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Week$1$&$Chapter$1$–$Consumer$behaviour$and$marketing$strategy$
Marketing!strategy!–!the!combination!of!product,!price,!distribution!and!promotion!
most!suited!to!a!particular!group!of!consumers.!
Consumer!behaviour!–!a!discipline!dealing!with!how!and!why!consumers!purchase!(or!
don’t!purchase)!products!and!services.!
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Understanding!consumer!behaviour!entails!finding!out!what!consumers!think!of!a!
company’s!products!and!those!of!competitors,!what!they!think!of!possible!
improvements!in!these!products!and!how!they!use!these!products,!what!attitudes!they!
have!about!these!products!and!related!advertising,!what!they!feel!about!their!‘roles’!in!
family!and!society!and!what!their!hopes!and!dreams!are!for!themselves!and!their!
families.!
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Influences!on!consumer!behaviour!include:!purchase!and!use!behaviour,!demographics!
and!household!structure,!needs,!emotions,!values!and!personality,!group!influences.!
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To!survive!in!a!competitive!environment,!a!business!must!provide!target!customers!with!
more!value!than!its!competitors.!
Customer!value!is!the!difference!between!all!the!benefits!derived!from!the!total!
product!and!all!the!costs!of!acquiring!these!benefits.!Providing!superior!customer!value!
requires!the!business!to!anticipate!and!react!to!customer!needs!faster!and!better!than!
its!competitors.!Today’s!consumers!hold!firms!responsible!not!only!for!the!quality!of!
their!products!and!advertising,!but!also!for!the!social!and!environmental!consequences!
of!manufacturing!and!using!the!products!(green!image).!!
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Consumer!behaviour!is!a!complex,!multidimensional!process!that!is!productGpersonG
situation!specific!as!it!recognises!personal!characteristics,!product!characteristics!and!
consumption!situation.!Ultimately,!the!understanding!of!consumer!behaviour!is!
required!by!managers!for!the!purpose!of!making!better!marketing!decisions.!!
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Aspects!of!marketing!strategy:!
• Market!segmentation!–!the!basis!of!most!marketing!strategies!involving!
identifying!consumer!groups!with!unique!needs!and/or!purchasing!processes,!
and!developing!specific!marketing!programs!targeted!at!individual!groups.!!
Benefit!segmentation!involves!a!focus!on!the!particular!outcome!consumers!seek!
from!using!a!product!and!is!often!a!potent!indication!leading!to!the!choice!of!a!
positioning!E.g.!different!outcomes!for!hair!products!(straight,!dry)!
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Positioning!strategy!–!Important!to!know!how!your!product!is!
positioned/perceived!in!the!minds!of!target!consumers.!By!using!consumers!to!
make!comparisons!a!business!can!learn:!which!attributes!are!critical!to!the!
consumer,!where!the!business!stands!with!these!attributes!compared!to!
competitors,!the!degree!to!which!different!segments!of!market!share!same!
perceptions.!Positioning!can!be!based!on!real!or!perceived!advantages.!!
New!market!applications!–!continued!success!for!products!when!new!markets!
are!discovered.!E.g.!fridges!are!a!mature!product,!and!they!have!been!redesigned!
to!a!compact!size,!repositioned!as!a!convenience!item!for!office,!bedroom.!
Global!marketing!–!form!of!international!marketing!that!aims!to!target!
particular!consumer!segments,!regardless!of!where!they!are!located!in!the!
world,!using!standardised!marketing!mixes!(no!changes!in!elements!of!
marketing!mix!or!nature!of!population!segment!to!whom!product!is!marketed).!
Although!cohesive!and!cheaper,!may!fail!when!there!is!no!universal!appeal.!
International!marketing!relies!mainly!on!understanding!similarities/differences!
between!domestic/international!consumers. !
Marketing!mix!–!To!be!successful!a!new!product!must!solve!a!consumer!
problem.!Therefore,!marketers!need!to!thoroughly!understand!both!the!needs!
and!desires!of!potential!consumers,!and!in!which!product!features!can!satisfy!
them.!E.g.!flat!screens!vs.!old!bulky!tv’s.!Success!depends!on!whether!the!
targeted!consumers!believe!that!the!products!can!deliver!what!is!claimed.!!
Consumer!behaviour!audit!–!systematic!review!of!all!important!aspects!of!
consumer!behaviour.!Aims!at!minimising!the!chance!of!overlooking!a!critical!
behavioural!dimension.!It!does!not!guarantee!a!successful!strategy,!but!can!
greatly!increase!the!likelihood!of!a!successful!marketing!program.!!
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How!consumer!influences!drive!marketing!decisions:!
Consumer!influences!
External!
Culture!and!values,!demographics,!income!and!social!class,!
influences! reference!groups!and!households,!marketing!activities!
Internal!
influences!
Needs,!motives!and!emotions,!perceptions!and!memory,!personality!
and!lifestyle,!attitudes!
Situational! Physical,!time,!social,!task!
influences!
DecisionG
process!
influences!
Problem!recognition,!information!search,!alternative!evaluation,!
outlet!selection,!purchase,!postGpurchase!processes!
!!
Marketing!decisions!
Market!
Target!segment(s),!single/multiple!target!segments!
segmentation!
Product!
positioning!
Key!productGdifferentiation!variables,!position!relative!to!
competition!
Marketing!
Product!features,!price!level,!promotional!appeal,!place!
Exposure!
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when!a!stimulus!comes!within!range!of!our!sensory!receptor!nerves.!For!an!
individual!to!be!exposed!to!a!stimulus!requires!only!that!the!stimulus!be!placed!
within!the!person’s!immediate!environment.!An!individual!is!generally!exposed!
to!no!more!than!a!small!fraction!of!the!available!stimuli!either!randomly!or!
deliberately!
go!to!great!lengths!to!ensure!that!certain!advertisements!are!noticeably!big!and!
colourful!so!they!are!above!the!absolute!threshold!(lowest!level!of!stimulation)!
selective!exposure:!process!by!which!individuals!deliberately!seek!out!
exposure!to!certain!stimuli!and!avoid!exposure!to!others!
e.g.!can!only!watch!one!channel,!one!magazine!at!a!time.!SelfGselecting!nature!of!
exposure!can!be!seen!with!‘zapping’!when!you!switch!channels!or!fastGforward!
ads.!!
Attention!
occurs!when!the!stimulus!activates!one!or!more!sensory!receptor!nerves!and!the!
resulting!sensations!go!to!the!brain!for!processing.!!
o Anyone!wishing!to!communicate!effectively!with!consumers!must!understand!
how!to!obtain!attention!after!obtaining!exposure.!!
o They!may!recruit!celebrities!e.g.!Jennifer!hawkins,!to!draw!audience!attention!to!
the!message,!or!use!clever!and!engaging!commercials.!!
o Attention!is!determined!by!3!factors:!the!stimulus,!individual!and!situation!
o Stimulus!factors!include;!!
• Size!and!intensity!(loudness!or!brightness)!
• colour!and!movement!
• position,!isolation!(if!its!by!itself!more!likely!to!be!noticed),!format!(way!
its!presented),!!
• contrast!(advertisements!that!differ!from!the!type!consumers!expect!for!
a!product!category!often!motivate!more!attention),!!
• compressed!messages!(messages!sped!up!to!increase!attention),!
information!quantity.!
o Individual!factors:!!
• Personal!characteristics!likely!to!influence!how!incoming!information!is!
perceived!and!processed!
• Interest!is!a!reflection!of!overall!lifestyle!as!well!as!a!result!of!longGterm!
plans!(becoming!manager)!and!shortGterm!needs!(hunger).!Individuals!
will!attend!to!information!relevant!to!their!current!needs.!!
• Perceptual!vigilance:!consumers!demonstrate!a!heightened!awareness!
of!stimuli!relevant!to!their!current!needs!and!interest!
• Perceptual!defence:!consumers!demonstrate!decreased!awareness!that!
not!relevant!to!them!
o Situational!factors!
those!elements!in!the!situation!that!are!likely!to!influence!consumer!behaviour.!It!
includes!stimuli!in!the!environment!other!than!the!focal!stimulus!(advertisement)!
and/or!temporary!characteristics!of!the!individual!that!are!induced!by!the!
environment,!such!as!time!pressure!or!very!crowded!store.!!
Program!involvement;!the!nature!of!the!program!or!editorial!content!in!which!the!ad!
appears!has!the!potential!to!influence!its!impact!e.g.!ad!for!Twisties!were!located!in!
boring!programs!in!order!to!capitalise!on!the!fact!that!bored!people!are!more!prone!to!
snacking.!!
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items!are!placed!in!highGtraffic!areas!to!capitalised!on!increased!
exposure.!Shelf!position!influences!which!items!and!brands!are!
allocated!attention.!PointGofGpurchase!displays!also!attract!attention!to!
sale!and!highGmargin!items.!Stores!are!designed!with!highly!visible!
shelves!and!overhead!signs!to!make!locating!items!(an!info!processing!
task)!as!easy!as!possible.!!
Brand!name!
and!logo!
development!
Marketers!believe!that!the!name!of!a!company!or!product!does!affect!
the!way!it!is!perceived.!Terms!with!relevant,!established!visual!images!
e.g.!Apple!are!easier!to!recognise!and!recall!than!are!more!abstract!
terms.!Seek!to!ensure!company!logo!looks!good!and!project!accurate!
image!of!product.!!
Media!strategy!
Must!find!the!media!that!the!target!market!is!interested!in!and!place!
the!advertising!message!in!these!media.!!
Advertisement!
and!package!
design!
Must!capture!attention!and!convey!meaning.!Interest!in!a!product!
tends!to!arise!only!when!the!need!for!the!product!arises.!Marketers!try!
to!communicate!with!them!at!times!when!interest!is!either!low!or!nonG
existent.!Caution!must!be!used!to!ensure!that!attentionGattracting!
devices!do!not!have!a!negative!impact!on!attention/interpretation!of!
main!message.!
Warning!labels! Ethical!and!legal!considerations!require!marketers!to!place!warning!
and!posters!
labels!on!productsG!made!less!obvious!so!does!not!have!a!bad!effect!on!
the!product!
Advertising!
evaluation
Successful!ad!must!accomplished:!exposure!to!reach!consumer!(how!
often!is!it!seen),!attention!attended!by!consumer,!proper!
interpretation,!stored!memory!to!allow!retrieval!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Regulation of
advertisements
and packaging
Ethical concerns can arise when marketers apply their understanding of the
process of perception eg endorsements
Advertisements aimed at children- don’t realise it’s a commercial and do
hear the disclaimers eg “each sold separately”
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Types!of!learning!
Conditioning!
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Conditioning:!learning!that!is!based!on!the!association!of!information!and!a!
response!(behaviour!or!feeling)!
conditioned!learning!simply!means!that!through!exposure!to!some!stimulus!and!
a!corresponding!response,!we!learn!that!the!stimulus!and!response!are!either!
associated!(go!together)!or!not!associated!(don’t!go!together).!
Classical!conditioning:!process!of!using!an!established!relationship!between!a!
stimulus!and!a!response!to!bring!about!the!learning!of!the!same!response!to!a!
different!stimulus!
• E.g.!hearing!popular!music!(unconditioned!stimulus)!elicits!a!positive!
emotion!(unconditioned!response)!in!many!individuals.!If!this!music!is!
consistently!paired!with!a!particular!brand!of!beer!(conditioned!
stimulus),!the!brand!itself!will!come!to!elicit!the!same!positive!emotion!
(conditioned!response).!!
• After!a!sufficient!number!of!lowGinvolvement!‘scannings’!or!glances!at!a!
commercial,!the!association!may!be!formed.!It!is!important!to!note!that!
what!is!learned!is!generally!not!information,!but!emotion!or!an!affective!
response,!which!leads!to!learning!about!the!product!or!to!a!product!trial.!
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Operant!conditioning:!process!of!learning!whereby!the!consumers!response!to!
a!stimulus!is!either!reinforced!by!a!reward!or!discouraged!by!a!punishment!
(also!known!as!instrumental!conditioning)!
• Differs!from!classical!conditioning!primarily!in!terms!of!the!role!and!
timing!of!the!reinforcement!
• For!operating!conditioning!trial!precedes!liking,!(whereas!for!classical!it!
is!the!reverse).!This!type!of!conditioning!often!involves!the!actual!usage!
of!the!product!e.g.!free!sample,!because!if!they!try!the!brand!and!like!it!
(reinforcement)!they!are!likely!to!take!the!next!step!and!purchase!it!in!
the!future.!
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Operant!conditioning!is!widely!used!by!marketers.!The!most!common!
application!is!keeping!products!at!a!consistent!quality,!so!that!the!use!of!
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the!product!to!meet!a!consumer!need!is!reinforcing.!Other!application!
include:!direct!mail/personal!contacts/email!after!a!sale!that!
congratulate!the!buyer!fro!making!a!wise!purchase,!giving!extra!
reinforcement!for!shopping!at!a!store/purchasing!a!brand!such!as!prizes!
(toys!in!cereal!box),!free!product!samples!or!coupons!to!encourage!
product!trial!!!this!is!called!shaping!–!process!of!encouraging!partial!
responses.!
Operating!conditioning!is!more!likely!to!occur!in!highGinvolvement!
situations.!Using!a!particular!product!implies!at!least!some!involvement.!!
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Cognitive!learning!
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o Cognitive!learning:!mental!activities!of!humans!as!they!work!to!solve!
problems!or!cope!with!situations!
o Involves!learning!ideas,!concepts,!attitudes!and!facts!that!contribute!to!the!
ability!to!reason!and!learn!relationships!without!direct!experience!or!
reinforcement!
o Iconic!rote!learning:!learning!the!association!between!2!or!more!concepts!in!
the!absence!of!conditioning!
o E.g.!a!person!may!see!an!ad!saying!panadol!is!a!headache!remedy,!and!associate!
the!new!concept!of!panadol!with!the!existing!concept!headache!remedy.!There!is!
neither!an!unconditioned!stimulus!nor!a!direct!reward!involved.!Features!a!lot!in!
lowGinvolvement.!Numerous!repetitions!of!a!simple!message!may!result!in!this!
essence!of!the!message!being!learned.!
• Vicarious!learning/modelling:!type!of!learning!based!on!the!
observation!and!imitation!of!the!behaviour!of!others!
o It!is!not!necessary!for!consumers!to!experience!a!reward!or!punishment!directly!
in!order!to!learn.!Instead,!they!can!observe!the!outcomes!of!others!behaviour!
and!adjust!their!own!accordingly.!!
o Common!in!both!low!and!high!situations.!!
o Group!influence!plays!part.!
• Reasoning:!!the!individual!engages!in!creative!thinking!to!restructure!
and!recombine!existing!info!as!well!as!new!info,!forming!new!
associations!and!concepts!as!a!result.!
o Most!highGinvolvement!decisions!generate!some!reasoning!
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General!characteristics!of!learning!
Importance:!value!that!the!consumer!places!on!the!information!to!be!
learned!
More!important!to!learn!the!more!effective!and!efficient!you!will!be!
• Message!involvement:!extent!to!which!the!consumer!is!involved!with!
the!message!eg!making!interesting!advertisements!
• Mood:!a!transient!state!of!mind!that!is!generally!not!tied!to!a!specific!
event/objectG!advertisements!that!enhance!a!persons!mood!would!
increase!learning!
• Reinforcement:!anything!that!increases!the!likelihood!that!a!given!
response!will!be!repeated!in!the!future!
Positive!reinforcementG!pleasant!consequenceG!trying!on!jeans!until!you!find!the!
one!best!for!you!
Negative!reinforcementG!removal!of!unpleasant!consequences!
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Punishment:!opposite!of!reinforcement,!any!consequences!that!
decrease!the!likelihood!that!a!given!behaviour!will!be!repeated!in!the!
future!eg!if!I!try!sugarless!solo!I!wont!buy!it!again!cause!its!gross!
• Repetition:!repeated!exposure!of!consumers!to!information!
Increases!the!strength!and!speed!of!learning!
Pulsing:!rapid,!frequent!repetitions!of!advertising!messages!
• Corrective!advertising:!advertising!undertaken!if!a!commercial!or!series!
of!commercials!has!caused!a!group!of!consumers!to!learn!false!
information!about!a!brand,!a!second!series!of!commercials!designed!to!
cause!unlearning!and!speed!extinction!of!the!incorrect!learning!eg!maccas!
trying!to!fight!rumours!of!poor!quality!food!
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Stimulus!generalisation:!whenever!a!response!is!learned!in!a!stimulus!
other!stimuli!similar!to!those!in!the!initial!situation!acquire!some!
tendency!to!produce!that!response!
Cheap!brands!mimics!expensive!brands!
Rub!of!effect!
• Stimulus!discrimination:!learning!to!respond!differently!to!somewhat!
similar!stimuliG!consumers!learn!to!differentiate!over!similar!products!
• The!response!environment!
• Strength!of!original!learning!affects!ability!to!retrieve!relevant!
information.!
• Similarity!of!the!original!learning!and!the!type!of!learning!is!important.!
• Marketers!aim!to!replicate!these!situations.!
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Memory!
ShortIterm!memory:!portion!of!total!memory!that!is!currently!activatedG!working!
memory!
• Two!kinds!of!information!processing!
• Elaborative!activity:!Use!of!previously!stored!experiences,!values,!attitudes,!
beliefs!and!feelings!to!interpret!and!evaluate!information!in!the!working!memoryG!
strengthen!information!
• Maintenance!rehearsal:!continual!repetition!of!a!piece!of!information!in!order!to!
hold!it!in!current!memory!for!the!use!of!problem!solving!or!transferral!to!long!
term!memory!
" LongIterm!memory:!unlimited,!permanent!storage!of!learned!itemsG!can!store!
many!types!of!information!such!as!concepts,!decision,!rules,!processes!
– Semantic!memory:!basic!knowledge!and!feeling!people!have!about!a!concept!
– Episodic!memory:!memory!of!a!sequence!of!events!in!which!a!person!
participated!eg!first!dateG!evoke!these!images!through!advertising!
" Schematic!memory:!patterns!of!association!around!a!particular!conceptG!form!of!
memory!that!is!concerned!with!the!association!and!combination!of!chunks!of!
information!
"