Consumer Behaviour | Lecture
Lecture 1: The Study of Consumer Behaviour
- Consumer behaviour includes processes involved in selecting, buying, using or disposing
of products, services, ideas and experiences to satisfy needs and wants. It is about
obtaining, consuming, and disposing products and services. It is influenced by personal and
external factors and has an effect on affect, cognition, and behaviour.
- Consumer behaviour is about:
Obtaining Consuming Disposing
Deciding to buy a product. How you use a product. How you get rid of remaining
product.
Deciding between brands. How you store a product. How much you throw away after
use.
Where to buy. Who uses the product. Reselling products.
How to pay. How much you consume. How you recycle products.
How you transport it. How a product compares with
expectations.
- To further illustrate:
- The consumer (i.e. individual/group/organization) has several dimensions each of which
are interrelated:
1. Affect
2. Behaviour
3. Cognition
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,- Why study consumer behaviour?
- Why study consumer behaviour? Marketing organizations:
1. To know how to influence consumers (firm → consumers)
2. To know what consumers want (consumers → firm)
→ Simply deliver what consumers want? Find out what they care about and provide that?
- Do we always know what we want?
- Studies show that fear only works if people feel that they are connected to the problem.
- Why study consumer behaviour? Public policy:
• Regulate behaviour: public policy.
- How will consumers react to regulations? (e.g. cigarette warning labels)
- How will consumers react to market changes? (e.g. recession, tax cuts)
• Change Behaviour: social marketing.
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, - Encourage/disencourage activities
- Effect of advertising on society
- Intuition trap: problems exist with common sense:
• Often wrong (we are often bad in predicting our partner's choices)
• Confirmation bias (we are resistant to changing our prior beliefs and we focus on
confirming instances)
• Your preferences are not representations (projection bias/false consensus)
• Limited theories
• Make decisions based on few observations
• Infer causality from correlation
• Overconfidence
- Intuitive ideas are easy, more vivid, appealing, and well-remembered.
Scientific stories are complex, careful, and situational.
→ Educated Intuition
- How to study consumer behaviour:
- Methods for studying consumer behaviour:
• Interviews and Survey
- Interviews (qualitative): depth interviews and focus groups.
- Surveys (quantitative): mall intercepts, telephone surveys, mail questionnaires, interest
surveys, and longitudinal survey studies.
• Experimental Research (allows analysation of cause and effect)
- Consumer research:
1. Beware of common sense: intuition trap
2. Understand the nature of the relationship → causal or correlational?
3. Consumer research is a social science → reducing uncertainty rather than establishing
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, certainty.
→ Best to combine methods to get an idea about everything that involves a choice (i.e.
consumer behaviour).
Lecture 2: Overview of Consumer Decision Making & Irrationality
- The Consumer Decision Process Model holds for many situations, but not all and is
therefore not always true. To illustrate:
- Problem Recognition: what is a need/want? A discrepancy between actual and desired
state:
• Needs = change in actual states.
• Wants = change in desired states.
- Firms can influence consumers' problem recognition:
• Remind consumers (= reduce awareness threshold)
• Lower the perceived actual state
• Raise consumers' plausible desired state (make it more plausible (i.e. cheaper,
innovations) and make it more desirable (create desires by connecting to basic needs)
- Information search:
Internal
• Retrieval from memory.
• Sufficient? Depends on quality of knowledge and of ability to retrieve knowledge.
External (Active vs. Passive)
• Marketer sources: advertising, company websites, stores, salespeople, brochures.
• Non-marketer sources: other consumers, WOM, consumer organizations, government,
media.
Page 4 of 53
Lecture 1: The Study of Consumer Behaviour
- Consumer behaviour includes processes involved in selecting, buying, using or disposing
of products, services, ideas and experiences to satisfy needs and wants. It is about
obtaining, consuming, and disposing products and services. It is influenced by personal and
external factors and has an effect on affect, cognition, and behaviour.
- Consumer behaviour is about:
Obtaining Consuming Disposing
Deciding to buy a product. How you use a product. How you get rid of remaining
product.
Deciding between brands. How you store a product. How much you throw away after
use.
Where to buy. Who uses the product. Reselling products.
How to pay. How much you consume. How you recycle products.
How you transport it. How a product compares with
expectations.
- To further illustrate:
- The consumer (i.e. individual/group/organization) has several dimensions each of which
are interrelated:
1. Affect
2. Behaviour
3. Cognition
Page 1 of 53
,- Why study consumer behaviour?
- Why study consumer behaviour? Marketing organizations:
1. To know how to influence consumers (firm → consumers)
2. To know what consumers want (consumers → firm)
→ Simply deliver what consumers want? Find out what they care about and provide that?
- Do we always know what we want?
- Studies show that fear only works if people feel that they are connected to the problem.
- Why study consumer behaviour? Public policy:
• Regulate behaviour: public policy.
- How will consumers react to regulations? (e.g. cigarette warning labels)
- How will consumers react to market changes? (e.g. recession, tax cuts)
• Change Behaviour: social marketing.
Page 2 of 53
, - Encourage/disencourage activities
- Effect of advertising on society
- Intuition trap: problems exist with common sense:
• Often wrong (we are often bad in predicting our partner's choices)
• Confirmation bias (we are resistant to changing our prior beliefs and we focus on
confirming instances)
• Your preferences are not representations (projection bias/false consensus)
• Limited theories
• Make decisions based on few observations
• Infer causality from correlation
• Overconfidence
- Intuitive ideas are easy, more vivid, appealing, and well-remembered.
Scientific stories are complex, careful, and situational.
→ Educated Intuition
- How to study consumer behaviour:
- Methods for studying consumer behaviour:
• Interviews and Survey
- Interviews (qualitative): depth interviews and focus groups.
- Surveys (quantitative): mall intercepts, telephone surveys, mail questionnaires, interest
surveys, and longitudinal survey studies.
• Experimental Research (allows analysation of cause and effect)
- Consumer research:
1. Beware of common sense: intuition trap
2. Understand the nature of the relationship → causal or correlational?
3. Consumer research is a social science → reducing uncertainty rather than establishing
Page 3 of 53
, certainty.
→ Best to combine methods to get an idea about everything that involves a choice (i.e.
consumer behaviour).
Lecture 2: Overview of Consumer Decision Making & Irrationality
- The Consumer Decision Process Model holds for many situations, but not all and is
therefore not always true. To illustrate:
- Problem Recognition: what is a need/want? A discrepancy between actual and desired
state:
• Needs = change in actual states.
• Wants = change in desired states.
- Firms can influence consumers' problem recognition:
• Remind consumers (= reduce awareness threshold)
• Lower the perceived actual state
• Raise consumers' plausible desired state (make it more plausible (i.e. cheaper,
innovations) and make it more desirable (create desires by connecting to basic needs)
- Information search:
Internal
• Retrieval from memory.
• Sufficient? Depends on quality of knowledge and of ability to retrieve knowledge.
External (Active vs. Passive)
• Marketer sources: advertising, company websites, stores, salespeople, brochures.
• Non-marketer sources: other consumers, WOM, consumer organizations, government,
media.
Page 4 of 53
