1. Consumer Behaviour and Target Audience Decisions

2. Consumer Behaviour Processes and activities which people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services to satisfy needs and desires.

3. A Basic Model of Consumer Decision Making Figure 2-1

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

5. Consumer Decision Making Need RecognitionMotivation Decision Stage Psychological Process

6. Sources of Need Recognition Out of Stock 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

7. Ads Help Consumers Recognize Needs

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

9. Hierarchy of Human Needs: Love, Nurturance, Belonging

10. Sexy Ads May Motivate Consumers

11. Sexy Ads Get Noticed

12. Consumer Decision Making Information SearchPerception Need RecognitionMotivation © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Decision Stage Psychological Process Need RecognitionMotivation

13. Information Search Internal Search External Search Undertaken if internal search does not yield enough information. Scan memory to recall experiences and knowledge about past purchase alternatives.

14. External Sources of Information Personal Sources Market Sources Public Sources Personal Experience

15. Perception The process by which an individual receives, attends to, interprets, and stores information to create a meaningful picture of the world. Marketers can formulate communication strategies based upon how consumers acquire and use information from external sources.

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

17. Occurs as consumers choose whether or not to make themselves available to information. TV viewers may change channels or leave the room during commercial breaks.

18. Selective Attention Occurs when consumer chooses to focus on certain stimuli while excluding others. For example, combining colour with black and white grabs attention.

19. Selective Comprehension Consumers may interpret information based on their own attitudes, beliefs, motives, and experiences. An ad disparaging a consumer’s favourite product may be interpreted as biased or untruthful.

20. Selective Retention Consumers do not remember all the information they see, hear, or read – even after attending and comprehending it.

21. Advertisers Attempt to Help Consumers Retain Information Mnemonics (symbols, rhymes, associations, and images) can assist in consumers’ learning and memory processes. Example: A telephone number spelling out the company’s name.

22. Consumer Decision Making Information SearchPerceptionAlternative EvaluationAttitude Formation Need RecognitionMotivation Decision Stage Psychological Process Information SearchPerception Need RecognitionMotivation

23. Attitude Formation is Based on 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

24. Consumers Must Evaluate Their Brand Choices Objective Evaluative Criteria Price Warranty Service Price Warranty Service Style Appearance Image Style Appearance Image Subjective

25. Evaluative Criteria Consumer View Product or service viewed in terms of its consequences. Consumer View Product or service viewed in terms of its consequences. Marketer View Products are viewed as bundles of attributes. Marketer View Products are viewed as bundles of attributes.

26. Different Perspectives: The Consumer’s View Product Is Seen As A Set of Outcomes Functional Functional Consequences 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? Psychosocial Consequences

27. Attitude “Attitudes are learned predispositions to respond to an object.” Gordon Allport A summary construct representing an individual’s overall feelings toward an object or its evaluation.

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

29. Advertising, Promotion, and Attitudes Advertising and promotion are used to create favourable attitudes, and/or change negative attitudes. Here, the ad attempts to change attitudes by highlighting added attributes.

30. Consumer Decision Making Information SearchPerceptionPurchase DecisionIntegrationAlternative EvaluationAttitude Formation Need RecognitionMotivation Decision Stage Psychological Process Alternative EvaluationAttitude FormationInformation SearchPerception Need RecognitionMotivation

31. Purchase Decision At some point in the buying process, the consumer makes a purchase decision. Consumer stops searching for and evaluating alternative brands in the evoked set. The purchase decision starts with a purchase intention. Predisposition to buy a certain brand.

32. Purchase Decision The purchase decision is not the actual purchase. Consumer must implement decision and make purchase. Additional decisions may be needed. Time delay often exists between making a purchase decision and purchase itself. The time delay affects the marketing strategy, and depends on: Type of purchase to be made Risk involved in purchase

33. Brand Loyalty May Affect Purchase Decision Consumers may have a preference for a certain brand, which will result in its repeated purchase.

34. Integration Processes The ways in which product knowledge, meanings, and beliefs are combined to evaluate two or more alternatives. Analysis of the integration process focuses on the different types of integration rules or strategies used by consumers to decide among purchase alternatives.

35. Types of Integration Strategies Integration Strategies Formal Decision Rules Require examination and comparison of alternatives on specific attributes. Formal Decision Rules Require examination and comparison of alternatives on specific attributes. Simplified Decision Rules or Heuristics Easy to use and adapt to environmental situations. Price- or promotion- based Simplified Decision Rules or Heuristics Easy to use and adapt to environmental situations. Price- or promotion- based

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

37. Postpurchase Evaluation After purchase, consumer assesses the level of performance of product or service. Provides feedback from actual use of product to influence the likelihood of future purchases.

38. Satisfaction “A judgment that consumers make with respect to the pleasurable level of consumption-related fulfillment.” Cognitive dissonance: A feeling of psychological tension or postpurchase doubt a consumer experiences after making a difficult purchase choice. More likely to occur when consumer has to choose between two close alternatives.

39. Variations in Consumer Decision Making Types of Decision Making Extended Problem Solving Limited Problem Solving Routine Problem Solving

40. Variations in Consumer Decision Making Group Decision Making Group situations constitute many purchase decisions. Reference group “A group whose presumed perspectives or values are used by an individual as the basis for his or her judgments, opinions, and actions.” Used to guide consumers’ purchase decisions even when the group is not present. Marketers use aspirational or dissociative reference group influences in developing ads and promotional strategies.

41. Variations in Consumer Decision Making Group Decision Making Figure 2-4

42. Target Audience Decision Consumer understanding is the key to the success of any IMC plan, program, or ad. The goal of an IMC plan, program or ad is to influence the behaviour of a target audience.

43. Marketing and Promotions Process Model Figure 2-5

44. Target Market Process Select Market To Target Determine Market Segmentation Identify Markets With Unfulfilled Needs Determine Market Segmentation Identify Markets With Unfulfilled Needs

45. Target Market and Target Audience Target market The group of consumers toward which an overall marketing program is directed. Target audience A group of consumers within the target market for which the advertising campaign, for example, is directed.

46. Target Market Process Identify Markets With Unfulfilled Needs

47. Market Segmentation Marketer identifies a target market by: Identifying the specific needs of groups of people, or segments Selects one or more segments as a target Develops marketing programs directed to each.

48. Beer is Beer? Not really!

49. A Product for Every Segment

50. A Package is More Than a Container

51. The Marketing Segmentation Process Take Marketing Actions To Reach Target Segments. Select the Product Segments Toward Which the Firm Directs Its Marketing Actions. Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions. Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization. Find Ways To Group Consumers According To Their Needs. Select the Product Segments Toward Which the Firm Directs Its Marketing Actions. Develop a Market/Product Grid To Relate the Market Segments To the Firm’s Products and Actions. Find Ways To Group Marketing Actions - Usually the Products Offered - Available To the Organization. Find Ways To Group Consumers According To Their Needs.

52. Bases for Segmentation behaviour Benefits Outlets Benefits Outlets Behaviour Psychographic Geographic Demographic Psychographic Demographic Geographic Customer Characteristics Customer Characteristics Socioeconomic Buying Situation Buying Situation Usage Socioeconomic

53. Psychographic Segmentation Dividing the market on the basis of lifestyle, personality, culture, and social class. Criteria include: Lifestyle VALS VALS 2 Personality Culture Social class

54. Marketing to a Lifestyle

55. Abercrombie & Fitch Targets Echo Boomers

56. Benefit Segmentation The grouping of consumers on the basis of attributes sought in a product.

57. Behaviouristic Segmentation Grouping customers according to their usage, loyalties, or buying responses to a product. Product or brand usage. Degree of use. Brand loyalty. Can be used in combination with demographic and/or psychographic criteria to develop profiles of market segments.

58. Target Audience Options: Rossiter and Percy Perspective Brand Loyal Customers Non- Customers Favourable Brand Switchers Regularly buy the firm’s product. Buy focal brand but also buy others. New category users Other brand switchers Other brand loyals Customers not purchasing within a product category. Not consistently purchasing focal brand. Loyal to another brand.