Consumer Behavior: Understanding the Psychology of Shopping, Study notes of Consumer Behaviour

Download Consumer Behavior: Understanding the Psychology of Shopping and more Study notes Consumer Behaviour in PDF only on Docsity!

CONSUMER BEHAVIOR

AAU SCHOOL OF COMMERCE

By: Mulugeta Gebremedhin (PhD)

DEFINITION OF CONSUMER BEHAVIOR

Consumer behavior is defined as the behavior of consumers displayed in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs. (Schiffman and Kanuk)

WHAT IS CONSUMER BEHAVIOR? (CTD…)

Individuals or groups acquiring, using, and disposing of products, services, ideas, or experiences. Arnould, Price, and Zinkhan

WHAT IS CONSUMER BEHAVIOR? (CTD…) Acquiring includes: Receiving Finding inheriting Producing purchasing Consuming encompasses: Collecting Preparing Displaying Storing Wearing Sharing Evaluating serving Disposing spans: Giving Throwing away Recycling and depleting

ELEMENTS OF CONSUMER BEHAVIOR The totality of decisions Whether What Why How Where When How much How often About the consumption Acquisition Usage disposition Of an offering Products Services Time Ideas By decision making units Initiator Influencer Information keeper Decider Purchaser user Over time Days Weeks Months years

CONCEPTUAL MODEL OF CONSUMER BEHAVIOR

The Psychological Core

• Motivation, Ability, &

Opportunity

· Exposure, Attention, &

perception

· Categorization &

comprehension

· Attitude formation

· Memory & retrieval

The Process of Making

Decisions

• Problem recognition

· Information search

· Judgment & decision

making

· Post- decision

processes

The Consumers Culture

• Regional, ethnic & religious

influences

· Social class influences

· Age, gender, & family

influences

· Social influences

· Psychographics: values,

personality, and lifestyles.

Consumer Behavior Outcomes

Adoption of, resistance to, and

diffusion of innovations

MARKETING IMPLICATIONS OF CONSUMER BEHAVIOR

1. Developing and Implementing Customer- Oriented Strategy  (^) How is the market segmented?  (^) How profitable is each segment?  (^) What are the characteristics of consumers in each segment?  (^) Are customers satisfied with existing offerings?  (^) Selecting the target market  (^) Positioning 2. Developing Products and Services  (^) What Ideas Do Consumers Have for New Products?  (^) What Attributes Can Be Added to or Changed in an Existing Offering?  (^) What Should Our Offering Be Called?  (^) What Should Our Package and Logo Look Like?

MARKETING IMPLICATIONS OF CONSUMER BEHAVIOR (CONT’D…)

3. Making Promotion and Marketing Communications Decisions  (^) What are our advertising objectives?  (^) What should our advertising look like?  (^) Where should advertising be placed?  (^) When should we advertise? 4. Making Pricing Decisions  (^) What price should be charged?  (^) How sensitive are consumers to price and price changes? 5. Making Distribution Decisions  (^) Where are target consumers likely to shop?

THE ORIGIN AND IMPORTANCE OF CONSUMER BEHAVIOR

Consumer behavior is regarded as a relatively a new field of study. The concepts of consumer behavior are borrowed from  (^) Psychology (the study of the individual)  (^) Sociology (the study of groups)  (^) Social psychology (the study of how individuals operate in groups)  (^) Anthropology (the influence of society on the individual) and  (^) Economics.  (^) Consumer behavior became an important field of study with the development of the ‘marketing concept’.

THE MARKETING CONCEPT  (^) According to the marketing concept, marketers first need to define the benefits sought by consumers in the marketplace , followed by the drafting of marketing plans supporting the needs of consumers.  (^) Assael summarized the importance of understanding consumer behavior " Consumers determine the sales and profits of a firm by their purchasing decisions. As such, their motives and actions determine the economic viability of the firm ".  (^) To be a successful marketer, organizations need to understand consumer needs and behavior and draft their marketing strategies to incorporate such behavioral needs of consumers.

CONSUMER MOTIVATION DEFINED

Motivation is defined as “an inner state of arousal ” directed to achieving a goal.

A motivated consumer is energized, ready, and willing to engage in goal-relevant activity.

EFFECTS OF CONSUMER MOTIVATION

 Goal – Relevant Behavior

When motivation is high, consumers are willing to engage in goal

relevant behavior.

Motivation not only drives behavior consistent with a goal but also

creates a willingness to expend time and energy engaging in goal

relevant behavior.

High-Effort Information Processing and Decision Making

 When motivation to achieve a goal is high:

consumers pay careful attention to the goal

consumers attempt to comprehend the information presented

Consumers critically evaluate the information and

Consumers try to remember the information

 Felt Involvement

Motivation evokes a psychological state in consumers called

involvement.

Felt involvement is the psychological experience of the motivated

consumer such as interest, excitement, anxiety, passion, & engagement.

WHAT AFFECTS MOTIVATION (CONT’D)  (^) Personal Relevance – A marketing stimuli will be personally relevant when:

 It solves the consumers problem (Propecia–Hair loss treatment)

 It bears on the consumers self concept (Clothing – professional, student,

sport team)

  (^) Marketing implication : Make an ad personally relevant to the consumer. (Volvo: This Car Saved My Life )  (^) Values, Goals, and Needs

 Values are culturally held beliefs about what is good or appropriate. E.g.

education, cigar etc.

 Goals are objectives that we would like to achieve. (ACCA certification to

become a licensed auditor).

 An internal state of tension caused by disequilibrium from an ideal/desired

physical or psychological state.

TYPES OF NEEDS: MASLOW’S NEED HIERARCHY