Understanding Consumer Behavior Chapter 1 Understanding Consumer Behavior

Learning Objectives Define consumer behavior and explain its elements. Identify the four domains of consumer behavior. Discuss the benefits of studying consumer behavior. Learn how consumer behavior is used in organizations to make marketing decisions.

Consumer Behavior Reflects totality of consumer’s decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas by (human) decision-making units (over time).

Consumer Behavior Involves Attitudes Towards Products Services Activities People Ideas

What Is Consumer Behavior? (Exhibit 1.1)

Consumer Behavior & Consumption Acquisition Usage Disposition

Consumer Behavior Dynamic process Can involve many people Involves many decisions Involves consumers’ feelings and coping

Consumer Decisions Whether? What? Why? Why Not? How? Ways? When? Where? How much? How often? How long?

Model of Consumer Behavior

What Affects Consumer Behavior? Psychological Core Process of Making Decisions Consumer’s Culture Consumer Behavior Outcomes

Psychological Core Motivation, Ability, and Opportunity Exposure, Attention, and Perception Categorizing and Comprehending Information Forming and Changing Attitudes Forming and Retrieving Memories

Decision-making Process Problem Recognition & Search for Information Judgments & Decisions Post-Decision Evaluations

Consumer’s Culture: External Processes/Influences Consumer Diversity Social Class & Household Values, Personality, & Lifestyles Reference Groups and Other Social Influences

Consumer Behavior Outcomes Symbolize who we are—external signs used to express our identity Diffuse through a market—influence others’ decision making Ethics and social responsibility

Who Benefits from the Study of Consumer Behavior? Marketing Managers Ethicists/Advocacy Groups Public Policy Makers/Regulators Academics Consumers

Marketing Implications of Consumer Behavior Developing/implementing customer-orientation Segmenting the market? Profitability of each segment? Characteristics of each segment? Customer satisfaction of each segment? Selecting the target market

Marketing Implications of Consumer Behavior Product positioning decisions Positioning of competition? How should our offerings be positioned? Should we reposition offerings?

Marketing Implications of Consumer Behavior Products/services development decisions Consumers’ ideas for new products? Additional or different attributes? Brand naming? Packaging and logo design?

Marketing Implications of Consumer Behavior IMC decisions Advertising objectives? Words and visuals of ads? Where should ads be placed? When should ads be placed? Have ads been effective?

Marketing Implications of Consumer Behavior IMC decisions (cont) Sales promotion objectives? When should sales promotions occur? Have sales promotions been effective? How large a sales force? How can salespeople best serve customers?

Marketing Implications of Consumer Behavior Pricing decisions What should the price be? How sensitive are consumers to price and price changes? When should pricing tactics be used? Distribution decisions Where does target market shop? How should stores be designed?