Introduction to Consumer Behaviour

Consumer Behaviour
RSM 353
Professor Scott Hawkins
Fall 2023
 Overview

 Course administration

 What is consumer behaviour and why is it important?

 The science of consumer behaviour:

 is multi-disciplinary (to understand the range of
influences)
 involves systematic study (not just intuitions and
anecdotes)
 requires a theoretical understanding of the process
(not just the outcome)

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© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 Course Administration

 Welcome to the course!

 Syllabus
 Learning outcomes for this course
 Required readings
 Grading
 Class participation
 Analysis
Courseand application papers
Component Due Date Weight
 Commitment to accessibility
Class Participation Ongoing 20%
First Paper October 5 22%
 Check course
Second page
Paper
The University on the
of Toronto portal
November
is committed regularly:
2
to accessibility. 25%
If you require
 Required
Third readings
accommodations
Paper (not HBS)
for a temporary or ongoing disability or health concern, or
November 30 the classroom or course
30%
have any accessibility concerns about the course,
 Links to videos
materials,
Research please and
Req. websites
contact Accessibility
December Services
1 as soon as possible. 3%
 SlidesTotal
posted before each session 100%
 Class recording posted after each session
3
© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 What is Consumer Behaviour?
“Consumer
“The purpose of a business is toiscreate
Boss”and keep a customer”
(A.(Peter
G. Lafley, former
Drucker, CEO, P&G)
1954/2012)
Consumers are the boss - without the consumers there is no business,
consumers influence the business,Descriptive Norm
consumer are the key to branding
and marketing, consumers drive all business functions, its the study
Join
of what consumers want, what they don’t your
want, what Fellow
they do not know t
[Guests] in Helping to
they want. CONSUMER CENTRIC

 Consumer behaviour is the study of the Save the Environment.

processes involved when individuals or In a study last Fall, 75%
groups select, purchase, use, or dispose of of [guests] participated
in our new resource-
products, services, ideas, or experiences to saving program.
satisfy needs and desires.

 Consumer behaviour takes as its unique

“A majority of our Type of Appeal
focus thereuse
guests theirof the culture,
study social
Citizen
environment,
towels” individual differences,
vs.
Gender
Standard
motivations, emotions, perceptions,
“Help save the
Guest
Same Room
memories, evaluations, choices, and
environment”

experiences of consumers.
Goldstein et al., JCR, 2008 4
© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 We Are All Consumers

 How many consumer experiences do you have in a typical day?

Unconscious learning - you see something, you don’t think about it much, much some part stays in your brain and memory

 What challenges do you face (as an experienced consumer) in

analyzing the behaviour of other consumers?
 Environmental effects (cultural and social context)
 Consumer heterogeneity (individual differences)
 Shifting motivations, perceptions, memories, attitudes, and
emotions (cognitive influences)
 Limits of introspection and prediction (unconscious
processes and projection biases)

 Understanding consumer behaviour can help:

 Marketers design and sell better products/services
 Policymakers develop better regulations
 Consumers make choices that yield more value
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© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 Why Study Consumer Behaviour?
3C’s - consumer, competition, creating value drive marketing

 Creating Customer Value

 The key to achieving organizational goals consists in
creating value for your target markets and delivering the
desired satisfactions more effectively and efficiently than
competitors (market orientation).
 Marketers need to understand consumers’ responses to
different environments and marketing tactics in order to
describe, predict, and influence their behaviour.

 The Age of Customer Capitalism

 “To create shareholder value…maximize customer
satisfaction.” (Martin, 2010)

 Relationship Marketing
Managerial
Shareholder
Value
Customer
 Firms Capitalism
must actively manage their
Capitalism customers in order to
Capitalism

increase the profitability of their acquisition, retention, and

enhancement efforts (CLV and CRM). 7
© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 Consumer Behaviour Shapes
Marketing Strategy
 Segmentation
The theory of segmentation states that no brand can
appeal to all consumers, which implies that we must
identify and satisfy one or a few groups of consumers that
have relatively homogenous needs.

 Targeting
This decision requires a clear understanding of the
responsiveness of consumers to various marketing stimuli
(product benefits, pricing, promotion, distribution, etc.).

 Positioning
This requires an understanding of the
effects of specific marketing tactics (e.g.,
advertising, price promotions) on
consumers’ perceptions and beliefs.

© September 7, 2023 by Scott A. Hawkins. All rights reserved.

Listerine 8
 Consumer Behaviour is Multi-Disciplinary

 The study of consumer behaviour draws upon many disciplines:

 Anthropology Influences on Consumer Behaviour
 Semiotics
Cultural
 Sociology Culture Subcultures
Social Class
 Demography
 Economics Reference Groups
Social
Roles & Status
 Psychology Family

✓ Behaviourism Personal
Age/Cohort Economic Education
✓ Personality Lifestyle Personality

✓ Social Psychological
✓ Cognitive Motivation
Memory
Perception Learning
Attitudes

✓ Neuroscience
Buyer
Decision Processes

10
© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 Consumer Research

 How can we learn about consumer behaviour?

Source: Zikmund & Babin (2007)

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© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 The Science of Shopping

 Paco Underhill (2000) reported a number of insights about

consumer behaviour in a retail environment based on
exhaustive observation and recording of actual shopping
behaviour (retail anthropology).
 Downshift Period and the Decompression Zone
 Destination and Impulse Zones
 Invariant Right
 Butt-Brush (see also Martin, 2012)
Apple - endowment
 Petting Clothes effect
 Advocacy

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© September 7, 2023 by Scott A. Hawkins. All rights reserved.
Information Processing View of Consumers
Motivation

Perception

Cultural
Learning Personal
& Social
& Memory Influences
Influences

Evaluation
& Choice

Purchase &
Consumption
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© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 The Process of Consumer Choice

 Need Recognition
 What motivates consumers? Customer value?
 Perception
 How do consumers sense, attend to, and
interpret information?
 Learning and Memory
 How do consumers form associations and
complex knowledge?
 What information do they store in memory and
how do they employ that information?
 Evaluation and Choice
 How do consumers put information together to
form judgments and make decisions?
 Purchase, Consumption, and Disposal
 What happens at the point-of-purchase?
 Satisfaction? Loyalty? Relationships?
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© September 7, 2023 by Scott A. Hawkins. All rights reserved.
 Summary

 Consumer behaviour is the study of the processes involved

when individuals or groups select, purchase, use, or dispose of
products, services, ideas, or experiences to satisfy needs and
desires and the cultural, social, personal, and psychological
forces that influence consumers.

 Marketers must understand consumer behaviour in order to

create customer value, build consumer relationships, develop
successful marketing strategies, and implement appropriate
marketing plans.

 There are many ways to enhance your understanding of

consumer behaviour:
 GO SHOPPING
 WATCH TELEVISION AND USE SOCIAL MEDIA
 CHAT WITH OTHER CONSUMERS
 COLLECT AND ANALYZE CONSUMER DATA
 APPLY THE LATEST THEORIES AND FRAMEWORKS 15
© September 7, 2023 by Scott A. Hawkins. All rights reserved.