1. Professor S.J. Grant Spring 2007 Overview: Marketing and Consumers BUYER BEHAVIOR, MARKETING 3250

2. Outline What is strategy? Strategy starts with analysis 3 C’s SWOT What is consumer behavior? How does consumer behavior impact marketing? STP 4P’s

3. Marketing Strategy What is the goal of strategy? To develop and maintain strategic fit between the company’s abilities and changing market opportunities Strategy positions the firm to optimize Strategy must consider alignments of internal, external factors Internal: company External: competitors, consumers

4. Marketing Management Market Opportunity Consumers Competition Company

5. SWOT Analysis Basic approach starts with evaluating Internally Strengths Weaknesses Externally Opportunities Threats

6. What is Consumer Behavior?

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

8. Psychological Core Having motivation, ability, and opportunity Exposure, attention, and perception Categorizing and comprehending information Forming and changing attitudes Forming and retrieving memories What Affects Consumer Behavior?

9. Process of Making Decisions Psychological Core Problem recognition and search for information Making judgments and decisions Making post-decision evaluations What Affects Consumer Behavior?

10. Consumer’s Culture Process of Making Decisions Psychological Core External processes: Regional and ethnic influences Age, gender, and household influences Reference groups What Affects Consumer Behavior?

11. Consumer’s Culture Consumer Behavior Outcomes Process of Making Decisions Psychological Core Consumer behaviors can symbolize who we are Consumer behaviors can diffuse within a market What Affects Consumer Behavior?

12. Developing a customer-oriented strategy starts with a segmentation scheme What is known about the market? How is the market segmented? Different types of consumers Different needs Perception of value Willingness to pay Implications: Segmentation

13. Choose a target How profitable is each segment? What are the characteristics of consumers in each segment? Are customers satisfied with existing offerings? Implications: Targeting

14. Positioning How are competitive offerings positioned? How should our offerings be positioned? Should our offerings be repositioned? Implications: Positioning

15. Developing products or services What are consumers’ ideas for new products? What attributes can be added to or changed in an existing offering? What about guarantees? Post-purchase service? Repeat-buying opportunities Any consumer trends that can inspire development? Implications: Product

16. Making promotion decisions Sales promotion objectives and tactics (push) When should sales promotions happen? Have our sales promotions been effective? How many salespeople are needed to serve customers? How can salespeople best serve customers? Advertising (pull) What should our advertising look like? Where should advertising be placed? When should we advertise? Has our advertising been effective? Implications: Promotion

17. Making pricing decisions What price should be charged? How sensitive are consumers to price and price changes? What is price elasticity? When should certain price tactics be used? How do price changes affect the firm? Implications: Price

18. Making distribution decisions Where are target consumers likely to shop? How should stores be designed? Implications: Place

19. Perception, Memory & Learning Professor S.J. Grant Spring 2007 BUYER BEHAVIOR, MARKETING 3250

20. Perception A model of memory What are the types of memory? Organization of memory How memory works Storage Retrieval Learning Outline

21. Hemispheric lateralization Perception

22. When do we perceive stimuli? Absolute and differential thresholds Just noticeable difference Weber’s law Selective – cocktail party Subliminal perception Does subliminal perception affect consumer behavior? Perception

23. Does subliminal messaging make people buy? 1956 N.J. movie theater flashed subliminal messages, “Hungry? Eat popcorn. Drink Coca-Cola.” Increased popcorn sales 58% and Coca-Cola sales 18%, but results were not replicated Erotic stimuli and sexual symbols in ads purported to increase receptivity to suggestions in the ad

24. A Model of Memory Perceived information is encoded Explicit Implicit Then stored in memory Short-term store Long-term store Retrieval involves calling up stored bits from memory

25. A Model of Memory Stimulus Short-Term Memory Long-Term Memory Retrieval Consolidation Recall

26. A Model of Memory Sensory Short-term Long-term

27. Sensory Echoic Iconic Characteristics of sensory memory A Model of Memory

28. Short-term memory (STM) Imagery processing Discursive processing Characteristics of short-term memory Short-term memory is limited (7±2) Short-term memory is short-lived A Model of Memory

29. Long-term memory (LTM) Autobiographical (episodic) memory Semantic memory Characteristics of long-term memory Stable memory of events of more distant past Unlimited capacity Organized by nodes A Model of Memory

30. Converting short-term memories to long- term store is physically located in the hippocampus Elaboration, or rehearsal, of information increases consolidation Recall from long-term storage is a function of recency and availability Availability is aided if memory is organized into a well-defined associative network of nodes Categories Hierarchies

31. A Model of Memory Beverages CarbonatedNon-carbonated MixersColasJuicesWater PepsiCokeEvian Poland Spring

32. A Semantic (or Associative) Network

33. Chunking Rehearsal Recirculation Elaboration Y=mx+b How Memory Is Enhanced

34. Semantic network Trace strength Accessibility Spreading of activation Priming Retrieval failures Decay Interference Primacy and recency effects Retrieval errors What Is Retrieval?

35. Explicit memory Recognition Recall Judgments Implicit memory Judgments What Are the Types of Retrieval?

36. Retrieval Perceptual “His name started with a ‘J’...” Conceptual “A brand of personal computers that competes with IBM...”

37. Characteristics of the stimulus Salience Prototypicality Redundant cues The medium in which the stimulus is processed How Retrieval Is Enhanced

38. What the stimulus is linked to Retrieval cues Where do retrieval cues come from? The brand name as a retrieval cue Other retrieval cues Consumer implications Consideration set How Retrieval Is Enhanced

39. How a stimulus is processed in short-term memory Dual coding Consumer characteristics affecting retrieval Network of associations Expertise Mood How Retrieval Is Enhanced

40. Exposure Attention Interpretation Memory Information Processing Selective

41. Exposure Random Deliberate Attention Low- High- involvement Interpretation Low- High- involvement Short-term Memory Long-term Active problem Stored experiences, solving values, decisions, rules, feelings Purchase and consumption decisions Perception A Model of Learning