Consumer Behavior

Fall 2010
Week 1

Dr. Liat Hadar

Class Materials

Course lectures

Reading materials

Chapters from Dan Ariely’s book “Predictably Irrational”.

3 Journal articles (available on the course website)

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 Requirements and Grading

Midterm (30%)
Exam (70%)
_________________________________
Total (100%)

Optional:
Midterm (30%)
Exam (70 - X%)
Participation in experiments (X%, up to 10%)
_________________________________________
Total (100%)
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Midterm: 30%

Closed materials

Based on lecture, discussion, and course reading materials

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 Exam: 70%

Closed materials

Based on lecture, discussion, and course reading materials

Administration

lhadar@idc.ac.il

Office hours: By appointment

Doors close 10 minutes after class starts

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 Introduction

Why Study the Psychology of Consumer

Behavior?

Understand how consumers make decisions

Understand how to influence consumers’ behavior and
decisions

Improve your own decisions

A few examples:

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 Real Estate Examples

Imagine that a potential buyer is about to see your house this

evening. What would you do to increase his or her interest?

Danny lives at 80 Washington St. Ben lives at 30 Federal Av.

Who is more likely to receive higher bids on his house?

Dana suggests that her parents set a minimal price of
$248,307 on their house. Her sister, Anna, suggests that the
minimal price is set to $250,000.

Which is expected to yield higher offers?

Marlboro Ads

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 Course Topics

Affect and Cognition

Motivation

Perception

Attitudes

Conducting experimental research

Decision-making

Learning

Environment and culture

Consumer behavior and marketing strategy

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Consumer Behavior: Big Business

The average American consumes about 280 mg of caffeine

each day, or three eight-ounce cups of coffee.

Americans currently drink nearly 35 billion glasses, or seven
gallons per person, of iced tea every year.

Beer accounts for nearly 87% of all alcohol beverages
consumed in the U.S.

The average American drinks approximately 23 gallons of beer every
year.

55.1% of all beer drinkers are college educated, while 38.9% are high
school dropouts.

12% of grocery products become “cabinet castaways”

Most typical branded castaway: Tabasco Sauce.

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 Consumer Behavior Matters

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Getting Close to the Consumer

“Excellent” companies are close to the consumer.

Strategy must be informed by what consumers are
doing/seeking

Revlon: “In the factory we make cosmetics. In the store we sell hope.”

Brand-name vs. Private-label

Importance of creativity or “marketing imagination”

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 The Evolving Philosophy of Marketing

Production Concept

Product Concept

Selling Concept

Marketing Concept

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Contrasting the Approaches

Selling Concept Marketing Concept

Orientation Internal, External,
Product-focused Customer-focused
Goal Profit through Profit through
volume customer satisfaction
Means Selling Determine needs/wants
and deliver more
effectively than
competition

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 Implications of Shift in Orientation

Products & Customers &

Processes Move to Outward Focus Competitors

Focus on more than just one transaction

(relationship marketing, branding, etc)

Focus on consumer research

Focus on competitive advantage

Focus on BENEFITS to your customers delivered through
product features.

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Framework for Consumer Analysis

Elements

Affect and cognition

Behavior

Environment

Marketing strategy (part of environment)

Reciprocal determinism

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 “The Consumer Wheel”

Marketing
Strategy

Consumer
Environment
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Affect and Cognition

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 Types of Affective Response

Affective Type Physiological Feeling Intensity Examples of

Response Arousal Level or Strength Positive, Negative Affect

Emotions High arousal Stronger Joy, love

Fear, guilt, anger
Specific feelings Warmth, appreciation,
satisfaction
Disgust, sadness
Moods Alert, relaxed, calm
Blue, listless, bored
Evaluations Lower arousal Weaker Like, good, favorable
Dislike, bad, unfavorable

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The Somatic Component of Affect

Physiological arousal

GSR

EEG

Blood pressure

Pupillometry

Facial expressions

Paul Ekman’s Work

Universal Emotions

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 Six Basic Emotions

Anger Fear Disgust

Surprise Joy Sadness 23

The Somatic Component of Affect

Physiological arousal

GSR

EEG

Blood pressure

Pupillometry

Facial expressions

Paul Ekman’s Work

Universal Emotions

Facial feedback hypothesis

Smiling and Success

Smiling and advertisement

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 Smiling and Advertising

Abstract: “Invest in your future health”

Concrete: “Ensure your health today”

☺  
Abstract Concrete Abstract Concrete Abstract Concrete
(Labroo & Patrick, 2009)
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Smiling and Advertising

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Purchase Intention

3
Abstract ad
2
Concrete ad

0
Positive Netural Negative

(Labroo & Patrick, 2009)

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Affect

Affective system primarily • Example: How do you feel

reactive about:

Responses immediate and
automatic

Not under voluntary control

Responds to virtually any
type of stimulus (e.g.,
physical, social)

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 Cognition

Mental processes include understanding, judging, planning,

deciding, thinking

Cognitive responses:

Knowledge
McDonald’s is a fast food restaurants

Meanings


Beliefs

McDonald’s has a diversified menu

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Cognition

Cognitive activities are localized in brain

Specialization of function

e.g., hemispheric lateralization

Much cognitive activity not conscious

Stroop effect (Stroop, 1935)

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 Stroop Effect

Please name the ink color of the following words:

xxxx
Blue
Yellow
Red
Red

Reading is an automatic, unconscious, process

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Next Week

Affect-Cognition Interaction

Thinking: Memory & Knowledge Structures

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