consumer behavior - NTNU an der TU München

• information acquisition is an ongoing process (ongoing search)
• scanning the market in search for new products (e.g. through advertisements)
• ongoing exposure to new products may convince you to buy
• for decisions you already have a "database of information" & then go into details

Q&A session:

• no wasting money/resources promoting a product to a market that does not want it
• where is your market? → reach that specific market → use "Big Data"

Market Segmentation:

= dividing a market into subsets of consumers with common needs or characteristics

• diversity in the global marketplace makes market segmentation an attractive, viable, and potentially highly profitable strategy
  • positive force for consumers & marketers
  • standardized marketing campaigns have the risk of being to generalized and then appealing to no one 
  • e.g. income, social class, age & sex of target customers may vary in different countries
• segmentation studies discover needs & wants of specific consumer groups
  • specialised goods and services can be developed and promoted to satisfy each group’s needs
• most companies with limited resources → few companies can pursue all the market segments identified
• targeting: selecting one or more of the segments identified for the company to pursue
• positioning: develop a distinct image for the product/ service in the consumers mind  to differentiate the offering from competing and squarely communicate that the particular product/ service fulfills their needs best

3 major strategic tools of Marketing (book):

• market segmentation
• positioning
• targeting

perception definition:

process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world

3 aspects of perception:

• selection
  • consumers subconsciously are selective to what they percieve
  • stimuli selected depend on 1)consumer's motives and 2)consumer's previous experience
  • selection depends on nature of stimulus, expectations, motives
  • concepts: selective exposure, selective attention, perceptual defense, perceptual blocking
• organization
  • principles: figure-and-ground (hazy ground, figure as noticed stimuli), grouping, closure
• interpretation
  • perceptual distortion: physical appearances, stereotypes, first impressions, jumping to conclusions, halo effect

⇒ selecting and organizing based on different criteria

In a consumer setting, any group or person that serves as a reference point is considered a reference group.

• group to represent your market and to refer to when making a decision
• normative, comparative, direct, indirect reference groups
• group: ≥ 2 individuals who reach individual or common goals thorough interaction
• groups can be membership groups or symbolic groups

Membership Groups:

A group you are, or can be a member of.

→ e.g. football team, amateur wine club

Symbolic Groups:

A group you are not and cannot become a member of, even though you act like members of the group.

→ e.g. the national football team, the professional wine club

⇒ reference groups make up the frames of reference that the consumer complies to in a variety of situations 

book definition:

"A person or group that serves as a point of comparison (or reference) for an individual in the formation of either general or specific values, attitudes or behaviour."

normative reference groups:

• define the frames of reference for general, overall values & behaviors

• reference groups influencing general or broadly defined values or behavior

• e.g. family

comparative reference groups: 

• serve as benchmarks for specific/ narrowly defined attitudes/ behavior
• reference for more precise, clearly defined attitudes and behavior 
• e.g. neighbors

direct reference group:

• you interact with the members 
• e.g. amateur wine club

indirect reference groups: 

• those individuals/ groups whom a person does not have direct face-to-face contact with
• e.g. actors in movie, national soccer team

ability to move up (or down) the social ladder

• different social classes
• one of the few ways to move up: education! (most important tool!!)

Definition (Google):

Social mobility is the movement of individuals, families, households, or other categories of people within or between social strata in a society. It is a change in social status relative to one's current sociallocation within a given society.

Modelling and Observational Learning: 

A process by which individuals observe the behavior of others, remember and imitate it.

⚡ no information in the book/ slides besides the definition above!

definition:

"A person who informally gives product information and advice to others."

•  the people you consult for buying something
• Opinion leaders know more than anyone else about a certain product/ service
• Innovators (adopter categories, 2.5%) are opinion leaders
• early adopters (adopter categories, 13.5%) contain greatest number of opinion leaders

Profile of Opinion Leaders:

• generalized attributes across product categories
  • innovativeness, willingness to talk, self-confidence, gregariousness, cognitive differentiation
• category-specific attributes
  • interest, knowledge, special-interest media, exposure, same age, same social status, social exposure outside group
• creation of opinion leaders: approach socially outgoing people
• advertisements stimulating opinion leadership

Opinion Leaders are...

• ...4x more likely to be asked about political issues
• ...3x more likely to be asked about computers/investments
• ...2x more likely to be asked about restaurants

Information seekers seek a "strong-tie" source when they know little about a topic, and "weak-tie" when they have some knowledege.

Opinion Leadership:

Process by which one person (= opinion leader) informally influences the consumption actions or attitudes of others who may be opinion seekers or opinion recipients.

→ opinion leaders

→ opinion seekers

→ opinion recipients 

⇒ related to word of mouth?!

Examples of Opinion Leadership:

• during a break a coworker talks about the movie he saw last night and recommends it
• someone showing a friend photos of his recent Australian Outback vacation and the friend suggests that using a polarizing filter might produce better pictures

how people talk about / verbally promote your product

→ related to opinion leadership?!

⚠︎ word of mouth may be uncontrollable (complaint handling)

→ w. r. t. the communication process: the message initiator (source) includes word of mouth

⚠︎ issues with the credibility of (informal) sources

"Perhaps the most important thing for marketers to understand about word of mouth is its huge potential economic impact" (Shiffman, Kanuk & Hansen, 2012)

Word-of-Mouth Communications (book definition):

"Informal conversations between friends concerning products or services."

No more age limits for what one can and cannot do

• in some areas age does not explain behavior, people who feel young are young
• young and old people doing the same things → not getting older socially/ psychologically 
• rather use feeling: e.g. lifestyle for segmentation
• people age in different ways: physical, physiological, sociological
• mature consumers have to be classified into categories based on their own self image
• categories like relating to health, other people, society, costs,... are not related to physical age

classifying personal traits & using them for marketing is almost hopeless

• too complicated → does not work
• no time & costs to do this 

personality definition:

the inner psychological characteristics that both determine and reflect how a person responds to his or her environment

• personality traits are often not recognizable(they are guarded/ not consciously recognized)
  • consumer innovators: open minded, perceive less risk in trying new things
• personality reflects individual differences
• personality can change but is consistent and enduring
• personality extremely hard and expensive to measure!

→ difficult to utilize in marketing

• the just noticeable difference (and) between 2 stimuli is not an absolute amount
  • it is an amount relative to the intensity of the first stimulus
• the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different

there is a lot of background noise

→ if you want to stick out you have to be above average

book defintion:

A theory concerning the perceived differentiation between similar stimuli of varying intensities; that is, the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.