CHAPTER 1
Consumer behavior reflects the totality of consumers' decisions with respect to the acquisition,
consumption and disposition of goods, services, activities, experiences, people, and ideas by
human decision making units. Because consumer behavior encompasses so many things, we
use the simple term; offering.
-Acquiring an offering also involves time and money.
-Usage is at the very core of consumer behavior.
-Disposition
Consumer behavior also involves managing debt and making financial decisions.
The sequence of acquisition, usage and disposition is a dynamic process.
Consumer behavior does not necessarily reflect the action of a single individual.
It also involves understanding whether, why, when, where, how, how often and for how long
consumers will buy, use or dispose of an offering.
Decisions concerning offerings are often related to personal goals, safety concerns or a desire
to reduce economic, social or phycological risk.
Ways of acquiring an offering: (different ways of payment)
1. Buying
2. Trading
3. Renting or leasing
4. Bartering (exchanging goods or services without having money change hands)
5. Gifting
6. Finding
7. Stealing (theft)
8. Stealing (sharing or borrowing; illegal and legal)
Improper usage of offerings can have problematic consequences. Using an offering can include
what we use with the offering as well as how we store and organize the items.
Ways to dispose of tangible offerings;
Find a new use for it
Get rid of it temporarily
Get rid of it permanently
Our need for variety can affect when we acquire, use and dispose of offerings. The timing can
depend on many factors.
Consumers make decisions regarding where to acquire, use or dispose of an offering.
Usage decisions involve; how much, how often and for how long to use an offering.
, Sales of a product can be increased when the consumer uses larger amounts of the product, uses
it more frequently or uses it for longer periods of time.
Consumer behavior involves emotions and coping.
Factors affecting acquisition, usage and disposition decisions can be classified into 4 broad
domains; (all are connected to each other)
1. The psychological core
Before consumers make decisions, they must have some source of info or knowledge upon
which to base their decisions. This source covers;
-motivation, ability and opportunity
-exposure, attention, perception and comprehension
-memory and knowledge
-attitudes about an offering.
2. Process of decision making
4 stages;
-problem recognition (realization of an unfulfilled need)
-information search (elements of psychological core are invoked from exposure to
comprehension)
-decision making (high effort vs low effort decisions. High effort = more motivation. Low
effort= less info search, resulting in less enduring attitudes and memories.
-post-purchase evaluation (psychological core; info, attitudes, memory)
3. The consumer's culture (external processes)
Culture; typical or expected behavior, norms, and ideas that characterize a group of people.
-Reference groups; a group of people consumers compare themselves with for information
regarding behavior, attitudes or values. (influence; word of mouth)
-diversity influences; regional, ethnic, and religious groups that affect the decision-making
process.
-household and social class influences
-values, personality and lifestyle.
4. Consumer behavior outcomes
The first 3 domains affect consumer behavior outcomes through the symbolic use of products
and the diffusion of ideas, products or services through a market.
-consumer behavior can symbolize who we are. Symbols; external signs consumers use to
express their identity. The groups we belong to and our sense of self can affect the symbols we
use, consciously or unconsciously, to express out actual or desired identity.
-consumer behavior can diffuse (spread) through a market. The diffusion of information can
have negative and/or positive effects.
-consumer behavior, ethics and social responsibility.
Who benefits from the study of consumer behavior? (one can affect the other)
1. Marketing managers
2. Ethicists and advocacy groups
,3. Public policy makers and regulators
4. Academics
5. Consumers and society
Making business decisions based on the marketing implications of consumer behavior:
Developing and implementing customer-oriented strategy (designed to actually provide
value to customers)
-market segmentation
-profitability of each segment
-consumer characteristics in each segment
-customer satisfaction with existing offerings
Selecting the target market
Developing products
-ideas consumers have for new products
-attributes that can be added to or changed in an existing offering
-branding of the offering
-packaging and logos
Positioning
-position of competitive offerings
-position of our offerings
-repositioning of our offerings
Making promotion and marketing communications decisions
-our communications objectives
-our marketing communications
-ad placement
-when to advertise
-has our advertising been effective?
-sales promotion objectives and tactics
-have our sales promotions been effective?
-how can salespeople best serve customers
Making pricing decisions
-price to be charged (endowment effect: generally, people tend to overestimate how much
other will pay for goods, particularly when they are selling a product of their own. Seller
should avoid this; they should not set a higher price than buyers are willing to pay.)
-sensitivity of consumers to price and price changes
-when should certain price tactics be used?
Making distribution decisions
-where and when are target consumers likely to shop
-what do customers want to see in stores?
-how should stores be designed?
,APPENDIX= Developing information about consumer behavior
Researchers collect and analyze two types of data: primary and secondary.
Primary: data originating from a researcher and collected to provide info relevant to a specific
research project.
Secondary: data collected for some other purpose that is subsequently used in a research project.
Companies use research tools to get unique insight on consumer behavior. This is research with
a purpose: to guide companies in making more informed decisions and achieving marketing
results.
RESEARCH TOOLS:
1. Survey
-quantitative insights
-helps marketers learn about shifts and trends that might affect their offerings or
industry.
-helps marketers understand media usage and purchasing patterns.
2. Focus group
-qualitative insights
-small group of consumers to discuss an issue or an offering.
-can be computer-based
-problem of anonymity
3. Interview
-more in-depth data than surveys.
4. Storytelling
-consumers tell stories about their experience with the acquisition, usage and disposition
of an offering. These stories help marketers to gain insights into consumer needs and
identify the product attributes that meet these needs.
-hypothetical situations to reveal needs, feelings and perceptions of the consumer.
5. Photography and pictures
6. Diaries
-often reveals how friends and family affect consumers’ decisions.
-can help marketers understand is consumers are brand loyal, brand switching or light or
heavy users.
7. Experiments
8. Field experiments
-market test; a study in which the effectiveness of one or more elements of the marketing
mix is examined by evaluating sales of the product in an actual market.
9. Conjoint analysis
-a research technique to determine the relative importance and appeal of different levels of
an offering's attributes.
10. Observations and ethnographic research
, -in-depth qualitative research using observations and interviews of consumers in real-world
surroundings. Often used to study the meaning that consumers ascribe to a product or
consumption phenomenon.
11. Purchase panels
12. Database marketing and big data
-use of data mining to identify promising opportunities.
13. Netnography
-observing and analyzing the online behavior and comments of consumers in an adapted
ethnographic research way.
14. Psychophysiological reactions and neuroscience
Research objectives:
o For application
o For consumer protection
o For general understanding
Types of consumer researchers: (see A.4)
In-house marketing research departments
-pro: information is kept inside the firm.
-con: may have a vested interest in the research result.
External marketing research firms
Advertising agencies and media planning firms
-conduct research to better understand what ad messages and media will appeal to their
client's target market.
Syndicated data services
-are companies that collect and then sell info they collect, usually to firms that market
products and services to consumers.
Retailers
Research foundations and trade groups
-nonprofit organization that sponsors research on topics relevant to the foundation's
goals.
-a professional organization made up of marketers in the same industry.
Government
Consumer organizations
Academic and academic research centers
Ethical issues in Consumer research
1. Positive side
-better consumer experiences
-potential for building customer relationships
2. Negative side
,-studying consumer behavior in different countries (not all countries have same legal, cultural
and language aspects)
-potentially higher marketing costs
-invasion of consumer privacy
-deceptive research practices (lying about sponsor/ anonymity/ compensation)
CHAPTER 2 PSYCHOLOGICAL CORE; motivation, ability and
opportunity
Consumer behavior is greatly affected by the amount of effort that consumers put into their
consumption behaviors and decisions.
3 critical factors that affect effort:
1. Motivation
2. Ability
3. Opportunity
MOTIVATION
Definition: an inner state of activation that provides energy needed to achieve a goal.
Consumers can be motivated to engage in behaviors, make decisions, or process information
and this motivation can be seen in the context of acquiring, using, or disposing of an offering.
Effects of motivation:
High effort behavior
Motivation not only drives the final behaviors that bring a goal closer but also creates a
willingness to expand time and energy on prepatory behaviors. Note, however that consumers
try to match anticipated and actual effort (by either simplifying or complicating the situation).
High effort information processing and decision making
When consumers are highly motivated they are more likely to pay attention to it, think about it,
attempt to understand goal-related information, evaluate that information critically and try to
remember it for later use (vice versa).
Motivated reasoning: processing information in a biased way that allows consumers to reach
the conclusion that they want to reach. (bv confirmation bias: seeking information that support
our own conclusions). Focus is on the motivation to process information accurately.
Felt involvement
The consumer's experience of being motivated with respect to a product or service, or decisions
and actions about these.
Types of involvement:
o Enduring: long term interest in an offering, activity or decision
o Situational: temporary interest in an offering, activity or decision, often caused by
situational circumstances.
,o Cognitive: interest in thinking about and learning information pertinent to an offering,
an activity or decisions.
o Affective: interest in expanding emotional energy and evoking deep feelings about an
offering, an activity or a decision.
Consumers may exhibit cognitive and/or affective involvement in objects. These can be: a
product or retail category, experiences, a brand, ads, a medium.
Consumers involved in certain decisions and behaviors are experiencing response involvement;
interest in certain decisions and behaviors.
We are motivated to behave, process information, or engage in effortful decision-making about
things that we feel are personally relevant and we will experience considerable involvement
when buying, using or disposing of them. We are also motivated to think deeply about issues
pertinent to a given decision when we believe we will have to justify or explain our decisions.
What determines motivation? /What is motivation influenced by?
Since motivation affects outcomes of interest to marketers, it is important for marketers to
understand what affects motivation so they can be able to predict consumers' motivation to think
about, be involved with, and/or process information about their brand or ad and then develop
marketing tactics to influence this motivation.
1. Personal relevance
Something that has a direct bearing on the self and has potentially significant consequences or
implications for our lives. This relevance fuels your motivation to process information, make
decisions and take actions. (bv. Careers, romance, living)
2. Consistency with self-concept
Any kind of offering may be personally relevant to the extent that it bears on your self-concept;
your view of yourself and the way others view you. Identifying with a brand and making an
emotional connection with it strengthens brand loyalty and makes those consumers less price
sensitive toward that brand.
o Values
Are abstract beliefs that guide what people regard as important or good. Consumers are more
motivated to attend and process information when its relevant to their values.
o Needs
Consumers also find things personally relevant when they have a bearing on activated needs. A
need is an internal state of tension experienced as a discrepancy between the current state and
an ideal or desired state. (bv. Motivation to go to the fridge because of hunger, or tension, aka
the need for food.)
Abraham Maslow's Hierarchy of needs:
Esteem=egoistic
Love/belonging=social
Lower levels must first be satisfied in order to activate higher levels.
, Critique original Maslow's hierarchy:
-needs are not always ordered exactly like this.
Lower order needs do not always have to be fulfilled
before higher order needs become important to
consumers.
-ordering od needs may not be consistent across
culture.
-it ignores the intensity of needs and resulting effect
on motivation.
Types of needs:
Social and Personal
Social: are externally directed and relate to other individuals. (bv. Consumption of a good to be
part of the group)
Personal: are those for which achievement is not based on other people. (bv consumption of a
good to maintain consistency or for variety)
Functional, symbolic, and hedonic needs
Functional: may be social or nonsocial. Motivates the search for products that solve
consumption-related problems.
Symbolic: need that relates to the meaning of our consumption behaviors to ourselves and to
others. That is, how we perceive ourselves, how we relate to others, and the esteem in which
we are held by others. This affects consumption decisions about how we express our sense of
self.
Hedonic: needs that relates to sensory pleasure. Can be nonsocial (novelty, cognitive
stimulation) and social (sex, play etc.).
Consumers with a high need for cognition enjoy being involved in mentally taxing activities
and vice versa.
All of the preceding needs share several characteristics:
Needs can be internally or externally activated
Needs satisfaction is dynamic: Constant process of need fulfillment.
Needs exist in a hierarchy
Needs can conflict
Types of need conflicts:
o Approach-avoidance conflict
Occurs when the consumer want both to engage in the behavior and to avoid it.
o Approach-approach conflict
Occurs when the consumer must choose between two or more equally desired options
that fulfill different needs.
o Avoidance-avoidance conflict
Occurs when the consumer must choose between two equally undesirable options.
Consumer behavior reflects the totality of consumers' decisions with respect to the acquisition,
consumption and disposition of goods, services, activities, experiences, people, and ideas by
human decision making units. Because consumer behavior encompasses so many things, we
use the simple term; offering.
-Acquiring an offering also involves time and money.
-Usage is at the very core of consumer behavior.
-Disposition
Consumer behavior also involves managing debt and making financial decisions.
The sequence of acquisition, usage and disposition is a dynamic process.
Consumer behavior does not necessarily reflect the action of a single individual.
It also involves understanding whether, why, when, where, how, how often and for how long
consumers will buy, use or dispose of an offering.
Decisions concerning offerings are often related to personal goals, safety concerns or a desire
to reduce economic, social or phycological risk.
Ways of acquiring an offering: (different ways of payment)
1. Buying
2. Trading
3. Renting or leasing
4. Bartering (exchanging goods or services without having money change hands)
5. Gifting
6. Finding
7. Stealing (theft)
8. Stealing (sharing or borrowing; illegal and legal)
Improper usage of offerings can have problematic consequences. Using an offering can include
what we use with the offering as well as how we store and organize the items.
Ways to dispose of tangible offerings;
Find a new use for it
Get rid of it temporarily
Get rid of it permanently
Our need for variety can affect when we acquire, use and dispose of offerings. The timing can
depend on many factors.
Consumers make decisions regarding where to acquire, use or dispose of an offering.
Usage decisions involve; how much, how often and for how long to use an offering.
, Sales of a product can be increased when the consumer uses larger amounts of the product, uses
it more frequently or uses it for longer periods of time.
Consumer behavior involves emotions and coping.
Factors affecting acquisition, usage and disposition decisions can be classified into 4 broad
domains; (all are connected to each other)
1. The psychological core
Before consumers make decisions, they must have some source of info or knowledge upon
which to base their decisions. This source covers;
-motivation, ability and opportunity
-exposure, attention, perception and comprehension
-memory and knowledge
-attitudes about an offering.
2. Process of decision making
4 stages;
-problem recognition (realization of an unfulfilled need)
-information search (elements of psychological core are invoked from exposure to
comprehension)
-decision making (high effort vs low effort decisions. High effort = more motivation. Low
effort= less info search, resulting in less enduring attitudes and memories.
-post-purchase evaluation (psychological core; info, attitudes, memory)
3. The consumer's culture (external processes)
Culture; typical or expected behavior, norms, and ideas that characterize a group of people.
-Reference groups; a group of people consumers compare themselves with for information
regarding behavior, attitudes or values. (influence; word of mouth)
-diversity influences; regional, ethnic, and religious groups that affect the decision-making
process.
-household and social class influences
-values, personality and lifestyle.
4. Consumer behavior outcomes
The first 3 domains affect consumer behavior outcomes through the symbolic use of products
and the diffusion of ideas, products or services through a market.
-consumer behavior can symbolize who we are. Symbols; external signs consumers use to
express their identity. The groups we belong to and our sense of self can affect the symbols we
use, consciously or unconsciously, to express out actual or desired identity.
-consumer behavior can diffuse (spread) through a market. The diffusion of information can
have negative and/or positive effects.
-consumer behavior, ethics and social responsibility.
Who benefits from the study of consumer behavior? (one can affect the other)
1. Marketing managers
2. Ethicists and advocacy groups
,3. Public policy makers and regulators
4. Academics
5. Consumers and society
Making business decisions based on the marketing implications of consumer behavior:
Developing and implementing customer-oriented strategy (designed to actually provide
value to customers)
-market segmentation
-profitability of each segment
-consumer characteristics in each segment
-customer satisfaction with existing offerings
Selecting the target market
Developing products
-ideas consumers have for new products
-attributes that can be added to or changed in an existing offering
-branding of the offering
-packaging and logos
Positioning
-position of competitive offerings
-position of our offerings
-repositioning of our offerings
Making promotion and marketing communications decisions
-our communications objectives
-our marketing communications
-ad placement
-when to advertise
-has our advertising been effective?
-sales promotion objectives and tactics
-have our sales promotions been effective?
-how can salespeople best serve customers
Making pricing decisions
-price to be charged (endowment effect: generally, people tend to overestimate how much
other will pay for goods, particularly when they are selling a product of their own. Seller
should avoid this; they should not set a higher price than buyers are willing to pay.)
-sensitivity of consumers to price and price changes
-when should certain price tactics be used?
Making distribution decisions
-where and when are target consumers likely to shop
-what do customers want to see in stores?
-how should stores be designed?
,APPENDIX= Developing information about consumer behavior
Researchers collect and analyze two types of data: primary and secondary.
Primary: data originating from a researcher and collected to provide info relevant to a specific
research project.
Secondary: data collected for some other purpose that is subsequently used in a research project.
Companies use research tools to get unique insight on consumer behavior. This is research with
a purpose: to guide companies in making more informed decisions and achieving marketing
results.
RESEARCH TOOLS:
1. Survey
-quantitative insights
-helps marketers learn about shifts and trends that might affect their offerings or
industry.
-helps marketers understand media usage and purchasing patterns.
2. Focus group
-qualitative insights
-small group of consumers to discuss an issue or an offering.
-can be computer-based
-problem of anonymity
3. Interview
-more in-depth data than surveys.
4. Storytelling
-consumers tell stories about their experience with the acquisition, usage and disposition
of an offering. These stories help marketers to gain insights into consumer needs and
identify the product attributes that meet these needs.
-hypothetical situations to reveal needs, feelings and perceptions of the consumer.
5. Photography and pictures
6. Diaries
-often reveals how friends and family affect consumers’ decisions.
-can help marketers understand is consumers are brand loyal, brand switching or light or
heavy users.
7. Experiments
8. Field experiments
-market test; a study in which the effectiveness of one or more elements of the marketing
mix is examined by evaluating sales of the product in an actual market.
9. Conjoint analysis
-a research technique to determine the relative importance and appeal of different levels of
an offering's attributes.
10. Observations and ethnographic research
, -in-depth qualitative research using observations and interviews of consumers in real-world
surroundings. Often used to study the meaning that consumers ascribe to a product or
consumption phenomenon.
11. Purchase panels
12. Database marketing and big data
-use of data mining to identify promising opportunities.
13. Netnography
-observing and analyzing the online behavior and comments of consumers in an adapted
ethnographic research way.
14. Psychophysiological reactions and neuroscience
Research objectives:
o For application
o For consumer protection
o For general understanding
Types of consumer researchers: (see A.4)
In-house marketing research departments
-pro: information is kept inside the firm.
-con: may have a vested interest in the research result.
External marketing research firms
Advertising agencies and media planning firms
-conduct research to better understand what ad messages and media will appeal to their
client's target market.
Syndicated data services
-are companies that collect and then sell info they collect, usually to firms that market
products and services to consumers.
Retailers
Research foundations and trade groups
-nonprofit organization that sponsors research on topics relevant to the foundation's
goals.
-a professional organization made up of marketers in the same industry.
Government
Consumer organizations
Academic and academic research centers
Ethical issues in Consumer research
1. Positive side
-better consumer experiences
-potential for building customer relationships
2. Negative side
,-studying consumer behavior in different countries (not all countries have same legal, cultural
and language aspects)
-potentially higher marketing costs
-invasion of consumer privacy
-deceptive research practices (lying about sponsor/ anonymity/ compensation)
CHAPTER 2 PSYCHOLOGICAL CORE; motivation, ability and
opportunity
Consumer behavior is greatly affected by the amount of effort that consumers put into their
consumption behaviors and decisions.
3 critical factors that affect effort:
1. Motivation
2. Ability
3. Opportunity
MOTIVATION
Definition: an inner state of activation that provides energy needed to achieve a goal.
Consumers can be motivated to engage in behaviors, make decisions, or process information
and this motivation can be seen in the context of acquiring, using, or disposing of an offering.
Effects of motivation:
High effort behavior
Motivation not only drives the final behaviors that bring a goal closer but also creates a
willingness to expand time and energy on prepatory behaviors. Note, however that consumers
try to match anticipated and actual effort (by either simplifying or complicating the situation).
High effort information processing and decision making
When consumers are highly motivated they are more likely to pay attention to it, think about it,
attempt to understand goal-related information, evaluate that information critically and try to
remember it for later use (vice versa).
Motivated reasoning: processing information in a biased way that allows consumers to reach
the conclusion that they want to reach. (bv confirmation bias: seeking information that support
our own conclusions). Focus is on the motivation to process information accurately.
Felt involvement
The consumer's experience of being motivated with respect to a product or service, or decisions
and actions about these.
Types of involvement:
o Enduring: long term interest in an offering, activity or decision
o Situational: temporary interest in an offering, activity or decision, often caused by
situational circumstances.
,o Cognitive: interest in thinking about and learning information pertinent to an offering,
an activity or decisions.
o Affective: interest in expanding emotional energy and evoking deep feelings about an
offering, an activity or a decision.
Consumers may exhibit cognitive and/or affective involvement in objects. These can be: a
product or retail category, experiences, a brand, ads, a medium.
Consumers involved in certain decisions and behaviors are experiencing response involvement;
interest in certain decisions and behaviors.
We are motivated to behave, process information, or engage in effortful decision-making about
things that we feel are personally relevant and we will experience considerable involvement
when buying, using or disposing of them. We are also motivated to think deeply about issues
pertinent to a given decision when we believe we will have to justify or explain our decisions.
What determines motivation? /What is motivation influenced by?
Since motivation affects outcomes of interest to marketers, it is important for marketers to
understand what affects motivation so they can be able to predict consumers' motivation to think
about, be involved with, and/or process information about their brand or ad and then develop
marketing tactics to influence this motivation.
1. Personal relevance
Something that has a direct bearing on the self and has potentially significant consequences or
implications for our lives. This relevance fuels your motivation to process information, make
decisions and take actions. (bv. Careers, romance, living)
2. Consistency with self-concept
Any kind of offering may be personally relevant to the extent that it bears on your self-concept;
your view of yourself and the way others view you. Identifying with a brand and making an
emotional connection with it strengthens brand loyalty and makes those consumers less price
sensitive toward that brand.
o Values
Are abstract beliefs that guide what people regard as important or good. Consumers are more
motivated to attend and process information when its relevant to their values.
o Needs
Consumers also find things personally relevant when they have a bearing on activated needs. A
need is an internal state of tension experienced as a discrepancy between the current state and
an ideal or desired state. (bv. Motivation to go to the fridge because of hunger, or tension, aka
the need for food.)
Abraham Maslow's Hierarchy of needs:
Esteem=egoistic
Love/belonging=social
Lower levels must first be satisfied in order to activate higher levels.
, Critique original Maslow's hierarchy:
-needs are not always ordered exactly like this.
Lower order needs do not always have to be fulfilled
before higher order needs become important to
consumers.
-ordering od needs may not be consistent across
culture.
-it ignores the intensity of needs and resulting effect
on motivation.
Types of needs:
Social and Personal
Social: are externally directed and relate to other individuals. (bv. Consumption of a good to be
part of the group)
Personal: are those for which achievement is not based on other people. (bv consumption of a
good to maintain consistency or for variety)
Functional, symbolic, and hedonic needs
Functional: may be social or nonsocial. Motivates the search for products that solve
consumption-related problems.
Symbolic: need that relates to the meaning of our consumption behaviors to ourselves and to
others. That is, how we perceive ourselves, how we relate to others, and the esteem in which
we are held by others. This affects consumption decisions about how we express our sense of
self.
Hedonic: needs that relates to sensory pleasure. Can be nonsocial (novelty, cognitive
stimulation) and social (sex, play etc.).
Consumers with a high need for cognition enjoy being involved in mentally taxing activities
and vice versa.
All of the preceding needs share several characteristics:
Needs can be internally or externally activated
Needs satisfaction is dynamic: Constant process of need fulfillment.
Needs exist in a hierarchy
Needs can conflict
Types of need conflicts:
o Approach-avoidance conflict
Occurs when the consumer want both to engage in the behavior and to avoid it.
o Approach-approach conflict
Occurs when the consumer must choose between two or more equally desired options
that fulfill different needs.
o Avoidance-avoidance conflict
Occurs when the consumer must choose between two equally undesirable options.
