Bem 212 notes Colour code Red - important info Gold - Subheading Blue - heading Chapter 1; Intro to consumer behavior Consumer behavior defined - Describes a multitude of mental and physical processes associated with consumer decision making. ~ Includes all related activities of consumers/buyers from pre purchase stage when they begin thinking about purchasing, through to actual purchase stage phase, to post purchase evaluation. - Context dependent always. ult iplines and their contribution to th * Economic, psychological, sociological, cultural Studying consumer behavior from: © (A) Economic perspective + Investigation of consumers behavior from an rational viewpoint - Consumers formulate one’s needs in terms of concrete and rational criteria ~ Can't only rely on economic principles * (8 ~ Acknowledge individual consumer traits > Motivation, Personality, Attitude, Perceptions ~ addresses consumers product preference at a personal level. - Brands character Is shaped to specific personality traits to attract market segments - Consumers are often attracted to products/brands the enhance or support personalities ~ Temporal choices: Temptations of immediate ownership of a product can exceed consumers concerns about obligations to pay back multiple installments with interest in the future. © (C) Sociological and socio-psychological perspectives - Sociology: Studles human behavior at group or society level. Focuses on society ~ Social psychology: Studies individuals. - Provides theoretical frameworks that analyses/interprets cross cultural influences in society. - Interprets issues like consumers socioeconomic status, lifestyle and socio-psychological aspects of consumption. = Consumer judgments are based on shared meaning they attach to certain images, brands and products. ~ These perspectives are used to design measuring instruments and interpret findings.© (0) Cultural perspective - Anthropology: Study of humans/human behavior and societies in the past and present. Focuses on culture, = Cultural anthropology: Helps understand consumption behavior and product needs of specific cultures. - cultural perspective acknowledges long-term influences on consumers consumption practices and accentuates deeper understanding of the meaning of products, brands and. symbols In a cultural context. -Etic Perspective: Approach that considers viewpoint of other cultures, Emic Perspective: Specific to one culture Why decision making is important to marketers? ~ Marketers alm to influence consumer decisions ~ It's difficult to predict consumer decisions as they differ in terms of how and why they were made, type of decision and who the decision makers are and where consumers are located Simple vs Complex decision making (A) Simple consumer decision: Reasonable degree of experience and stil. = Product holds minimal risk, - Product is easy to replace. + Selection of reputabie brand. © (8) Complex consumer decisio - Consumer has little or no experience. - Some form of risk attached. - Many product alternatives exist. * (C) Impulsive purchase decision: - Fairly swift This is a purchase de consideration. ~ example: Buying a chocolate when paying for groceries. jon person makes at a point of purchase without any prior = (0) Habitu - These are purchase decisions based on similar decisions made in the past. - Example: Buying your favorite brand of tea every month. I Purchase decisior Factors that influence buying decisions - Consumer skill and ability to handle the buying decision. = Consumers involvement during decision process owing to particular interest in the process or the lack thereof - Variety of products to choose from - Context in which the decision is madeHandling consumer decisions © Simple consumer decision: + Little external information ~ Personal info from friends and family or generally trusted people © Complex consumer decisions = More info is required as complexity increases - This is non personal info from technical reports, ads and electronic media «Takes time and effort The consumer decision making process * Inputs > Process > Outputs (tt stages) © Inputs Personal/Internal level: ~ Customers existing knowledge Learning, prior experience - Personal characteristics such as motives, intellectual capacity, perception, personality and attitude External level: = Influenced by marketing and socio-cultural factors - Controllable marketing forces: Marketing related factors that can be manipulated by an organization such as product, price, place, process and personnel. - Uncontrollable marketing forces: Economic conditions, public policy, competition in marketplace and forces of nature ~Socio-cultural factors: social status, cultural impacts, family influences © Process Phases of process stage: + Need recognitio - Any given point when a consumer needs something ‘© Information search: ~ Gathered pre-purchase information will depend on the urgency or seriousness of the product need ~ Limited search: experienced consumer, minimal risks, reputable brand - Extensive search: Less experienced consumer, pertinent risk perception, unfamiliar product brands + Evaluation of alternatives: - Evoked set of possibilities: Consumer identifies number of possibilities - tt-fl possible product choices ensures less intimidating and confusing evaluation process ~ Evoked set: includes products/brands that consumers like and are familiar with ~ Consumers identifies more acceptable alternatives and rejects products that are less acceptable Decision rules:- Used to Identify most suitable alternative from evoked set of products Compensatory strategy: = Consumer assigns a score to each relevant product attribute to identify product with highest weighted score Non-compensatory strategy: = Does not allow one positive attribute to compensate for one or more negative features of a product/service fe options when using this strategy: Conjunctive rule: = Consumer assign certain minimum acceptable levels or cut off points for project features Disjunctive rule: = Products that meet or exceed minimum cut off points are retained Lexicographic rule: = Consumer evaluate potentially suitable products individually by considering product features in order of importance Affect referral rule: - Applied when consumer considers an entire product based on overall perceptions gained from experience or prior exposure toa brand © output = Actual consumer decision depends on consumer perception of most important criteria Cognitive dissonanc - Feeling of discomfort or uncertainty consumer experiences immediately after purchase has been concluded - more likely to occur after an expensive purchase Main cause of cognitive dissonance: ~ conscious awareness of positive attributes of products not selected and the realization that the decision can't be easily reversed positive feedback relieves cognitive dissonance: once consumers start using product and concludes it performs to expectation - when someone else admires product choice indicating it was a wise decision - when concrete evidence that supports product choice Is performed positive disconfirmation: - product performs better than expected = cognitive discrepancy: product exceeded expectations - culminates as consumer satisfaction + satisfied customers more likely to return to where they received good service Negative disconfirmation: = product falls consumer expectations ~ negative cognitive discrepancy - will cause disconfirmation unless consumer finds good reason to explain the negative disconfirmationThe evolution of the marketing concept © historical overview production orientation: = second half of the 19ft0s. - Increase of production of goods to overcome shortage at the time = philosophy was to manufacture and sell whatever products the market demanded - production was poorly planned in terms of consumer product specific needs ~ market became overstocked with low quality products product orientation: = 1950s ~ particular attention to quality of products ~ many products weren't designed with consumer needs in mind sales orientation: + 1960s - manufacturers revised effort to sell abundance of goods on the market -transaction orientated efforts - aggressive, persuasive sales techniques = typical when product suipply exceeds customer need Customer orientation: - 1960s - John F Kennedy propagated consumer Bill of Rights - fundamental part of his campaign societal marketing concept: - alms to protect consumers and to prevent exploitation of vulnerable consumers by overenthusiastic marketers retro marketing: ~ consumers are cleverly tricked into becoming interested in new product developments through ingenious marketing techniques ~ old brands revived by relying on nostalgia relationship orientation: = since 1990s = customer care =It costs 5 times more to attract new customers than itis to retain one existing one - focuses on responsibility of retailers to secure long-term, profitable relationships with customers and stakeholders Personal/social marketing orientation: ~ gaining momentum as a result of technology such as the internet and cellphone connectivityChapter 2: Consumer motivation Part 2: Internal factors Defining motivation - Factors that influence the behavior of humans - Emotion determines motivations’ strength or intensity - Personality and attitude have impact on motivation Theories of motivation * Masiow’s Hierarchy of Needs * McClelland’s need theory * Vroom’s expectancy theory * Adam’s equity theory * Alderfer’s ERG theory * Goal-setting theory * Maslow’s Hierarchy of need: Lower order needs: = 1" level: Physiological needs - 2" level: Safety needs tt" level: Social needs Higher order needs: = ft level: Ego needs = 5 level: Self-actualisation © McCleliand'’s need theory - individual's specific needs are acquired over time and are shaped by one's life experiences Need for achievement - Desire to overcome obstacles and achieve goals Need for affiliation aa = Need to spend time with others and be part of a group Need for power = Need to influence people or contro! others + Individual need for power/institutional power© Alderfer’s ERG theory - More than one need can be satisfied simultaneously = There is no hierarchy of needs — All needs are equal Existence = Persons physiological and materialistic well-being Relatedness = Persons need for good relationships with others Growth - persons need to grow and use their abilities to increase their competence ® Adams equity theory ~ Based on the belief that itis important to strive for fairness and justice - Equity: Occurs when person perceives themselves as being treated equally or fairly when compared to another person in a similar position - Person's motivation is driven by sense of inequality in effort to find equality and fairness - Fair Trade: Whatever is put in should ensure specific output ~ Equity in terms of others: A person should be treated the same as other people who are similar to them ® Vroom - Proposes that people are motivated by the results that they expect from an action = It 1s a persons input that will lead to achieving an outcome rather than pursuing a need - Implies that people analyse costs and benefits of possible behavioral actions Three elements of the theory: Valence - Value or degree of satisfaction an individual expects to receive. Instrumentality - Persons belief that their input will lead to specific outcome expectancy - probability that outcome will be achieved - probability is based on past experiences, self-confidence and the perceived difficulty of achieving the outcome © Goal-setting theory Reasons why goal setting is important ~ goals direct attention towards need that Is set as a goal - goals regulate effort because they motivate the person to act - Increase persistence because person has clear image of the end result in thelr mind ~ help create plans and actions to achieve the end result5 key principles of goal setting = 1 clarity - goal should be clear and specific - 2, challenge - people are motivated by the reward of achievement - tt. commitment - goal should be understood and bought into ~ft. feedback - helps person in question clarify the expectations, adjust level of goal difficulty and receive recognition ~5, task complexity - goal shouldn't be too easy/too hard Consumer motivation Factors that play a role in motivation of the consumer © Individual difference Value Orientations: - Theoretical person - values knowledge and deeper understanding - Economic person - driven by utility motive that something should be useful/practical consumer wants to see value for money + Social person - person experiences meaning in relationships with others - Power person - person needs to be in position of power ~ Religious person - person's behavior has a spiritual foundation - Aesthetic person - person values beauty of experience of beautiful things © Rational and emotior ve Rational - focuses on facts, logic, durability and quality ~ Emotional - focuses on subjective criteria such as fun, pleasure and beauty © Intrinsic and extrinsic motive - intrinsic - pleasure person gets from an activity. {tis a motivation from within extrinsic - means to an end and is motivated by external rewards © Conscious and unconscious motives ~ conscious - conscious knowledge of the fact that the purchase will be made - unconscious - unconscious triggers that may highlight the need to buy © Situational impact on motive ~ situational occasion for which consumer is shopping for can have an impact on the motivation of a person © Urgency - this is the urgency that consumer has for obtaining the particular need © Polarity influences on motive - positive influences push consumers towards certain behaviors - negative influences motivate consumers to avoid negative consequencesMotivational Conflict Three scenarios of motivational conflict © Attraction - Attraction = consumer has desire or need for something and finds item on sale (Attraction) = Person can afford to buy product as it Is also well priced and affordable (Attraction) © Attraction - Avoidance ~ consumer wants to buy product (attraction) + product Is pricey and unaffordable (avoidance) Avoidance - Avoidance ~ consumer does not want particular product (avoidance) - they are also not happy to pay the cost of the product (avoidance) How retailers make use of conflict scenarios © attract + retailers could advertise sale items with clearly marked signs to increase interest © attraction - avoidance ~ buy now, pay later ® avoidance - avoidance - marketers may make use of potential negative consequences of not purchasing the item to make consumers more willing to buy the productChapter 3: Learning and information processing Define Learning - Change in behavior and knowledge as result of an experience + learning results in a change of behavior when an individual adapts to what was learned or solves a problem based on previous experience learning theories © Classical conditioning - Unconditioned stimulus - unconditional response - conditional stimulus - conditional response ~ humans also react to stimulus when making a decision as a consumer © operant conditioning - driven by behavioral consequences ~ positive reinforcement -> encouragement -> reward - negative reinforcement -> encouragement -> punishment avoidance - positive and negative rewards ~a desired goal can be reached through objects in the environment ~ behavior is based on learnt facts and not merely on reactions to stimull active mental process -> think, Insight, make decisions ial context © learning ina s ~ people learn by observing others - observational learning ft steps in process of social learning 1. attentional processing - amount of attention given 2. retentional processing - info processed/retained to use when necessary tt. reproduction processing - display of info learned and do it If necessary ft. motivational processing - if behavior is rewarded it will be reinforced, if not it might not be used againInfluence of the brain on learning - The brain processes info; memory stores it ~ human behavior is influenced by genetic and environmental learning ® neuroscience - studies the brain's response to advertising stimuli - understand consumer decisions ~ establish which part of the brain Is acting during the decision-making process = magnetic response imaging (MRI) - Electroencephalogram (EEG) = neuroimaging all used to measure change in brain activity and Identify parts of the brain activated when observing products - neuromarketing -> study suibconscious decisions consumers make, to improve effectiveness in marketing © The communication = communication in the body takes place through interaction of neurons - 100 billion neurons sensory neurons ~ hearing, smelling, touch, taste = collects info from outside environment and sends it to the brain motor neurons - these neurons form part of the pathway which impulses pass to the brain oF spinal cord to muscles or glands so they know what to do = eft side of brain > analytical thinking = right side of brain -> more creative side Memory ~ The storing of information received from experiences, stimuli and learning - forgetting -> inability to retrieve info that was stored stages of memory 1. Sensory memory + Info enters memory from ail five senses at once ~ Info processed in a few seconds -elther retained as important or disregarded as unimportant 2. Short-term memary holds info for 15 to 20 seconds - comprehends and decides where best this info can be stored while simultaneously receiving new info from sensory memory ~ encoding refers to way info Is held ulth. Long-term memory - relatively permanent and has high capacity to store info - the way in which info is encoded determines the way info needs to be retrieved in order to be remembered declarative learning - conscious memories of events, facts - personal experience - episodic memory -> conscious memories of events or facts, personal experiences - semantic memory -> conscious recollection of factual info and general knowledge about the world we live in implicit memory -> past experiences that influence behavior although not possible to recollect the specific experience Methods to enhance learning and memory ® Repetition - Increases chance that info will be processed and transmitted from short-term memory through to long term memory - most successful when consumer is in need of the product at the time - by showing how product can be used assists the consumer in recalling the info if faced with similar situations - contributes to brand awareness © self-referencing = relating info to a person's own situation helps improve the storage of info in long-term memory ® elaborat = links new info to something the consumer already knows and Is farmiliar with xaggeration ~ consumers remember more effectively if humor has been used © chunking - when Items are organized together it becomes easier to remember themChapter 4: Consumer perceptions Defining perceptions - persons awareness of, reaction to and interpretation of stimult The process by which stimull activates sensory receptors ~ perceptions are subjective - What consumer has learned and experienced in the past will influence his or her perceptions of the product or service The process of perception - Perception process starts with the way person senses the stimull to which they're exposed to, then makes meaning of that stimuli. the stimull is then processed. the processed stimuli then impacts the person's decision making a oH The perception process Sensation Perception process starts with the person being exposed to stimuli visual stimulus ~ sight = colours effect emotional response to stimuli, customers prefer shapes and round edges - Hue - pigment, warm(orange/red) cool(purple/blue) + saturation - richness of colors = lightness - Light or dark tone ~ people in high income bracket tend to prefer deep rich colors - people generally prefer objects with curve shapes to angular objects‘Auditory stimulus ~ sound A stimulus that reaches a person's sounds through his or her ears It must be loud enough to be perceived - it should be distinguishable from background sounds if it is to be noted ~ slow music In stores can increase sales because it encourages leisure shopping - fast music tends to energize people and make them shop more quickly - songs that consumers like and are familiar with can bring about a positive mood - music they don't like and have opposite effect ‘Scent stimuli—smell ~ Some basic emotions are linked to smell - for example the fragrance of freshly baked cookies might bring back childhood memories Taste stimuli ~ Growing health consciousness amongst consumers poses particular challenge to producers to create healthier products that still taste good Different cultural groups differ vastly regarding taste ~ consumers accept of reject food based on the relationship between the intensity of perceptible attributes and the degree of acceptance - perceptible attributes - sensory evaluation of the food: it's taste, smell and presentation degree of acceptance - how acceptable consumers find the food in terms of taste, smell and presentation Touch stimuli — texture - Feeling or texture of a product - marketers can provide samples to ensure the touch stimuli is noticed = Receives the stimulus absolute threshold - minimum intensity needed to become aware of a stimulus differential threshold - intensity difference between 2 of more stimuli for a person to realize that they are different subliminal perception «stimulus below a person's level of awareness© Attentiox - Must get consumers attention to impact purchase decision consumers are exposed to more stimulus than they can possibly respond to - challenge that markers face - not only to attract customers but also how to keep their attention = how? - humor and product design =a strong brand has good value proposition and unique offerings that differentiate the product ® interpretatior + First phase in forming meaning from what a person has become aware of through their senses places the stimull into a category/schema = human brain is compared to a filing system and retrieves related stimuli together ~ Cortical process - person becomes aware of stimulus, processes the stimulus, then reacts to the stimulus - Masked stimuli - stimuli that are hidden and thus difficult to discern © Memory = Refers to consumer not only thinking about a message and its meaning but also remembering It - Stimulus must be strong and differentiated to be stored in memory - the information stored in the memory can be retrieved and utilized in purchasing decisions ~ emotional excitement is often not enough to result in a purchase © Decision - Final step in the perception process decision to purchase = Not only from sensory process, but also previous info received about the product, past, experiences, ther beliefs, values and attitudes Functions of perception ~ To guide the consumers decisions to adapt to the environment in the best possible way - the context in which consumers make decisions must be considered Primitive mans function - often linked to survival - For example the use of food to stimulate hunger and desire to eat = health food consciousness is an example of survival orientated perceptions today ~ Socially responsible producers developed nations - buy what they want not what they need 15social responsibility = seek to differentiate - Independent and well informed Developing nations ~ Aware of social responsibility - Basic needs = less inclined to compromise on product price and quality Theories that are relevant to perception talt psychology = A person usually organizes stimuli, in order to make them meaningful perceptual organization - figure and ground - figure ((ocal point), background (hazy, undefined) - elosure - (form a meaningful whole) © Neuropsychology - the brain's function is monitored to understand how marketing messages trigger neurological reactions - what happens to the brain when people are exposed to certain stimuli - Messages processed in primitive parts of the brain are often most compelling ~ fight, flight, hunger and protection © Depth psye ev = Consumption may have to do with the unconscious need for fulfilment - understanding of the unconscious mind Marketing communication and the consumer perception: Getting the attention of consumers - How is it possible to get the attention of consumers? - how is it possible to encourage consumers to develop a positive perception of a specific product or service? ~ how is it possible to convince consumers to purchase a specific product? The changing ~ Consumers in the post wanted low priced, mass produced goods = now consumers are more discerning and sophisticated, consumers find meaning in consumption - The new approach to marketing Is to satisfy inner hunger, rather than external appetite nature of consumer perception - The way to reach consumers in a post market era Is through new messages In new media 16- E shopping and social media marketing (how people by what they buy and why they bu has all changed) = Consumers connect to one another = consumers shape each other's perceptions - authenticity can be contrived through authenticity myths: ~ BUZZ vs. HYPE - hard selling (push selling) Is no longer successful = Social media Is relationship based - men and women pay attention to different aspects of stimulus Strategic marketing applications - The consumers perception is their reality - SMM Is here to stay - health is big business - brand perception - success of marketing