CONSUMER
BEHAVIOR
Mm elect 101 Chapter 2: ROLE OF CONSUMER BEHAVIOR
TimothyJoshuaVentayen
Why do people buy ?
Product is a potential valuable of benefits .
“ value “ of the product
Ex. Milk shakes satisfy hunger and ease boredom. It is usually
purchased before 10 AM and most of the buyers are commuters.
It is accessible and prepared fast. ( according to research )
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Consumer Behavior’s Role in
Business and Society
It provides an input to business/ marketing.
Provides a force that shapes society.
Provides input to making responsible decisions as a consumer.
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Consumer Behavior and
Personal Growth
Facing decisions as consumers includes choices that will affect
our professional careers, quality of life, very fiver of our families.
Debt issues due to overspending / consumerism issues / credit
cards debts handling etc.
Thus :
1. Consumers associated with poor budget allocation.
2. The role of emotions in consumer decision making.
3. Avenues for seeking redress for unsatisfactory purchases.
4. Social influences on decision making, including peer pressure.
5. The effect of the environment on consumer behavior.
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Technological Changes
Why do people go to a store when they could simple purchase the
products on line and pay on digital debit system?
Ex. O shopping
Shopping online can be valuable experience but are “virtual shopping”
and “real shopping” gratifying in the same way ?
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Changing Communications
Once upon a time, consumers’ favorite form of communication was
face-to-face
But now, text messaging, face book , twitter , etc.
Marketers are fast learning how to use these tools to communicate with
consumers.
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Changing Economy
In a “downturn economy”, consumer spending has changed in several
ways.
Consumers are more cautious about spending money and react more
favorable to price-cutting policies.
If the bad economies continues , consumers will likely continue to be
more cautious about spending.
In “upturn economy” , consumer spending may turn to unwise decisions
and there are several changes too.
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Market Segmentation Practices
Undifferentiated marketing – focus on serving very large segments in which
consumers do not have specific desires.
Adopt a production orientation wherein innovation is geared primarily
toward making the production process as efficient and economic as
possible.
Certain types of widely consumed items ( gasoline, soft drinks, white
bread)
Undifferentiated market approach makes the most sense. ( toothpaste (
Crest isn’t made specially for one consumer and it is sold in huge
quantities.
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Differentiated marketing - serve multiple segments each with a unique
product offering. Emphasize matching of a product with a segment.
Also known as the one-to-one marketing. The company offers a unique
product to each individual customer and treats each customer as a
segment of one.
Casinos develop promotional packages for individual customers
based on information collected and stored about customer’s
preferences
Differentiated marketing focuses on a specific market, a “different”
market that is interested in buying a certain type of product….
Undifferentiated marketing is designed to appeal to a broad range
of customers.
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differentiated marketing strategy is when a company creates
campaigns that appeal to at least 2 market segments or
target groups. For example a store can promote a sale that
appeals to people in at least 2 cities or locations or a company
can market a product that appeals to women in at least 2 age
groups.
example of product differentiation
choosing between different mineral brands. The customer
doesn’t know the real difference but chooses one anyway.
Two ice-cream stalls selling similar ice- creams but the
customer chooses the one closer to them because he is
indifferent between them.
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Niche marketing – practiced by firms that specialize in serving one market segment with particularly unique demand
characteristics.
Is the subset of the market on which a specific product is focused. The product features aimed at satisfying specific
market needs, as well as the price range, production quality and demographics that it is intended to target. It is a small
market segment
Example
price – luxury, moderate, discount
Demographics – gender, age, income level, education l level
Level of quality – premium, handmade, economical
Psychographics – values, interest, attitudes
examples
healthy food and drinks on the go
Reusable food wrap
Buy it for life
Cool socks
Smart backpacks
Quality tea
Consumer Research
Interpretive Research - seeks to explain the inner meanings and
motivations associated with specific consumption experiences.
Researchers interpret meanings rather than analyzing the data.
Qualitative Research - tools include case analysis, clinical interviews,
focus group interviews where respondents are usually free to respond in
their own words or simply through their own behavior. Results are
considered research dependent.
Phenomenology - where researchers relies on casual interviews.
Ethnography - has roots in anthropology and often involves analyzing
the artifacts associated with consumption.
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Quantitative Consumer Research - addresses questions about consumer
behavior using numerical measurement and analysis tools.
The measurement is usually structured where consumer will simply choose a
response from among alternatives supplied by the researcher.
Discover ideas using exploratory research
Observe and interpret
Free forms
Results are subjective
Small samples
Exploratory designs
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General Hierarchy of Motivation
Maslow ‘s Hierarchy of Needs
Physiological – basic survival ( food, drink, shelter etc. )
Safety and security – the need to be secured and protected
Belongingness and love – the need to feel like a member of a
family or community
Esteem – the need to be recognized as a person of worth
Self- actualization- the need for personal fulfillment
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Classification of consumer
motivations
Utilitarian Motivation – is a drive to acquire products that consumers
can use to accomplish things. It helps a consumer maintain his or her
state , these motivations work much like homeostatis .
Hedonic motivation – involves a drive to experience something
personally gratifying. It is emotionally satisfying. Ex. On-line shopping.
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Utilitarian Motivations leads to…
Choosing the most convenient place to have lunch
Buying a tank of gas for the car
Choosing to shop with retailers that are seen as useful and
easy to use
Using air freshener to cover up a range smell in the apartment
Going gift shopping out of a sense of obligation to give a gift
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Hedonic Motivations leads to…
Going out to a trendy , new restaurant for dinner
Driving the car fast on a curvy road even when not rushed
Choosing to shop with retailers that are seen as fun and
exciting
Using air freshener because one really enjoys the smell
Giving a gift to enjoy the giving process and the joy the
recipient experiences when opening the gift
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Personality and Consumer Behavior
As the totality of thoughts, emotions, intentions and behaviors
that a person exhibits consistently as he adapts to his
environment.
Personality is unique to an individual
Personality can be conceptualized as a combination of
specific traits or characteristics
Relatively stable and interact with situations to influence
behavior
Specific behaviors can vary across time
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Value and the Consumer Behavior
Value Framework
Represents consumer behavior theory illustrating factors that
shape consumption-related behaviors and ultimately
determine the value associated with consumption.
Customer Relationship Management(CRM) – tracks detailed
information about customers so marketers can make
customer- oriented decisions that hopefully lead to longer-
lasting relationships.
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End of Chapter 2
Preapared by:
Mr. Timothy Joshua M. Ventayen, LPT
Instructor I
AIM HIGH BSBA Students!!! =)
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