Transcript Consumer Behavior

An Introduction to Applied Buyer
Behavior
Partha Krishnamurthy
Spring 2006
Agenda
• What’s this course is about
• Contrast buyer and consumer behavior
• Define consumer behavior
– What is marketing exchange
• Who is interested in consumer behavior
• How do we study consumer behavior
• Exercise for Chapter 1
What’s this course about?
• This course is about buyer behavior.
• …rather, consumer behavior.
• What’s the difference?
Buyer Behavior
• Buyer behavior focuses primarily on buyers and
buying.
– But, often you buy for others (significant others,
spouses, friends, children)
– To buy, you have to engage in activities other than
buying e.g., searching, learning to search, using,
knowing how to use, and disposing.
… so buyer behavior cannot be the whole story
Consumption and Consumer Behavior
• Consumption
– Activities, thoughts and feelings (of individuals and
groups) directed toward achieving satisfaction (often
using market offerings).
• Consumers
– Those who engage in consumption activities
• Consumer Behavior (Brief definition)
– How consumers go about achieving satisfaction.
Examples of Consumption
(and why it is just not “buying”)
• Ulusaba – South African Private Game Reserve
» $10000 per night, up-close and personal with wild game
• Nimmo Bay – British Columbia
» $26000 for 3-6 guests, 4 days/nights.
» Helicopter and Chef on demand, exclusive fishing, dining.
» Can’t keep the fish though!
• Personal Perfume
» Created for you, and only you.
» Based on your style, taste, activities etc.
» Only $32,000
What Does it Mean to Study Consumer
Behavior?
• It is a study of the feelings, thoughts, and behaviors of
consumers.
• Specifically, from a managerial point of view, it is a study
of how people respond to marketing entities such as
products, advertisements, promotion, price etc.
• This study is aimed at increasing the likelihood and
frequency of the marketing exchange.
What is Marketing Exchange?
• Marketing is an exchange process between the consumer
and the producer – benefits are exchanged for profits; more
concretely, goods and services exchanged for money.
Goods & Services
Consumer
Marketer
Money
• Marketing strategies are activities geared toward
increasing the probability and frequency of the exchanges
so that the exchange is profitable and satisfying.
Why should Consumer Behavior be
Studied
– Suppose, your product is not selling well. Should you
decrease the price, increase advertising, offer consumer
promotions?
– If you don’t know how consumers respond to these
marketing actions, how can you make the decision?
– Hence, for marketing strategies to be successful,
understanding consumer behavior is absolutely
important.
How to Study Consumer Behavior:
A Real World Application of
How Studying Consumer Behavior Facilitates Marketing Exchanges
Activebuyersguide.com is a website which assesses your
goals, preferences, what you like and don’t like about
the features of products and then creates a list of
products that fit your needs.
It provides the degree of fit between your preferences and
the product features, descriptions of features etc.
It encourages/facilitates marketing exchange
A Correction
• In this course, our study of consumer behavior
will also focus on:
– consumer satisfaction.
– consumer well-being.
… sometimes these goals may have little to do with the
probability/frequency of marketing exchange.
Returning to Consumer Behavior
• What do we study?
– Primarily, three aspects
• Affect/Cognition:
» Feelings (“I love the restaurant”)
» Thoughts (“$14.99 for a bowl of soup? Why is it so
expensive?”)
• Behavior:
» Action (Going to the restaurant)
• Environment:
» Context (The lighting in the restaurant)
In other words, we will be examining consumers’
affective/cognitive and behavioral responses in the
environmental context.
Groups Interested in Consumer
Behavior
Marketing
organizations
Marketing
strategies
Public
Policy
Consumer
activities
Consumers
Government
and political
organizations
Approaches to the Study of Consumer
Behavior
Approach
Interpretive
Core
Disciplines
Cultural anthropology
Primary
Objectives
Understand consumption and its
meaning
Primary
Methods
Long interviews & focus groups
Approaches to the Study of Consumer
Behavior (cont’d)
Approach
Traditional
Core
Disciplines
Psychology & Sociology
Primary
Objectives
Explain consumer decision
making and behavior
Primary
Methods
Experiments & Surveys
Approaches to the Study of Consumer
Behavior (cont’d)
Approach
Marketing Science
Core
Disciplines
Economics & Statistics
Primary
Objectives
Predict consumer choice and
behavior
Primary
Methods
Math-modeling & Simulation
Exercise # 1
“Out of Class” Exercise
• Home Work: Vacation Fantasy Consumption Story
– Surf the web, and based on information available in the
web, and create an imaginary vacation, complete with
details about the vacation ($5000 budget). Describe the
vacation as if it were a story (2 pages, 10 points).
• To be handed in class next Monday.
– Type written, double-spaced, 1-inch margins on all
sides, times-roman 12-point font only.