CONSUMER BEHAVIOR
D0R13a
,L1: Introduction
What is marketing?
- According to critics: marketing = fluff, manipulative& wasteful
- According to prof.: marketing = not rocket science, behavioral science
Rocket science= deterministic:
process
bad good
outcome Good 0 50
bad 50 0
Behavioral science= probabilistic:
process
bad good
Outcome Good Dumb luck Deserved success
bad Poetic justice Bad break
Marketing: the activity, set of institutions, and processes for creating, communicating, delivering and
exchanging offerings that have value for customers, clients, partners, and society at large.
Ralph Waldo Emerson:
- “Build a better mousetrap, and the world will beat a path to your door”
- “If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or
knives, crucibles or church organs, than anybody else, you will find a broad hard-beaten road
to his house, though it be in the woods.”
ARTICLE: “high online user ratings don’t actually mean you’re getting a quality product”
Suppose you consider many pairs of products. The two products in each pair are generally similar
(same product category, product features, etc.), but user ratings on Amazon of one of them are
higher on average than the other.
How often will you find that the product with the higher user ratings performs better in standardized
tests of product quality (as done by testing agencies like Consumer Reports)?
1
,Experiment: people received 5 glasses of wine and needed to rate them (on taste) in 2 conditions. In
the first condition there were no prices given, in the second condition the price was given
Condition 1: linking without price condition 2: linking with price
People rate higher priced things higher even though they’re the same
Experiment: what are people willing to pay?
➔ In the experiment ppl didn’t receive both of the cups next to each other, everyone observed
and rated 1
Even though there’s less in the second cup people are willing to pay more for it
Experiment: independent vs. social market
➔ People received a list of 48 new music ‘hits’
➔ They were separated in 2 groups and had to rank all songs from 1 to 48
2
, Value in function of the product → consistent/ predictable demand
Value in function of the place → inconsistent/ unpredictable demand
Independent market (A) social market (B)
Value in function of the marketing mix → price, product, promotion, place
Customer value → 2 sides:
Value of consumers: what the consumer is worth
to the company
Value to consumers: what the product is worth to
the consumer.
L2 :Managerial thinking traps
What is the secret to success?
Egocentrism undermines effective marketing
3
D0R13a
,L1: Introduction
What is marketing?
- According to critics: marketing = fluff, manipulative& wasteful
- According to prof.: marketing = not rocket science, behavioral science
Rocket science= deterministic:
process
bad good
outcome Good 0 50
bad 50 0
Behavioral science= probabilistic:
process
bad good
Outcome Good Dumb luck Deserved success
bad Poetic justice Bad break
Marketing: the activity, set of institutions, and processes for creating, communicating, delivering and
exchanging offerings that have value for customers, clients, partners, and society at large.
Ralph Waldo Emerson:
- “Build a better mousetrap, and the world will beat a path to your door”
- “If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or
knives, crucibles or church organs, than anybody else, you will find a broad hard-beaten road
to his house, though it be in the woods.”
ARTICLE: “high online user ratings don’t actually mean you’re getting a quality product”
Suppose you consider many pairs of products. The two products in each pair are generally similar
(same product category, product features, etc.), but user ratings on Amazon of one of them are
higher on average than the other.
How often will you find that the product with the higher user ratings performs better in standardized
tests of product quality (as done by testing agencies like Consumer Reports)?
1
,Experiment: people received 5 glasses of wine and needed to rate them (on taste) in 2 conditions. In
the first condition there were no prices given, in the second condition the price was given
Condition 1: linking without price condition 2: linking with price
People rate higher priced things higher even though they’re the same
Experiment: what are people willing to pay?
➔ In the experiment ppl didn’t receive both of the cups next to each other, everyone observed
and rated 1
Even though there’s less in the second cup people are willing to pay more for it
Experiment: independent vs. social market
➔ People received a list of 48 new music ‘hits’
➔ They were separated in 2 groups and had to rank all songs from 1 to 48
2
, Value in function of the product → consistent/ predictable demand
Value in function of the place → inconsistent/ unpredictable demand
Independent market (A) social market (B)
Value in function of the marketing mix → price, product, promotion, place
Customer value → 2 sides:
Value of consumers: what the consumer is worth
to the company
Value to consumers: what the product is worth to
the consumer.
L2 :Managerial thinking traps
What is the secret to success?
Egocentrism undermines effective marketing
3
