What is Consumer Behavior? Chapter 1

Overview of Consumer Behavior Every day interactions Every day interactions Important to: Important to: Marketers Policymakers Consumers

Consumer Behavior Two definitions: Two definitions: 1. As human behavior: “Set of value-seeking activities that take place as people go about addressing realized needs” “Set of value-seeking activities that take place as people go about addressing realized needs”

Basic Consumption Process NEED WANT EXCHANGE COSTS & BENEFITS REACTION VALUE

Consumer Behavior Two definitions: Two definitions: 2. Study of consumers as they go about the consumption process; study how they seek value to address needs

Consumer Behavior Economics Psychology Marketing Anthropology Sociology

How Are Consumers Treated? Two determinants Two determinants How competitive is the environment? How competitive is the environment? License Bureau v. Upscale restaurant License Bureau v. Upscale restaurant Consumer orientation v. market orientation Consumer orientation v. market orientation How dependent on repeat business? How dependent on repeat business? Relationship marketing Relationship marketing Touchpoint Touchpoint

Role of Consumer Behavior CB & Marketing CB & Marketing Resource advantage theory Resource advantage theory What do consumers give up? What do consumers give up? What are they looking for? What are they looking for? Products v. Attributes Products v. Attributes Milkshake study Milkshake study Understanding value helps determine who your competitors are Understanding value helps determine who your competitors are Examples: Examples:

Role of Consumer Behavior Business Orientation Business Orientation Undifferentiated Undifferentiated Production Production Wal-mart Wal-mart Differentiated Differentiated Toyota Toyota Niche Niche One specific group One specific group

Role of Consumer Behavior CB & Society CB & Society Purchasing behaviors shape society Purchasing behaviors shape society What’s “cool” and “not cool” What’s “cool” and “not cool” CB & Personal Growth CB & Personal Growth Debt Debt Credit cards Credit cards

Approaches to CB How can we study it? How can we study it? Interpretive research Interpretive research Qualitative Qualitative Pros & cons Pros & cons Phenomenology Phenomenology Ethnography Ethnography Quantitative Quantitative Pros & cons Pros & cons

CB is Dynamic CB changes over time CB changes over time Internationalization Internationalization Technological changes Technological changes TV ads Internet Changing demographics Changing demographics Changes in the family How does this affect their CB?