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MODULE 1: UNDERSTANDING CONSUMER BEHAVIOR

Consumer behavior: the totality of consumers’ decisions with respect to the acquisition,
consumption and disposition of goods, services, time and ideas, by human decision making
units (over time).
- Acquisition: the process by which a consumer comes to own an offering.
- Usage: the process by which a consumer uses an offering.
- Disposition: the process by which a consumer discards an offering.

Consumer behavior also includes consumers’ use of services, activities, experiences and ideas.
How we use time reflects who we are, what our lifestyles are like and how we are both the
same and different from others. Offering is the term used to encompass these entities. An
offering is a product, service, activity, experience or idea offered by a marketing organization
to consumers.

Consumer behavior is a dynamic process and involves:

- Many people (like group purchases or taking different roles in purchase process);
- Many decisions (like what offering to acquire, why an offering is not used, how to
dispose an offering);
- Emotions and coping (like stress because of a purchase decision).

Consumer behavior encompasses four domains:

1. The consumer’s culture: Social influences, like reference groups (a group of people
consumers compare themselves with for information regarding behavior, attitudes or values),
consumer diversity, household and social class influences and psychographics like values and
lifestyles.
2. The psychological core: Motivation, Ability and Opportunity (MAO), exposure,
attention, perception and comprehension, memory and knowledge and forming and changing
attitudes.
3. The process of making decisions: Problem recognition and information search,
making judgments and decisions and post-decision processes/evaluations.
4. Consumer behavior outcomes and issues: Innovations, symbolic consumer behavior
and marketing, ethics and social responsibility.

Marketing implications of consumer behavior illustrate how marketers apply consumer

behavior concepts:
- Developing and implementing customer-oriented strategy;
- Making promotion and marketing communication decisions;
- Making pricing decisions;
- Making distribution decisions;

Consumer Behavior is affected by the consumer’s culture and by the typical or expected
behaviors, norms, and ideas of a particular group. Consumers belong to a number of groups,
share their cultural values and beliefs, and use their symbols to communicate group
membership. Household and social class influences are involved in consumer behavior, as are
each individual’s values, personality, and lifestyles. Consumer behavior can be symbolic and
express an individual’s identity. It is also indicative of how quickly an offering spreads
throughout a market. Further, ethics and social responsibility play a role in consumer behavior.

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Consumer Behavior Research Methods

Types of Data
1. Primary data: data originating from a researcher and collected to provide information
relevant to a specific research project.
2. Secondary data: data collected for some other purpose that is subsequently used in a
research project.

Research Methods Used

- Survey: a method of collecting information from a sample of customers, predominantly by
asking questions.
- Focus group: a form of interview involving 8 to 12 people; a moderator leads the group and
asks participants to discuss a product, concept, or other marketing stimulus.
- Storytelling: a research method by which consumers are asked to tell stories about product
acquisition, usage or disposition experiences. These stories help marketers gain insights into
consumer needs and identify the product attributes that meet these needs.
- Experiments: laboratory testing and field experiments with consumers, which is one way to
research new products and marketing trends.
- Market test (field research): a study in which the effectiveness of one or more elements of the
marketing mix is examined by evaluating sales of the product in an actual market, e.g. a specific
city. - Conjoint analysis: a research technique to determine the relative importance and appeal
of different levels of an offering’s attributes.
- Ethnographic research: in-depth qualitative research using observations and interviews (often
over-repeated occasions) of consumers in real-world surroundings. Often used to study the
meaning that consumers ascribe to a product or consumption phenomenon.
- Data mining: searching for patterns in a company database that offer clues to customer needs,
preferences and behaviors.
- Netnography: observing and analyzing the online behavior and comments of consumers.

Marketers study consumer behavior to gain insights that will lead to more effective marketing
strategies and tactics. Ethicists and advocacy groups are keenly interested in consumer
behavior, as are public policy makers and regulators who want to protect consumers from
unsafe or inappropriate offerings. Consumers and society can both benefit as marketers learn
to make products more user-friendly and to show concern for the environment. Finally,
studying consumer behavior helps marketers understand how to segment markets and how to
decide which to target, how to position an offering, and which marketing-mix tactics will be
most effective.

ACTIVITY: SHORT ESSAYS. Answer each question in 3 to 4 paragraphs.

1. How is Marketing defined in Consumer Behavior? (15 points)
2. How can public policy decision makers, advocacy groups, and marketing managers use
consumer research? (15 points)

REFERENCES:
Hoyer, Wayne D., Maccinis, Deborah J., and Pieters, Rik (2013). Consumer Behavior
in the 21st Century 2nd Edition. Cengage Learning Asia Pte Ltd, Unit 2105-2106 Raffles
Corporate Center, Esmerald Avenue, Ortigas Avenue, Pasig City, Philippines 1605
https://s3.studentvip.com.au/notes/5692-sample.pdf

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MODULE 2: PERCEPTION

Sensation and Perception

Sensation refers to the immediate response of our sensory receptors (eyes, ears, nose,
mouth, fingers, skin) to basic stimuli such as light, color, sound, odor, and texture.
Perception is the process by which people select, organize, and interpret these
sensations. The study of perception, then, focuses on what we add to these raw sensations to
give them meaning.
Our brains receive external stimuli, or sensory inputs, on a number of channels. We
may see a billboard, hear a jingle, feel the softness of a cashmere sweater, taste a new flavor of
ice cream, or smell a leather jacket. These inputs are the raw data that begin the perceptual
process. Sensory data from the external environment (e.g., hearing a tune on the radio) can
generate internal sensory experiences; a song might trigger a young man’s memory of his first
dance and bring to mind the smell of his date’s perfume or the feel of her hair on his cheek.
Marketers’ messages are more effective when they appeal to several senses. For
example, in a recent study one group read ad copy for potato chips that only mentioned the
taste, whereas another group’s ad copy emphasized the product’s smell and texture, in addition
to its taste. The participants in the second group came away thinking the chips would taste
better than did those whose ad message only focused on taste.

Sensory Marketing
In new era of sensory marketing, companies think carefully about the impact of sensations
on our product experiences. From hotels to carmakers to brewers, companies recognize that
our senses help us decide which products appeal to us—and which ones stand out from a host
of similar offerings in the marketplace.
a. Vision - Marketers rely heavily on visual elements in advertising, store design, and
packaging. They communicate meanings on the visual channel through a product’s
color, size, and styling.
b. Dollars and Scents - Odors stir emotions or create a calming feeling. They invoke
memories or relieve stress. This form of sensory marketing takes interesting turns as
manufacturers find new ways to put scents into products, including men’s suits,
lingerie, detergents, and aircraft cabins.
c. Sound - Music and other sounds affect people’s feelings and behaviors. Some marketers
who come up with brand names pay attention to sound symbolism; the process by
which the way a word sounds influences our assumptions about what it describes and
attributes, such as size. For example, consumers are more likely to recognize brand
names that begin with a hard consonant like a K (Kellogg’s) or P (Pepsi).
d. Touch - Encouraging shoppers to touch a product encourages them to imagine they own
it, and researchers know that people value things more highly if they own them: This is
known as the endowment effect. One set of researchers reported that participants who
simply touched an item (an inexpensive coffee mug) for 30 seconds or less created a
greater level of attachment to the product; this connection in turn boosted what they
were willing to pay for it. Researchers are starting to identify the important role the
haptic (touch) sense plays in consumer behavior. Haptic senses appear to moderate the
relationship between product experience and judgment confidence.
e. Taste - Our taste receptors obviously contribute to our experience of many products.
So-called “flavor houses” develop new concoctions to please the changing palates of
consumers. Cultural factors also determine the tastes we find desirable. A food item’s
image and the values we attach to it (such as how vegans regard beef menu items, which
is not kindly) influence how we experience the actual taste.

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The Stages of Perception

Stage 1: Exposure occurs when a stimulus comes within the range of someone’s sensory
receptors. Consumers concentrate on some stimuli, are unaware of others, and even go out of
their way to ignore some messages. We notice stimuli that come within range for even a short
time—if we so choose. However, getting a message noticed in such a short time (or even in a
longer one) is no mean feat. The figure below shows the overview of the perceptual process
starting with Exposure.

Stage 2: Attention refers to the extent to which processing activity is devoted to a particular
stimulus. As you know from sitting through both interesting and “less interesting” lectures, this
allocation can vary depending on both the characteristics of the stimulus (i.e., the lecture itself)
and the recipient (i.e., your mental state at the time).

Although we live in an “information society,” we can have too much of a good thing.
Consumers often live in a state of sensory overload; we are exposed to far more information
than we can process. In our society, much of this bombardment comes from commercial
sources, and the competition for our attention steadily increases. The average adult is exposed
to about 3,500 pieces of advertising information every single day—up from about 560 per day
30 years ago.

A large proportion of teens report that they engage in multitasking, where they process
information from more than one medium at a time as they alternate among their cell phones,
TVs, and laptops.63 One study observed 400 people for a day and found that 96 percent of
them were multitasking about a third of the time they used media.

Stage 3: Interpretation
Interpretation refers to the meanings we assign to sensory stimuli. Just as people differ in
terms of the stimuli that they perceive, the meanings we assign to these stimuli vary as well.
Many of these meanings depend on our socialization within a society: Even sensory perception
is culturally specific. A team of anthropologists created a “kit” of stimuli to compare what
people around the world perceive; this included color chips, scratch-and-sniff cards, sounds
recorded at different frequencies, and so on. When they exposed the same stimuli to people in
more than 20 different cultures, the results were dramatic: For example, prior research on
mostly English speaking people indicated that the typical person is not good at identifying the
smell of everyday things like coffee, peanut butter, and chocolate; they usually identify about
half of them correctly. However, people who live on the Malay Peninsula were more accurate.

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Interpretational Biases: The Eye of the Beholder

The Gestalt perspective provides several principles that relate to the way our brains organize
stimuli:
- The closure principle states that people tend to perceive an incomplete picture as
complete. That is, we tend to fill in the blanks based on our prior experience. This principle
explains why most of us have no trouble reading a neon sign even if several of its letters
are burned out. The principle of closure is also at work when we hear only part of a jingle
or theme. Marketing strategies that use the closure principle encourage audience
participation, which increases the chance that people will attend to the message.
- The similarity principle tells us that consumers tend to group together objects that share
similar physical characteristics. Green Giant relied on this principle when the company
redesigned the packaging for its line of frozen vegetables. It created a “sea of green” look
to unify all of its different offerings.
- The figure-ground principle states that one part of a stimulus will dominate (the figure),
and other parts recede into the background (the ground). This concept is easy to understand
if one thinks literally of a photograph with a clear and sharply focused object (the figure)
in the center. The figure is dominant, and the eye goes straight to it. The parts of the
configuration a person will perceive as figure or ground can vary depending on the
individual consumer, as well as other factors. Similarly, marketing messages that use the
figure-ground principle can make a stimulus the focal point of the message or merely the
context that surrounds the focus.

Semiotics: The Meaning of Meaning

Some marketers turn to semiotics, a discipline that studies the correspondence between signs
and symbols and their roles in how we assign meanings.91 Semiotics is a key link to consumer
behavior because consumers use products to express their social identities. Products carry
learned meanings, and we rely on marketers to help us figure out what those meanings are. As
one set of researchers put it, “Advertising serves as a kind of culture/consumption dictionary;
its entries are products, and their definitions are cultural meanings.

From a semiotic perspective, every marketing message has three basic components: an object,
a sign (or symbol), and an interpretant. The object is the product that is the focus of the
message (e.g., Marlboro cigarettes). The sign is the sensory image that represents the intended
meanings of the object (e.g., the Marlboro cowboy). The interpretant is the meaning we derive
from the sign (e.g., rugged, individualistic, American).

According to semiotician Charles Sanders Peirce, signs relate to objects in one of three ways:
They can resemble objects, connect to them, or tie to them conventionally. An icon is a sign
that resembles the product in some way (e.g., the Ford Mustang has a galloping horse on the
hood). An index is a sign that connects to a product because they share some property (e.g.,
the pine tree on some of Procter & Gamble’s Spic and Span cleanser products conveys the
shared property of fresh scent). A symbol is a sign that relates to a product by either
conventional or agreed-on associations (e.g., the lion in Dreyfus Fund ads provides the
conventional association with fearlessness and strength that it carries [or hopes to carry] over
to the company’s approach to investments).

Hyperreality
One of the hallmarks of modern advertising is that it creates a condition of hyperreality. This
refers to the process of making real what is initially simulation or “hype.” Advertisers create
new relationships between objects and interpretants when they invent connections between

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products and benefits, such as when an ad equates Marlboro cigarettes with the American
frontier spirit. In a hyperreal environment, over time it’s no longer possible to discern the true
relationship between the symbol and reality. The “artificial” associations between product
symbols and the real world take on lives of their own.

Perceptual Positioning
When a marketer understands how consumers think about a set of competing brands, it can use
these insights to develop a positioning strategy, which is a fundamental component of a
company’s marketing efforts as it uses elements of the marketing mix (i.e., product design,
price, distribution, and marketing communications) to influence the consumer’s interpretation
of its meaning in the marketplace relative to its competitors. For example, although consumers’
preferences for the taste of one product over another are important, this functional attribute is
only one component of product evaluation. Marketers can use many dimensions to carve out a
brand’s position in the marketplace. These include:
- Lifestyle. Grey Poupon mustard is a “higher-class” condiment.
- Price leadership. L’Oréal sells its Noisôme brand face cream in upscale beauty shops,
whereas its Plenitude brand is available for one-sixth the price in discount stores—even
though both are based on the same chemical formula.
- Attributes. Bounty paper towels are “the quicker picker-upper.”
- Product class. The Spyder Eclipse is a sporty convertible.
- Competitors. Northwestern Insurance is “the quiet company.”
- Occasions. Wrigley’s gum is an alternative at times when smoking is not permitted.
- Users. Levi’s Dockers target men in their 20s to 40s.
- Quality. At Ford, “Quality is job 1.”

ACTIVITY: Prepare a Narrative Report (50 points)

1. Choose One (1) of your favorite products that you have been buying for some years.
How has it changed over the years? Is it better, bigger, smaller, easier to use, better
tasting? Narrate your personal experiences with the product throughout the years by
applying the concepts and principles that you have learned.

REFERENCES:
Solomon, Michael R. (2018). Consumer Behavior: Buying, Having, and Being, Twelfth
Edition, Global Edition. Pearson Education Limited, Edinburgh Gate, Harlow, Essex CM20
2JE, England

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