Elements of Consumer Behavior, and Defining the Market Hierarchy BA396 Supplement

Consumer Behavior EKB Model Need Recognition Information Search Information Evaluation Purchase Decision Post-purchase Attitude Formation

Consumer Behavior EKB Model Needs: * Functional - product related * Psychological - stimulation - social - status/power - self-reward Information: * Amount of information * Sources - internal/external * Reduce search? Need Recognition Information Search Information Evaluation Purchase Decision Post-purchase Attitude Formation

Consumer Behavior Buying Process and Decision Making Need Recognition Information Search Information Evaluation & Trial Purchase Decision Post-purchase Attitude Formation Adoption

Consumer Behavior Buying Process and Decision Making Need Recognition Information Search Information Evaluation & Trial Purchase Decision Post-purchase Attitude Formation Adoption Habitual Decision Making Limited Problem Solving Extended Problem Solving

Consumer Behavior Who are your competitors, and how do customers end up selecting your product? Hierarchy of Markets Competition at different ‘levels’ Try to understand consumer’s decision process Within a household competition regarding the importance of different generic markets this will increase when resources are limited -- transportation will compete with food or housing

Consumer Behavior Hierarchy of Markets Desire Generic Level all products and services that compete for the consumer’s dollars Generic Level demand for broadly defined need Specific Product Level car, bicycle, single family dwelling, apt. Brand Honda, Chevrolet, Schwinn, Trek, BikEE

Hierarchy of Markets Diet Food Example 1 prepared unprepared Entrée Supplement frozen fresh frozen fresh Weight Watchers Stouffers Store Deli restaurant

Hierarchy of Markets Example 2 Food prepared unprepared Entrée Supplement E S ‘Fast’ Sit-down American Asian Mexican American Asian

Census Information http://www.census.gov/dmd/www/products.html Click on “intro to Census 2000 data products”  United States (PDF) Click on the Public Use Presentation Library and browse through the different presentations About ½ way down the list, there is presentation on the geographic concepts discussed in class. Look for: Title: Census 2000: Geographic Concepts and Products (September 2002)  Number of slides: 36 Description: This presentation gives an overview of Census 2000 geographic concepts and products and the various geographic units for which Census 2000 data are available.

Census Information http://www.census.gov/dmd/www/products.html Click on the Public Use Presentation Library and browse through the different presentations About the sixth presentation on the list, there is presentation that covers the short form and long form information. Look for: Title: Census 2000: and Its Data Products (September 2002) Number of slides: 41 Description: An overview of the Census 2000 questions, the data sets, and the products released and the released media.

Segmentation Requirements Customers have different response elasticities Salesx1=Advx.5 x SalesPrx.2 x Distrx.3 Salesx2=Advx.2 x SalesPrx.4 x Distrx.2 Response differences can be identified and matched with customer descriptions Knowledge of market segments must be translatable to retail mix combinations Sufficient demand in at least one segment Characteristics stable over time

Bases of Segmentation Geographic Demographic Psychographic Behavioral Nations, regions, states Demographic Age, gender, family size, income Psychographic Social class, lifestyle, personality, AIO inventories Behavioral Usage rate, occasion for use, benefits, loyalty