas: Impossible is nothing -> taps into the self-identity and motivation of serious sportspeople 4.Product class - Positioning of product according to product class, usually keeping one element as the identifying category representation EXAMPLE: Subway: Eat fresh -> highlights their fresh menu items, against the range of fast food options available 5.Competitors - Competition is the explicit or implicit frame of reference - Major purpose is to convince consumers that a brand is better than the market leader on important attributes - Positioning with respect to a competitor is commonly done in advertisements in which a competitor is named and compared EXAMPLE: Pepsi: Choice of a new generation-> clearly targeted against Coca-Cola

Reference groups

A group consists of two or more people who interact with each other to accomplish some goal. A reference group involves one or more people used as a basis for comparison or point of reference in forming affective and cognitive responses and performing behaviors. My consumption behavior is influenced the most by a peer group and by professionals as salespersons group. A peer group mostly influences me since I feel a connection to my peers on a personal level, I can understand their opinions and evaluation better since we are around the same age, might share same interests and usually are more or less in the same life situation so it is easier for me to get influenced by these people. Also, I value opinions more from people I can somehow relate to. Sometimes it also happens that sales persons might influence me if I have a connection to the store meaning that I'm used to visiting it being a regular customer so the sales persons are more familiar to me and thus more influential since I trust them more. So, it is mostly about relating to people to value their opinions or having a connection.

4 types of approach/avoidance responses in retail store environments

Approach and avoidance behaviors 1. Physical -> what you see, smell, feel = approachable/or not 2. Exploratory -> if you have explored a product 3. Communication -> communication with the sales person 4. Performance and satisfaction -> how the sales people behave

Attitude & two ways to acquire attitude

Attitude is a persons overall evaluation of a concept. There evaluations are affective responses created by affective and cognitive systems which are also the two main ways for consumers to acquire attitude. Overall evaluation is formed through the integration process which analyzes the personal relevance of the concept and determines whether it is favorable or unfavorable. These evaluations are produced by the attitude formation process which may be stored in memory.

Consumer & products characteristics

CONSUMER CHARACTERISTICS Vary in their willingness to try new products Different types of consumers may adopt a new product at different times Classic adoption curve and five categories of adopters - Innovators - Early adopters - Early majority - Late majority - Laggards PRODUCT CHARACTERISTICS Compatibility - Degree to which a product is consistent with consumers' current affect, cognition, and behavior Trialability - Degree to which a product can be tried on a limited basis or divided into small quantities for an inexpensive trial Observability - Degree to which products or their effects can be sensed by other consumers Speed - How fast the benefits of the product are experienced Simplicity - Degree to which a product is easy for a consumer to understand and use Competitive advantage - Degree to which an item has a sustainable competitive advantage over other product classes, product forms, and brands Product symbolism - What the product or brand means to the consumer

Adopter categories

Classification of consumers on the basis of their degree of readiness to try a new product. Market researchers have identified five categories that exist in every market segment. Starting with those with the highest readiness to try, they are 1. Innovators - venturesome people and risk takers who are the very first users 2. Early adopters - prestige oriented opinion leaders 3. Early majority - the leading segment of the mass market 4. Late majority - followers of the early majority 5. Laggards - conservative, price conscious segment

Characteristics in new products that are useful in predicting effective marketing strategies

Compatibility - Degree to which a product is consistent with consumers' current affect, cognition, and behavior Trialability - Degree to which a product can be tried on a limited basis or divided into small quantities for an inexpensive trial Observability - Degree to which products or their effects can be sensed by other consumers Speed - How fast the benefits of the product are experienced Simplicity - Degree to which a product is easy for a consumer to understand and use Competitive advantage - Degree to which an item has a sustainable competitive advantage over other product classes, product forms, and brands Product symbolism - What the product or brand means to the consumer

Problem solving approach in decision making

Consumer decision making is a goal-directed, problem-solving process. It is a continuous stream of interactions among environmental factors, cognitive and affective processes, and behavioral actions. There are five basic stages to decision making as problems solving which are also called sub processes. These are: - Problem recognition - Search for alternative solutions - Evaluation of alternatives - Purchase - Post purchase use and reevaluation of chosen alternative Actual problem solving processes involve multiple continuous interactions among consumers cognitive processes, their behaviors and aspects of the physical and social environment. Most of these processes involve multiple problems and thus multiple decisions. Problem solving approach to consumer decision making is a useful perspective because marketers are interested in consumers purchase behaviors, because the more they know the more they can use it as their benefit. These processes show which knowledge is combined to evaluate two or more alternative behaviors and select one thus the outcome being a choice which is represented cognitively as a behavioral intention.

Consumer involvement & factors affecting it

Consumer involvement is the consumers perceptions of importance or personal relevance for an object, event or activity - A motivational state that energizes and directs consumers cognitive and effective processes and behaviors as decisions are made - Felt involvement emphasizes that involvement is a psychological state that consumers experience only at certain times Involvement focuses on - Products and brands - Physical objects - People - Activities or behaviors Factors that affect consumer involvement are two sources of self-relevance which are intrinsic and situational. Intrinsic focuses on self-concept such as basic values, goals, needs, personality traits and expertise. Situational focuses more in the purchase situation itself, intended use situation, time pressure, social environment, and physical environment.

Consumer involvement & knowledge affecting problem solving processes during purchase decisions

Consumers' relevant knowledge in memory about the choice domain is an important element in problem solving. Some knowledge may be acquired by interpreting information encountered in the environment during the problem-solving process. For instance, in the opening example, Megan learned a lot about cars, car dealers, and price ranges for cars. Other relevant knowledge may be activated from

Interpretation processes (attention & comprehension) affecting recalling marketing information

Exposure to marketing information can occur by accident or as a result of an intentional search for information. Once exposure has occurred, the interpretation processes of attention and comprehension begin. For unfamiliar marketing information, these processes are likely to require some conscious thought. However, as consumers become more experienced in interpreting marketing stimuli, attention and comprehension processes require less cognitive capacity and conscious control and become more automatic. Attention varies from preconscious, automatic levels to focal levels where the comprehension begins. Comprehension varies in the depth of meanings produced (from concrete product attributes to abstract consequences and values) and in elaboration (few or many interrelated meanings). Both factors influence the memorability of the meanings created. Attention and comprehension are strongly influenced by two internal factors: the knowledge structures activated in the exposure situation and the level of consumers' involvement. These respective factors influence consumers' ability and motivation to interpret the information.

Means-End Chain Conceptualization of Advertising Strategy (MECCAS)

Helps marketers understand the key aspects of ad strategy and make better strategic decisions - Specify advertising strategy in terms of the type of relationship the consumer will have with the product or brand

Market segmentation & management tasks

Market segmentation is the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) of individuals for the firm to serve. There are five tasks in the process of market segmentation which are: - Analyze consumer-product relationships Entails analysis of the affect and cognition, behavior and environments involved in the purchase/consumption process for the particular products. There are three general approaches to this which are brainstorm the product concept, focus groups and other types of primary research and secondary research. - Investigate segmentation bases There is no simple way to determine the best bases for segmenting markets. There are four specific types of segmentation which are benefit, psychographic, person/situation and geodemographic. - Develop product positioning There are five approaches to positioning strategy: 1. Attribute 2. Use or application 3. Product user 4. Product class 5. Competitors - Select segmentation strategy - Design marketing mix strategy

Strategies that influence consumer behavior Differences for existing products & new products

Marketing managers develop strategies to accomplish particular objectives. This focuses on influencing consumers affect, cognitions and behaviors. It involves both long-term and short-term strategies. Appropriate strategies are created depending on the levels of consumers affective, cognition and behavioral responses to the company's products. Strategies for existing products are developed by creating an ad to highlight benefits superior to competitive offerings. For new products strategies often focus on affect and cognition to create favorable behavioral responses such as a free sample of a new soap is mailed to consumers to generate trial.

Channel strategies

Marketing managers have many decisions to make when designing effective channels to serve consumers. For example, decisions must be made whether to market directly to the consumer through company-owned or franchised stores or indirectly through combinations of intermediaries such as independent retailers, wholesalers, and agents. Decisions must be made whether to use store retailing, nonstore retailing, or multichannel retailing. Decisions must be made about plant and warehouse locations, how products will be delivered to consumers, and who will perform what marketing functions within the channel.

Overt consumer behavior & factors influencing it

Overt consumer behavior is the observable and measurable responses or actions of consumers which are distinct from affect and cognition because it is external and can be observed directly Strategies influencing it: 1. Affective - Marketing mix elements are designed to influence consumers' affective responses in order to influence overt consumer behaviors (moods, feelings, evaluations) 2. Cognitive - Marketing mix elements are designed to influence consumers' cognitions in order to influence consumer behaviors (knowledge, meanings, beliefs) 3. Behavioral - Marketing mix elements are designed to influence consumers' overt behaviors somewhat directly (positive reinforcement, modeling desired behaviors) 4. Combined - Marketing mix elements are designed to influence some combination of consumers' affect, cognitions, and behaviors in order to influence other consumer behaviors (all the above)

Segmentations relation to positioning strategies

Positioning is one of the stages that belong to segmentation process so the strategies that are made for positioning are highly related to segmentation Without positioning strategies segmentation would lose one key elements to it's process since it is vital to a business to assess its competitive advantage and position itself in the consumers minds to be the more attractive option I these categories.

Preferences formed in childhood & influence on future purchases

Preferences formed during childhood is called consumer socialization which refers to how children acquire knowledge about products and services and various consumption-related skills. This can occur directly through intentional instruction or indirectly through observation and modeling. This collected knowledge during childhood can influence people in later years.

Price & difference between price strategy & other elements of marketing mix

Price is usually defined as what the consumer must give up to purchase a product or a service. Price strategy is used in three general situations which are - When a price is being set for a new product - When a long-term change is being considered of an established product - When a short-term price change is being considered - There is always a customer segment, product form, location and time. The differences between price strategy and other elements of the marketing mix are that price is the most intangible element of the marketing mix when others are tangible. The price variable typically offers very little for the consumer to experience at the sensory level, although it may generate considerable cognitive activity.

Salient beliefs, differences from other beliefs & influencing beliefs

Salient beliefs are associated with attitudes towards objects. These are activated beliefs, which can only create a person's attitude towards an object. Many factors influence which beliefs about an object will be activated in a situation and thus become salient determinants of that object. Salient beliefs vary over time or situations for some products. Marketers may find that consumers' salient beliefs vary over time or situations for some products. That is, different sets of salient beliefs about a product may be activated in different situations or at different times. For instance, a consumer who has just returned from the dentist is more likely to activate beliefs about tooth decay and cavities when thinking about which brand of toothpaste to buy. Variations in the set of salient beliefs over time and situations can produce changes in consumer attitudes depending on the situation, context, time, consumer's mood, and so forth. Consumers have more stable attitudes toward objects that have a stable set of salient beliefs. Normally, though, the amount of variation in salient beliefs and attitudes is not great for most objects. INFLUENCING: - Marketers can also try to change attitudes by changing the strength of already salient beliefs. 34 They can attempt to increase the strength of beliefs about positive attributes and consequences, or they can decrease the strength of beliefs about negative attributes and consequences. - Marketers can also try to change consumers' attitudes by changing the evaluative aspect of an existing, strongly held belief about a salient attribute. This requires constructing a new means-end chain by linking a more positive, higher-ordered consequence to that attribute.

Experiencing satisfaction/dissatisfaction

Satisfaction/Dissatisfaction - Consumer satisfaction is a critical concept in marketing thought and consumer research - The most current formulation of studying satisfaction is the expectancy disconfirmation with performance approach - The degree to which a product's performance exceeds the consumers expectations EXPERIENCES: - Prepurchase expectations EXAMPLE: I want to buy skinny black jeans - Postpurchase expectations EXAMPLE: Jeans will look great and feel good - Disconfirmation which can be either positive, negative (dissatisfaction) or neutral EXAMPLE: Positive: Found jeans and they look great Negative: Jeans look like crap after using them

Multi-Attribute Attitude Model (MAAM) & how marketers can use it to make better decisions

The Multi-Attribute Attitude Model focuses on consumer's beliefs about multiple product or brand attributes. It measures evaluations of salient beliefs cause overall attitude which is function of two factors: - Strengths of the salient beliefs associated with the object - Evaluation of those beliefs The components of the model are belief strength which perceives profitability of association between and object and its relative attributes, it's affected by past consumer experiences and several salient beliefs about an attitude object unlikely to exceed seven to nine. Belief evaluation reflects how favorably the consumer perceives that attribute, but it's not necessarily fixed over time or constant across different situations.

Routes to persuasion

The two routes to persuasion are: 1. Central route to persuasion - The central route to persuasion involves being persuaded by the arguments or the content of the message. For example, after hearing a political debate you may decide to vote for a candidate because you found the candidates views and arguments very convincing. 2. Peripheral route to persuasion - The peripheral route to persuasion involves being persuaded in a manner that is not based on the arguments or the message content. For example, after reading a political debate you may decide to vote for a candidate because you like the sound of the person's voice, or the person went to the same university as you did. - The peripheral route can involve using superficial cues such as the attractiveness of the speaker.

Cognitive process of consumer decision making

Two processes: 1. Interpretation processes - exposure to information & involves cognitive processes: attention & comprehension 2. Integration processes - how consumers combine different types of knowledge to form evaluations of products, other objects and behaviors - includes product knowledge & involvement Example. Buying winter shoes

Consumers product knowledge

Used by consumers in different levels to interpret information & make purchase decisions Four levels: 1. Brands 2. Model 3. Product form 4. Product class Three types of product knowledge & example with Nike running shoes 1. Knowledge about the attributes or characteristics of products (attributes: lacing, pattern, price, arch support) 2. The positive consequences/benefits of using products (benefits: run faster, long-wearing, stabilized heel) 3. The values the product helps consumers satisfy/achieve (value satisfaction: have good health, be fit, live a long life)