Transcript Chapter 3 Effects of IT on Strategy and Competition

Part 3
CUSTOMER BEHAVIOR
AND E-MARKETING.
Dr. Chen, Principle of Marketing
6: Consumer Buying Behavior
7: Business Markets and
Buying Behavior
8: Reaching Global Markets
9: Digital Marketing and Social
Networking
Dr. Chen, Principle of Marketing
Chapter 6
Consumer Buying Behavior
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected]
Dr. Chen, Principle of Marketing
Class Exercise
 Social Influences on Consumption
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 The objective of this class exercise is to help students understand
how social influences affect their consumption behaviors.

 Prompt for Students: Imagine that you are going out tonight.
Which of the following social influences will determine what
you wear, where you go, what you do, and what you will buy
or consume?
 1. Your role as a student, family member, employee, church
member, or fraternity or sorority member.
 As fraternity or sorority members, students may be influenced to
stay out late for social reasons, which may conflict with their roles
as students, employees, and church members. The demands of a
person’s many roles may be inconsistent and confusing. Some
married students may describe joint decision-making situations
and the influence of children. Other likely responses will relate to
clothing, restaurant choice, and food or beverage consumption.
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 2. Membership in a subculture based on geography,
age, or ethnic background.
 Students may be able to identify certain types of
 food (catfish in the South),
 clothing (surf wear in the West),
 vehicles (pickups in the Midwest and Southwest),
or
 accessories (Gucci handbags in the East) that are
associated with subcultures.
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 3. Knowing how these factors affect your consumption
behavior, how can marketers adjust their marketing mixes to
meet your needs? (Use vehicle (Car) as an example)
 Some possible examples include the following:
 Promotion
 show upper-class individuals in luxury car ads.
 Product
 design products (cars) that meet joint needs of family.
 Price
 offer price discounts to students with limited income.
 Distribution
 allocate more pickups to Midwest and Southwest.
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Marketing Applications
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 4. Attitudes toward products or companies often affect consumer
behavior. The three components of an attitude are cognitive,
affective, and behavioral. Briefly describe how a beer company
might alter the cognitive and affective components of consumer
attitudes toward beer products and toward the company.

 The cognitive component is the person’s knowledge and
information about the object or idea, so a beer company
 may try to inform consumers about its special brewing process
or about benefits like reduced calories.
 The affective component comprises the individual’s feelings and
emotions toward the object or idea. Some beer companies
 will focus on local issues, social responsibility, or fun
promotions as a way to influence the affective component.
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Figure 6.2 - Maslow’s Hierarchy of Needs
Self-actualization
needs
People’s needs to
grow and develop
Esteem needs
Social needs
Safety needs
Physiological needs
Dr. Chen, Principle of Marketing
Respect,
recognition
Social acceptance
(love and affection)
Life insurance
• Basic level
• Requirements for survival such
as food, water, clothing etc.
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 6. Select five brands of toothpaste and explain how the appeals
used in advertising these brands relate to Maslow’s hierarchy of
needs.
 Responses should cover some basic ideas:
 Physiological needs
 not included (WHY?)
 (humans can survive without toothpaste)
 Safety needs
 fights decay and cavities
 Social needs
 fights bad breath
 Esteem needs
 whitening (may also be social needs)
 Self-actualization needs
 connect to career or relationship success (depends on
advertising)
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Internet Exercise
 Amazon

 Some mass-market e-commerce sites, such as
Amazon.com, have extended the concept of
customization to their customer base. The
company has created an affinity group by
drawing on certain users’ likes and dislikes to
make product recommendations to other users.
Check out this pioneering online retailer at
www.amazon.com.
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 1. What might motivate some consumers to read a
“Top Selling” list?

 Students’ responses will vary, but they should
discuss ideas from their study of consumer
behavior. Answers could include meeting social,
esteem, and self-actualization needs, or using the
list as a tool in an information search.
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 2. Is the consumer’s level of involvement with an
online book purchase likely to be high or low?

 Because books are low-priced and low-risk
products, consumer involvement is likely to be low,
especially because no one can see an individual’s
purchase history. However, students could argue
that the visibility of some books once they are
purchased or the time commitment of reading could
raise some consumers’ levels of involvement.
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 3. Discuss the consumer buying decision process as it relates to
a decision to purchase from Amazon.

 Students’ responses should cover the following general ideas:
 Problem recognition - consumers realize that they would like to
purchase a product
 Information search - consumers search for information, which is easy
to do directly on Amazon because of extensive product information
and customer reviews
 Evaluation of alternatives - consumers consider all of the benefits of
products; this may take place online, or they may go to other stores to
actually touch and try out products
 Purchase - consumers purchase the product from Amazon, which is
easy if the consumer has an account with the company because
mailing and billing information is already stored (1-click shopping)
 Postpurchase evaluation - consumers evaluate products, potentially
sharing their evaluations with others via Amazon
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Video Case 6.1
 STARBUCKS REFINES THE
CUSTOMER EXPERIENCE
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 Summary

 Starbucks is popular in the United States thanks to its focus
on the customer experience. While the company continues
to improve its American stores through innovations such as
mobile pay, Starbucks is also expanding globally, especially
in Asian markets. It is also diversifying; Starbucks recently
purchased premium-juice company Evolution Fresh and is
adding the company’s nutritious blended drinks to the
traditional Starbucks menu. Starbucks plans to open more
Evolution Fresh stores as the demand for healthy foods
increases. The company is also competing with energy drink
companies after releasing its all-natural Starbucks
Refreshers. Starbucks is also promoting its focus on social
responsibility.
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 1. In terms of situational influences and level of
involvement, what are the benefits of mobile pay?

 Starbucks is working to keep customers involved
by creating routinized response behavior. Mobile
pay reduces search-and-decision effort, and the
ease of payment and accumulation of Starbucks
rewards makes it easy for their customers to prefer
Starbucks as a brand.
 Starbucks is also taking advantage of customers’
momentary conditions to make sure they have an
easy and fast way to pay.
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 2. With Evolution Fresh, which psychological
influences on consumer buying decisions does
Starbucks seem to be addressing?

 Motives, attitudes, personalities, and lifestyles are all
important to Starbucks. With Evolution Fresh,
Starbucks is primarily addressing consumers’
attitudes, especially perceptions and interpretations
of the company.
 By providing products such as smoothies, juices,
salads, and wraps, Starbucks is creating the
impression that it cares about consumers’ health and
is working to fit into their healthy lifestyles.
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 3. Why would Starbucks want customers to know
that it believes in social responsibility?

 Starbucks wants to improve consumers’
perceptions and interpretations of the company and
its actions. If consumers believe the company
values ethical and socially responsible behavior,
they will be more involved with the brand and more
willing to purchase the company’s products.
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