COPYRIGHT 2006 Thomson Learning Australia

CHAPTER 1

Consumer behaviour and

consumer research

What is consumer behavior?

Activities people undertake when
obtaining, consuming, and disposing
of products and services
A field of study that focuses on
consumer activities
Scope goes beyond just why and
how people buy to include
consumption analysis

Consumer
influences

Obtaining

Organisational
influences

Consuming

Consumer behavior

Disposing

Consumer
influences
Culture
Ethnicity
Personality
Family
Life-stage
Values
Income
Available resources
Attitudes
Opinions
Feelings
Motivations
Past experiences
Peer groups
Knowledge

Organisational
influences
Brand
Product features
Advertising
Word of mouth
Promotions
Retail displays
Price
Quality
Service
Store ambiance
Convenience
Loyalty programs
Packaging
Product availability

Obtaining

Consuming

Disposing

How you decide

you want to buy

How you use the

product

How you get rid of

remaining product

Other products
you consider
buying

How you store the

product in your
home

How much you

throw away after
use

Where you buy

Who uses the

product

If you resell items

yourself or
through a
consignment
store

How you pay for

product
How you
transport
product home

How much you

consume
How product
compares with
expectations

How you recycle

some products

Consumption analysis
Why and how people use products in
addition to why and how they buy

The marketing concept

The process of planning and
executing the conception, pricing,
promotion, and distribution of ideas,
goods and services to create
exchanges that satisfy individual and
organisational objectives
Satisfaction with an exchange
depends on satisfaction with
consumption of product and the
exchange of money

Why Study Consumer Behavior?

Consumer Behavior Determines the
Economic Health of a Nation

Why study consumer behaviour?

Consumer behavior determines the
success of marketing programs
Marketing can be used to
influence brand choice and
purchase, while de-marketing
can influence people to stop
harmful consumption
The Customer is King:
Organisation influenced by
consumer needs and wants

Why study consumer behaviour?

Organisations that are customer-centric use
a total marketing approach to focus their
resources on satisfying customers
Marketing is the process of transforming or
changing an organisation to have what
people will buy

Why study consumer behaviour?

Consumer behavior determines
everyones economic health:
The individuals decisions as a consumer
determine their economic health by making
more effective consumption decisions while
avoiding deceptive practices harmful to them
Public policy leaders and social
commentators study consumer behavior to
alleviate over-consumption and underconsumption by educating consumers about
problems and providing assistance

Consumer
behaviour
helps to
formulate
public policy

Educating consumers about health

Understanding
consumers issues or
problems and
developing methods
to reach and educate
consumers

Studying consumer behaviour

helps formulate public policy
Understanding
consumers
needs to
formulate public
policy and
predicting
behavioral
changes that
follow

Government Protection
and Education
Int
e
rat rest
es

Soci
al
Welf
are
ng
Warni
labels

ic
Econom
ily
Fam ing
n
Plan

nt
e
m
n
r
Gove tions
la
u
g
e
R

Protection from
Competitive Markets

Consumer behaviour affects

personal policy
Personal policy includes
how you behave
towards others and in
buying situations, your
values and beliefs, and
how you live your life
A persons economic
quality of life is
determined by personal
policy

Evolution of consumer behavior

Supply chain:
all the organisations involved in taking a
product from inception to final consumption
- Manufacturers
- Wholesalers
- Retailers
- Facilitating organisations

Consumers increased influence on

business

Evolution of consumer behaviour

Consumers increasing influence

Wholesaler

Manufacturer

Manufacturing
Orientation

Retailer

Consumer

Selling
Marketing Consumer
Orientation Orientation Orientation

US

1750-1850

1850-WWII

1970-2000

2000+

Europe

1750-1850

1760-WWII

1970-2000

2000+

Evolution of consumer behaviour

Manufacturing orientation
Selling orientation
Marketing orientation:
- Motivation research
- Positivism
- Postmodernism
Consumer orientation

Consumer orientation
Beyond a marketing focus
How all organisations in a demand chain
adapt to changing consumer lifestyles and
behaviors bringing product design,
logistics, manufacturing, and retailing
together
Role of consumers in shaping many
aspects of life society, government, social
programs, health cares, and other areas

Studying consumer behaviour:

Consumer research methods
Observation
Observing consumer behaviors in different
situations such as natural or artificial
settings
In-home observation: examining how and when consumers
use and consume products in their households
Shadowing: following and observing consumers in the
shopping and consumption processes. Researchers may ask
questions about reasons for behaviors
Physiological methods: techniques borrowed from medicine,
psychology and other sciences including cameras to measure
eye movement, galvanic skin response, and MRI

Consumer research methods

Interviews and surveys
Surveys: efficient method for gathering
information from a large sample of consumers by
asking questions and recording responses
(telephone and Internet surveys, mall intercepts,
and mail questionnaires)

Focus groups: a group discussion led by a

moderator skilled in persuading consumers to
thoroughly discuss a topic of interest

Longitudinal studies: repeated measures of

activities over time to determine changes in
opinions, buying, and consumption behaviors

Consumer research methods

Experimentation
Measuring cause-and-effect relationships by
manipulating independent variables to
determine the effects of changes on
dependent variables
- Laboratory experiment

- Field experiment
Independent variables might include number of
advertisements and package design

Dependent variables might include purchase

intent or behavior

Consumer research methods

Consumption research builds on the three
primary research methods to examine how
people use products and services rather
than how they buy them
May use ethnographic tools to under-stand
how values and culture influence usage of
products and other behaviors
May identify new uses for existing products
or new product to satisfy unmet or changing
consumer needs

Understanding how consumers

use products

Underlying principles of
consumer behaviour
The consumer is sovereign
The consumer is global
Consumers are different
Consumers are alike
Consumers appear different but
respond in similar ways to brands

The Underlying Principles of

Consumer Behavior
The Consumer Is
Sovereign
The Consumer Is Global
Consumers Are Different;
Consumers Are Alike
The Consumer Has
Rights

Consumer Bill of Rights

Refer to DOCEP (Department
of Consumer and Employment
Protection) in Western
Australia for information on
consumer rights. Remember
that consumer rights may vary
across countries in the South
East Asian region.

Challenges for the future

Gathering and interpreting information
that organisations need to meet
changing needs of consumers
Developing effective consumer
research methods to capture changes
in trends and lifestyles
Understanding consumer behaviour
from a broader perspective as an
important part of life