MARKETING FOR PREMASTER
LECTURE 1: INTRODUCTION AND FRAMEWORK
Online lecture
Why do we need consumer behavior?
Misconception 1: Consumers are sales figures.
Misconception 2: We should trust our intuition.
How companies often think of consumers:
Tailor the marketing mix to our target group so we get them to do/think X.
More product features à Increased product liking.
More product in brand portfolio à Increases sales.
Make the product less expensive à Increases sales.
How should we think of consumers?
Stimulus (S) à Marketing mix
Organism (O) à Consumers à OFTEN IGNORES
Response (R) à Buying behavior
What is consumer behavior?
Stimulus (S) = marketing stimuli: price, product, promotion, place (input)
Organism (O) = consumer behavior theories (internal influences, external influences, judgment, and decision-making)
Response (R) = e.g., purchase, positive word-of-mouth, loyalty behaviors (output)
Some products are as good as consumers want them to be!
What is consumer behavior?
• Key insights
• Individuals react on the basis of perception – not on the basis of objective
reality!
• Objective product features are not the same as consumer benefits
à We need to understand consumers to better satisfy their needs.
à Our intuitions about what consumers perceive, think, and will do are often wrong!
Which fields does consumer behavior draw on?
Consumer Decision Process Model
Need recognition à Search for information à Pre-purchase evaluation of alternatives à Purchase à Consumption à Post-
consumption evaluation à Disposal.
What is a need?
Discrepancy between actual and desired state.
,Information search
Internal
Retrieval from memory.
External
Marketer sources: advertising, company websites, stores, salespeople, brochures.
Non-marketer sources: other consumers (including family & friends), consumer organizations, government, media.
Consideration of Options
Evaluation of alternatives
• Evaluation criteria
• Judgment models or decision rules
iPhone Galaxy HTC
Screen size (inch) 4 5 7
Talk time (h) 10 29 19
Camera quality (mpx) 8 16 4
Together the need recognition, search for information and the pre-purchase evaluation of alternatives is MAO (= Motivation, Ability,
Opportunity).
Consumer Decision Process – Continuum
From Low to High: more effort & time spent on decision
• More information gathered
• More processing of information (time, effort)
• More alternatives considered
• More attributes considered
Purchase
Decisions on:
, • Purchase timing (immediate or delayed)
• Mode of purchase (web, store, catalog)
• Place/store
• Quantity
Consumption
Timing, frequency, volume of use
• Important for packaging (storage)
• Affects satisfaction
Pre-consumption evaluation
Expectations are crucial:
• Satisfaction: Product meets or exceeds expected performance
• Dissatisfaction: Product performs below expectation
Key Takeaways
1. Perceptions is not similar to objective reality!
2. Objective product features are not similar to consumer benefits.
3. Consumer decision process can be broken down in a 7-stage process.
4. Motivation, opportunity, and ability are key determinants of high-effort information processing and decision-making.
LECTURE 2: INDIVIDUAL CHARACTERISTICS AND CULTURE
Online lecture
How does culture influence marketing?
• Segmentation
• Targeting
• New product development
• Promotional activities
à Careful when using demographics to segment consumers and infer the values/benefits they are looking for.
Examples of ethnic targeting
• Often marketers group people based on demographics, throwing them all in the same pot.
• E.g., women want X, men want X, lower income people want X, etc.
• It is a simplification to cluster people around those demographics! Need to acknowledge that.
• More fine-grained measures: value questionnaires, VALS.
Generally: targeting to sub-groups/subcultures/ethnicities is costly and might sometime harm your brand.
Cultures and Values: Hofstede
• Power distance (Belgium: 65, Netherlands: 38)
• Masculinity/femininity (Belgium: 54, Netherlands: 14)
• Individualism/collectivism (Belgium: 75, Netherlands: 80)
• Uncertainty avoidance (Belgium: 94, Netherlands: 53)
Social class
• A status hierarchy in which individuals and groups are classified on the basis of esteem and prestige acquired mainly
through economic success and accumulation of wealth.
• Objective indicators
LECTURE 1: INTRODUCTION AND FRAMEWORK
Online lecture
Why do we need consumer behavior?
Misconception 1: Consumers are sales figures.
Misconception 2: We should trust our intuition.
How companies often think of consumers:
Tailor the marketing mix to our target group so we get them to do/think X.
More product features à Increased product liking.
More product in brand portfolio à Increases sales.
Make the product less expensive à Increases sales.
How should we think of consumers?
Stimulus (S) à Marketing mix
Organism (O) à Consumers à OFTEN IGNORES
Response (R) à Buying behavior
What is consumer behavior?
Stimulus (S) = marketing stimuli: price, product, promotion, place (input)
Organism (O) = consumer behavior theories (internal influences, external influences, judgment, and decision-making)
Response (R) = e.g., purchase, positive word-of-mouth, loyalty behaviors (output)
Some products are as good as consumers want them to be!
What is consumer behavior?
• Key insights
• Individuals react on the basis of perception – not on the basis of objective
reality!
• Objective product features are not the same as consumer benefits
à We need to understand consumers to better satisfy their needs.
à Our intuitions about what consumers perceive, think, and will do are often wrong!
Which fields does consumer behavior draw on?
Consumer Decision Process Model
Need recognition à Search for information à Pre-purchase evaluation of alternatives à Purchase à Consumption à Post-
consumption evaluation à Disposal.
What is a need?
Discrepancy between actual and desired state.
,Information search
Internal
Retrieval from memory.
External
Marketer sources: advertising, company websites, stores, salespeople, brochures.
Non-marketer sources: other consumers (including family & friends), consumer organizations, government, media.
Consideration of Options
Evaluation of alternatives
• Evaluation criteria
• Judgment models or decision rules
iPhone Galaxy HTC
Screen size (inch) 4 5 7
Talk time (h) 10 29 19
Camera quality (mpx) 8 16 4
Together the need recognition, search for information and the pre-purchase evaluation of alternatives is MAO (= Motivation, Ability,
Opportunity).
Consumer Decision Process – Continuum
From Low to High: more effort & time spent on decision
• More information gathered
• More processing of information (time, effort)
• More alternatives considered
• More attributes considered
Purchase
Decisions on:
, • Purchase timing (immediate or delayed)
• Mode of purchase (web, store, catalog)
• Place/store
• Quantity
Consumption
Timing, frequency, volume of use
• Important for packaging (storage)
• Affects satisfaction
Pre-consumption evaluation
Expectations are crucial:
• Satisfaction: Product meets or exceeds expected performance
• Dissatisfaction: Product performs below expectation
Key Takeaways
1. Perceptions is not similar to objective reality!
2. Objective product features are not similar to consumer benefits.
3. Consumer decision process can be broken down in a 7-stage process.
4. Motivation, opportunity, and ability are key determinants of high-effort information processing and decision-making.
LECTURE 2: INDIVIDUAL CHARACTERISTICS AND CULTURE
Online lecture
How does culture influence marketing?
• Segmentation
• Targeting
• New product development
• Promotional activities
à Careful when using demographics to segment consumers and infer the values/benefits they are looking for.
Examples of ethnic targeting
• Often marketers group people based on demographics, throwing them all in the same pot.
• E.g., women want X, men want X, lower income people want X, etc.
• It is a simplification to cluster people around those demographics! Need to acknowledge that.
• More fine-grained measures: value questionnaires, VALS.
Generally: targeting to sub-groups/subcultures/ethnicities is costly and might sometime harm your brand.
Cultures and Values: Hofstede
• Power distance (Belgium: 65, Netherlands: 38)
• Masculinity/femininity (Belgium: 54, Netherlands: 14)
• Individualism/collectivism (Belgium: 75, Netherlands: 80)
• Uncertainty avoidance (Belgium: 94, Netherlands: 53)
Social class
• A status hierarchy in which individuals and groups are classified on the basis of esteem and prestige acquired mainly
through economic success and accumulation of wealth.
• Objective indicators
