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MARK2051: Consumer Behaviour Study Notes CONSUMER BEHAVIOUR AND MARKETING STRATEGY • Marketing strategy: combination of product, price, distribution and promotion most suited to
a particular group of consumers. • à key to successful marketing strategy is an understanding of CONSUMER BEHAVIOUR
(CB): discipline dealing w/ how and why consumers purchase (or don’t) goods + services.
o Dynamic interaction of cognitive, behaviour and environmental events by which human beings conduct the exchange aspects of their lives – (American Marketing Association)
• Org must provide customer value: different between all benefits derived from a total product + all the costs of acquiring those benefits.
Consumer behaviour a crucial aspect of:
Marketing strategy
• MARKET SEGMENTATION o = identifying consumer groups w/ unique needs/purchasing
processes and developing specific marketing programs targeted at individual groups.
o Basis of most marketing strategies. o e.g. benefit segmentation: focus on particular outcome consumers
seek from using a product. • POSITIONING STRATEGY
o = the way a product/brand compares to its competitors, as perceived by customers.
New market applications
• Examining CB can yield insights that can produce new marketing opportunities and markets.
Global marketing
• = form of international marketing that aims to target particular consumer segments, regardless of where they are located in the world.
o à using STANDARDISED marketing mixes. o More cohesive, less costly. o But, may fail when there is no universal appeal.
• Must understand differences in CB between international markets.
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Marketing mix
• = 4 Ps = Product, Price, Place (Distribution), Promotion. • Products must solve a consumer problem. • Consumer behaviour audit: systematic review of all important aspects
of consumer behaviour. o List of key questions as guide to develop marketing strategy from CB
perspective. o Organised around key decisions MMs must make re:
§ Target market/segmentation. § Product positioning. § Marketing mix – 4Ps.
o Reveals gaps à points to need for future research. An overview of consumer behaviour The nature of consumption • MMs view the consumer as a
decision-making unit that takes in info, processes it and takes action to achieve satisfaction and enhance their lifestyle.
• Past decisions and time-related events lead to lifestyle CHANGES that pose additional consumption problems and result in new purchases/attitudes à further lifestyle changes.
Model of consumer behaviour
Inte
rnal
influ
ence
s
External influences
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• Key to understanding consumers to develop marketing strategies à maximise sales .: profitability.
• LIMITATIONS: o Appears static à does reflect dynamic nature of CB. o Consumers are continually evolving and changing as they process new information related
to their lifestyle and the outcome of past purchase decisions. o .: underlying model is the assumption that information processing is a never-ending
activity. Consumer behaviour and society • Consumerism: evolving activities of govts, businesses, orgs and consumers aimed at
protecting/enhancing rights of consumers. o Movement in response to increasing roles of ethics in business.
• Issue of injurious consumption for MMs = CB that may be harmful/have negative consequences – e.g. cigarettes, alcohol, gambling.
PART A: Internal influences
1) PERCEPTION • Perception: process through which people notice/attend to/interpret the stimuli (objects,
messages, events) they encounter. • Critical activity that links individual consumers
to group/situation/marketer influences. The nature of perception • Critical part of human brain’s information
processing system: series of interlinked activities by which stimuli are transformed into info and stored.
• PERCEPTION PROCESS: 1. Exposure 2. Attention 3. Interpretation
• 4TH step in information processing system =
MEMORY: how the meanings given to perceptual situations are recorded as info for s-t/l-t storage.
• Distinction between s-t and l-t memory referred to as duplex theory of memory.
• Perceptual selection – only small % of info person is exposed to is passed onto the brain for interpretation.
o EFFECT: consumers are active in process of perception à important for MMs.
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1. Exposure • = stimulus comes w/in a range of person’s sensory receptors. • Stimulus must be placed in consumer’s immediate environment – via different
promotional/distribution channels. • Stimulus must exceed absolute threshold: lowest level of stimulation necessary for detection
by a person’s sensory receptors. • Selective exposure: process by which individuals deliberately seek out exposure to certain
stimuli and avoid others; exposure can be: o RANDOM. o DELIBERATE à consumers seek info that will help them achieve certain GOALS
(immediate + long-range). 2. Attention • = stimulus activates sensor receptor nerves and resulting sensations go to brain
for processing. Attention determined by…
1. Stimulus factors Physical characteristics of stimulus
• Size and intensity (loudness/brightness) o Bigger. o Insertion frequency: no. of times the same ad appears in the same
program. • Colour and movement • Position
o Centre – e.g. competition for eye-level space in grocery stores. • Isolation (separation from other objects) • Format
o Simple. • Contrast
o Adaptation level theory: people adjust to the level/type of stimulus to which they are accustomed.
§ .: MMs must change campaigns regularly. o Differential threshold: consumer’s ability to notice differences in
levels of stimulation. § Just-noticeable difference (jnd): min amount of change in a
stimulus that needs to occur for consumers to notice difference.
• Compressed messages (sped up to increase attention) • Information quantity
o MMs must avoid info overload.
2. Individual factors Personal characteristics influencing perception
• Consumer INTERESTS/NEEDS/MOTIVATIONS are the primary individual characteristics that influence attention.
o à reflection of lifestyle and goals. • Tendency for customers to demonstrate a:
o Heightened awareness of stimuli relevant to their needs/interests = perceptual vigi lance.
o Decreased awareness of stimuli not relevant to their needs/interests = perceptual defence.
• Increasing trend of ‘adversarial shoppers’ and ‘ad sceptics’.
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3. Situational factors Environmental elements other than the focal object
• Program involvement o Gain in attention occurs when program involvement moves from
low to moderate levels. o But high levels of program involvement may detract from attention
paid to some types of commercials.
Non-focused attention • = automatic monitoring = superficial/distracted allocation or processing ability to a stimulus. • Explained by hemispheric lateralisation: two sides of brain control different types of
activities. o Left: rational though, verbal info. o Right: pictorial, geometric, non-verbal info.
• Controversy over subliminal messaging: message not consciously attended to by audience exposed.
o Prohibited under the Commercial Television Industry Code of Practice. 3. Interpretation • = assignment of MEANING to
sensations. • Gestalt psychology: school of
psychology that examines the process by which stimulus info is organised/categories by human brain into patterns.
• 2 components: a) COGNITIVE
INTERPRETATION: stimuli are placed in existing categories of meaning. § Adding meaning from existing knowledge. § FACTUAL. § Info more likely to be recalled w/out prompting.
b) AFFECTIVE INTERPRETATION: emotional response triggered by stimulus. § Adding meaning from feeling. § EMOTIONAL. § Info more likely to be recognised w/out prompting.
• Must distinguish between semantic meaning (conventional) and psychological meaning (based on experience/context).
Interpretation determined by…
1. Individual characteristics
• Learning o Provides framework w/in which people give meaning to new
events/data. o Can vary across different cultures.
• Expectations o Play a role in how quality is perceived and how satisfaction is
experienced.
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2. Situational characteristics
• Moods. • Motivations (e.g. hunger). • Temperature. • Proximity.
o Perception of objects close together as related. o e.g. advertisements during ‘feel-good’ programs.
• Internet. o e.g. pop ups are involuntary exposure formats.
3. Stimulus characteristics
• SEMIOTICS: science of how meaning is created, maintained and altered. o Focuses on signs – anything that conveys meaning incl. words,
pictures, colour, music, prices.
Issues • Misinterpretation of marketing messages
o Beware of misleading claims. o Particular issue w/ radio broadcast messages and package info. o Currently no workable set of guidelines for eliminating this problem.
• Children’s information processing o Evidence that younger children:
§ Have a limited ability to process certain info. § Pay more attention to visual versus auditory stimuli.
Perception and marketing strategy a) Retail strategy • MMs must consider:
o Store layout. § Sought-after items separated so consumer will travel through more of store =
increased exposure. § Cold and hot zones. § Traffic and islands: high-margin items placed in high-traffic areas = increased
exposure. o Shelf position and shelf space.
§ Eye level. o Point-of-purchase displays.
§ Attract attention to sales. o Reference prices.
b) Brand name and logo development • Important source of perception; but, long + expensive development process. • To develop a single corporate identity. • e.g. Commonwealth Bank spent > $20 million to develop logo. c) Media strategy • Selective exposure .: MMs must assess which media target consumers are most often exposed
to à place advertising accordingly. o Selective approach: reach where target market it. o Random approach: reach where target market may be.
• Depends on whether high or low involvement w/ product category.