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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.! ! 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.! ! Influences!on!consumer!behaviour!include:!purchase!and!use!behaviour,!demographics! and!household!structure,!needs,!emotions,!values!and!personality,!group!influences.! ! 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).!! ! 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.!! ! 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)! ! • • • • • 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.!! ! 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! o o o o 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.!! o o o 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” ! $ $ $ $ $ $ $ $ $ $ $ $ $ Types!of!learning! Conditioning! o o o o 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.! ! 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.! • • ! Operant!conditioning!is!widely!used!by!marketers.!The!most!common! application!is!keeping!products!at!a!consistent!quality,!so!that!the!use!of! • 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.!! ! Cognitive!learning! ! 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! ! 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! • o o o 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! • o o ! 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.! • o o ! 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! "