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Week 1 – Introduction to the Module Sarah Hill [email protected] Todays Agenda Names and Introductions Blackboard – VLE Introduction Lecture to Consumer behaviour Consumer behaviour defined The study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires. Michael R. Solomon et al , 2014 Consumer behaviour is the activities people undertake when obtaining, consuming and disposing of products and services. Blackwell,Miniard and Engel 2001 Consumer behaviour Figure 1.2 The pyramid of consumer behaviour The issue of strategic focus Interdisciplinary research issues in consumer behaviour The issue of strategic focus ) Importance of consumption Consumption plays an important role in our social, psychological, economical, political and cultural lives. Possessions Here’s some more wisdom from Russell W Belk, sociologist and consumer behaviorist, and his inquiry into consumer behaviour and consumption: “…Possessions are an important component of sense of self. The most direct form of evidence is found in the nature of self-perceptions. Additional, especially striking evidence is found in the diminished sense of self when possessions are unintentionally lost or stolen. More evidence in the role of possessions in sense of self comes from anthropological studies of the way possessions are treated ritually and after death.” We are what we have. It’s a simple concept, and a basic premise of consumer behaviour. But, it has boggled the minds of the best psychologists, sociologists, consumer behaviorists, advertisers and marketers for half a century at the least. For, as it turns out now, this simple concept is really a combination of two others. Not only are we what we are seen to be (the ‘me’ concept), we are also what is seen to be ours (the ‘mine’ concept). It seems we, as human beings, create our identities using both these – the ‘me’ and the ‘mine’ – concepts. http://runawaysun.blogspot.com/2006/09/possessi ons.html Question What influenced you in your last major purchase decisions? Dan Ariely- TED lecture Are we in control of our own decisions? http://www.ted.com/talks/dan_ariely_asks_ are_we_in_control_of_our_own_decisions.h tml Buyer Characterisitcs Cultural Social Personal Culture Psychological Reference Groups Subculture Family Roles & Status Age& lifecycle stage Occupation Economic circumstances Lifestyle Personality & self-concept Social class Source: Kotler et al Motivation Perception Learning Beliefs & attitudes Buyer What is culture? Culture is the set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions. Subcultures Nationalities Religion Racial groups Geographic regions HSBC is the first to offer Islamic financial products. Social factors Reference groups Family Roles and status Personal factors Buyer’s age Lifecycle stage Occupation Economic situation Lifestyle Personality Self-concept The Life Cycle Midlife Transition Adolescent Transition Early Maturity Childhood Birth Source: Admap September 1997 Middle Age Late Maturity Late-life Transition Death The “Me” Concept Cultural Social Personal Culture Psychological Reference Groups Subculture Family Roles & Status Age & lifecycle stage Occupation Economic circumstances Lifestyle Personality & self-concept Social class Source: Kotler et al Motivation Perception Learning Beliefs & attitudes Buyer Psychological factors Motivation Perception Learning Beliefs and attitudes Personality “Perception is the process of sensing, selecting & interpreting consumer stimuli in the external world” (Wilkie 1994) “… is how we see the world around us” (Schiffman & Kanuk 2003) The “Me” Concept Cultural Social Personal Culture Psychological Reference Groups Subculture Family Roles & Status Age & lifecycle stage Occupation Economic circumstances Lifestyle Personality & self-concept Social class Source: Kotler et al Motivation Perception Learning Beliefs & attitudes Buyer Successful Marketing Relies on knowing and understanding your customer – their likes/dislikes and wants/needs Relies on being able to focus on groups of similar customers – via a process of segmentation Why Segment? Better matching of customer needs - increased brand loyalty Enhanced profits -ability to raise prices in some premium sectors Retain customers e.g. through the FLC Targeted communications e.g. a clearer message about benefits possible Market segment share - e.g. market share & not size which dictates profitability Segmenting consumers Geographic Demographic Psychographic Behavioral Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Consumer Psychology Consumer Psychology Model of Buyer Behaviour Marketing Other Stimuli stimuli Buyer’s Black Box Buyer’s Responses Product Price Place Promotion Buyer Buyer charact Decision -eristics Process Product choice Brand choice Purchase timing Purchase amount Economic Technological Political Cultural The Black Box Model (Solomon et al 2008) Buyer Decision process What about a packet of at the till? What about your regular pint of ? What about the way you choose a How do you choose between ? and ? Engel, Kollat and Blackwell Model 1968 Buyer Decision Process Need Recognition Information search Evaluation of Alternatives Purchase decision Postpurchase behaviour Low or high involvement? How is the model impacted by the level of involvement in the product category? Source: Kotler et al , Marketing Management , 2009 http://sylwia1603.blogspot.co.uk/2012/05/consumer-buying-behaviour.html Consumer behaviour is a process Figure 1.1 Some issues that arise during stages in the consumption process Marketing’s impact on consumers • Marketing activities exert an enormous impact on individuals. Consumer behaviour is relevant to our understanding of both public policy issues (e.g. ethical marketing practices) and of the dynamics of popular culture. Packtyping! Time to play 64 different cards Hold the pack with the descriptive words facing you Pick 12 words from the pack that best describes the answer to the question you have set yourself Yes – No – Maybe The key is to choose the words that are ‘most you’ rather than those that are ‘quite you’ What the cards mean.... 7/8 cards – indicates a dominating influence 5/6 cards – forms a powerful influence 4 cards – significant influence 3 cards – important influence 2 cards – supporting influence 1 card – latent influence New ideas Risk taking Above the line – looking to the future Along the line – the present, the here and now Results Action People Emotion Below the line – reflecting on the past Facts Certainty What does it mean? Hounds creativity, challenge, risk taking, unearthing new opportunities Pointers analysis, facts, certainty, evaluation, measurement Guard dogs direction, results, decision making, steering the team Terriers delivery, action, doing it, being hands-on Coachdogs people, pastoral care, relationships, listening Mastiffs communication, performing, sharing ideas, networking Retrievers principles, process, trust building, continuous improvement Sheepdogs organisation, planning for success Packtypes Communication Hounds (back of an envelope) fast talkers, lots of stories, through drawings & doodling. They like big ideas... (they hate detail) Pointers (spreadsheet/laptop) love facts and figures, right and wrong, interested in detail, tend to be clear and unemotional. Guard dogs (iPhone/Blackberry) Anything meaningful – news, priorities etc. Like short updates, getting to the point. Terriers (let the action do the talking) Like good news & bad news, they challenge ask questions, only communicate when necessary. Need to remember communication is a two way process. Coachdogs (over a tea/coffee) talk about people issues & feelings, enjoy listening & becoming emotionally involved. Informally the better. Mastiffs (in the bar or on a stage) talk about the latest ‘thing’, very friendly & conversational, love to tell stories & perform. Retrievers (spade a spade) truth & getting things right, down to earth & straight talking, frank & purposeful. Sheepdogs (emails & texts) Sorting out tasks, paying attention & taking notes, keen on updates & to-dolists.