Chapter 1- Intrductin- Cnsumer Behaviur What is Cnsumer Behaviur? The acquisitin, cnsumptin and dispsitin f gds, services, time and ideas by (human) decisin making units (ver time) Invlves: Prducts/gds Services Activities Peple Ideas Dynamic prcess (ccur ver time in a dynamic rder) Can invlve many peple Invlves cnsumers feelings Cnsumer behaviur reflects the ttality f decisins abut the cnsumptin f an ffering by decisin making units ver time 1
Cnsumer Behaviur as a Field f Study As a marketer yu need t: Understand- The market; needs and wants f cnsumers Predict- Trends in the market Influence- Cnsumer purchasing behaviur Mdel f Cnsumer Behaviur What influences cnsumer behaviur? Psychlgical cre Prcess f making decisins Cnsumer s culture Cnsumer behaviur utcmes and issues 2
A Cnsumer s Psychlgical Cre Mtivatin, ability and pprtunity (MAO) Expsure, attentin and perceptin Memry and knwledge Frming and changing attitudes The Decisin Making Prcess Prblem recgnitin (unfulfilled need, e.g. need fr a vacatin) and search fr infrmatin Judgments and decisins Pst decisin evaluatins Cnsumer s Culture Cnsumer diversity Scial class and husehld Values, persnality and lifestyles Reference grups and ther scial influences 3
Cnsumer Behaviur Outcmes Symblize wh we are- external signs used t express ur identity Diffuse thrugh a market- Influence ther s decisin making Ethics and scial respnsibility Chapter 2: The Psychlgical Cre I: Mtivatin Ability and Opprtunity What is Mtivatin? Mtivatin is defined as "an inner state f arusal that prvides energy needed t achieve a gal Mtivated cnsumers are energised, ready, and willing t engage in a gal relevant activity Physilgically, psychlgically r envirnmentally driven The Effects (Outcmes) f Mtivatin High effrt behaviur (behaviur that takes cnsiderable effrt) High Infrmatin prcessing and decisin making (mre likely t pay careful attentin t the infrmatin prvided befre making a decisin) Mtivated reasning (Prcessing infrmatin in a way that allws cnsumers t reach the cnclusin that they want t reach) Felt invlvement: psychlgical experience f the mtivated cnsumer Enduring Invlvement (Lng term interest in an ffering)vs Situatinal Invlvement (Shrt term interest)- e.g. supprting an NBA team fr the whle seasn r just the playffs. Cgnitive Invlvement (Interest in thinking abut and learning infrmatin pertinent t an ffering, activity r decisins) vs Affective Invlvement (Interest in expending emtinal energy and evking deep feelings abut an ffering, activity r decisin) Drivers f Cnsumer Mtivatin Persnal Relevance: The extent t which it has a direct bearing n & significant implicatins. Persnal Relevance fr yur life Cnsistency with Self-Cncept: Our mental view f wh we are, yur view f yurself & the way yu think thers view yu Values: Beliefs abut what is right, imprtant, r gd Needs: An internal state f tensin caused by disequilibrium frm ur ideal/desired physical r psychlgical state Gals: Outcmes that we wuld like t achieve Perceived Risk: The extent t which the cnsumer is uncertain abut the cnsequences. Perceived Risk f an actin (e.g. buying, using, dispsing f an ffering) 4
Incnsistency with Attitudes: The extent t which new infrmatin is cnsistent with previusly acquired knwledge r attitudes. Needs A need is an internal state f tensin caused by disequilibrium frm an ideal r desired state Maslw s Hierarchy f Needs: Prduct Examples 5
Characteristics f Needs Dynamic (Never fully satisfied; satisfactin is nly temprary. E.g. hunger) Hierarchical Can be internally r externally arused Can cnflict: Reslve the cnflict- new marketing pprtunities Apprach-apprach situatinal cnflict: Chice between 2 attractive alternatives Apprach-avidance situatinal cnflict: Psitive and negative cnsequences Avidance-avidance situatinal cnflict: Chice between 2 undesirable alternatives Uncvering Cnsumer s Needs Gals A gal is a particular end state (utcme) that we wuld like t achieve Regulatry fcus: Prmtin fcused r preventin fcused Match (+) 6
Perceived Risk The extent t which the cnsumer is uncertain abut the persnal cnsequences f buying, using r dispsing f an ffering. Types f perceived risk include: Perfrmance- Pssibility that the ffering perfrms wrse than expected Financial- Extent t which buying and using the prduct may cause financial harm Physical- Extent t which a prduct may harm ne s safety Scial- Extent t which a prduct may damage smene s scial standing Psychlgical- Hw a prduct may cause negative emtins Time risk- Lss f time assciated with a prduct Circumstances Causing Increased Perceived Risk Lack f infrmatin New/nt enugh experience High price Technlgically cmplex Brands differ substantially Incnsistency with Attitudes Cnsumers tend t be mtivated t prcess messages Mderately incnsistent with ur knwledge r attitudes Mderately threatening and uncmfrtable Cnsumers tend t be less mtivated t prcess messages Highly incnsistent with ur knwledge r attitudes They simply reject it Cnsumer Ability Ability is defined as the extent t which cnsumers have the necessary resurces t make an utcme happen. Factrs that affect ur ability t prcess infrmatin: Financial resurces Cgnitive resurces (e.g. intelligence and experience)- Attributes fr experts, benefits fr nvices Emtinal resurces Physical resurces Scial and cultural resurces Educatin and age Cnsumer Opprtunity Can be influenced by: Time: Opprtunities (fast fd, ready t use prducts) High time pressure -> less infrmatin prcessed 7
Distractin: Mre n infrmatin prcessing, less n emtins Amunt, Cmplexity, Repetitin and Cntrl f Infrmatin: Hw-t-vides Visualizatins Enhancing Cnsumer s Opprtunity t Prcess Infrmatin Repeat marketing cmmunicatins Simplify messages Reduce distractins/ time pressures Reduce purchasing/ using/learning time Prvide mre infrmatin channels Case Study: Allianz- The Ahh Mments Challenges Prduct- Insurance N ne really wants t buy it, but everyne knws they need it Engagement is infrequent The market 1. Tugh cmpetitin 2. Lw barrier t entry 3. Highly advertising driven The brand- Allianz a) Nt yet a market leading brand (3rd r 4 th ) b) Nt an Australian brand like NRMA r AAMI Objectives Sales- Increase 1q business sales by 15% Qutes- Generate an increase f 28% in qutes carried ut Ad recall- Achieve nrmative scres f ad recall at 38% Unaided brand awareness- Achieve nrmative level f 30% Marketing efficiency- Reduce the verall CPA by 7% Sustain brand awareness abve 45% Sme Thughts frm Marketers - Cnsumer research shws: Peple culdn t prnunce Allianz The brand is high quality, safe and secure (+) The brand is als premium, clinical and inaccessible (-) - Need t mtivate cnsumers: Lw mtivatin assciated with insurance prducts Advertising driven - Brand perates acrss all insurance segments: Stretch frm retail t high end crprate- purely price based campaigns nt an ptin 8
- Three bjectives: Help cnsumers t remember and crrectly prnunce the brand name Make Allianz mre familiar and Australian Mve brand perceptin t accessible mid-market, rather than premium The main idea f this campaign was t tie the brand name t the exclamatin peple make when smething ges wrng. Ahh!! When it cmes t insurance, just say 'Ahh-llianz'. Reasns why this wuld wrk include: Relatable, funny idea Unique t Allianz. N ther insurer culd wn it - Marketing Cmmunicatins: Televisin: Shwing multiple vignettes f everyday Australians having an Ahhh mment. Radi: Reinfrcing the aural link f Ahh Ahh-llianz YuTube: Be k buttn vides - Outcmes Sales: Exceeded plan by 25.8%, an increase f 45%YOY Qutes: Exceeded plan by 23.9%, an increase f 58% YOY Ad Recall: Achieved 59% against the nrm f 38% fr ad recgnitin Brand Link: Achieved 62% cmpared t the nrm f 52% The marginal return n investment was $12.78 - Lessns Learned: > Cmpetitive markets with lw cnsumer mtivatin is abut strng frnt-f-mind awareness requires a rbust branding device that facilitates cnsistent recall requires careful tracking f research insights and mnitring cnsumer reactins t the campaign. > Campaigns need crrect brand attributin link the creative idea t the brand s they are inseparable d s in an entertaining and engaging way. 9
Lecture 2 Chapter 3: Frm Expsure t Cmprehensin - Expsure reflects the prcess by which the cnsumer cmes int cntact with a stimulus. - Marketer (prmte) Psitin f an ad (e.g. back cver f a magazine, first and last ad during a cmmercial break) Prduct distributin- Extensive Shelf placement- Eye level - Cnsumer (reject) Blcking pp-up ads Zipping thrugh recrded cmmercials Zapping/channel surfing during cmmercials Attentin reflects hw much mental activity cnsumers devte t a stimulus. A certain amunt f attentin is necessary fr infrmatin t be perceived fr it t activate ur senses. Characteristics f attentin: Selective Capable f being divided Limited Measuring Visual Attentin 10
Enhancing Cnsumer Attentin by Making Stimuli Persnally relevant: Appeal t cnsumers needs/values/emtins/gals Typical cnsumers (e.g. 9/10 cnsumers suffer dandruff) Use mini-stries t attract attentin (E.g.: Allianz cnsumer stries) Pleasant: Attractive mdels Using music Using humur Surprising: Using nvelty Using unexpectedness Using a puzzle Easy t prcess (e.g. a vide): Imprve the prminence (causes it t stand ut) f the stimuli (e.g. size/clur/vlume) Using cncrete stimuli- The extent t which a stimuli can be imagined- Stimuli are easier t prcess if they are cncrete as ppsed t abstract Using cntrasting stimuli- Cntrast captures attentin, e.g. clur newspaper Think abut cmpeting infrmatin We may be expsed t stimuli, it may grab ur attentin but hw d we perceive it? Perceptin: The prcess by which incming stimuli activate ur sensry receptrs: eyes, ears, taste buds, skin, & s n. Size and Shape: Eye-catching shapes cntains mre Lettering: Lg, symbl, texts Clurs: Warm clurs Cl clurs Snic identity: Use sunds t supprt a brand s image Perceiving Thrugh Smell Smell and physilgical respnse mds E.g. what yu feel after smelling a freshly baked cake Smell and the influence n liking and buying Freshly baked bread attracts cnsumers Firms may strategically use smell, M&M When d we Perceive Stimuli? Abslute threshlds- Minimal level f stimulus intensity needed t detect a stimulus Differential threshlds- Intensity difference needed between tw stimuli befre they are perceived t be different 11
Hw d Cnsumers Perceive a Stimulus? Perceptual rganizatin- Prcess by which stimuli are rganized int meaningful units Figure and grund- The principle that peple interpret stimuli in the cntext f a backgrund. Clsure- The principle that individuals have a need t rganize perceptins s that they frm a meaningful whle. Gruping- The tendency t grup stimuli t frm a unified picture r impressin Bias fr the whle- The tendency t perceive mre value in a whle than in the cmbined parts that makeup a whle. Chapter 4: Memry and Knwledge What is Memry? Cnsumer Memry is a vast persnal strehuse f knwledge abut prducts, services, shpping excursins, and cnsumptin experiences. Sensry Memry: Stre sensry experiences temprarily as they are prduced Operates autmatically In its actual sensry frm (e.g. hw smething feels) Last frm a quarter f a secnd t several secnds Infrmatin may enter ur shrt-term memry If nt analysed further, infrmatin will be lst Echic memry/ Icnic memry (memry fr sunds) Shrt Term Memry: is the prtin f memry where we encde r interpret incming infrmatin in light f existing knwledge. Mst f ur infrmatin prcessing takes place here 12
Can take ne f several frms f infrmatin; Wrds, pictures, smell, feel, taste Characteristics f STM: Limited capacity Limited time Marketing Implicatins f Shrt Term Memry Imagery can affect hw much infrmatin we can prcess Imagery may affect hw satisfied we are with a prduct r cnsumptin experience. Lng Term Memry That part f memry where infrmatin is permanently stred fr later use. Tw majr types: Autbigraphical (episdic) Memry (Knwledge we have abut urselves and ur past persnal experiences Semantic Memry (General knwledge abut an entity, detached frm specific episdes) Hw Memry is enhanced STM LTM Chunking: A chunk is a grup f items prcessed as a unit- E.g.: knwing yur phne number in certain blcks- 0422/572/047 Using acrnyms t simplify names (e.g. KFC) Rehearsal: Actively reviewing material- Jingles, slgans, etc Recirculatin: Simple repetitin withut active rehearsal; e.g. repetitin f marketing cmmunicatins Elabratin: Infrmatin being prcessed at deeper levels; e.g. using cnsumer curisity mvie trailers Elabratin> Rehearsal> Recirculatin Knwledge Reflects the set f things we have learned frm the past The infrmatin are linked t/assciated with a cncept 13
A brand image is a subset f salient and feeling related assciatins stred in a brand schema- A specific schema Nt all assciatins, nly the mst salient Make the brand different frm thers in the categry Schemas and Brand Persnality Schemas can reflect the brand s persnality Brand s persnality: the way the cnsumer wuld describe the brand if it were a persn. Knwledge Structure Schemas reflect what we knw We need a way f rganising ur knwledge; bjects divided int taxnmic categries A taxnmic categry: hw cnsumers classify a grup f bjects in memry in an rderly, ften hierarchical way, based n their similarity t ne anther. 14
Taxnmic Categry Structure Retrieval Failures Decay: The weakening f memry strength ver time Interference: When the strength f a memry deterirates ver time because f cmpeting memries Primacy and Recency Effects: The tendency t shw greater memry fr infrmatin that cmes first r last in a sequence (e.g. cmmercial break) Hw Retrieval is enhanced Enhance memry first: Chunking, rehearsal and similar factrs Hwever 4 additinal factrs als affect retrieval: The stimulus itself What it is linked t- Retrieval cue The way it is prcessed (e.g. imagery in cnsumer mind) The characteristics f cnsumers Characteristics f the Stimulus Salience: E.g., big, bright, cmplex, mving, r prminent in its envirnment. Prttypical r pineer brands: We are better able t recgnize prttypical brands 15