1
Q
What is Consumer Behavior?
A
Consumer behavior is the analysis of how consumers allocate their time and thoughts in the process of buying, using, and disposing of products.
2
Q
Model of Consumer Behavior
A
(feelings, goals, thoughts, needs, attitudes, etc.) –> 4P’s (price, promotion, product, place) —> Marketing —-> black box of consumer —–> response
3
Q
Why try to understand consumers?
A
Marketers want to influence consumers:
Targeting, promo, new product development, etc.
To influence consumers, we need to understand them:
Need to consider not only what consumers prefer, but also why they prefer it
4
Q
Who needs to understand CB?
A
- Marketing Managers
- Ethicists/Advocacy Groups
- Public Policy Makers/Regulators
- Academics
- Consumers
5
Q
What are the steps in the Loyalty Loop?
A
- Initial consideration set
- Active evaluation, information gathering, shopping
- Moment of purchase
- Post purchase experience/exposure
- trigger; loop reset
6
Q
Why do we conduct consumer research?
A
- To provide data that provides basic insights into how consumers think, feel, and decide.
- Inform marketing strategy and tactics
- Understand consumer wants and needs
- Understand what drives perceived value
- Understand satisfaction and loyalty
- To guide the 4 P’s
7
Q
You have been hired by Michelin to develop a new ad campaign for their tires. What kind of data might you gather?
A
possibility: sales data from past purchases
-prices paid
-time bw purchases
-location of purchase
-characteristics of buyer
analysis: regression that explains sales as a function of demographic characteristics of the buyer
problem: inferring causation. suppose we find that most Michelin tire purchases are made by men aged 30-45 during the summer months. should we design an ad campaign that features this combination? No.
Example survey: Asks about price, brand name, and warranty. However this is not exhaustive.
8
Q
Types of Consumer Research
A
Quantitative:
-secondary data: uses already-avail data (e.g. sales, clickstreams) to infer prefs and buying patterns
-primary data: surveys directly measure consumer prefs
Qualitative:
-depth interviews, focus groups, projective techniques
-potentially provides deeper insights, but use of small samples makes generalization difficult
9
Q
What are the weaknesses of surveys?
A
- The researcher may have not asked about attributes that are important
- Consumers many not have conscious insights into their own preferences
- The factors “interact” in determining importance (e.g., the importance of price may depend on the brand name) - “perfect painting example for each country”
- Respondents may “strategically misrepresent” their preferences (i.e., they are not totally honest) - handwashing by gender/country example
10
Q
Correlation and Causation
A
Correlation
- Relationship between two
variables
Causation
- One variable affects another variable
Correlation does not equal causation.
11
Q
What’s needed for causation:
A
- Correlation
- Temporal antecedence
- No third factor driving both
12
Q
causation: stork and baby example
A
1) correlation: storks and babies in same house
2) temporal antecedence: storks –> baby
3) no 3rd factor driving both –> NOT TRUE
the 3rd factor is that houses are warmer with pregnant women!!
13
Q
Spurious Correlation
A
The danger of data mining is that lots of things are correlated, but not really related.
- fulfills all of the requirements for causation, but there is still no causation.
- e.g. “number of people who drowned by falliing into a pool correlates with films nicolas cage appeared in”
14
Q
Experimental Research
A
Test hypotheses about causal relationship between
variables
- Independent Variable (IV) (or Factor)
◦ Conditions or treatments
◦ Manipulated to see if
affect dependent
variable(s) - Dependent Variable (DV)
◦ Measured to see if
affected by independent
variable(s)
15
Q
Magic of Random Assignment
A
suppose randomly assigned some ppl to see an online fb ad, and others not.
In large groups, anything affecting sign-ups other than ad affects both groups equally
-gender? income level? fb activity?
equated across ad and no-ad groups!
16
Q
Examples of Qualitative Research
A
- Depth Interview
- Focus groups
- Projective techniques
17
Q
Observational Research
A
Making and recording observations of behavior in an objective manner
- Observing what, inferring why
Systematic Coding Methods
◦ Deciding what to observe
◦ Deciding how to record observations
18
Q
Observation Research Limitations
A
- Typically explores fewer consumers in depth
- Must infer causes
- Difficult to observe consumers in natural settings without causing reactivity
19
Q
Designing an experiment
A
- What would be your independent variable (i.e., what you manipulate)?
- What would be your dependent variable (i.e., what you measure)?
- How would you randomly assign participants?
- What might be some issues you run into?
20
Q
ZMET - Zaltman Metaphor Elicitation Technique - assumptions
A
- Developed in the 1990s by two academics: Jerry Olson (Penn State) and Gerry Zaltman (Harvard)
Assumptions:
1. Most Communication is nonverbal.
2. Thoughts occur as images
3. Metaphors are essential units of thought
21
Q
ZMET Process
A
- Respondents (usually 20) are given several days to gather 12 pictures that they associate with the topic of interest (e.g., a brand)
- Participants typically engage in 5-6 hours of preparation for interview
- Guided Interview explores images (7-10 days later)
- Uses computer program to create a collage which illustrates sub-conscious thoughts/feelings
Goal: find or develop a “strategic” metaphor that capture the core (deep) meaning of the marketing strategy
22
Q
Motivation
A
Definition: Inner state of activation that provides energy needed to achieve a goal
Consequences:
- Willingness to engage in high effort behavior
- Motivated to acquire, use, or dispose of a product
- Motivated to engage in high-effort information processing and decision making
23
Q
Consumers expend more effort when:
A
- Issue is personally relevant
- Consistent with values (Enduring beliefs that a given
behavior or outcome is desirable or good) - Needs are unsatisfied
- Goals are at stake
24
Q
Maslow’s Hierarchy
A
Physiological, Safety, Social, Egotistic, Self-actualization
25
Issues with Maslow
1. Needs not always fulfilled in the order presented
2. Different cultures have different values
3. Intensity of needs also influences motivation
26
4 Basic Needs
Need for esteem: motivated to build and maintain positive self esteem
Need for control: want to feel that they are in control of what happens to them
Need for belonging: want acceptance and connections to others
Need for meaningfulness: seek out ways to create things of significance and permanence that will endure
27
Why are needs important?
If people recognize a need, they’ll be more motivated to:
a) Process information relevant to that need
b) Stronger attitude toward product
28
Using Need Recognition in Marketing
What can you do with this understanding?
◦ Segment on needs
◦ Develop need-satisfying offerings
◦ Use needs in marketing communications
29
Coke Case: Why successful before the switch?
1. Coherent and appealing brand meaning
◦ Strong connection with consumer culture of the 30s, 40s, and 50s:
◦ Contributed TO the culture (Santa, Rockwell’s art)
2. Coherent product, price, and distribution strategy
◦ One taste the world over, formula a sacred cow
◦ Extensive distribution
◦ Affordable price
30
Pepsi Strategy
- for younger individuals
- Coke old and traditional
- Pepsi Challenge ("tastes better")
-
31
Why was new coke introduced?
1. Soft Drink category was shrinking
2. Tastes were changing and Coke had not
3. Supermarket share was declining versus Pepsi (1984)
32
Issues with Coke Market Research
1. Participants not told that by picking one they would lose the other
2. Symbolic value of coke: they asked the wrong question
3. Discounted the minority who opposed the change in focus groups
4. Discounted callers who complained
33
Where did Coke go wrong?
Focused on product attribute: taste-- not on the impact on the
“brand relationship”
34
Perceptual Process
Exposure --> Attention --> Perception
35
Exposure
Exposure is the process by which the consumer comes into contact with a stimulus
Effects:
- Increases brand awareness and recognition (which brings your brand into consumers’ consideration set)
- Without it, there is no opportunity to process
36
Selective Exposure
Consumers decide what they’ll be exposed to
37
How to influence selective exposure
◦ Ad repetition
◦ Product placement
◦ Spreading ads across different channels
◦ Make entertaining ads, hoping they’ll go “viral”?
38
Value Placement
1. Screen time
2. Character building
3. Awareness and recall
4. Business function
39
Mere exposure effect
People tend to develop a preference for things or people that are more familiar to them than others. Repeated exposure increases familiarity.
40
Mere exposure - Dasani
Consumers viewed 20 photographs with people for 2 seconds each:
◦ 0,4, or 12 photos had a Dasani water bottle
More exposure to Dasani in images = picking dasani more out of the four brands offered
41
“Central” product placement vs. “Non-central” product placement
Recall boost: 50% vs. 14%
Recognition boost: 78% vs. 32%
- Better memory when blatant
- Better associations when subtle
Know your objective
◦ Generate awareness and recall?
◦ Increase familiarity and attractiveness?
42
Characteristics of Attention
1. Limited
2. Selective
3. Capable of being divided
43
Attention
Devoting cognitive resources to a stimulus
44
Voluntary vs. Involuntary Attention
Voluntary
◦ Paying attention to something
◦ Selective, more likely if consumer intends to purchase something, high
involvement
Involuntary
◦ Something grabs our attention
◦ If things depart from expectation, are novel
45
Marketing Implications (Attention) - how do we direct it?
Stimuli need to be:
1. personally relevant
2. pleasant
3. surprising
4. easy to process
45
Measuring Attention: Eye Tracking
Eye trackers measure events where our eyes focus on a point or object---called fixations—as well as movements between fixations--called
saccades.
46
Take 5 Example
- used eye tracking
- need to redesign candy package
- yellow design worked well
- management went with a black design that did not draw attention
47
Perception
Process of deciding what a stimulus means.
Important to understand how perception works because
◦ What customers perceive is what affects their actions
◦ What is perceived is not necessarily what is "true"
48
Sensory Thresholds
Consumers can’t notice something if it doesn’t exceed a sensory
threshold:
◦ Absolute threshold: lowest level of stimulation a person can detect
◦ Subliminal = below this threshold
Differential threshold: the intensity difference needed for a stimulus to be
perceived
◦ Relevant construct for marketers: Just noticeable difference (JND)
49
Principles of Perception
Closure principle: individuals have a need to organize perceptions so that
they form a meaningful whole
Principle of similarity: we often group stimuli to form a unified picture or impression, making it easier to process them
Figure-ground principle: people interpret incoming stimuli in contrast to
a background
50
Pudding Example (about expectations)
- Two of the same pudding
- One looks vanilla and one looks chocolate
Results:
Which was voted creamiest?
* Lightest pudding
Which was voted most “Chocolatey”
* Darkest pudding
What % recognized the trick?
* 0%
51
Expectations/Perceptions
Effected by people's goals and expectations.
Color alters taste:
◦ Coke using a special-edition white can
52
How does memory work?
Environmental stimulus ---> attention given to it ----> sensory memory (all 5 senses) ---> processing ---> short term memory ---> long-term memory (needs rehearsal to go from short to long)
53
Sensory Memory
- Stores information about sensory experiences
- Operates automatically
- Houses information from all 5 senses
- Extremely short-lived; can retain information for ¼ - 3
seconds
54
Short Term Memory
- Active or working memory
- Where we encode or interpret information; where most information processing occurs
- Limited: 7± 2 chunks of information
55
Types of Processing
Automatic processes
- require few cognitive resources.
Controlled processes
- require more cognitive resources.
Processes can move from controlled to automatic with
practice.
As a general rule, we are “cognitive misers” (Fiske, 1993).
56
Two Kinds of Information Processing
- Discursive processing: processing inputs as words
- Imagery processing: processing inputs as images
57
Long Term Memory
- Storehouse of information
- Limitless
- Episodic – autobiographical info, sensory abstractions
- Semantic – detached concepts, meaning
58
LTM vs STM
LTM:
- Much larger
- Lasts much longer (can last a lifetime)
- Mostly inactive (at any one time)
- Includes a lot that you don’t know that you know
- Mostly concerned with meaning
59
How is LTM Organized?
- Associative network model
- Consumers store concepts, feelings, and events in “nodes”
60
Nodes and Links in LTM
- Nodes: concepts, words, images
- Links: associations between 2 concepts
- Different people have different networks
- Not all links are equally strong
61
2 important types of links for marketers
Categories: Important for consideration sets (corvette = sports car)
Attributes: Important for attitudes toward brand (corvette = US made and fast)
62
Marketing applications of categories and attributes
1. Improving the emotions triggered by a brand name
2. Broadening the contexts that trigger recall of the brand- comparative ads, product placement
3. Generalizing the visual cues that evoke the brand
63
Improving Associations - Pens and Music Study (Gorn, 1982)
- See a pen
- While seeing the pen, hear music for 1 minute
- Either pleasant or unpleasant music
- Offered a choice between the ‘advertised’ pen and a new pen
64
When might comparative advertising be
helpful?
1. If you are a smaller brand, you might benefit by having associations with a bigger, more popular brand
2. Might be able to create buzz
65
Memory Exercise
3 iterations of 20 words. Hear all then 30 seconds to write down as many as you remember.
Iteration 1 was easiest. Words could be grouped
Iteration 2 was medium difficulty. Some could be grouped, but more random.
Iteration 3 hardest. not grouped and had to count backwards from 27 by 3’s outloud beforehand
66
Memory Failures
Decay
Interference
Serial Position Effects: Primacy and Recency
67
Memory Failure: Decay
Memory strength deteriorates over time, because it has not been used
68
Memory Failure: Interference
Memory strength deteriorates over time, because of the presence of
other memories that compete with it
69
Memory Failure: Primacy and Recency Effects
The things we encounter first or last in a sequences are the things most easily remembered
70
Memory Reconstruction
Memory is deconstructed in storage (like semantic “bullet points”) and reconstructed in recall (to create a coherent narrative from incomplete information)
71
The misinformation effect
The misinformation effect: a person’s recall of episodic memories becomes less accurate because of post-event information
Created by Elizabeth Loftus.
72
Illusion of truth (cdc myths)
* Immediately had good memory for
myths/facts
* After 30 mins, misremembered 15%
of myths as facts
* After 3 days, misremembered 40%
of myths as being facts
73
False Claims as recommendations
We see something that is labeled a myth or false, but forget that label later on and only remember the fact itself.
Semantic memory (what you heard) separated from episodic memory (where you heard it).
Examples: CDC myths and health claims given to older adults
74
Encoding: Getting things into LTM (4 ways)
Chunking
Recirculation
Rehearsal
Elaboration
75
Chunking
grouping items together so that they may be processed together as one piece of
information
76
Recirculation
simple repetition of material to be remember without active rehearsal
Notes
- Lower involvement: generated by stimulus
- Marketer’s Tool: Brand name and message repetition
77
Rehearsal
Process of actively reviewing the material we are
trying to remember
Notes:
◦ Requires higher involvement
◦ Marketer’s Tool: Novelty, catchy jingles and slogans
78
Elaboration
Consciously integrating
information with existing knowledge
- creates more and stronger links in semantic network
79
Levels of Categorization
1. Superordinate (ex. beverages)
2. Basic (ex. soda, juice, alcohol)
3. Subordinate (ex. regular coke, diet coke, cherry coke)
80
Implications of Categorization
Category-based expectancies: we expect members of particular
category to be similar.
- Allows consumers to make inferences about features and benefits
81
What two characteristics define categories?
Graded Structure
◦ Some members represent category better than others
Prototype
◦ Best example of a category
◦ Most easily recalled
◦ Standard of comparison for category
82
Reasons for brand extensions
- Increasing users (different types of coke)
- Increasing uses (arm and hammer products)
- Increasing usage (different oreo types)
83
Disadvantages to extending the brand
- Positive associations may not transfer to extension
- Hurt or dilute core brand image if unsuccessful
- Cannibalize core brand sales
84
Should I launch an extension?
Do consumers have awareness of and positive associations for the parent brand?
Will a relevant set of these associations be evoked by the extension?
Are negative associations created by the brand extension?
85
"Rule" about brand extensions
A brand seen as prototypical of a product category can be
difficult to extend outside a category
– Examples: Kleenex diapers, gerber old person food
86
Co-branding
One time relationship with another brand
example: thin mint Crunch bar
87
Sub-branding
When one wants to differentiate a new brand, but keep a strong association with the parent.
example: diet coke
88
Goal-Derived Categories
◦ Contain things relevant to a goal, consumption situation
◦ Created via rules and experience
Example: Ways to escape the Mafia
89
Attitude
Definition: an overall evaluation that expresses how much we
like or dislike an issue, person, or object
◦Characterized by strength and direction
◦Learned and enduring
◦Stored in memory; sometimes constructed on the fly
90
Characteristics of Attitudes
Favorability
Attitude Accessibility
Attitude Confidence
Attitude Persistence
Attitude Resistance
Can be explicit (conscious) or implicit (subconscious)
91
Elaboration Likelihood Model
Central Route
Higher motivation and involvement
Message matters
Facts, evidence, logic
Peripheral Route
Less motivation
Low involvement
Usually no interest before seeing a commercial/product
Message length, number of features
How does it make me feel
92
Other Categorization Effects
1. People think of cities within the same state as being within the same category - earthquake example
2. People think of dates within the same month as being within the same category - work/school assignment example
3. People think of items as being more similar as being in the same category
4. The proportion of categories completed can affect people’s estimates of goal progress - workout example
93
Categorization as Units
People discount the size of units/categories
*will take two scoops of ice cream or pretzels. Doesn't matter what size scoop.
94
Cultural Background of Burberry
- Deeply rooted in modern British cultural history
-Invented Gabardine in 1859, the fabric of choice among the English leisure class
- Worn by soldiers in WWI
- Became the outerwear of choice worn by British Royalty (and Hollywood)
95
Burberry Issues before Bravo
- Ongoing decline on the price/exclusivity dimension
- Uncontrolled variation along the price/exclusivity dimension
- Little variation along the product-orientation dimension
96
How did Burberry become positioned?
Old:
Traditional
Conservative
Functional
Iconic
Practical
New:
Modern
Edgy
Fashionable
Trendy
Innovative
97
Who was Burberry trying to attract?
- A customer seeking functional luxury
- A customer preferring classic style
- Accessibly priced products
- Cross-generational
- Makes many aspirational purchases
98
Burberry Takeaways
1. The importance of understanding and managing brand meaning
(associations)
◦ Reinforce core positive associations/heritage
◦ Elaborate new associations – paradox
2. Management/Tactical
◦ Restraint and Control
◦ Increase favorable associations, Leverage existing affect, Avoid detractions, Monitor changes
99
Favorability
The degree to which we like or dislike something (attitude object)
100
Attitude accessibility
How easily an attitude can be remembered (retrieved from memory)
101
Attitude confidence
How strongly we hold an attitude
102
Attitude resistance
How difficult it is to change an attitude. (ex: someone is brand loyal will be hard to change)
103
Episodic Memory
Involves the ability to learn, store, and retrieve information about unique personal experiences that occur in daily life. These memories typically include information about the time and place of an event, as well as detailed information about the event itself.
104
Semantic memory
a type of long-term memory involving the capacity to recall words, concepts, or numbers, which is essential for the use and understanding of language.
105
Attitude persistence
How long our attitude lasts. Our endurance.
The attitudes we hold with confidence may last for an extremely long time, whereas others may be very brief.
Consumer Behavior
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