Marketing Seminar

1. Marketing Seminar Chapter 6

2. Would you purchase this good?

3. What about this one?

4. What do you prefer for lunch?

5. What is your choice?

6. ANALYZING CONSUMER MARKETS Chapter 6 Felipe Ribeiro Ivan Ribeiro Paula Ribeiro Paulo Magalhães Pedro Ivo Rodrigo Cabral Yuri Renó

7. Chapter Objectives How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? How do marketers analyze consumer decision making? Feel free to ask questions at anytime!

8. WHAT INFLUENCES CONSUMER BEHAVIOR? Consumer Behavior is the study of how individuals, groups and organizations make decisions to satisfy their needs and wants. The consumer’s buying behavior is influenced by cultural, social, and personal factors.

9. Cultural Factors Fundamental determinants of a person’s wants and behavior Consists Subcultures Social Classes: members who share similar values, interests, and behavior according to the social stratification

10. Reference Groups Family Role and Status Social Factors

11. Social Factors – Reference Groups Membership Groups Primary Groups Secondary Groups Opinion Leaders: individual whose ideas and behavior serve as a model to others. Aspirational Groups Dissociative Groups

12. Social Factors - Family Family Orientation Family Procreation

13. Social Factors - Roles and Status Social groups: family, organizations and clubs Roles: activities a person is expected to perform Status: degree of importance of each role

14. Personal factors – Age & Life cycle Factors related to age: clothes, food and recreation Life cycle: Family x Psychological (patterns) (critical life events)

15. Personal factors – Occupation & Economic Circumstances Developing products for occupational groups Economic events: purchase power x effects

16. Personal factors – Personality & Self - Concept Personality: each of the different human psychological style. How can we describe it? Self-confidence, sociability, defensiveness and adaptability. How does it influence? Self-concept, ideal self-concept and other’s self-concept

17. Personal factors – Lifestyle & Values “A lifestyle is a person’s pattern of living in the world as expressed in activities, interests and opinions” (Kotler & Keller)

18. Personal factors – Lifestyle & Values Lohas Gen Next Time constrained x money constrained

19. Personal factors – Lifestyle & Values Core values: The point marketers want to achieve. Why?

20. KEY PSYCHOLOGICAL PROCESSES The starting point for understanding consumer behavior is the stimulus-response model:

21. KEY PSYCHOLOGICAL PROCESSES • Four key psychological processes fundamentally influence consumer responses to the various marketing stimuli: • Motivation • Perception • Learning • Memory

22. Motivation: Freud, Maslow, Herzberg • A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act. • Three theories of human motivation • Sigmund Freud • Abraham Maslow • Frederick Herzberg

23. Motivation: Freud Sigmund Freud assumed that the psychological forces shaping people's behavior are largely unconscious, and that a person cannot fully understand his or her own motivations. Whisky can meet the need for social relaxation, status, or fun.

24. Motivation: Maslow Human needs are arranged in a hierarchy.

25. Motivation: Maslow People will try to satisfy their most important needs first. Maslow's theory helps marketers understand how various products fit into the plans, goals, and lives of consumers.

26. Motivation: Herzberg • two-factor theory: • dissatisfiers (factors that cause dissatisfaction) • satisfiers (factors that cause satisfaction) • Satisfiers must be present to motivate a purchase • Avoid dissatisfiers • Identify and supply the major satisfiers or motivators of purchase in the market.

27. PERCEPTION A motivated person is ready to act. Perception influences how the motivated person acts in the situation. In marketing, perceptions are more important than the reality Three perceptual processes: selective attention, selective distortion, and selective retention

28. SELECTIVE ATTENTION Attract consumers' notice Which stimuli people will notice Marketers may attempt to promote their offers intrusively to bypass selective attention filters.

29. SELECTIVE ATTENTION People are more likely to notice stimuli that relate to a current need People are more likely to notice stimuli that they anticipate People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli

30. SELECTIVE DISTORTION Tendency to interpret information in a way that will fit our preconceptions Consumers will often distort information to be consistent with prior brand and product beliefs. Can work to the advantage of marketers with strong brands "blind" taste tests

31. SELECTIVE DISTORTION Diet Coke X Diet Pepsi Equally split in preference on a blind basis Diet Coke(65%), Diet Pepsi(23%), others see no difference.

32. SELECTIVE RETENTION We are likely to remember good points about a product we like and forget good points about competing products. Works to the advantage of strong brands Explains why marketers need to use repetition in sending messages to their target market—to make sure their message is not overlooked.

33. Learning When people act, they learn. Learning involves changes in an individual's behavior resulting from experience. Learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement.

34. Learning A drive is a strong internal stimulus impelling action. A Cue is a minor stimulus that determines when, where, and how a person responds. Example: buying a Dell computer: you generalize your response to a similar stimulus. Discrimination means that the person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly.

35. Learning • Learning theory teaches marketers that they can build demand for a product when they associate it with strong drives, use motivating cues, and provide positive reinforcement. For example: • A new company can enter the market by appealing to the same drives that competitors use and by providing similar cue configurations, because buyers are more likely to transfer loyalty to similar brands (generalization); • or the company might design its brand to appeal to a different set of drives and offer strong cue incentives to change (discrimination).

36. Memory • All the information and experiences we encounter in our life can end up in our long-term memory. • Cognitive psychologists distinguish between: STM: a temporary repository of information LTM: a more permanent repository.

37. Memory Most widely accepted views of long-term memory structure involve some kind of associative model formulation. Any type of information can be stored in the memory, including information that is verbal, visual, abstract, or contextual. Memory becomes activated because external information is being encoded (e.g., when a person reads or hears a word or phrase) or internal information is retrieved from LTM (e.g., when a person thinks about some concept).

38. Memory Consumer brand knowledge is linked to associations. The strength and organization of these associations will be important determinants of the information that can be recalled about the brand. Brand associations consist of all thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on, related to the brand.

39. Memory Marketing can be seen as making sure that consumers have the right types of product and service experiences so that the right brand knowledge structures are created and maintained in memory. Companies like Procter & Gamble create mental maps of consumers that show their knowledge of a particular brand in terms of the key associations that are likely to happen in a marketing setting and their relative strength, favorability, and uniqueness to consumers. The following figure displays a very simple mental map:

40. Hypothetical Dole Mental Map

41. Memory • ENCODING: • Memory encoding refers to how and where information gets into memory. • It can be characterized according to how much a person thinks about the information and the manner a person thinks about it. • The quantity and quality of processing determines the strength of an association.

42. Memory • In general, the more attention placed on the meaning of information during encoding, the stronger the resulting associations in memory. • One reason why personal experiences create such strong brand associations is that information about the product is likely to be related to existing knowledge.

43. Memory A number of different scenarios characterize how consumers might process an ad: 1. Some consumers almost don’t notice the ad, so the amount of processing devoted to the ad is extremely low, resulting in a weak brand association. 2. The ad may catch the attention of other consumers, resulting in sufficient processing, but these consumers may devote most of the time during the ad. 3. Another group of consumers may not only notice the ads but may think of how they had a wrong impression of the brand and that they would feel good with this brand.

44. Memory • Repeated exposures to information provide greater opportunity for processing and thus the potential for stronger associations. • But high levels of repetition for an uninvolving, unpersuasive ad is unlikely to have sales impact as lower levels of repetition for an involving and persuasive ad.

45. Memory RETRIEVAL: • Refers to how information gets out of memory. • The strength of a brand association increases both the probability that the information will be accessible, and how easily it can be recalled. • Successful recall of brand information by consumers does not depend only on the initial strength of that information in memory. Three factors are particularly important:

46. Memory The presence of other product information in memory can produce interference. It may cause the information to be either overlooked or confused. The time, since exposure to information at encoding affects the strength of a new association. Information may be "available" in memory but not "accessible". The particular associations for a brand that "come to mind" depend on the context in which the brand is considered.

47. UNDERSTANDING CONSUMER BEHAVIOR 47 Who buys our product or service? Who makes the decision to buy the product? Who influences the decision to buy the product? How is the purchase decision made? Who assumes what role? What does the customer buy? What needs must be satisfied? Why do customers buy a particular brand? Where do they go or look to buy the product or service? When do they buy? Any seasonality factors? How is our product perceived by customers? What are customers' attitudes toward our product? What social factors might influence the purchase decision? Do customers' lifestyles influence their decisions? How do personal or demographic factors influence the purchase decision?

48. TheBuyingDecisionProcess THE FIVE-STAGE MODEL

49. THE FIVE-STAGE MODEL

50. PROBLEM RECOGNITION A problemorneed, triggeredby internalorexternalstimuli, thatrises to a drive.