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COPYRIGHT © 2006 Thomson Learning Australia Consumer Behaviour Roger D. Blackwell Clare D’Souza Mehdi Taghian Paul Miniard James Engel Requests for permission to make copies of any part of the work should be addressed to: Thomson Level 7, 80 Dorcas Street South Melbourne Victoria Australia 3206 COPYRIGHT © 2006 Thomson Learning Australia CHAPTER 1 Consumer behaviour and consumer research What is consumer behavior? Activities people undertake when obtaining, consuming, and disposing of products and services A field of study that focuses on consumer activities Scope goes beyond just why and how people buy to include consumption analysis Consumer influences Obtaining Organisational influences Consuming Consumer behavior Disposing Consumer influences Culture Ethnicity Personality Family Life-stage Values Income Available resources Attitudes Opinions Feelings Motivations Past experiences Peer groups Knowledge Organisational influences Brand Product features Advertising Word of mouth Promotions Retail displays Price Quality Service Store ambiance Convenience Loyalty programs Packaging Product availability Obtaining Consuming Disposing How you decide you want to buy How you use the product How you get rid of remaining product Other products you consider buying How you store the product in your home How much you throw away after use Where you buy Who uses the product If you resell items yourself or through a consignment store How you pay for product How you transport product home How much you consume How product compares with expectations How you recycle some products Consumption analysis Why and how people use products in addition to why and how they buy The marketing concept The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives Satisfaction with an exchange depends on satisfaction with consumption of product and the exchange of money Why Study Consumer Behavior? Consumer Behavior Determines the Economic Health of a Nation Why study consumer behaviour? Consumer behavior determines the success of marketing programs Marketing can be used to influence brand choice and purchase, while de-marketing can influence people to stop harmful consumption ‘The Customer is King’: Organisation influenced by consumer needs and wants Why study consumer behaviour? Organisations that are customer-centric use a total marketing approach to focus their resources on satisfying customers Marketing is the process of transforming or changing an organisation to have what people will buy Why study consumer behaviour? Consumer behavior determines everyone’s economic health: The individual’s decisions as a consumer determine their economic health by making more effective consumption decisions while avoiding deceptive practices harmful to them Public policy leaders and social commentators study consumer behavior to alleviate over-consumption and underconsumption by educating consumers about problems and providing assistance Consumer behaviour helps to formulate public policy Educating consumers about health Understanding consumers’ issues or problems and developing methods to reach and educate consumers Studying consumer behaviour helps formulate public policy Understanding consumers’ needs to formulate public policy and predicting behavioral changes that follow Government Protection and Education Protection from Competitive Markets Consumer behaviour affects personal policy Personal policy includes how you behave towards others and in buying situations, your values and beliefs, and how you live your life A person’s economic quality of life is determined by personal policy Evolution of consumer behavior Supply chain: all the organisations involved in taking a product from inception to final consumption - Manufacturers - Wholesalers - Retailers - Facilitating organisations Consumers’ increased influence on business Evolution of consumer behaviour Consumers’ increasing influence Wholesaler Manufacturer Manufacturing Orientation Retailer Consumer Selling Marketing Consumer Orientation Orientation Orientation US 1750-1850 1850-WWII 1970-2000 2000+ Europe 1750-1850 1760-WWII 1970-2000 2000+ Evolution of consumer behaviour Manufacturing orientation Selling orientation Marketing orientation: - Motivation research - Positivism - Postmodernism Consumer orientation Consumer orientation Beyond a marketing focus How all organisations in a demand chain adapt to changing consumer lifestyles and behaviors bringing product design, logistics, manufacturing, and retailing together Role of consumers in shaping many aspects of life – society, government, social programs, health cares, and other areas Studying consumer behaviour: Consumer research methods Observation Observing consumer behaviors in different situations such as natural or artificial settings In-home observation: examining how and when consumers use and consume products in their households Shadowing: following and observing consumers in the shopping and consumption processes. Researchers may ask questions about reasons for behaviors Physiological methods: techniques borrowed from medicine, psychology and other sciences including cameras to measure eye movement, galvanic skin response, and MRI Consumer research methods Interviews and surveys Surveys: efficient method for gathering information from a large sample of consumers by asking questions and recording responses (telephone and Internet surveys, mall intercepts, and mail questionnaires) Focus groups: a group discussion led by a moderator skilled in persuading consumers to thoroughly discuss a topic of interest Longitudinal studies: repeated measures of activities over time to determine changes in opinions, buying, and consumption behaviors Consumer research methods Experimentation Measuring cause-and-effect relationships by manipulating independent variables to determine the effects of changes on dependent variables - Laboratory experiment - Field experiment Independent variables might include number of advertisements and package design Dependent variables might include purchase intent or behavior Consumer research methods Consumption research builds on the three primary research methods to examine how people use products and services rather than how they buy them May use ethnographic tools to under-stand how values and culture influence usage of products and other behaviors May identify new uses for existing products or new product to satisfy unmet or changing consumer needs Understanding how consumers use products Underlying principles of consumer behaviour The consumer is sovereign The consumer is global Consumers are different Consumers are alike Consumers appear different but respond in similar ways to brands The Underlying Principles of Consumer Behavior The Consumer Is Sovereign The Consumer Is Global Consumers Are Different; Consumers Are Alike The Consumer Has Rights Consumer Bill of Rights Refer to DOCEP (Department of Consumer and Employment Protection) in Western Australia for information on consumer rights. Remember that consumer rights may vary across countries in the South East Asian region. Challenges for the future Gathering and interpreting information that organisations need to meet changing needs of consumers Developing effective consumer research methods to capture changes in trends and lifestyles Understanding consumer behaviour from a broader perspective as an important part of life