Unsuccessful Tactics Are A Result of Ignoring the Consumer…

• Marketers often price an item as “x.99”– A pack of soap: 3.99

• Why not 4?

• Dim Lighting in upscale restaurants

• Why?

• In the US, the Marlboro cowboy is usually shown alone

• In Japan, the cowboy is shown in a group

• Why?

• Coca-Cola was a big failure when it was first introduced in mainland China

• Why?

• McDonald’s in India: no beef in their hamburgers!

• Why?

• Mercedes-Benz sponsors certain sports

• Which types does it sponsor? Which does it not sponsor?

• Why?

“ Come alive with Pepsi ”

• “Come alive out of the grave” - GermanyGermany

• “Pepsi brings your ancestors back from the grave” - ChinaChina

• Real estate agents in Vancouver, Canada are able to command higher prices for house numbers which contain the number “8”, and lower prices for number “4”

• Why?

Consumer Behavior is the Process Involved

When Individuals or Groups Select, Use, or Dispose off

Products, Services, Ideas or Experiences (Exchange) to Satisfy

Needs and Desires.

• CB = Entire Decision process– Not just how you choose a brand– What happens in your mind before you buy:

• What makes you like the brand? (advertising, friends’ opinions, family influence)

• What makes you remember brand information you see in an ad (memory issues?)

– Also: what happens after you buy• Are you satisfied/dissatisfied?

– So, a large part of CB = mind of consumer!

CCONVENIENCE. . .ONVENIENCE. . .CONVENIENCE. . .CONVENIENCE. . . CONVENIENCE. . CONVENIENCE. . . .

• The average consumer (a woman) takes just 21 minutes to do her supermarket shopping

• Buys an avg. of 18 items out of 30 – 40,000

• Browse time decreased 25% over past 5yrs. & she doesn’t bother to check prices

Applied Marketing

• Out of 11000 products launched by 77 companies, only 56% are present five years later – Kuczmaski & Associates

• Only 8% of new product concepts offered by 112 leading companies reached the market. Out of this 83% failed to reach marketing objectives – Group EFO Ltd., Marketing News, Feb 1, 1993, Pg 2

“MEET THE NEW CONSUMERand smile when you do because she is your

boss. It may not be the person you thought you knew. Instead of choosing from what you have

to offer, she tells you what she wants. You figure it out how to give it to her.”

-Fortune Editor

The Consumption Process

Consumer Buying Behavior

• Consumer Buying Behavior Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption.

• Study consumer behavior to answer:

““How do consumers respond to marketing How do consumers respond to marketing efforts the company might use?” efforts the company might use?”

Marketing’s Impact on Consumers:Consumption Typology

Consumption Typology Consumption Typology Explores the Different Ways That Products and Experiences Can Provide Meaning to People.

There Are 4 Distinct Types of Consumption Activities:

Consuming as Experience

Consuming as Integration

Consuming as Classification

Consuming as Play

An Emotional or Aesthetic Reaction to Consumption Objects

Express Aspects of Self or Society

Communicate Their Association With Objects, Both to Self/ Others

Participate in a Mutual Experienceand Merge Self With Group

Complete model of consumer behavior

Stimuli (marketer dominated, other)

External search

Memory

Internal search

Exposure

Attention

Comprehension

Acceptance

Retention

Search

Need recognition

Alternative evaluation

Purchase

Outcomes

Dissatisfaction Satisfaction

Individual differences• resources• motivation & involvement• knowledge• attitudes• personality, values, lifestyle

Influences• culture• social class• family• situation

Start

The Dark Side of Consumer BehaviorCompulsive ConsumptionCompulsive Consumption

>Behavior is Not Done by Choice>Gratification is Short-Lived>Strong Feelings of Regret or Guilt Afterwards

Illegal ActivitiesIllegal Activities

> Consumer Theft (Shrinkage)>Anti-consumption

– Culture Jamming– Cultural Resistance

Consumed ConsumersConsumed Consumers

> People Who Are Exploited for Commercial Gain in the Marketplace.

Addictive ConsumptionAddictive Consumption

> Gambling

Deceptive Advertising

• An advertisement which is potentially misleading or literally false is deceptive.

• Potentially misleading ads are difficult to evaluate because miscomprehension may often occur.– Miscomprehension is a problem for firms because the audience

does not understand the message being delivered.

• The FTC regulates deceptive advertising, but not miscomprehension.

Big Take-away

• Marketing cannot be driven only by the product, or the competition, or the channel

• Marketing is about understanding the consumer’s side: – why they like/dislike something

• Coke was popular, but management did not understand why! Not the taste…

– More (recent) scientific evidence (not taste, but brand name)…

• In other words, important to understand Consumer Behavior!