Course Notes Consumer Behaviour

Current trends in CB: 1. Health, wellness; 2. Ecological things: automobile industry, detergents 3. Price sensitivity ( a lot of Discount chains are gaining in market share) 4. Social responsibility (fair trade) 5. Convenience (internet banking, 24/7 stores or stores at the gasoline stations, apps for phones) 6. Social networking/communication 7. Information overload (95%) – we perceive and further process only a small portion of information – 1-5% 8. Ubiquity (?????????????) – we are always on 9. Picture-based communication. the pictures superior in regard to memory. 10. Low-involvement: typically an advertiser are reaching consumers in a low-involvement situation (when u are not interested in a specific as for a specific product); product-placement 11. Hybrid Consumer – earlier it was easier to reach a target consumer. Hybrid consumer – consumer which may act in one manner in one situation, and in another situation in a different way, it is very difficult to predict the behavior. And u don’t know his income and so on, u cannot guess. 12. Emotions Picture-Text gap – company should avoid it.

PERCEPTION: * Visual * Auditory * Olfactory – smell * tactile * gustatory (taste) Depends on 1) the involvement we have: whether we are willing to process the information, how interesting it is for us. 2) if we already have information about sth, it is easier to process; 3) if the message itself is interesting or very striking, grabs ur attention. In formation is process in our sensory memory, then processed in short-term memory and then maybe transferred to the long-term memory. Sensory memory –> Short-term memory-> long-term memory.

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Sensory memory – very short durations but very complex and with high capacity. Some of the info goes to STM – depending on our involvement etc. STM has a longer duration (a bit), but smaller capacity.. Then info can be transferred to LTM (maybe we can combine the info we already had in LTM with STM and store this info in LTM), LTM has long duration and big capacity. 2 competing theories about forgetting: 1) info is still in LTM but we cannot access it; 2) knowledge decays Recall recognition Recall is not very high usually. Recall scores lower than recognition. Free recall – to recall sth without help.

Added recall – a type of free recall, when smb gives u hints, which help u to guess, but it is still a free recall. How to get in contact with the recipients Create attention: Getting attention in the competition environment is fundamental Three basic activation technics: Activation through: * physical intense stimuli (colors (ex. red, orange – very captivating); size – the bigger the better); * cognitive surprising stimuli – we don’t expect to see sth, it is against our scheme, against our expectations; * emotional stimuli. We can combine all these technics.

For the exam: Example: there is an ad given and we have to analyse the activation technique of it: we should go step by step through all activation categories, and then make a summary – as conclusion: an activating or not an activating ad, will have a success in a competitive environment or not. Ex. : Activation is important because of the information overload. And the consumer chooses which info to process or not. With regard to activation process here we can analyse 3 activation technics: blablabla ex. size and colors are important issues – red color, big size… rose – emotions.

But a kind of distraction from a brand name – everybody looks at the rose, not at the brand name. Here: all the activation go to rose, hot to the Logo of the company. So, high activation, but low attention to the brand name and a danger of distraction. Advertisers want to create a positive atmosphere in an ad, connect a product with positive emotion, positive perception by making ad with positive atmosphere depicted. There are a lot of interchangeable ads: ads from different brands which use similar technics, so it is difficult to recognize them, which one belongs to which brand.

Role of emotions in consumer behavior. Emotional differentiation e. g. washing powder ->some technical function -> we need to talk about quality e. g. jeans -> is quality different? Technical quality similar; design a bit different but brands make emotions -different from competitors via emotions e. g. energy drinks – similar ingredients -> different emotions: e. g. red bull gives wrings – positive emotional profile Blind tests: people don’t know what they drink e. g. wine, coke etc. e. g. washing powder – spe – emotion – getting a good deal – emotional branding strategies: 1) to creative of a positive perception of the atmosphere – u put ur product close to emotional stimulus. E. g. – car and the woman staying next to the car – transfer of information; perfumes. How to do it? Find strong positive pictures. But there can be negative effects (e.. g. car perceived as less safe and more expensive). Disadvantages: there can be similar commercials, it is easily copies by competitors (not long term). And if u raise expectations and they are not satisfied – > dissatisfaction. ) creation of a brand specific emotional world : e. g. red bull – wings; Marlboro, vodka Absolut. Aim here – clear emotional positioning. Brand positioning – a specific position that is in the mind of consumer – from perspective of CB; it differentiates one brand from another, and it is about being attractive for consumers. Multi-sensual branding: try to communicate a brand via different senses. when people recognize that there is a persuasive intent and don’t like it, their expectations fell dramatically.

Multi-model theory of learning (Engelkamp/zimmer) (look this theory up in more details for exam): we have different areas in our brain for every sense and these areas are interconnected, so if we use multi-sensory branding then there are memory traces in different areas of the brain. – as the areas are interconncted – a complete picture of the brand is established in the brain. Dual Coding Theory (Paivio): Visual coding (pictures) vs verbal coding (texts, words). He tries to measure recall and recognition of pictures, concrete words and abstract words.

If smb tells a concrete word –Table- a nd at the same time says it – we remember it as visual subject and as a word table at the same time. If u just show a subject –table – we code it in a visual code, but find a corresponding word for it as well – dual coding. Abstract word – democracy – people code a word in a verbal code, but they have a proble, finding a related picture. Paivio made such experiments. Results: where the same in a long and short-term, both for recall and recognition: it is easier to find a related word for a picture, then to find a related picture to a concrete word, and for abstract word it is the most difficult thing.

Results: pictures are better remembered then words – picture superiority effect. LEARNING THEORIES Classical Conditioning : UCS (unconditioned stimulus) – triggers a specific reaction: in Pawlow case – food is a UCS, salivation – is a unconditioned reaction (UCR) to the stimulus. +bell – CS. At the beginning it was not related to salivation. But after several repetition it was also able to elicit salivation. e. g. in the real life : a jingle is not connected to a specific brand, but after commercials u connect a specific brand to a specific brand. Eg. Marlboro – pictures WWW – wild west world.

At the beginning it was UCS – freedom/adventure – UCR. After constant relation of Marlboro to this WWW in commercials, it is able to elicit this associations of freedom, adventure. Another example –red bull with wings. Suppose we have a brand and this Brand triggers specific reaction which is attractive and makes positive reaction. Now we want to make a brand extension – add additional products e. g. we want that this new brands are though a little diffirent but not to different so that they can trigger the same reactions, remind us of the previous brand.

Instrumental conditioning (operant condition): – when we get rewards when we do sth. E. g. with a bird : skinner box, when bird starts eating corns from a specific side it is rewarded. E. g. from real life – reward programs of airlines, gather coupons – then discounts, coffee and kebab card – after ten – one for free. The too above mentioned theories are SR-theories (Stimuli-response theories) Learning by observing (modelling): e. g. restaurant – u go to a restaurant where there are a lot of people, not the empty one; a child uses the toothpaste that the parents use.

Cognititve learning – learning through understanding. E.. g u see the manual of the somputer. Look in internet where u can buy trousers. So, looking for information. Usually different types of learning are included. In the exam we should then just find good argumentation, why this or other types. Semantic memory – what we know about a specific product, ex. a car, or what I know about Apple computer etc. we as marketers need to know what consumers know about a specific product in order to communicate. Episodic memory– related to actions : if I have a car what I should do to drive it.

We have to know the consumer’s episodic knowledge as well in order to position a product correctly. Involvement – the amount of interest a customer shows towards the product. In the situation of low-involvement – conditioning will work better, high-involvement learning is more cognitive. Is it necessary to try to from drive people to change from low-involvement to high-involvement? No simple yes or no. Lambda curve Lambda curve Normally the consumers are in the underactivated situation. Sometimes it can be overactivated – when there is the overload of information.

The question is if we should try to increase activation… If u are in a relaxed situation it is really difficult to really alert u but try to increase performance. For commercial maybe the most relevant is to stay in the middle (in the area where relaxed in the middle). Why not to try to activate till the maximum? 2 issues here: 1)whether it is possible to activate till the maximum? It is difficult, many commercials… so normally won’t be possible, only till the moderate level 2) the commercials very often exaggerate the information, show better then the products are.

And then, if a person is activation to the maximum, the he starts questioning – so better till the moderate level. MOTIVATIONS: achievement of goal is important: u have a goal and wants to achieve it. Maslow pyramid. Conflict: 2 types of conflicts: 1. cognitive conflict – clash of information stored in the cells of ur brain. 2. motivational conflict – conflict of interests. Theory of cognitive dissonance (Festinger): if people have acognitive dissonance they don’t like it and try either to avoid it or reduce it.

Motivational conflicts: 2 Tendencies: * Approach e.. g u need a new suit, go to retailor and like it, want to have this suit * Avoidance: u look at the price and it is 5000 euros… expensive… Motivational conflict But u know u need a suit for an interview, so have to buy it. 3 approach behaviours: 1. Approach-approach – typically between 2 or more positive alternatives 2. approach-avoidance (ambivalence) – typically 2 sides of 1 alternative (positive and negative features): I want to buy but too expensive. 3.

Avoidance-avoidance – typically between 2 negative alternatives (example: there 2 types of winter tyres, u don’t like them and don’t want to buy them but have to do it) Most of the consumer situations are without conflicts (think about buyig products at the grocery) In some purchase situation can be a lot of conflicts may be included. How stable are the conflicts and how can we solve this motivational conflicts: He can deliver or stress the features and gives arguments in favor of one of the available alternatives – in the case of approach-approach conflict (it is not so difficult to solve it).

Approach-avoidance: is more difficult: either increase an approach or reduce the avoidance – but it should be a significant step (ex. 2 euros discount won’t help really) Product placement: study : relation between technology and perception of product placement. Hypothesis: 1) subtle brands suffer from tit as there is less attention left for processing this info 2) prominent brand profit from it 2) attitude for the prominent brand improves through the enhancement of technologies. The results showed: 1st hypothesis is true: subtle brands suffered fro the inhancement of technology, both for recall and recognition.

For the prominent brand: with the enhancement of technology from 2D to 3D the recognition and recall increased, then from 3D to 4D – decreased… ATTITUDES. Attitude – relatively stable predisposition. Standard Learning hierarchy: based on information processing Attitudes are very important variable – they are relatively good predictors of behavior. Behaviour can be measured after it is done, but attitudes can help to predict it. Attitudes can be measured every time. If there are changes u can take some countermeasures. How well do they predict the behavior?

Other factors influencing behavior: financial situation, social norms or attitudes and opinions of other people. In order to increase predictability of attitudes: in the surveys include sth regarding other factors: e. g. In ur current financial situation, would u buy this car within next 2 years? -> specify questions. Correlation coefficient : from -1 to 1. Shows correlation between 2 variables. 0 – no relationship, 1 and -1 – strong relationship. Relationship between attitude and purchase intention are typically pretty high (0. 8-0. 9), and between attitude and behavior – not so high (0. 2 – 0. ) How can we measure attitudes. We should define a target group, and then usually ask in surveys. Do u like a car ? – is not enough usually.. It is important, if a person participating in a survey is already a customer , already has the product or not. And include such questions as: would u buy it again? Would u recommend to ur friends? Why did they bought? More details: features of the car, efficiency, fuel, design – evaluate them. Then it is necessary to define which of the characteristics influenced and to which extent the overall evaluation, which are the relevant dimension of evaluation.

To try tp approach really important underlying motives. Ex. – BMW – status, Porsche – driving experience. So u can use these knowledge in the commercials: to underline this important features or to try to change the perception, the image of a car. It was the Multi-attribute model of attitudes. E. g. car: design, safety, prestige, performance, fuel efficiency and so on. And we ask the evaluation on the 5 –point scaleon all these features. If there are a lot of respondent , and especially if there are evaluation also for competitors, then this info is more representative and more interesting.

And the second stage to ask – how it is important to u, each of this dimensions. (because e. g. fuel efficiency maybe good, but not so important for a consumer). E. g. to ask again on the 5-point scale: 1 – not important, 5 – very important. We can even try to combine then the figures. E. g. multiply the figure using different coofficients according to the importance. Try to subgroup the consumers according to the importance of this or that dimension and to approach them in a different ways after. Fishbeinmodel in the book – the idea described above.

Elaboration likelihood model: Involvement – on of the most important variables as it determines ur further processing information. If the sttitude is change through central rrroute it is normally quite a stable change and a stable attitude is changed. If through peripheral route – then the change may occur, but it can be not that stable. Central route: ask friends about, look on internet, check what who says. Peripheral – commercials, ex. after have seen an ad of Heineken with screaming u think “Heineken might be fun, let’s try it”. Purchase decisions: 1.

Extensive Buying Behavior: a consumer has no experiences here, it is usually for expensive products, products important for us, for our lifestyle, image; it is normally a more time-consuming process, takes longer to make a decision E. g. the first time u buy a house; as well cosmetics e. g. can be extensive (u have a problem skin, or may be allergic, or sth else) 2. Limited buying behavior: we have some experience, but we haven’t made a a decision yet. We have an evoked set of alternatives and already reduced efforts. (u have some brands relevant to u, but no decisions u) e. . u need sports shoes, go to CityArkaden, think which brands are appropriate for u and look only at these limited amount of brands, others even do not consider. 3. Routine Buying Behaviour (or Habitual). Characterised by automatic processes,without much thinking about it, demand low cognitive efforts. E. g. products at Hofer. 4. Impulsive Buying Behaviour. Products that are in the basket after the purchase but which a customer didn’t want to buy – between 30-50% of products bought were not supposed to be bought, the decision was made in the store.

Here there are some subcategories: 1) recognition-based (when u come t a shop, sees a product and then recognizes that u need did, u just forgot to write it down in ur shopping list (it is not really an impulsive behavior) 2) true impulsive behavior – when u go to CityArkaden, sees a T-shirt, or earings, or a chocolate bar and buys it 3) intended impulsive purchases – u have an exam and after an exam goes to CityArkaden with the purpose to reward urself after the exam.

Sometimes a purchase decision starts in a one way, but the purchase itself is then conducted in another way. E. g. u wants to buy sth, search for information, etc. but haven’t made a decision yet and then buy just impulsively (because friends told, or because everybody has it etc. ) or u can start impulsively – see a T-Shirt, likes it, put on and then think that u should look for other T-shirts which may fit u better and start looking for them in different shops.

How to find out which kinds of behavior are impulsive.. Solutions: survey: e. g. ask people after the cash register if they have a shopping list, if yes – to compare with what is in the basket: but there are problems with it: the information is incomplete, people may not write down everything – the things they buy every time etc; furthermore, maybe those who make a purchase list are more structured then generally, so cannot represent the general public.

U can also ask after the purchase has been done, what they were intended to buy.. but they may lie as they won’t confess that they are “bad purchasers” and cannot control their purchases. U can also try to observe surfers, but u are not allowed to do so without his permission. Or another kind: researchers ask a purchaser to tell everything he sees, to comment on everything while shopping, why he wants to buy this thing, how he chooses it. 3 Dimensions that are important when a person enters an environmaent, e. g. store: PAD (this comes from the emotional approach to environmental psychology – assumes that the first reaction a person shows in an environment is anemotional one (we like it or we don’t like it), and it predetermines to a big extent ur further behavior: Stimula (e. g. Store)->Organism (Emotional Reaction)->Response/Reaction (Approach or avoidance)): 1. Pleasure 2. Arousal 3. Dominance – do we have a feeling of control SO, if u a are a store manager u should try to influence these dimensions. Ex. n IKEA u shave to follow a specific way, no exit, so u may feel lack of control there… Cognitive approach to environmental psychology: U must have a clear structure, clear landmarks, where everything is, where – u have a cognitive map of sth – it should be easy for people t have a feeling of orientation (e. g. in a shop the products are at the same place, in the same position) in changeig the position there positive and negative sides: at the one hand people have to search and they may pay attention to other products then.

And the same time it may be irritating for customers. Exam: 3 open questions on an aggregate level – each 20 minutes aproxiamtely: ex. discuss the role of emotons in advertising : discuss the role of personality in consumer behavior. Big five personality traits for example – big five personality approach. No specific details will be asked. It is about the chapters which we didn’t deal with here. With the chapters that we did deal with in class – will be sth form the class 22nd of April in the afternoon.