1 Consumer Behavior Spring 2010 Spring 2010 Dr. Abdullah Sultan Dr. Abdullah Sultan

What consumer behavior is all about?

What is Marketing? AMA defines marketing as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its shareholders.

4 What is Consumer Behavior? Why did you decide to take this course? Why did you decide to take this course? What influenced where you sat today? What influenced where you sat today? How did you decide what shoes to wear today? How did you decide what shoes to wear today? What impacted what you had for breakfast this morning? What impacted what you had for breakfast this morning?

5 Consumer Behavior… …reflects the totality of the consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, time, ideas and/or experiences to satisfy needs and desires. …reflects the totality of the consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, time, ideas and/or experiences to satisfy needs and desires. What three broad categories of consumer activity do marketers and researchers study in consumer behavior? What three broad categories of consumer activity do marketers and researchers study in consumer behavior?

6 So, it is more than just acquiring Acquiring Acquiring  Buying, leasing, trading, borrowing, gift-giving, finding, stealing Using Using  Functional  Symbolic Disposing Disposing  Throw away  Give away  Recycle  Ebay

Dino Dung Dinosaur dung sold to Ohio man at auction for nearly $1,000 to motivate his employees and using it as a marketing tool in his pet store

Washington State University - kre 8 More than just “goods” Offering Offering  A product, service, activity, or idea offered by a marketing organization to consumers

9 Important characteristics of consumers Classified by demographics and psychographics Classified by demographics and psychographics  Market segmentation strategies Heavily influenced by the opinions and behaviors of others Heavily influenced by the opinions and behaviors of others  Cultural values  Consumption communities

10 Segmenting Consumers Why do we need segmentation? Why do we need segmentation?

11 Segmenting Consumers Gather Knowledge and data about customers… Gather Knowledge and data about customers…  …Help to define the market  …Identify threats/opportunities to a brand  Group similar consumers Example: “Heavy Users” of fast- food industry Example: “Heavy Users” of fast- food industry

12 Segmenting Consumers: Demographics Age Age Gender Gender Family Structure & Marital Status Family Structure & Marital Status Social Class & Income Social Class & Income Race & Ethnicity Race & Ethnicity Geography Geography

13 Why do new product fail at the launch? Failure rate is as high as 50%. Failure rate is as high as 50%. Gerber's Singles: Small servings of fruits, vegetables, and entrees intended for adults that came in the same jars used for baby food. Gerber's Singles: Small servings of fruits, vegetables, and entrees intended for adults that came in the same jars used for baby food. Heinz's Funky Fries: chocolate, cinnamon, sour cream and blue-colored frozen fries Heinz's Funky Fries: chocolate, cinnamon, sour cream and blue-colored frozen fries

14 Why Study CB? Who benefits from studying CB? Who benefits from studying CB?  Managers – strategic marketing plans are consumer focused  Ethicists – advocacy groups, co-ops  Public policy makers – FDA, nutrition information, investigation of misleading ads  Consumers

15 Why would you study CB? Have you ever made a purchase that made no sense? Have you ever made a purchase that made no sense? Have you ever felt cheated or misled by marketing? Have you ever felt cheated or misled by marketing? Have you ever paid too much for something? Have you ever paid too much for something? Do you ever hold (even a glimmer of) hope that a purchase will make you more interesting/glamorous? Do you ever hold (even a glimmer of) hope that a purchase will make you more interesting/glamorous?

16 More Why’s… It is fun and entertaining to learn about yourself and your friends and family It is fun and entertaining to learn about yourself and your friends and family It might even be beneficial to be a well- educated, informed consumer! Why do we do what we do?? It might even be beneficial to be a well- educated, informed consumer! Why do we do what we do?? WARNING: You will never be the same again… WARNING: You will never be the same again…

17 Organization of Course