1. BUAD 307 MARKETING FUNDAMENTALS
CONSUMER BEHAVIOR
BUAD 307
MARKETING FUNDAMENTALS

2. Learning Outcome Objectives
Indentify how consumer cognitive (thinking) processes and limitations, affect, beliefs, social influences, and other contextual factors influence consumer decision making, choices, and behavior
Identify how these insights can be used to design and implement effective marketing strategies
Identify individual and segment differences in process and outcome

3. Influences on and of Consumer Behavior
PERCEPTION/
SENSATION
MARKET
RESEARCH
INFO
SEARCH
COGNITION
CHOICES
STRATEGY
AFFECT
PREFERENCES
BELIEFS
CONSUMER
COMMUNICATION
SOCIAL AND
OTHER INFLUENCE

4. True or False? If you have bad breath, you cannot smell it yourself.
If you eat a balanced diet, you do not need vitamin supplements.
Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation.
Dell Computers tend to be of higher quality than those made by HP and Sony.
Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.

5. Questions Faced By Consumers
Are soft drinks sweetened with high fructose corn syrup worse than those sweetened with cane sugar?
Are veggie burgers actually healthy?
What makeup should you use to get an “even” skin tone?
Do I get any useful benefits from spending more than $125 on a digital camera?
Should I get a “make-over?” What am I looking for? What should I do?
Is my mechanic honest?
Should I give my wife roses, chocolate, or software?

6. Consumer Problems and Recognition
Consumer problem: Discrepancy between ideal and actual state--e.g., consumer:
Has insufficient hair
Is hungry
Has run out of ink in his or her inkjet cartridge
A “problem” does not have to be a major concern—there merely has to be some discrepancy
Problems can potentially be solved in several ways--e.g., stress reduction  vacation, movie, hot bath, medication

7. CONSUMER DECISIONS: Theory and Reality in Consumer Buying
PROBLEM
RECOGNITION
INFORMATION
SEARCH
EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS
Theory
Complications

8. Post Purchase Behavior

9. Usefulness of the Model of Consumer Decision Making
Most useful to determine how search for a particular consumer need or a product category may systematically differ from others
Importance of different steps
What may happen in each step (e.g., brand switching)
Extent of overlap of stages
Likeliness of different types of post purchase behaviors (e.g., WOM, positive or negative review, returning product)
Not as useful for assessing search for frequently used products

10. Approaches to Search for Problem Solutions
INTERNAL
Memory
Thinking
EXTERNAL
We now turn to the consumer’s search for potential solutions to the problems that he or she is facing. Search strategies can be divided into those involving internal and external search, although consumers may use both in some combination.
Internal search is based on the consumer’s memory and his or her thinking processes. In the case of a motorist stranded with a blown tire, for example, he or she may remember preferred provider of replacement tires and thus go to that one. An implication of this reality is that it may pay to advertise to establish an identity among potential future consumers. For example, bail bonds people will advertise on TV to people, suggesting a solution if they, for some reason, should find themselves in jail. Similarly, Midas Mufflers and various other auto service providers attempt to create internal beliefs about the benefits of patronizing their establishments if and when the need arises. Aamco Transmissions advertises that half the half the transmissions they see do not need to be replaced, presumably implying that it is safer to take a car there than to ostensibly less skilled competitors. The marketer, however, faces some significant problems in creating this kind of awareness. First, many consumers, not readily expecting to encounter a need for the products and services in question, may have little motivation to process and store the information. Secondly, recalling the relevant information may be difficult as need arises.
External search involves the consultation of outside sources, ranging from friends and acquaintances to the yellow pages and the media. (We will revisit this issue in Chapter 18, when we discuss, within the context of the diffusion of innovation, which
Word of mouth, media,
store visits, trial

11. Internal vs. External Search
Based on anything within the consumer’s head—e.g.,
Memory
Experience
Reasoning
External
Going outside the consumer’s head—e.g.,
Online research
Consulting friends
Visiting stores and trying out products

12. Options Identified and Considered
UNIVERSAL SET
All possible options
RETRIEVED SET
Options that readily come to mind
EVOKED/ CONSIDERATION SET
Options that will be considered by the consumer
Note: Retrieved and evoked sets will vary among different consumers. Brand awareness is important since this is required for the brand to be in the evoked and retrieved sets.

13. REMINDER
For low involvement products, efforts aimed at affecting internal search tend to be more effective—the consumer is usually not willing to expend energy on external search.
External search is more likely for higher involvement products.

14. Decision Making Issues
Involvement level
Temporary
Enduring
Consumer locus of control
Internal
External
Product category complexity
Consumer knowledge

15. Evaluation Type IMPORTANT
Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones)
Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission)
Hybrid: Combination of the two (e.g., one non-compensatory measure, then compensatory tradeoffs on other attributes
Abandoned strategy: Consumer finds initial criteria unrealistic and proceeds to less desirable solution
IMPORTANT
LESS
IMPORTANT

16. Heuristics—Low Involvement Decision Rules
If either Coke or Pepsi is on sale, buy that brand; otherwise, buy Coke
The larger the navels, the better the orange
The larger package is likely to offer a lower unit price (not true in reality)

17. Consumer Information Processing
Note: This is a simplified conceptual model that should not be taken too literally. The boundaries between the steps are actually rather “blurry.”
PERCEPTION
CONSCIOUS
PRE-CONSCIOUS
ATTENTION
LIMITED—SUBJECT TO PRIORITY
DIVIDED
BEHAVIOR
ELABORATION
(THINKING BRINGS ABOUT NEW LINKS AND THOUGHTS)
LINKS TO OTHER ITEMS IN MEMORY
 ASSOCIATION
COMPREHENSION
CORRECT OR INCORRECT
ELABORATE OR SHALLOW
RETRIEVAL
(ACTIVATION)
STORAGE
(IN MEMORY)
TRIGGERS
(“REMINDERS” TO ACTIVATE MEMORY)
No “guaranteed” arrow—triggers may or may not happen.

18. Associate Network of Knowledge
SANDWICH
PEANUT
BUTTER
MITT
ROMNEY
FAT
PEANUTS
REPUBICAN
PARTY
ELEPHANT
7 BLIND MEN
TRUNK
ZOO
GIRAFFE
MEDICINE
TIGER

19. APPLE TRAVEL iTUNES E-MAIL TEXTING CASKET PORTABLE FUNERAL DEAD
STEVE JOBS
GOSSIP
iPHONE
iPAD
INNO-
VATION
LAPTOP
APPLE
FRUIT
HEALTHY
PEAR
SPREAD-SHEET
REPORT TV
MONITOR
FINANCE
DESKTOP
SOAP
OPERAS
JUICY
GRANDMA
PRINTER

20. Attitudes―components
BELIEFS
AFFECT
(FEELING)
BEHAVIORAL
INTENTIONS

21. Attitude Components Beliefs Affect Behavioral Intentions
Can be positive, negative, or neutral
May or may not be accurate
May contradict other beliefs held by the other person
Affect
May be positive or negative
May take on specific dimension (e.g., pleasure, disgust)
Behavioral Intentions
An individual’s plan or expectations of what he or she will do
May appear inconsistent with beliefs
May not predict well what the individual will do in reality

22. Generating Beliefs Through Advertising
Statements must be
Perceived
Comprehended
Remembered
Believed (at least in part)

23. Affect Based on Past emotional associations of product
Emotional effect of beliefs

24. Attitude Change Strategies, Part I
Changing Affect
Classical conditioning: “Pairing” the brand or product with desired stimulus—e.g., a car with a beautiful woman
Attitude toward the ad: A likable ad for a brand in a mundane product category—e.g.,
Energizer Bunny
Snuggles (fabric softener)
Mere exposure: Items (e.g., advertisements) that have been seen before tend to be better liked

25. Attitude Change Strategies II
Changing behavior (e.g., sampling): Consumers tend to infer attitudes from behavior (e.g., I buy the product  I must like it or It must be good)
Changing a belief component
Changing existing beliefs
Difficult
Advertiser’s motives are suspect
Changing the importance of attributes
Adding beliefs

27. Adding Beliefs (True or Not): Examples
Brushing and flossing do not reach all areas of the mouth
People under stress need more vitamins
Baking soda will reduce odor of refrigerators
Fragmented hard drives may cause computer errors

28. REMINDER
Changing currently held beliefs tends to be difficult—people know the marketer has an ulterior motive
Adding new beliefs that are not inconsistent with what is already believed may be more effective

29. One-sided vs. two sided appeals
One-sided: only saying what favors your side
Two-sided: stating your case but also admitting points favoring the other side
Why is this effective?

30. The Means-End Chain Self-esteem Values Feeling of power Consequences
Promotion/
positioning should be aimed at higher
levels of chain!
Self-esteem
Values
Feeling of power
Consequences
Performance
Attributes
Fast acceleration
Note additional details on the handout.
Large engine 11 15

31. The Means-End Chain
First step must be a concrete product attribute (e.g. large engine of car)
The product category is not an attribute! I.e., one would start with “large engine” and not “car.”
The second step must be an immediate consequence of the product attribute identified in the first step
Each step after that must be an immediate consequence of the one before
The final step must be a terminal value—i.e., something valued in its own right—e.g., happiness, security.
There should be only one path in each means-end chain. If attributes have multiple consequences, you can have several different chains.

32. Subliminal Perception: A Diabolical Marketing Tool?
Subliminal messages in ads are illegal in U.S.
Almost certainly not a useful method to sell products
At most one or two syllables can be “registered” or understood
Complex messages cannot be processed subliminally

33. The Mythical Theater Experiments
An advertising executive claimed in 1957 to have “spliced” messages of “EAT POPCORN” or “DRINK COCA COLA” into film footage (24 frames per second in traditional movie films)
A frame with the message inserted every, say, 20th frame
Not consciously notable
Claimed that popcorn sales increased 57% and Coca Cola sales by 18% on days the respective message was used
Admitted to be a hoax
These messages are much longer than the 1-2 syllables the brain can pick up
Tachistoscope research: People giggle at “dirty” words exposed for a fraction of a second but not at neutral ones (those exposed to dirty words do not consciously know specifically what they saw)

34. Procedural Knowledge: One Component of Ability
Knowledge—whether verbal or unconscious accessing—of how to do something
Drive a car
Touch type
Tie a tie
Put on makeup
Lack of training may prevent consumers from buying and using certain products—e.g., manual transmission car, motorcycle
Some products can be optimized to reduce the effort needed to gain sufficient procedural knowledge

35. Demographics (segmentation) Lifestyle (segmentation)
Some Consumer Behavior Issues That Will Come Up Elsewhere in the Course
Demographics (segmentation)
Lifestyle (segmentation)
Culture/subculture (segmentation, international marketing)
Diffusion of innovation (product)
Attention (promotion)

36. Organizational Buyers
Types
Industrial
Reseller
Government and non-profit organizations
Purchase types
Straight rebuy
Limited decision making
Extended decision making
Characteristics
Greater involvement
Bureaucracy
Long term relationships
Price is important but may not be the most important factor