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Free - Conusmer Behaviour Information - Marketing Your Business.
We
have compiled information to help you to understand consumer behaviour.
1-
The fundamentals of consumer behaviour
Consumer Behaviour & Marketing Strategy – Research
• What Consumers think of a companies products and those
of competitors
• What they Think of Possible Improvements
• How they use these products
• What attitudes they have about these products and related
advertising
• What they feel about their roles in family & society
Important
points
- Customer Value is the difference between all the benefits derived
from the total product and all the costs of aquiring these benefits.
- Consumer behaviour is product-person-situation specific –
purchase and consumption behaviour may vary from product to product,
and usage variables with the same product.
Aspects
of Marketing Strategy
-
Market Segmentation - Identifying consumer groups with unique
needs and/or processes and developing specific marketing programs
targeted at individual groups
-
- Positioning Strategy – How your product is positioned
in the minds of your target customer v’s your competitors
– positioning could be real or perceived product advantages.
-
- New Market Applications – Selling the same product to
a different market or slightly different products to meet the
needs of the same market ie 100% fridge penetration – sell
a bar fridge
-
- Global Marketing – Marketing worldwide using a standardized
marketing mix
-
- The Marketing Mix – Products, Prices, Promotion, Distribution
The
Nature of Consumption
-
Consumers are problem solvers & decision making units, who
take in information, processes it in the light of the existing
situation and takes action to achieve satisfaction.
Consumer
decision making process;
1.
Situation
2. Problem recognition
3. Information search
4. Evaluation of alternatives
5. Store choice and purchase
6. Postpurchase process
Internal
influences
1. Perception
2. Learning & Memory
3. Motives, Personality & Emotions
4. Attitudes
External
Influences
1. Demographics & Lifestyles
2. The Household
3. Reference groups
4. Social Class
5. Culture
6. Values
Summary
– What is consumer behaviour & why do I need to know
about it
-
Successful marketing decisions require a thorough knowledge of
consumer behaviour
- Knowledge of consumer behaviour provides the basis for many
marketing strategies, such as product positioning, market segmentation,
new product development, new market applications, global marketing,
marketing mix decisions.
- A consumer behaviour audit can be helpful with all aspects of
a marketing decision making process including market segmentation,
product positioning & each component of the marketing mix.
2
- Situational influences
1.
Situations influence consumer behaviour
2. 4 main types of situations
3. situational influences can be categorized into 5 classes
4. situational influences effect marketing strategy
5. person-situation segmentation process
Situations
– a set of factors outside of and removed from, the individual
consumer or the stimulus object to which the consumer is reacting.
Situational
influences – the influence on purchase decisions by things
such as; physical surroundings, social surroundings, temporal
perspective, task definition, and antecedent states
Types
of situations
1. The communication situation – where & when information
is received about products and services - shopping malls, happy
or sad TV programs
2. The purchase situation – time critical, who is with the
consumer, temperature etc.
3. The usage situation – social gathering, who is traveling
(what type of car to hire) - consumption situation similar meaning
4. The disposal situation – having to dispose of a TV may
delay a purchase decision, recyclable packaging etc.
Definition
Situational
Influence – All the factors that are particular to a time
and place of observation which do not follow from a knowledge
of personal (intra-individual) and stimulus (choice/alternative)
attributes and which have a demonstrable and systematic effect
on current behaviour.
5
classes of situational influence
-
Physical surroundings – geographical or institutional location,
décor, sounds, aromas, lighting, weather, merchandise
- Social surroundings – provide additional depth to a description
of a situation, are other people present, their characteristics,
their apparent roles etc.
- Temporal perspective - time of day/season, time may also be
relative to past or future events for the situational participant
- Task definition intent to select, shop for, or obtain information
about products - A person shopping for a gift is in a different
situation than for personal shopping
- Antecedent states – momentary moods or conditions
Ritual
situations – Ie xmas, easter, weddings etc,
3-
Problem Recognition
-
The difference between habitual, limited & extended decision
making
- The methods for measuring problem recognition
- The uncontrollable factors that affect problem recognition
- The marketing strategies used to activate problem recognition
Definition
The
first stage in the consumer decision process, it is the result
of a discrepancy between a desired state and an actual state that
is sufficient to arouse and activate the decision process.
Purchaser
Involvement
Habitual
decision making - either brand loyal or repeat purchase decisions
– involving no decision as such. This occurs when there
is a very low involvement with the purchase.
Brand
Loyal Decisions - an extensive decision making process may have
previously been made the consumer will now buy without further
consideration. A high degree of product involvement & emotional
attachment to that brand is shown.
Repeat
Purchase Decisions – A consumer who considers that all toilets
are the same and may not attach importance to the product category
or the purchase.
Both
brand loyal and repeat purchasing can have a strong situational
component ie billy bob buys ‘no brand’ product for
his customers homes yet buys Caroma for his own home.
Limited
Decision Making
The
middle ground between habitual decision making & extended
decision making. Decision rules - ‘buy the cheapest toilet
I can’ ‘Dorf taps are reliable’.
Extended
Decision Making
High
level of purchase involvement, complex alternative evaluation,
internal & external information search. Post purchase dissonance
Problem
Recognition Processes
There
are different types of problems, and as consumers we encounter
several consumption problems daily ie
- Depletion
- Unplanned problem – major appliance breakdown
- Slow evolving problems – need a new computer
The
discrepancy between your actual state and your desired state,
which is sufficient to activate the decision process.
Without
recognition of a problem there is no need for a consumer decision
Desire
to resolve recognized problems
The
level of a persons desire to resolve a problem depends on 2 things
1. The magnitude of the discrepancy between the desired state
and the actual state
2. The relative importance of the problem
Types
of consumer problems
Active
problem - where the consumer is aware of, or will become aware
of in the normal course of events – petrol, food, light
bulbs
Inactive problem – is one of which the consumer is not aware
- ie the concept of felt need versus unfelt need
The
problem recognition factors to which marketing managers can’t
control
Factors
influencing one’s desired state
•
Culture/social class
• Reference groups
• Household characteristics
• Financial status/ expectations
• Previous decisions
• Individual development
• Motives
• Emotions
• The situation
Culture and social class provide broad boundaries for lifestyle
and therefore delineate appropriate desired states.
Reference
groups exert significant influence on a consumers’ lifestyle,
and when they change so does a consumers desires ie when a student
leaves school and enters the workforce change occurs ie clothing,
behaviour etc
Household
characteristics – the difference between a couple with no
children and a family of 5’s needs are completely different
ie having a child may increase a consumers desired state for financial
security
Financial
status - ie increase in salary, inheritance, gambling wins will
often changes one’s desired state and decide that an existing
state is less satisfying.
Individual
development – These characteristics are harder to distinguish
from the other states such as household lifecycle, quite simply
individual development applies a similar theory to maslows hierarchy
of needs – when someone is hungry their desired state is
to not be hungry and then higher order needs become more important.
Factors
influencing one’s actual state
•
Past decisions
• Normal depletion
• Product/ brand performance
• Individual development
• Emotions
• The efforts of consumer groups and government departments
• The availability of products
• The current situation
Past
decisions determine the consumers existing set of solutions to
problems. A consumer may be searching for a short term solution
to the desired need of a house by renting one, but the consumers
desired state may change over time to feel the need to own a house.
Normal
depletion - ie need for petrol, tyres or an oil change
The
performance of existing solutions to problems ie the quality of
a house cleaner may create the recognition of a problem (actual
state does not match desired state) products in general need to
perform on 2 levels;
• Instrumental performance – electric hot water system
delivers showers
• Expressive performance - Self concept – I want to
be green = solar hot water purchases
Individual
development
• Age development – weight problems, health problems
= need for different solutions and therefore altered desired states
• Mental development – may alter ones desired state
to want more advanced reading material, further education
• Skills development – learning to play golf well
may lead to a dissatisfaction with existing golf equipment (not
good enough product/ not respected brand within a new reference
group)
Emotions
– people are either relatively neutral or experiencing a
state where one or more emotions are aroused. Consumers will desire
to be either in a neutral state (not depressed) or in a positive
state (happy), this can be can be an important factor for problem
recognition.
Consumer
groups and Government authorities attempt to produce a particular
type of problem recognition, the goal is to produce dissatisfaction
with current solutions ie unhealthy , dangerous, environmentally
unsound.
Availability
of products – ‘not in evoked set’, inability
to afford, situational needs eg the lack of gluten free products
available until a few years ago had a major impact on the existing
state of health for many consumers.
The
current situation – the presence of others, mood, hot weather
etc.
Marketing
Strategy & Problem Recognition
Marketers
need to know what problems the consumer is facing, and what marketing
mix is required in order to solve the problems.
A
marketer may want to cause customers to recognize a problem or
in some cases seek to suppress a problem.
Measuring problem recognition
Commonly,
intuition is used to measure the recognition of consumer problems
ie quiet air conditioners, economical cars. Whilst a clear problem
may be recognized potential problems may arise such as the perceived
importance of the problem to actual consumers may be low.
Common
tools used to recognize problems
• Survey
• Focus groups
Ways
to conduct problem recognition analysis;
• Activity analysis – focus on a particular activity
ie - washing hair, driving to work, mowing the lawn. A survey
or focus group would be involved in determining what problems
will arise during the completion of such ‘activities’
• Product analysis – whilst similar to an activity
analysis a focus group may be asked what problems arise when completing
a task whilst using a specific product ie a hair dryer
• Problem analysis – a group may be asked to to name
products, brands or actions that may be associated with certain
problems ie ________ brand of washing powder is too expensive.
• Human factors research – to improve the layout of
a store human factors research may be conducted using slow motion
video, to provide optimal placement of products etc.
• Emotion research – research that focuses on the
subject of emotion with regards to a particular brand, advertising
message or whether a product was able to arouse or suppress a
specific emotion.
Responding
to consumer problems
Example
commercial responses to recognized problems
• Weekend and late night trading as a response to longer
working hours and dual income families
• Shopping on the internet, where a consumer can conduct
an information search, buy & arrange for delivery of products
and services
Generic
versus selective problem recognition
There are two basic approaches to stimulating problem recognition
– generic & selective problem recognition.
Generic
refers to the recognition of a discrepancy between an actual &
desired state that many brands within a product category can reduce.
– aim total market growth.
A
firm will engage in generic problem recognition activities, when
the perceived importance of a problem is low or
• It is early in the product lifecycle
• The firm has a high market share
Selective
problem recognition refers to the recognition of a discrepancy
that only one brand in the product category can solve –
aim maintain/gain share of existing market.
Approaches
to influence problem recognition
Influencing
the desired state
BY
offering something not previously offered even by a multitude
of brands can be seen as an attempt to change the ‘desired
state’. Ie eating healthy products or using skin care treatment.
Influencing
the perceptions of the existing state
Questioning
whether the existing state matches the desired state. Attempts
by firms to break into the desired state is usual when a new product
fits an existing need ie gum v’s Listerine pocket packs.
Status
and social acceptance are key ethical issues in terms of influencing
one’s existing state ie your not cool unless you have this.
Timing
problem recognition
Consumers
often recognize problems when purchasing a solution is either
inconvenient, difficult or impossible.
I.E.
A consumer may realize that new tyres are required for a car after
nearly having an accident.
Some
companies attempt to solve problems after they arise (ie providing
home delivery, or extended trading hours). More commonly marketers
try to trigger problem recognition in advance.
It
is often mutually beneficial to the marketer and consumer for
a consumer to recognize and solve problems before they become
actual problems.
4
- Information Search
The
internet is becoming an invaluable tool for information search
– information such as product features & benefits, plus
comparison pricing is easily available.
The
nature of information search
Internal
Search – The use of information from memory
External
Search – When an internal search doesn’t provide an
ideal solution for a problem. The search process entails external
stimuli that relates to solving the problem.
An
example of an internal search, would be if a consumer recognizes
the problem of being thirsty, and then buys Coke because he/she
remembers that previous decisions have been satisfactory, no external
stimuli is considered.
An
example of the use of external information would be if in the
same example the consumer went into a store and was attracted
by a point of sale display, and as such the consumer buys the
other brand
Types
of external information
• The opinions & attitudes of a consumers ‘network’
• Information provided in brochures, flyers, articles &
books
• Experience through trialing a product or service
• Marketer generated communications through mass media,
displays & sales staff.
Ongoing
& exploratory searching
This
form of external search is generally conducted in the absence
of problem recognition. In general the information search is a
pleasurable experience for the searcher & the information
may be used at a later date.
For
example a person actively involved in bathroom renovations, may
continually seek information prior to actually recognizing problem
recognition.
Market
mavens (experts) are usually involved in an ongoing search, this
search allows the expert the opportunity to stay an expert with
up to date knowledge about the market.
Information
types
Evaluative criteria
The features or desired characteristics of a product, to meet
a consumers need.
A consumer may not be fully informed of what they should be looking
for (internal search) so they conduct an external search to compile
some/all of the evaluative criteria required to, meet a need.
IE searching the internet, speaking with friends and speaking
to sales personnel.
Once an evaluative criteria is compiled, products or brands are
considered or not considered depending on an awareness or unawareness
set.
Awareness
Sets
Evoked
set – Brands that a consumer is willing to consider to solve
a ‘problem’
Inert
set – Brands that a consumer is aware of but has no specific
‘liking’ for.
Inept
set – Brands to which a consumer is aware, and will not
be considered to solve a problem. The consumer dislikes this brand.
Brands
within the ‘evoked set’ are compared versus the evaluative
criteria imposed on a purchase decision.
This
type of decision making process would not usually occur for a
habitual or low involvement purchase.
Sources of information
•
Memories of past searches, and personal experience – low
involvement learning. (internal)
• Reference groups such as friends, family & others
(external)
• Independent sources such as consumer groups (external)
• Sales people, advertising & online (external)
• Experience related information – ie product trial
(external)
Information search online and marketing strategy
How
a company currently views the internal is of strategic importance
to marketers.
Some
companies may think of the internet for use in the following ways;
• Promotional purposes only
• Distribution channel
• Payment system
Consumers
expect that a company has a relevant and up to date website, with
the address listed on all external communication.
Some
of the latest strategies employed by companies to ‘harness
the power’ of the internet include;
• Online shopping (distribution channel)
• Customer retention/ongoing relationships
• Information source (opinion leadership)
It
is commonly accepted that a marketer needs to consider how the
internet is being used by consumers within a given market.
Extent
of external information search
External
information search provides the opportunity for marketers to ‘speak’
to a consumer, unfortunately depending on the decision not a great
deal of external searching may be conducted.
If
a habitual or limited decision making, decision is being undertaken
little or no external searching is conducted – this accounts
for the majority of purchases.
Different
measures of external information search are used
1. number of stores visited, 2. number of alternatives considered,
3. number of personal sources used, 3. overall of combination
of measures.
Information relating to external information search
• External information search is skewed towards limited
search
• Most consumers perform very little external search immediately
prior to purchase
• In general consumers searching for services rely on personal
sources more than non personal sources.
Types
of searchers;
• Non searchers
• Limited searchers
• Extended searchers
Critical
information
• 50% of purchases involve no information search prior to
purchase
• 38% of purchases involve limited decision making
• 12% of purchases involve extended decision making
• An individual may display all types of decision making
pertaining to the decision
• Extended information searches tend to be above average
in terms of education & income, heavy users of mass media
& opinion leaders.
Cost/benefit
analysis – external information search
• Some consumers may engage in extended information search
for a product where as another consumer may not - (not worth their
time)
• The benefits of external information search may be tangible
& in tangible - lower price, desired product, greater confidence,
more enjoyment.
• Frustration, fatigue & other non-monetary factors
may be taken into account when a consumer asks one self does the
benefit exceed the cost?
Factors
influencing cost V’s benefit when searching for information.
Market
Characteristics
• Number of alternatives – The more alternatives available
to fix a need generally requires an extended information search.
If too many models & brands are available a consumer could
shop less, or else stick to one retail outlet especially if the
range of models/brands varies in each store. Some marketers develop
large numbers of models in response to this, and may offer exclusive
products to deter price competition between stores.
• Price range – If prices differ for the same product
between different outlets this may make consumers shop around
more often, if a product is sold at the same price everywhere
shopping around will result in no financial gain and hence consumers
may be deterred.
• Store distribution – The number, location &
distances between stores affect the amount of stores a consumer
will chose to visit, if you had a ‘precinct of stores’
offering similar solutions information search/comparison shopping
will increase.
• Information availability – too much information
will result in overload and, a consumer may withraw completely
or else use only minimal information. Readily available information
tends to produce learning over time therefore, when a consumption
problem is realized they may not involve an external information
search and rely on prior learning
• Advertising - Used frequently as a source of information
for routine purchases. In general a consumer prefers TV, Print
& to a lesser extent radio. Newspapers seem to be the most
credible source of consumer information, if numerous studies can
be ‘believed’. Easily accessed information is now
available on the internet, and independent authority sites seem
to be the final place for information search.
Product
Characteristics
•
Price level & product differentiation
• More expensive brands are more differentiated than cheaper
brands, in general to justify price.
• The higher the price level – the more external information
search
• Features, style & appearance may play a big part in
external searching as the importance of the difference increases.
• Positive products will generally be searched for externally,
products that provide neutral or negative emotions will require
less external information search.
Consumer Characteristics
Learning,
Memory & Experience
•
Confidence in ones knowledge of solutions for a recognized problem
is an important determinant of external search
• A satisfying experience with a brand is a positively reinforcing
process
• Basic knowledge of a particular solution to a recognized
problem may stimulate information search – where as someone
who doesn’t know anything about a solution may not search
at all
Shopping
Orientation
Individuals
are divided into generic groups as they display similar characteristics
1. The adventurous
2. Born to shop
3. Professionals
4. Practical/Low risk/Elderly
Social
Status
Middle
income people conduct external information searching more often
than people of higher or lower income.
Household
life cycle & age
As
people age and have more established lives, the prevelance of
external information search decreases
Product
involvement
The
more involved with a product category a consumer is the more they
will search externally for information about it.
Perceived
Risk
• Instrumental – As the risk of ‘product performance’
requirements increase so does external information searching
• Self Concept – high fashion & clothing involve
higher levels of information search because the self concept risk
is high
Perceived
risk is a major cause of product involvement
Situational
Characteristics
•
As the time available for solving a consumer problem increases
external information search increases & vice versa.
• Gift giving tends to increase information search through
additional perceived risk
• Shoppers with limited energy will search less –
time poor, depressed etc.
• Information search is generally reduced with bargaining
at the point of purchase
Information
search patterns & marketing strategy
To
understand the nature of searching conducted by your target audience
prior to creating a marketing strategy is critical for a successful
result. Marketers need to know the type of decision making influences
& the evoked set, and it’s influence.
Maintenance
Strategy – habitual decision making
• If a consumer habitually buys your product, the strategy
is to continue that.
• Product quality & distribution (no stock outs) is
key
• Brand reinforcement advertising may be used
Disrupt
strategy – habitual decision making
• Employed by brands that are not in the evoked set of the
consumer
• The target market engages in habitual decision making
• Consumers are not generally seeking external information
so the task is hard
• Eye catching products – in supermarkets are examples
of a disrupt strategy
• Cash backs and rebates – can also be used in a disrupt
strategy
• Comparative advertising is also used to disrupt habitual
decision making
Capture
strategy
When
a brand is in the consumers evoked set and a marketer wants to
gain as many sales as practical – point of sale displays
etc – limited decision making
Intercept
strategy
Brand
not in the evoked set for limited decision making purchases -
Intercept the consumer during information search for brands in
a consumers evoked set, co-op advertising, POP displays &
shelf space etc.
Preference
strategy
When
a consumer uses extended decision making, a marketer tries to
add a new brand in the evoked set
• A strong position with regards to the consumers evaluative
criteria
• Information readily available
• Encourage independent groups to trial the brand
• Sales personnel sell the F&B’s
• Company pays extra commissions for the sale
• Point of purchase displays
Acceptance
strategy – extended decision making
Similar to the preference strategy although the marketer must
also motivate a consumer to learn about a brand
• Long term advertising – low level learning
• Don’t sell the brand - attempt to move the brand
into the evoked set
• When a purchase situation arises the consumer will accept
this brand into the ‘evoked set’
5
- Evaluative criteria – and alternative selection
•
The nature of evaluative criteria
• The measurement of evaluative criteria
• Marketing strategy & evaluative criteria
The
nature of evaluative criteria
•
Features, Attributes & Benefits.
• Evaluative criterion may not be associated with benefits
desired ie consumer buys toothpaste with fluoride to stop cavities
– so they don’t want to buy fluoride but they know
it stops cavities.
• Price can be used as an evaluative criteria
Evaluative
criteria can differ in
• Type
• Number
• Importance
Type
– The type of evaluative criteria used could be in many
different forms- tangible & intangible, or even how they feel
about a brand.
Measuring
evaluative criteria
Market
research – determine the evaluative criteria used
Direct
methods
• Focus groups
• Individual surveys
This
type of researching requires that consumers are honest about the
reasons why they purchase and don’t purchase specific brands
or products.
Direct
methods of market research do not always work, as consumers may
not actually be aware of the true reasons why they do or don’t
purchase.
Indirect
techniques –
• Perceptual mapping – find the similarity of brands
(not evaluative criteria)
• Projective techniques – individual surveys in the
3rd person
Determining
brand performance v’s evaluative criteria
•
Rank ordering scales – rank a set of brands, advertisements
or features in terms of performance, taste or importance
• Semantic-differential scales – A consumer is asked
to rank an item on a bound scale (ie 1-5)
• Likert scales – Where a consumer is asked the level
of agreement or disagreement to a statement.
Determining
the importance of evaluative criteria
Direct
measurement – constant sum scale a consumer is asked to
rank a set of evaluative criteria that adds up to a total figure
ie 100
Indirect
measurement – conjoint analysis, provides data on the relative
importance of each evaluative criteria and how one would be traded
off for another. Segmentation of similar consumers may results,
requiring differing products.
How
to conduct conjoint analysis
1. Research the main evaluative criteria
2. Create several hypothetical products including differing criteria
3. Ask focus group to rank products in ‘most liked’
to ‘least liked’
Individual
judgment & evaluative criteria
How
can a consumer accurately judge quality with regards to a purchase?
• Knowledge
• Engineering
• Craftsmanship
Most
consumers will make an indirect judgment of a product by using
the reputation of a brand or the price level. (surrogate indicators)
A
surrogate indicator – an attribute such as price used to
estimate the level of a different attribute – such as quality.
Individual
judgments – are they accurate?
Consumers
are adequately trained to accurately judge complex criteria such
as quality & durability, but can judge things such as price
based on comparison.
Sensory
discrimination – The ability of a consumer to distinguish
between similar stimuli
Just
noticeable difference – The minimum amount of change in
a stimulus that needs to occur for consumers to notice the difference.
Wikipedia
definition - In psychophysics, a just noticeable difference, customarily
abbreviated with lowercase letters as jnd, is the smallest difference
in a specified modality of sensory input that is detectable by
a human being. It is also known as the difference limen or the
differential threshold.
The
sum for just noticeable difference is as follows
JND
= the noticeable change in attribute/ initial level of attribute
= The constant
Weber’s
law or the weber-fechner law
For many sensory dimensions, the 'jnd' is an increasing function
of the base level of input, and the ratio of the two is roughly
constant (that is the jnd is a constant proportion/percentage
of the reference level). Measured in physical units, we have
The
use of surrogate indicators
Most
consumers use price as a surrogate indicator for quality in atleast
some of the items they purchase.
Predictive
value – The consumers perception that one attribute is an
accurate predictor for an other
Confidence
value – The cosnumers ability to distinguish between brands
on the surrogate indicator.
Price
In
general the most widely used surrogate indicator, due to it’s
high confidence value.
This
factor decreases when – there are physical product differences,
prior product use or extended information searches.
Price
is used when a consumer feels they aren’t able to judge
a products quality or their degree of involvement is limited.
Unfortunately
price is not actually always a good surrogate indicator for quality
as there are many expensive products of low quality , and many
inexpensive products of high quality.
Brand
Brand
is commonly used as a surrogate indicator of quality, some products
can sell for twice the price of other products because they have
a desirable image.
A
quality brand can interact with or replace the impact of relative
price
Marketing
strategy – relating to evaluative criteria & individual
judgements
Blind
tests – a product test where the recipient is not exposed
to the brand name. (halo effects of the brand do not come into
effect)
A
marketer may use a blind test before releasing a product, to ensure
that the JND markers are reached for a particular evaluative criteria
Marketers
might also want to introduce a new evaluative criteria into a
consumers decision making process. – Consumer education
to look for certain product features.
Marketers
also may make direct use of surrogate indicators – a price
quality relationship exists for a lot of products ‘you get
what you pay for’. Some marketers have increased the price
of products and actually sold more because of the price quality
relationship.
Advertising/Communications
are also used by marketers to enhance the brand=quality relationship
Celebrity
endorsement is another way of using surrogate indicators in marketing,
if ‘XYZ celebrity is endorsing it then it must be of good
quality’
Country
of origin is often used as a surrogate indicator of quality ie
Germany for cars & sometimes ‘support Australia’
type promotions are successful but generally only if country of
origin is not an important evaluative criteria. (unless ie Wine
where australia is seen as premium)
Colour
can be used as a surrogate indicator ie hot sauce is in red bottles,
and creamy sauces are in creamy bottles. Using green in an advertisment
suggests natural & wholesome products.
Warranties
& guarantees can be used as direct surrogate indicators, although
if universally accepted a warranty war may start leading to major
market profitibility issues.
Decision
Rules
There
are 5 common decision rules
• Conjunctive – I will consider all or I’ll
buy the first brands that are all right on the attributes that
I think are important
• Disjunctive – select all or any or the first brand
that surpass a satisfactory level on some criteria
• Elimination by aspect – Start with the most important
attribute and elimate products until only 1 is left
• Lexicographic – Start with the most important attribute
and select that product if there are 2 or more then follow down
from most important to least important until one brand outperforms
the others
• Compensatory – select the brand that provides the
highest overal score for your evaluative criteria when added together.
Which
decision rules do consumers use ?
Consumers
do not assign numerical weights to their decisions the above decision
rules are ‘vague’ decision rules that consumers use.
Low
involvement decisions will more frequently involve non compensatory
decision rules (conjunctive, disjunctive, elimination & lexicographic)
Compensatory
decision rules are most likely to be used in extended decision
making searches (high involvement)
Affective
choices
Functional
product decision rules differ to purchases that are affective
in nature. IE movie choice, fashion clothing
Many
advertisments appeal to people’s ‘self-concept’
rather than to any cognitive argument
Decision
rules – marketing in the real world
•
Marketers need to be aware of which decision rules are used by
their target market – they may differ for different types
of purchases.
• Decision rules need to be considered when positioning
products and arming sales people with ‘features & benefits’
1.
Identify the target markets dominant decision rule
2. understand how a products strangths and weaknesses apply to
that decision rule
3. Develop a strategy to strengthen position within the decision
rule
= Increased chance of selection
6
- Outlet selection & buying behaviour
Brand
then outlet or outlet then brand ?
There
are 3 ways these decisions could possibly be made
a. Outlet selection then brand selection
b. Brand selection then outlet selection
c. Or simoultaneous selection of outlet & brand
In
a lot of purchases the brand will be chosen first and then an
outlet will be chosen on a different set of evaluative criteria
ie lowest price, location, image, service.
Although
also very common is outlet being selected rather than brand, according
to research over 2/3rds of brand decisions are made in the supermarket
environment.
Simultaneous
selection may occur for example, a cosnumer may buy a 2nd or 3rd
‘ideal’ product from a store that is close and has
great service.
Brand
first – marketing style for the manufacturer
• Brand image & feature advertising
• Limited distribution strategy
Outlet
first decision sequence – marketing style for a manufacturer
• Point of purchase advertisements
• Key outlet distribution
• Programs to increase shelf space (or maintain)
• Incentives to sales personel for support
•
Manufacturers often supply advertising dollars to be featured
in a retailers adds
•
Manufacturers sometimes include the name of retailers to induce
purchasing
Attributes
affecting retail outlet selection
A
consumer in general has a differing set of evaluative criteria
for their store purchase decision.
Outlet
image
Dimensions
& components of store image
Merchandise
Quality, selection, style, price
Service Lay-by plan, sales personnel, easy return, credit, delivery
Clientele Customers
Physical facilities Cleanliness, store layout, shopping ease,
attractiveness
Convenience Location, parking
Promotion Advertising
Store atmosphere Congeniality, fun, excitement, comfort
Institutional Store reputation
Post transaction Satisfaction
Retail
advertising
Price
advertising is an important function for retail advertising, for
groceries specifically price advertising is a major component
or their advertising strategy.
Sometimes
price advertising doesn’t get the recognition it deserves
as spill over sales aren’t taken into account . People will
be attracted by the low price offer and buy other things in addition
or instead of.
Price
advertising may not always work due to the fact that price isn’t
the reason why someone may be shopping from a particular store,
sometimes it is better to accentuate things such as service &
delivery.
Decisions
for price advertising
a.
How large will the discount be
b. Should a comparison price or reference be used
c. Should verbal statements accompany the advertisement
Does
50% off or buy one get one free sound better ?
• Varies across markets
• Every day items either appears to be equivalent
• For perishable products 50% off seems better than buy
one get one free
Advertisers
commonly use a reference price or percentage off to enhance the
chances of a consumer realizing that savings are on offer.
Outlet
location & size
•
If all things are equal then a consumer will choose the closest
store
• Size of outlet is important in store choice
• Unless a consumer is specifically interested in fast service
or convenience, larger outlets are preferred over smaller outlets
Retail
attraction model or retail gravitation model
A
method for calculating the level of store attraction, based on
store size & distance.
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