use theories to understand, explain, predict and change the Consumer Behavior
- consumer consume (consumer behavior)
- customer buy (customer behavior)
consumer behavior and advertising , how to link together?
- largely a matter of motivation
- what and how to say things that interest them
needs: hunger state of feeling deprivation, shaped by culture and individual
wants: noodles. sushi, rice
marketing myopia
- forgetting customers needs, focusing only on wants
- product differentiation to a point that it is overdone
- forgetting customers needs
different benefits for diff wants and needs, differentiate and target different segments
Motivation and Culture
two motivation types:
utilitarian - functional
hedonistic - fun, pleasure
approach or avoidance motivation
- problem solving or avoidance of problem
evolutionary psychology
- human do not like being oppressed, rebel instinct
- humans seek status instinctively
- conformity consumption - fitting in
- opposition consumption - standing out, rebel cool
Consumption and signals
- clean cut (Ralph Lauren) or rebellious (Diesel)
- hanky code , ppl create their meaning
public consumption : conspicuous consumption - want to be seen
private consumption : cheaper brands
Adding structure to unstructured problems
- structured: routine and repetitive
- unstructured: non routine, rely on experience, intuition, judgement, eg. choosing strategy to remain competitive in changing market
- semi-structured: combination of the above two, eg. choosing a new univ
theories and past research help structure an unstructured problem into semi structure problem
constructs - prefer intangible variables
price, age - tangibles
IQ, personality, religiosity, happiness - intangibles
factor analysis - data reduction to identify a small number of factors that explain most of the variance that is observed in variables
Marketing Research
the planning, collection, analysis of data relevant to marketing decision making, and communication of the results of analysis to the management (the client)
use market research before advertising campaign, reduce risk. save money
1st step - identify the problem
2nd step - identify the variables
- eg. what factors are involved when choosing a bank
3rd step - clarify the questions
4th step build the constructs and scales
qualitative - understanding, tell you why, such as focus group
quantitative - measurement, tell you what but not why, such as descriptive research
descriptive research doesn't tell why, only tell what, it is very weak
Attitudes and Behavior
- do attitudes have to be based on experience
no, you can form attitudes without ever using a product
attitudes comes first, long lasting behavior second
attitudes drives behavior
Double jeopardy
- similar to halo effect
- ppl are using a brand with high market share, so end up with more ppl talking about a brand they use themselves
- big brands get good scores
- small brands will not, except from those who use the brands
Puffery
- express subject views, no reasonable person would take it seriously
- a brand calling itself the best or the finest, might not be true
** marketing can be very good at stimulating wants and needs, but nobody can force you to buy anything
Loyalty and Brand Repertoires
- loyalty means a person chooses a brand due to preference
- timeframe very likely to affect loyalty patterns
- more time, less likely to appear loyal
- using share of category requirements (SCR), how many times you buy the category per year
- proportional loyalty - SCR
Dirichlet model
- assume normal distribution, random (stochastic) purchasing
implications of it
- brand loyalty is mostly divided, almost all customers buy more than one brand over time period
- buyers of my brand also buy other brands
- individuals have brand repertoires -> multi brand royal
- should try to reach more consumers so that a larger group of people us buying your brand, some of the time
- do not aim for 100% loyalty
- big brands likely to be consumed publicly, while cheaper brands consumed privately
Branding
- familiarity and trust make it easier for consumers to buy, reduce effort in decision making
- serves as a bridge, help connect people
- a strong brand moves product away from commodity status
product differentiation or salient point
- no fixed answer
- most ads are using salient points
- product differentiation can be boring because it focus on facts
after learning about brand repertoires, it seems that ads should mainly be about getting ppl to know a brand and use it (at least once in a while)
- brand does not have to be seen as the best, but only as good enough - satisficing
- survival of the fit enough, not of the fittest
the more you see an ads, the more effective it is ? Not true
- if ad doesn't work in the short term, will it magically start working in the long term?
- must have short term impact to have any long term effect
break thru the clutter
- to find a way to reach consumers in spite of the many ads they are exposed to
- use creativity
however, dangers of creativity
- ppl don't understand
- may offend ppl
- ppl don't link to or remember the brand
- different reactions to ads because values may differ, sense of humor can differ
world of mouth can be tiring if repeat many times, such as on social media
Product and price
core product: core benefits, eg. same functionalities, watches, cameras, shampoo
actual product: combine to deliver core product benefits, eg. private label or manufacturer bands
augmented product: additional services or benefits
**successful new products are kept away from the formal system. Why?
ans: company is rigid and slow , difficult to break out of the system
dont judge new product using old criteria
Marketing Management
- five different concepts
1. production - believe that consumers want products that are available and affordable.
mgt shd focus on improving production efficiency
2. product - believe that consumers want products that offers most quality, features, performance. mgt shd focus on continuous product improvements
3. selling - believe that people won't buy enough unless promotion is done
4. marketing - believe that consumer needs and wants must be understood and satisfied
5. social marketing - questions the marketing concept is adequate due to the number of problems in the world
McDonalds - selling , faster , std product
BurgerKing - marketing, slower, customised product
Promotion and advertising
- if you have a discount, give a reason
- advertising, for LT, build up the brand
- promotion, for ST, if brand is strong, promotion can be effective
cognitive dissonance, buyer's remorse
- anxiety or regret that lingers on after a difficult decision
esp if it is tough choice, many close alternatives, expensive, or leads to long term commitment
advertising type
- primary demand stimulation, for entire product category, eg. milk, egg
- selective stimulation, promote particular brand
Marketing funnel
- awareness
- interest
- evaluation
- commitment
- referral
if awareness high, interest low, what to do?
ans: change benefits or communications
if awareness high, interest high, trial low , what to do?
ans: free sample, distribution
if awareness high, interest high, trial high , what to do?
ans: more market research, maybe it is not good value for money
buyer decision process
- need recognition
- info search
- evaluation of alternative
- purchase decision
- post purchase behavior
adoption process
- action
- desire
- interest
- awareness
STP marketing
- segmentation
according to demographics or psychographics
- targeting
target specific segment
- positioning
where the product's position is in the consumers' mind
beware:
- different benefits for diff wants and needs, differentiate and target diff segments
- create choice confusion, variety seeking
- danger to label ppl when they don't want to be reminded of
better:
- understand ppl and position product to reach a wider group
- better than segment the market and find loyal customers
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