Transcript How to Use Consumer Behavior

Developing and Using CB
Information
Dr. Abdullah Sultan
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Why do we need this information?
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Understand the consumer
“Fit” our products to the needs (and desires)
of the consumer
Develop better marketing strategies
Protect consumers
Make better purchases
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Who Conducts Consumer Research?
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In-House Marketing Research Departments
External Marketing Research Firms
Advertising Agencies
Syndicated Data Services
Retailers
Research Foundations/Trade Groups
Government
Consumer Organizations
Academics & Research Centers
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Two Types of Consumer Research: Primary
vs. Secondary Data
• Primary
• Collected specifically for current purpose
• Could be internal or external
• Experiments (lab studies)
• Quasi-experiments (test markets, coupon studies)
• Non-experimental (focus groups, observations, projective
techniques)
• Secondary
• Collected for some other purpose
• External (census, Gallup, etc.)
• Internal (company records, data)
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General Rule of Thumb:
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Collect secondary data first, then turn to primary
data, why?
Advantages of secondary data:
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Time savings, Low costs
Disadvantages of secondary data:
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May be out of date
Definitions or categories might not be what you’re looking
for
Might not be specific enough for your project
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Focus Group
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Focus Group – A form of in-depth
interview involving 6 to 12 consumers
led by a moderator who
asks participants to discuss
a product, concept or other
marketing stimulus
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Observational Research
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A technique in which
researchers observe
how consumers behave
in real-world
surroundings
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Experiments
 Consumers randomly assigned
to receive different “treatments”;
e.g., shown different brand
names
 Treatment is called “independent
variable”; e.g., in a test
experiment, only the type of
detergents is varied (whether it
is biodegradable) -> infer its
effectiveness
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Test Market (Field Experiment)
Studies the effectiveness of
one or more elements of the
marketing mix evaluating
sales of the product in an
actual market (e.g., a specific
city).
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Commonly used Test Markets
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How do experiments differ from field experiments?
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In field experiments, researchers conduct
tests in the real world and observe the actual
results.
In experiments, researchers control the test
so that different groups of people can be
compared on the basis of a key differentiated
factor(s).
Why don’t we just ask people?
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People don’t know why they do what they do
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People don’t want to tell you why they do
what they do
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Sometimes asking them changes their
behavior
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When Developing Products
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LOTS of questions to be answered!
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Consumers’ ideas
Attributes
Names
Packaging
Distribution
Promotions – marketing communications
Pricing
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Consumer Behavior Research and The
4 P’s:
Key Research Questions:
How does the company design products,
promotions, prices, and distribution (place) to
satisfy the customer’s needs and wants?
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Questions to Pose When Developing A
New Product
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What ideas do consumers have for new products?
What attributes can be
added to or changed in
an existing offering?
What should our offering
be called?
What should our package
and logo look like?
What About Guarantees
/warranties?
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Making Promotion Decisions
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What are advertising
objectives?
What should advertising look
like?
Where should advertising be
placed?
When should we advertise?
Has advertising been effective?
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Making Pricing Decisions
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What price should be charged?
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How sensitive are consumers
to price and price changes?
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When should certain price
tactics be used?
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Making Distribution Decisions
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Where are target customers
likely to shop?
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How should stores be
designed?
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Practical Scenarios
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Imagine you’re a marketing manager for Burger King. You need
consumer research to support future decisions about menu items
and promotions. Which research tool(s) would you use to
uncover the answers to the following questions – and why?
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Do Burger King customers prefer the chain’s French fries over
those of McDonald’s?
Which Burger King sandwich is the most popular in Kuwait?
Do coupons increase sales of the discounted menu items?
Would Burger King sell more burgers if it added cheese without
raising the price?
Which media vehicles do Burger King customers prefer?
What condiments, if any, do take-out customers add to Burger
King burgers eaten at home?
What new side dishes should Burger King introduce?
Consumer Research & Ethical Issues
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Positive
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Better consumption experiences
Better customer relationships
Negative
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Higher marketing costs – passed on
Invasion of privacy
Deceptive research policies
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Correlation and Causation
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Correlation = relationship between two
variables
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Causation = one variable producing an effect
in another variable
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Correlation ≠ Causation
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Washington State University - kre
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Washington State University - kre
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3 Factors Necessary for Causation:
1)
Correlation
2)
Temporal antecedence
3)
No third factor driving both
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3 Factors Necessary for Causation
1)
Correlation – Storks and babies in same
house
2)
Temporal antecedence
3)
No third factor driving both
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3 Factors Necessary for Causation
1)
1)
Correlation –
Storks and babies in same house
Temporal antecedence
Storks
2)
Babies
No third factor driving both
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3 Factors Necessary for Causation
1)
Correlation –
Storks and babies in same house
2)
Temporal antecedence
Storks
3)
Babies
No third factor driving both
Houses with pregnant women, warmer
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3 Factors Necessary for Causation:
1)
Correlation
more mosques / more crime (r = .85)
2)
Temporal antecedence
3)
No third factor driving both
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3 Factors Necessary for Causation:
1)
Correlation
more mosques / more crime (r = .85)
2)
Temporal antecedence
one doesn’t precede the other
3)
No third factor driving both
large cities have more mosques and more crime/ small
cities have fewer mosques and less crime
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Spurious Correlation
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Spurious = artificial, fake
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Danger of data mining
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Lots of things are correlated, but not really
related
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