Chapter 1

UNDERSTANDING CONSUMER BEHAVIOR

Consumer Behavior- The totality of consumer’s decision with respect to the acquisition,
consumption and disposition of goods, services, time and ideas by human decision-
making(over time).
Consumer behavior reflects more than the way that a product is acquired by a single
person at any one point in time. Think of some marketing strategies and tactics that try to
influence one or more of the dimensions of consumer behavior shown in this exhibit.

Consumer Behavior reflects:

the totality about the by decision-
of decision consumption of an offering making units
over time

Whether

What Products Information Hours

Services gatherer Days
Why
Acquisition
Activities Influencer Weeks
How
Usage
Experiences Decider Months
When
Disposition
People Purchaser Years
Where
Ideas User
How much/How
often/How long
Consumer behavior involves more than buying
How consumers buy is extremely important to marketers. However, marketers are also
intensely interested in consumer behavior related to using and disposing of an offering:
OFFERING- a product, service, activity, experience or idea offered by a marketing
organization to consumers.
ACQUISITION- The process by which a consumer comes to own an offering.
USAGE- The process by which a consumer uses an offering.
DISPOSITION- The process by which a consumer discards an offering.

Eight ways to acquire an offering

1. Buying- Buying is a common acquisition method used for many offerings,
2. Trading- Consumers might receive a good or service as part of a trade.
3. Renting or leasing- Instead of buying, consumers rent or lease cars, furniture,
vacation, homes and more.
4. Bartering- Consumers(and businesses) can exchange goods or services without
having money change hands.
5. Gifting- Each society has many gift giving occasions as well as informal or formal
rules dictating how gifts are to be give, what is an appropriate gift, and how to
respond to a gift.
6. Finding- Consumers sometimes find goods that others have lost( hats left on the
bus) or thrown away.
7. Stealing- Because various offerings can be acquired through theft, marketers have
developed products to deter this acquisition method, such as alarms to deter car
theft.
8. Sharing- Another method of acquisition is by sharing or borrowing. Some types
of “sharing” are illegal and border on theft, as when consumer copy and share
movies.

WHAT AFFECTS CONSUMER BEHAVIOR?

The many factors that affect acquisition, usage, and disposition decisions can be
classified into four broad domains.
1. The Psychological core
2. The process of making decisions
3. The consumer’s culture
 4. Consumer behavior outcomes

The Psychological Core: Internal Consumer Process

Before consumer make decisions, they must have source of knowledge and information
upon which to base their decisions. This source- the psychological core- covers
motivation, ability and opportunity; exposure, attention, perception and comprehension:
memory and knowledge; and attitudes about an offering.

The Process of Making Decisions

The process that are part of the psychological core are intimately tied to the process of
making decisions. This domain involves four stages: problem recognition, information
search, decision making, and post purchase evaluation.

The Consumer’s Culture: External Processes

The typical or expected norms, behaviors and ideas that characterize a group of people.
It can be a powerful influence on all aspects of human behavior.

Consumer Behavior Outcomes and Issues

Consumer behavior can symbolize who we are. The groups that we belong to and our
sense of self can affect the symbols or external signs we use, consciously and
unconsciously to express our actual or desired identity.

WHO BENEFITS FROM THE STUDY OF CONSUMER BEHAVIOR?

1. Marketing Managers- Marketers need consumer behavior insights to understand
what consumers and clients value; only then can they develop, communicate and
deliver appropriate goods and services.
2. Ethicists and Advocacy groups- Concerned consumers sometimes form advocacy
groups to create public awareness of inappropriate practices.
3. Public Policy Makers and Regulators- Understanding consumer behavior is
crucial for legislators, regulators and government agencies in developing policies
 and rules to protect consumers from unfair, unsafe and inappropriate marketing
practices.
4. Academics- Academics disseminate knowledge about consumer behavior when
they teach courses on the subject. Academics generate knowledge about consumer
behavior when they conduct research focusing on how consumers think, act, and
feel when acquiring, using and disposing of offerings.
5. Consumers and Society- A better understanding of consumer behavior can pave
the way for programs that benefit society.

MARKETING IMPLICATIONS OF CONSUMER BEHAVIOR

Developing and Implementing Customer-Oriented strategy

Marketing is designed to provide value to customers.
How is the market segmented?
What one consumer values in a product may not be the same as what another consumer
values. Research helps marketers understand the different groups that make up a market
and whether they can make an offering to appeal to one or more of these groups.
How profitable is each segment
What are the characteristics of consumers in each segment?
Are customers satisfied with existing offerings?
Selecting the target market
Understanding consumer behavior helps marketers determine which consumer groups are
appropriate targets for marketing tactics and how heavy users of a product differ from
light users.

Developing products
Developing goods and services that satisfy consumers’ wants and needs is a critical
marketing activity. Marketers apply consumer research when making a number of
decisions about products and branding.
What ideas do consumers have for new products?
What attributes can be added to or changed in an existing offering?
How should the offering be branded?
What should the package and logo look like?

Positioning
Another strategic choice is deciding how an offering should be positioned in consumers’
minds. The desired image should reflect what the product is and how it differs from the
competition.
How are competitive offerings positioned?
How should our offerings be positioned?
Should our offerings be repositioned?
Making promotion and marketing communication decisions
One area receiving attention is the use of techniques to measure consumers’ physiological
and neurological responses to marketing communications.
What are our advertising objectives?
What should our advertising look like?
Where advertising should be placed?
When should we advertise?
Has our advertising been effective?
What about sales promotion and objectives?
How can salkes people best serve customers?

Making pricing decisions

The price of a product or service can have a critical influence on consumers’ acquisition,
usage and disposition decisions.
What price should be charged?
How sensitive are consumers to price and price change?
When should certain price tactics be used?

Making distribution decisions

Another important marketing decision involves how products are distributed and sold to
consumers in retail stores.
Where and when are the target consumers likely to shop?
What do customers wants to see in stores?
How should stores be designed?

Questions for review and Discussion

1. How consumer behavior is be defined?
2. What is an offering?
3. What are some of the factors in the psychological core that affect consumer
decisions and behavior?
4. What are aspects of the consumer culture influence decisions and behavior?
5. How is marketing defined?
6. How can public policy decision makers, advocacy group and marketing managers
use consumer research?
7. What kinds of marketing questions can companies use consumer behavior research
to answer?
8. How can you benefit from studying consumer behavior?
Chapter 2

MOTIVATION, ABILITY AND OPPORTUNITY

Consumer Motivation And It’s Effects

Motivation is an inner state of arousal that provides energy needed to achieve a goal.
Motivated reasoning is processing information in a way that allows consumers to reach
the conclusion they want to reach.
Felt involvement is self-reported arousal or interest in an offering, activity, or decision.
Enduring involvement long term interest ina n offering, activity or decision.
Situational Involvement Temporary interest in an offering, activity or decision, often
caused by situational circumstance.
Cognitive Involvement Interest in thinking about and learning information pertinent to an
offering, activity or decisions.
Affective Involvement Interest in expending emotional energy and evoking deep feelings
about an offering, activity or decision.
Response Involvement Interest in certain decisions and behaviors.

What affects motivation?

Personal relevance –Something that has direct bearing on the self and has potentially
significant consequences or implications for our lives.
Self-Concept Our mental view of who we are.
Values Abstract, enduring beliefs about what is right/wrong, important, good/bad.
Need An internal state of tension caused by disequilibrium from an ideal/desired physical
or psychological state.
Types of needs
1. Social needs
2. Nonsocial needs
3. Functional needs
4. Symbolic needs
5. Hedonic needs
6. Needs for cognition and stimulation

Characteristics of needs
1. Needs are dynamic
2. Needs exist in a hierarchy
3. Needs can be internally or externally aroused
4. Needs can conflict

Goals
Goals are also important influence on personal relevance and motivation. A goal is a
particular end state or outcome that a person would like to achieve. Goals are more
specific and concrete than needs.

Goal setting and pursuit

Consumers set goals that they try to pursue overtime. Goal setting comprises what to
pursue and at what level. Consumer behavior is a continuous cycle of setting goals,
pursuing them, determining success and failure of goal pursuit, and adapting the
goals.

Goals and emotions

The extent to which we are successful or unsuccessful in attaining our goals
determines how we feel. We feel good when we make sufficient progress towards
goal attainment or have attained our goals and feel bad when we make insufficient
progress towards goal attainment or have failed to attain our goals.
Appraisal theory is a theory of emotion that proposes that emotions are based on an
individual’s assessment of a situation or an outcome and it’s relevance to his or her
goals.

Self-Control and Goal Conflict

Consumers use self-control to regulate their feelings, thoughts, and behavior in line
with their long term goals. Self-control conflicts arises when we face decisions about
actions related to goals that are in conflict. The mental effort involved in making such
 decision may result in ego depletion, which means the consumer’s ability to control
his or her behavior is impaired. In other words, such challenges deplete a consumer’s
mental energy, which in turn reduces decision quality.
Embodiment is the connection between mind and body that influences consumer’s
self-control and behavior.

Perceived Risk
Another factor of consumers’ motivation to process information about a product or
brand is perceived risk. The extent to which the consumer is uncertain about the
personal consequences of buying, using, or supposing of an offering.
Types of perceived risk
1. Performance risk
2. Financial risk
3. Physical risk
4. Social risk
5. Psychological risk
6. Time risk

Consumer Ability: Resources to act

Motivation may not result in action unless a consumer has the ability to process
information, make decisions, or engage in behaviors. Ability is defined as the extent to
which consumers have the necessary resources to make outcome happen.
Financial Resources
In some situations, consumers can use money instead of other resources to enhance their
ability to make decisions and take actions. Obviously, the lack of money constraints
consumers who might otherwise have the motivation to engage in a behavior that
involves acquisitions.

Cognitive Resources
Consumers vary greatly in their knowledge about and experience of an offering. They can
gain knowledge from product or service experiences such as ad exposure, interactions
with salespeople, information from friends and media, previous decision making or
product usage, or memory.
Emotional Resources
Consumers’ ability to experience empathy and sympathy can affect their processing of
information and their decisions about brand choices, consumption, disposition, spending
and so on. Emotional resources also affect the actions consumers take to participate in
charitable events or donate for causes.

Physical Resources
Physical abilities “body power” can affect how, when, where and weather consumers
make decisions and take actions. Physical resources also influence consumers’ ability to
use certain product or services.

Social and Cultural Resources

The extent of a consumer’s social resources also plays a role in weather marketing
activities conducted on Facebook or in other social media will generate strong word of
mouth support and referrals to potential buyers or brand fans.

Education and Age

Better educated consumers will have more cognitive resources to use in processing
complex information and making decisions. Age also accounts for differences in physical
resources and processing ability. Old age has been associated with a decline in certain
cognitive skills and thus reduces ability to process information.

Questions for Review and Discussion

1. How is motivation defined and how does it affect felt involvement?
2. What types of goals do consumers have?
3. According to appraisal theory, what do emotions have to do with goals?
4. What are 5 types of perceived risk, and how does perceived risk affect personal
relevance?
5. What five types of resources affect ability to process information and make
decision
Chapter 3
FROM EXPOSURE TO COMPREHENSION
Exposure and Consumer Behavior

Exposure is the process by which the consumer comes in physical contact with a
stimulus.
Marketing stimuli information about offerings communicate either by the market
(such as ads) or by non-marketing resources (word of mouth).

Factors Influencing Exposure

The position of an ad within a medium can affect exposure. Consumers are most
likely to be exposed to ads placed next to articles or within TV programs that
interest them.

Selective Exposure
While marketers can work very hard to affect consumers’ exposure to certain
products and brands, ultimately consumers are the ones who control their exposure
to marketing stimuli. Consumers avoid ads for product categories that they do not
use, they also tend to avoid ads they have seen before because they know what
these products will say.
Zipping is fast forwarding through commercials on a program recorded earlier.
Zapping is the use of remote control to switch channels during commercial breaks.

Attention and Consumer Behavior

Attention is how much mental activity a consumer devotes stimuli.

Characteristics of attention
1. Attention is Limited
2. Attention is Selective
3. Attention can be divided

Although consumers can process general information (such as logos and brand
names) preattentively, specific information (such as about ingredients and
directions for use) will have more impact when customers devote full attention to
it.
 They can use various research methods to gauge consumers’ attention to ads,
packages, and products.
1. Make stimuli personally relevant Stimuli are personally relevant when they
appeal to our needs, values, emotions, or goals. A way to increase personal
relevance is by using mini drams, mini-stories that depict the experiences of
actors or consumers through a narrative in one or more ads.
2. Make stimuli pleasant.
a. Using attractive models
b. Using music
c. Using humor

3. Make stimuli surprising. Consumers are likely to process a stimulus when it is

surprising by;
a. Using novelty
b. Using unexpectedness
c. Using a puzzle

4. Make stimuli easy to process. Marketers can enhance attention by boosting

consumers’ ability to process the stimuli. Four characteristics that make
stimulus easy to process:
a. Prominent stimuli
b. Concrete stimuli
c. Amount of competing stimuli
d. Contrast with competing stimuli

Habituation
When a stimulus becomes familiar, it can lose its attention getting ability.

Perception and Consumer Behavior

After we are exposed to a stimulus and have devoted at least some attention to it, we are
in a position to perceive it. Perception is the process of determining the properties of
stimuli using one or more of our five senses.
Perceiving through vision
What arouses perception?
1. Size and shape
 2. Lettering
3. Image location on package
4. Color
5. Effects of color on physiological responses and moods.
6. Color and liking

Absolute thresholds
The absolute threshold is the minimum level of stimulus intensity needed to a stimulus to
be perceived. In other words, the absolute threshold is the amount of intensity needed for
a person to detect a difference between something and nothing.

Differential threshold
The differential threshold refers to the intensity difference needed between two stimuli
before people can perceive that the stimuli are different.

How do consumers perceive a stimulus?

Consumers tend not to perceive a single stimulus in isolation; rather, they organize and
integrate it in the context of the other things around it. Perceptual organization is the
process by which stimuli organized into meaningful units. Grouping refers to the fact that
we often group stimuli to form a unified picture or impression, making it easier to process
them. Bias for the whole means that consumers perceive more value in the whole of
something than in two or more parts that are equivalent to the whole.

Comprehension and Consumer Behavior

So far, we have been exposed to a marketing stimulus, focused our attention on it, and
used our senses to perceive it. Now, we have to identify what it is and understand the
message it conveys. Comprehension is the process of extracting higher-order meaning
from what we have perceived in the context of what we already know.
Source identification is the process of determining what the stimulus that we have
detected actually is. Source identification is the rapid, perhaps automatic process of
determining what an ad contains.
Message Comprehension
Once we have identified the source as a marketing message and determined what product
or brand is involved, we can start to comprehend its message- make sense out of it- on a
number of levels.
Objective Comprehension refers to weather the meaning that consumers take from a
message is consistent with what the message actually stated. Subjective Comprehension is
the different or additional meaning consumes attach to the message whether or not theses
meanings were intended.
Miscomprehension occurs when consumers inaccurately construe the meaning contained
in a message.
Questions for review and discussion
1. How do zipping and zapping affect consumers’ exposure to marketing stimuli
such as products and ads?
2. What is attention, and what are its three key characteristics?
3. What is perception, and what methods do we use to perceive stimuli?
4. Discuss how source identification and message comprehension affect consumers’
comprehension of stimulus.