3 What is Consumer Behavior? MarketingResponse4 P’sWe do stuff as marketers to manipulate the 4 P’s and our hope is to get a response from consumers. For instance, we lower the price of our product by a dollar and we see an increase in sale. Marketing led to a response.
4 Relationship between sales and # of times ad is shown ($)Another example of a marketing response is the effect that ads have on sales.In this case we see that there is an inverted U relationship between sales and the number of times an ad is shown. We have the statistics that show us this, but we don’t know WHY this happens. Economics and statistics can show us the graph, but it can’t explain it completely.The goal of consumer behavior is to figure out and predict HOW and WHY marketing affects observed responses. We want to figure out this middle part between marketing and responses, so the way to do it is to put the consumer into the equation.So in the case of ads, why does seeing an ad too many times lead to lower sales?# of Times ad is shown
5 What is Consumer Behavior? Black Box of the ConsumerMarketingResponse4 P’sSo hear we have marketing influencing the consumer and then the consumer responding. Since we don’t understand consumers, we think of them as a black box. Consumer behavior tries to get inside the black box and figure out what’s going on inside consumer’s heads.So going back to the case of ads, CB shows why seeing an ad too many times leads to lower sales. Since consumers see the same ads again and again, they habituate and get tired of them. They also start to be able to develop counterarguments to ad claims since they’ve seen them so many times and don’t need to devote processing to message anymore. This then leads to lower sales. Studies have shown that 3 exposures are best.In summary, CB looks at how consumers make decisions. The question that remains is what kind of decisions?
6 MOTIVATION ABILITY OPPORTUNITY Incidental Information DECISION EXPOSURE ATTENTION PERCEPTIONMOTIVATIONCATEGORIZATION/ COMPREHENSIONABILITYDECISIONATTITUDE FORMATION & CHANGEMAO – Today we are starting the main part of the course. We talked about in the overview how the consumer is a black box because we don’t understand what’s going on in there and today we’re going to start looking inside the black box at the psychological processes of how consumers make decisions.One thing that predominately affects how we process/do most things is MAO. It influences whether consumers pay attention and perceive info, what info they notice, how they categorize info, how they form attitudes, and what they remember. It also influences search, choice, and post-purchase evaluation.Even though there are three different components of MAO that could all be at varying levels, the way we’re going to look at how MAO affects processing is through a dual process model. That means that MAO as a unit affects processing in one of two ways. So, you either have high MAO vs. low MAO, or higher MAO vs. low-er MAO, or you can view it as having MAO or not having MAO, but either way, we’re going to group MAO into two categories—high and low---and look at how processing is different depending on which category it is in.OPPORTUNITYMEMORY & RETRIEVAL
7 Motivation?Inner state of arousal/encouragement, this aroused energy is directed to achieving a goalWe, as humans, are goal driven beings – all of our behavior is driven by some motivation or goal….not always congruent goalsHigh vs. low motivationWe’re going to look at each of the components of MAO, but will focus mostly on motivation.Motivation is the process that leads people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy. Once a need has been activated a state of tension exists that drives the consumer to attempt to reduce or eliminate the need. The desired end state is the consumer’s goal. Marketers try to create products and services that will provide the desired benefit and permit the consumer to reduce the tension.High motivation – pay careful attention, evaluate critically, try to rememberLow motivation – don’t devote much energy, use shortcutsMotivation drives behaviors consistent with a goal, creates a willingness to expend energy and timeWhat products can you think of that are examples of high motivation (e.g., cars)? Low motivation (e.g., ?buy what we bought last time, buy the cheapest
8 MotivationHigh motivation – pay careful attention, evaluate critically (central issues)Low motivation – don’t devote much energy, use shortcuts (peripheral issues)Now that we now a whole lot about needs and goals and motivation in general, let’s talk about how it affects processing (which is what we started the class saying we were going to look at – high vs. low motivation). How is processing different for high vs. low motivation?What products can you think of that are examples of high motivation? Low motivation?88
9 What affects motivation? A) Personal relevanceB) Values, goals, & needsC) Perceived risk (safety, social standing, self-perception, …)D) Moderately inconsistency with attitudesWhat Affects Motivation?A. Personal Relevance: Marketers can increase a consumer’s motivation by trying to make the information as personally relevant as possible1. Something is personally relevant to the extent that it has direct bearing on the self and has potentially significant consequences or implications for one’s life.2. As things become more personally relevant, they are more likely to motivate us to behave, process information, or engage in effortful decision making about these things, and we will experience considerable involvement when buying, using, or disposing of them.3. Marketers can increase a consumer’s motivation to process promotional materials by trying to make the information as personally relevant as possible.B. Values, Goals, and Needs1. Values guide what we see as relevant to ourselves.2. Goals reflect the objectives we would like to achieve given the current situation.a. Goal-attainment activities involve setting goals, planning, implementation and controlling relevant actions.Needs reflect underlying inner forces that create tension in individuals when they are not held in equilibrium. Activation of the need produces goal-directed arousal in the individual.C. Perceived Risk1. Describing Perceived Riska) Perceived risk is defined as the extent to which the consumer is uncertain about the consequences of an action (buying, using, or disposing of an offering).2. Types of Perceived Riska) Performance risk reflects uncertainty about whether the product or service will perform as expected.b) Financial risk reflects consumers’ concerns about their monetary investment in a product or service.c) Physical (or safety) risk refers to the potential harm that a product or service might pose to one’s safety.d) Social risk refers to the potential harm to one’s social standing that may arise from buying, using, or disposing of an offering.e) Psychological risk reflects consumers’ concern over the extent to which a product or service fits with the way they perceive themselves.f) Time risk reflects uncertainties over the length of time consumers must invest in buying, using, or disposing of the product or service.3. Risk and Involvementa) Involvement can be classified by risk level. The higher the risk, the higher the involvement.b) Since high risk is uncomfortable, consumers are likely to attempt to reduce or resolve risk by gathering more information or by relying on brand loyalty.4. Marketing Implicationsa) When perceived risk is high, marketers can either reduce uncertainty or reduce the perceived consequences of failure.b) When perceived risk is low, marketers have to increase risk perceptions to make emotional appeals more convincing.D. Inconsistency with Attitudes1. Consumers tend to be motivated to process messages that are moderately inconsistent with existing knowledge or attitudes, because they are perceived as moderately threatening or uncomfortable. The consumer is motivated to remove or understand this inconsistency.2. Consumers are less motivated to process information that is highly inconsistent with their prior attitudes.
10 A) Personal Relevance increases when: Has consequences on your life (dandruff ads – cannot get a job done)Influences your self-concept or the way others view you (smoking is cool!)Consistent with values, goals, & needsSo you see this a lot in advertising—they want you to think their product has massive consequences on your life. Dandruff ads—where model doesn’t get job because of dandruff. Smoking ads—people view you differently because you smoke.1010
11 B) Values, Goals, NeedsValues – beliefs that guide what we think is important or good (very close to wants)Goals – objectives that we would like to achieve (a goal develops from a need)Needs – Internal state of tension, caused by disequilibrium from ideal/desired physical or psychological stateHow are needs different than wants?Should mention difference between need and goal: goal develops from a need in a specific situation.May have a goal to save money, get a good job, meet a good looking person on Friday night, go to bed early, get to class on time, be a good student, be cool….Should mention that technically there is a difference between needs and wants, and the goal of marketers is to try and make wants SEEM like needs.
12 Maslow’s Hierarchy of Needs The psychologist Abraham Maslow proposed this approach to motivation. It was originally developed as a way to understand personal growth, but marketers have adapted it to understand consumer motivations. The hierarchical structure implies that the needs at the bottom have to be attained before the next, higher level is activated. It can help marketers identify what products someone might need depending on their development or the environment around them.1. Physical or Physiological needs are those biogenic needs we discussed earlier- the need for water, food, air, etc. - easy to think what products are associated with these needs: food products!2. Need for Safety- what products are associated with this need? homeowners insurance, burglar alarms, the club,3. Belongingness/Social needs - facebook, myspace, USC!!,4. Personal or Ego needs – a BMW, a Rolex, a yacht5. Actualization: a trip to Europe, going for my PhD, etc.*One criticism of this characterization is that it may be western specific. Many Asian cultures value belongingness needs (fitting in with the group, working for good of the group), more than individual needs.Still, it’s helpful to marketers b/c it reminds us that consumers have different priorities in different situations and in different stages in their lives.
13 Types of Needs Biogenic Needs (food, air, water) Psychogenic Needs Need for Affiliation (social interaction)Need for Power/ControlNeed for UniquenessUtilitarian Needs (mpg, durability)Hedonic & Symbolic NeedsFirst let’s talk about different types of needsBiogenic- need for certain elements necessary to retain life (food, air, water, shelter)Psychogenic – reflect the priorities of a culture (e.g., Americans may be drive to buy products that help them express their individuality)Need for affiliation- need for social interaction, company of othersNeed for Power/Control- need to control environment, increase predictability and consistencyUniqueness- need to assert individual standing/place within the social structure.Utilitarian or functional needs -emphasize objective, tangible attributes of a product (e.g., miles per gallon a car gets, durability of a pair of jeans)Hedonic needs – subjective and experiential – product can help consumers get excitement or fulfill a fantasy (e.g., how stylish are the blue jeans vs. how durable)
14 Characteristics of Needs Dynamic! – ever evolvingExist in hierarchyInternally or externally arousedNot always congruent – can conflictAll needs have the same characteristics. They are dynamic—needs are never fully satisfied, but rather, are only temporarily met. This is good from a mktg perspective because it means we can fulfill needs again and again.Hierarchy—there is always an order, but it doesn’t stay the same. Sometimes getting to your destination is more important than eating, but sometime eating is more important than getting to your destination on a road trip.Needs can be Internally or Externally aroused – again this is good for marketers because it means that we can create needs to be metConflict: needs often conflict (ex. You might have a hedonic need for something exciting/bad for you, like a cheeseburger, but also a need eat fewer calories). We’ll talk more about conflicting needs and goals a little bit later.Conflict: approach-avoidance (one option has both desirable and undesirable aspects, satisfies some needs but fails others—ex. Eating dessert, important to know that this isn’t two So these are characteristics of needs, but why are they important?Approach – avoid: want to engage in a behavior, but it has consequences – go to party, will fail exam, eat desert – will gain weightApproach – Approach: Two equally desirable options – attend neighborhood watch meeting or meeting to accept award.,Avoid – avoid: Two choices, neither or which are optimal. Being between a rock and a hard place. Neither option is good.First, let’s look at a very famous characterization of needs as a hierarchy
15 Needs Social or nonsocial Functional, symbolic or hedonic Social - Need for affiliationAnti-social needs – seats in a theatre or airplaneFunctional, symbolic or hedonicNeed for cognition or mental stimulationReading are mentally taxingMovies that make you thinkNeeds can draw us toward a product/service or keep us away – e.g. dentist.Other anti-social needs – urinals – always leave one between youSymbolic – how we perceive ourselves and are perceived by othersHedonic – reflects our inherent desires for sensory pleasureNeed for cognition – puzzles, reading, playing games that are mentally taxing, going to movies that make you thinkOther stimulation – enhanced involvement in ads, sky-diving, extreme games
16 Identifying NeedsHow do physical characteristics of products get linked up with our motivations?How would managers even know what our motivations are?How do we know what consumers want?Ask them – but they don’t always knowSo we use a special technique to try to link up physical characteristics of our products with consumers’ needs and ultimately their valuesHow do we know what consumers want? We could ask them…but they don’t always know. Sometimes they know and they don’t want to say…which is another problem.Projective techniques – Bounty paper towels, instant coffeeProjective techniques - Why do you smoke? “Because I enjoy it and believe that smoking in moderation is not harmful”Yet, when asked to complete these sentences: “People who never smoke are _____” they used “happier and wiser.” “Teenagers who smoke are _________” (crazy, foolish). Clearly different feelings than their explicit answers indicated.Draw cartoon and ask the consumer to describe what is happening, what the people are like.
17 Measuring Needs Attributes Consequences Values A means-ends chain is a knowledge structure that links consumers’ knowledge about product attributes with their knowledge about consequences and valuesAttributesConsequencesValuesThis technique is called means-ends chains. Called this because it illustrates that consumers value products as a means to an end. The best way to explain a means end chain is to show you one.
18 Means-End Chain: Gillette Fusion Functional ConsequencesPsychosocial ConsequencesValuesBrandAttributesClose ShaveBe attractiveFeel well-groomed5 BladesGillette FusionStart with a product, then we look at 2 specific attributes of the product. These attributes give us functional consequences. What does the product actually do? Then, we can look at what the psychosocial consequences of the function is (e.g., a close shave makes us feel well-groomed), then from there we can get to the value that that attribute is helping the consumer achieve.Be attractive could even go further, to be loved, belongingness, etc.Know we’ve gotten to a terminal value when consumers can’t answer why anymore (e.g., Why do you want to be loved? Well, just b/c we do or b/c it makes us happy – signs we’ve gotten to a terminal value)Smooth, Soft ShaveBe comfort-ableBe relaxed, not stressedLubricating Strip
19 C) Perceived Risk…the extent to which a consumer is uncertain about the consequences of buying, using or disposing of an offeringSo personal relevance (or involvement) is one determinant of motivation. Perceived risk is another one, which we have mentioned a few times during class today. What do we mean by risk?
20 Types of Perceived Risk Performance risk – will the product perform?Physical risk – is it safe?Social risk – will it hurt my social standing?Psychological risk – does it fit with what I think of myself?Time risk – do I have the time to invest in it?Washington State University - kre
21 What can marketers do? Reduce risk perceptions Reduce uncertaintyReduce perceived consequences of failureEnhance risk perceptions in order toIncrease consumer motivation to process/involvement (safety features on cars)
22 Motivation evokes involvement: Level of perceived personal importance and/or interest evoked by a stimulusHigh vs. Low InvolvementKey concept in consumer behavior is involvement. High vs. low involvement maps onto high vs. low MAO and processing. High involvement results in careful, detailed processing of information, whereas low involvement results in limited processing, little attention.What types of things are personally relevant? Depends on the person! Important to remember that involvement is not the same as high priced. You can be highly involved with something that is cheap. We call these people neurotic, but it still is possible.So what exactly is involvement?2222
23 To Me (Object to be Judged) Is Involvement ScaleTo Me (Object to be Judged) Is1.important_:_:_:_:_:_:_unimportant2.boringinteresting3.relevantirrelevant4.excitingunexciting5.means nothingmeans a lot6.appealingunappealing7.fascinatingmundane8.worthlessvaluable9.involvinguninvolving10.not neededneededWe can measure it with a scale – this gives you a good feeling for what involvement is. We are highly involved with our hobbies, for example, b/c we find them important, interesting, exciting, fascinating, etc. This is called enduring involvement – we feel that way all the time, not just in some situations2323
24 Involvement ObjectsInvolvement is not just with a certain product – it can be with:Product categories - carsBrands – Crest, MacAds (e.g., the creepy Burger king)Mediums – magazines, TVSpecific DecisionsIn addition to classifications, you can also have involvement towards different objects: product categories, brands, ads, medium (TV-low, magazines are high), and decisions.It is important to know about involvement because it can influence mktg strategies.2424
25 Marketing Strategies Concentrate on high involvement segment Attempt to increase or build involvementAccept low involvementFirms have a choice in dealing with involvement. They can try and concentrate on high involvement segment, they can increase or build involvement, or they can accept low involvement. Since processing is higher for high involvement categories, you want to try and raise involvement. You want people to think about your category, to evaluate products, not make decisions on a whim, be influenced by peripheral cues. HOW DO YOU INCREASE INVOLVEMENT—same way you increase motivation, since one evokes the other. Make it personally relevant, consistent with needs, risky, moderately inconsistent with prior attitudes. BUT, if you have a low involvement category, you need to adapt your strategy to take that into account. Simple packaging, POP displays, type of advertising.If have high involvement category, going to give more content in ads, can take time to explain product, get spokesperson that knows about the product and isn’t just a pretty girl on top of a car. Ex. Explaining features of car vs. putting model on top of one.So let’s look more closely at one way to increase involvement—increasing personal relevance.2525
26 D) Inconsistency with Attitudes We tend to process messages that are moderately inconsistent with our attitudesIf they are drastically inconsistent, we will dismiss themIf they are highly consistent, the ad may not get our attentionIf totally consistent, not motivated to process – may not even get our attention. if too inconsistent, we’re overwhelmed and can’t process or we just dismiss the information. Want it to be moderately inconsistent.
27 So, motivation enhanced when something is: Consistent with our needs, values & goalsPersonally relevant (involving)Somewhat RiskyModerately inconsistent with our prior attitudesSince increased motivation leads to better processing, it’s important to know what increases motivation. Motivation is enhanced when things are personally relevant, consistent with needs, values and goals, risky, and moderately inconsistent with our prior attitudes.We’ve already talked a lot about our needs, values, and goals. Now we’ll talk about each of these ways to enhance motivation.2727
28 Knowing when to enhance perceived risk and when to reduce perceived risk is vital to creating effective marketing strategies. For which of the following products does it make sense (for the marketer) to increase perceived risk of not buying?A) Home security systemsB) Sky-divingC) Life insuranceD) All of the aboveE) A and C
29 Ability to Act - Depends Upon: Knowledge/ExperienceCognitive StyleIntelligenceEducationAgeMoneySo we’ve covered motivation to act in depth, now let’s look at ability.Ability are things that are person-specific rather than circumstantial or situational. They are things related to the individual person. Basically looking at whether consumers have the resources to make the necessarily out come happen. Motivation may not result in action if consumers do not have the ability to process information, make decisions, or engage in behaviors.Cognitive style=learning style (visual vs. verbal, etc)I’m not spending a lot of time on this b/c your book covers it pretty well.
30 OpportunityConsumers may be motivated and have the ability, but are we as marketers giving them the opportunity to process the information?Even when motivation and ability are high – we must ensure opportunityFinal factor affecting whether motivation results in action is opportunity. Do consumers have the opportunity to engage in the behavior? Opportunity are things that are external or situational. They change from situation to situation.
31 Opportunity determined by: TimeDistractionsAmount of InformationComplexity of InformationRepetition of InformationAll of these can affect info processing, decision making, and behavior.Opportunity are things that are external or situational. They change from situation to situation.Might be motivated to go to the gym, might have the ability to join a gym, but might not have the opportunity because of the hours available.Go into details if time, but otherwise tell them to read the sections in the book.AbilityUnderstand consumers’ knowledge and processing stylesMatch communications with processing stylesFacilitate abilityOpportunityRepetitionReduce time-pressured decision makingReduce purchase/usage time
32 In marketing, which do you think are the most important factors in determining whether consumers will engage in the action we want them to? Hint: Dinar ExamplePENNIES.Okay – Everyone take out a piece of paperHow many pennies do you think you have handled in your lifetime.Draw the front and back of a pennyAsk about how many pennies people handled<HAND OUT PENNIES>
33 How well does your drawing match? Okay now how well did you do?
34 Marketing Implications: MotivationSegment on needsCreate new needsDevelop need-satisfying offeringsAbilityUnderstand consumers’ knowledge and processing stylesMatch communications with processing stylesFacilitate abilityOpportunityRepetitionReduce time-pressured decision makingReduce purchase/usage timeSince this is MKTG 351 and not PSYCH 351, let’s take what we learned about MAO and look at some marketing implications.
35 Advertisers leverage MOA to Takeaway…Advertisers leverage MOA toinvolve and engagetarget customers
36 Managerial Questions?What factors of motivation, ability, and opportunity could affect consumers whom you are trying to attract to your brand?How would consumer motivation, ability, and opportunity affect your brand compared to others in your category (i.e., competitors)?What would you do to address the issues of motivation, ability, and opportunity if you were preparing a marketing effort for your brand?