1. Chapter 4 Perspectives on Consumer Behavior

2. Last Class  Organization of the advertising agency

3. Today’s Objectives  Consumer Behavior Culture  Subculture Social Class  Small groups  Family  Social roles & status Personal Factors  Life style  Personality Psychological Factors  Motivation  Perception  Learning  Beliefs & Attitudes  Types of Buying Behavior  Consumer Decision Making Process

4. What is Consumer Behavior? The process and activities people engage in when  searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to  satisfy their needs and desires

5. Why consumer behavior?  Markets have to be understood before strategies can be developed.  World consumer consists of more than 6 billion people. Consumers vary tremendously in: age, income, education level and tastes.  Consumer Behavior is influenced by buyer’s decisions process.

6. Information SearchPerceptionPostpurchase EvaluationLearningPurchase DecisionIntegrationAlternative EvaluationAttitude Formation Problem RecognitionMotivation Purchase DecisionIntegration Consumer Decision Making Decision Stage Psychological Process Alternative EvaluationAttitude FormationInformation SearchPerception Problem RecognitionMotivation

7. Out of Stock Sources of Problem Recognition Dissatisfaction New Needs or Wants New Needs or Wants Related Product Purchase Related Product Purchase Market-Induced Recognition Market-Induced Recognition New Products New Products

8. Ads Help Consumers Recognize Problems

9. Safety needs (security, protection) Social needs (sense of belonging, love) Esteem needs (self-esteem, recognition, status) Self-actualization needs (self- development, realization) Physiological needs (hunger, thirst) Maslow’s Hierarchy of Needs Safety needs (security, protection) Social needs (sense of belonging, love) Esteem needs (self-esteem, recognition, status) Physiological needs (hunger, thirst)

10. Nurturance, Love and Belonging +

11. Strong Inhibitions Strong Inhibitions Symbolic Meanings Symbolic Meanings Surrogate Behaviors Surrogate Behaviors Surrogate Behaviors Surrogate Behaviors Symbolic Meanings Symbolic Meanings Strong Inhibitions Strong Inhibitions Complex and Unclear Motives Freudian Psychoanalytic Approach Subconscious Mind Subconscious Mind

12.  consumer's novelty-seeking behavior In saturated markets manufacturers should come up with new offerings Example -Honey Maid graham crackers /sticks

13. What Consumers Want?

14. Depth Interviews Association Tests Focus Groups Projective Methods Depth Interviews Association Tests Focus Groups Probing the Minds of Consumers

15. No One Knows You Better

16. Highlights Importance of Symbolic Factors Reveals Hidden Feelings, Drives and Fears Reveals Hidden Feelings, Drives and Fears Shifts Attention from “What” to “How” and “Why” Varying, Subjective Interpretations Qualitative Results from Very Small Samples Difficult or Impossible to Verify or Validate Varying, Subjective Interpretations Qualitative Results from Very Small Samples Shifts Attention from “What” to “How” and “Why” Highlights Importance of Symbolic Factors Reveals Hidden Feelings, Drives and Fears Reveals Hidden Feelings, Drives and Fears “MR” Not All Positive or All Negative Motivation Research ProsCons

17. Information Search Personal Sources Market Sources Public Sources Personal Experience

18. Perception  You can see a white vase as figure against a black background, or two black faces in profile on a white background

19. Do you see the flashing dots? The flashing is all in your head.

20. What do you see? Now what do you see?

21. Perception Müller-Lyer Illusion –The two lines above are the same length, but the diagonals extending outward from both ends of the lower line make it look longer than the upper line

22. Selective Retention Selective Comprehension Selective Attention Selective Exposure Selective Comprehension Selective Attention Selective Exposure The Selective Perception Process

24. Doing two things at a time

25. Pick a card

26. I’ve removed your card

27. YESIL MAVI SARI KIRMIZI MAVI YESIL KIRMIZI Tell me the colors?

28. TURUNCU MAVI YESIL SARI TURUNCU YESIL MOR YESIL SIYAH SARI Tell me the colors again?

29. ORANGE BLAU GRUN GELB ORANGE GRUN VIOLETT GRUN SCHWARZ GELB Tell me the colors now?

30. A memory test: 1. Please listen carefully to the following list of words. 2. Please DO NOT write the words down. Just listen carefully. 3. In a little while, I’ll ask you to remember the words.

31. Now count backwards with me slowly, by threes, from 45 to 3: 45, 42 … 3

32. 1.Write down each word below: ghost cake blanket sweet rabbit candy 2. Circle only the words you heard on the list. 3. If you VIVIDLY remember hearing a word, circle it twice.

33.  sour  candy  sugar  bitter  good  taste  tooth  nice  honey  soda  chocolate Now examine the list carefully: TO THINK ABOUT OR DISCUSS : Should this make us worry about eyewitness testimony?  heart  cake  tart  pie

34. Now we are going to do a simple activity involving letters of the alphabet. Based on your gut feelings, quickly write down: 1.Your six FAVORITE letters 2.Your six LEAST FAVORITE letters

35. Look over each list and circle all of the letters that occur in your own first name. Count the number of circled letters in each list. Which list included more of the letters from your own first name??

36. The preference for the letters in one’s own name is the name letter effect. TO THINK ABOUT: Would people be more likely to purchase a product if the product resembled his or her name? Should the musician depicted here like M&Ms more than the average person does?

37. Can you spot the vertical white bar?

40. Pop Out Examples  Form: line orientation, length, width spatial orientation, added marks, numerosity (4)  Colour: hue, intensity  Motion: flicker, direction of motion  Spatial Position: stereoscopic depth, convex/concave shape

41. Color

42. Orientation

43. Motion

44. Simple shading

45. Combining Color With Black-and- White Is Intended to Gain Attention +

46. Memory  Try to remember the following words

47. 1. Vegetable 2. Television 3. Lampshade 4. Statue 5. Aluminium 6. Picnic 7. Comma 8. Diary 9. Photograph 10 Bicycle 11 Cabinet 12 Tiger 13 Window 14 Medicine 15 Factory

48.  First Group Recall Words Immediately

49. 1. Vegetable 2. Television 3. Lampshade 4. Statue 5. Aluminium 6. Picnic 7. Comma 8. Diary 9. Photograph 10 Bicycle 11 Cabinet 12 Tiger 13 Window 14 Medicine 15 Factory

53. Evaluation of Alternatives All available brands Brand ABrand BBrand CBrand DBrand E Brand FBrand GBrand HBrand IBrand J Brand KBrand LBrand MBrand NBrand O Evoked Set of Brands Brand BBrand E Brand I Brand M Brand F

54. Objective Two Forms of Evaluative Criteria Evaluative Criteria Price Warranty Service Price Warranty Service Style Appearance Image Style Appearance Image Subjective

55. Different Perspectives: Marketer’s View Enough power? Traction okay? Too pricy? Product is seen as a bundle of attributes or characteristics.

56. Product Is Seen As A Set of Outcomes Functional Different Perspectives: Consumer’s View How does it cut the taller grass? How close can I get to the shrubs? Will the neighbors be impressed with my lawn? Is it going to be as fun to use later this summer? Will I enjoy having more time for golf? Will it pull that little trailer I saw at the store? Psychological

57. Heuristics Depends on the consumer segment Examples  Never buy cat litter that does not contain a deodorizing agent.  Do not buy national brands of pet food.  Use coupons for the purchase of all snack foods.  Do not buy cake mixes that contain artificial color.

58. Individuals Products Brands Companies Organizations Retailers Media Retailers Organizations Companies Brands Products Individuals Ads Consumer Attitudes Focus on Objects Attitudes Toward:

59. Change Perceptions or Beliefs About a Competing Brand Add a New Attribute To the Attitude Formation Mix Change Perceptions of the Value of An Attribute Change Beliefs About An Important Attribute Add a New Attribute To the Attitude Formation Mix Change Perceptions of the Value of An Attribute Change Beliefs About An Important Attribute Ways to Change Attitudes

60. Adding Attributes Changes Attitudes +

61. Conditioning Based on conditioning through association or reinforcement Thinking Intellectual evaluation comparing attributes with values Conditioning Thinking How Consumers Learn Modeling Based on emulation (copying) of respected examples

62. Unconditioned stimulus (waterfall) Unconditioned stimulus (waterfall) Conditioned stimulus (Brita water filtration pitcher) Conditioned stimulus (Brita water filtration pitcher) Unconditioned response (freshness, purity) Unconditioned response (freshness, purity) Unconditioned stimulus (waterfall) Unconditioned stimulus (waterfall) Conditioned stimulus (Brita water filtration pitcher) Conditioned stimulus (Brita water filtration pitcher) Unconditioned response (freshness, purity) Unconditioned response (freshness, purity) Classical Conditioning Process Association develops through contiguity and repetition Conditioned response (freshness, purity) Conditioned response (freshness, purity)

63. Classical Conditioning for Cosmetics +

64. Increase or decrease in probability of repeat behavior (purchase) Positive or negative consequences occur (reward or punishment) Positive or negative consequences occur (reward or punishment) Positive or negative consequences occur (reward or punishment) Positive or negative consequences occur (reward or punishment) Instrumental Conditioning Process Behavior (consumer uses product or service) Behavior (consumer uses product or service) Behavior (consumer uses product or service) Behavior (consumer uses product or service)

65. Purposive Behavior Insight Goal Achievement Goal Insight Purposive Behavior Goal Cognitive Learning Process

66. Culture Subculture Social class Reference groups Situations Culture : the complexity of learned meanings, values, norms, and customs shared by members of the society Subculture Social class Reference groups External Influences on Consumers

67. Subcultural Ads Appeal to Shared Beliefs, Values and Norms +

68. BP  Ogilvy Awards 2003 $7 million on research $100 million on promoting “connect” brand image. Revenues were up by 23% (to $3.23 billion)

69. Intel 1997  One of the most valuable brands in the world  Founded in 1968  introduced the world's first microprocessor in 1971  Intel's mission is “to be the preeminent building block supplier to the Internet economy” 2002 Financial Data (in millions) Net Revenues: $ 26,764 Net Income: $ 3,117 R&D Investment: $ 4,034 Diluted Earnings Per Share (dollars): $ 0.46  Spends nearly $1 billion a year globally on advertising

70. Great Advertising Can Strike a Responsive Chord with Consumers Wendy’s 1984

71. Summary  Consumer Behavior Culture Social Class Personal Factors Psychological Factors  Types of Buying Behavior  Consumer Decision Making Process