Multimedia Marketing/Marketing.iso/market/chapter3.1p

Text File | 1996-08-22 | 16KB | 351 lines

CHAPTER 3  Consumer Behavior

SECTION 3.1  Overall Consumer Behavior

INSTRUCTIONS Answer this question: "Why do consumers buy goods and services?"
Then pursue this section to find answers.

EXAMPLE

Facing a steady decline in birthrates since the late 1970's, a
large producer of infant and preschool toys, cut back its advertising
programs. But then in the mid-1980's, the preschool market suddenly
became more attractive, due to a resurgence in the birthrate: the
"baby boomers" of the 1950's were beginning to have children. As it
had in the past, the company began to astutely tailor its marketing
strategies to meet these new trends. Agressive marketing efforts by
competitors have made this segment one of the most hotly-contested
in the toy industry.

The company made several agressive moves in the mid-1990's. With
at least 60 new toys presented at the 1995 February Toy Fair trade
show in New York, the director of advertising predicted that 1996
would be a very bright year for the company. To augment the new
line of products the company increased its advertising budget by
over 90 percent.

DETAILS

Consumers are the focus of most companies. In this regard, profitably
satisfying consumer needs is at the heart of successful marketing.
Understanding why consumers purchase certain items, avoid others,
and how they make their purchase decisions is of vital interest to
marketing managers.

Consumers are people, acting as individuals or in small groups, who
buy goods and services for personal purposes--in contrast to industrial
buyers who buy and use items for commercial purposes.

Those with an interest in consumer behavior look at a number of
variables. A very important one is the population. Trends in population
have a great effect on marketing decisions. To illustrate, many
colleges and universities have begun to market continuing education
programs to adults, primarily because of large increases in this
group. Similarly, a surging birthrate has lead to increasing competition
in the toy market.

Populations shift from one area of the country to another is
significant for marketers. Some of the high growth states are Florida,
Arizona, and Nevada. To the contrary, New England states have lost
population. This provides indicators of how new opportunities are
available to marketers who adjust to these shifts. The ski industry
has boomed, for example, with increases of the population in the
Rocky Mountain region.

Marketers study Metropolitan Statistical Areas (MSA's) to moniter
trends within specific areas. A MSA is an intregated social and
economic unit having at least one city with 50,000 or more inhabitants
or a U.S. Census Bureau defined urbanized area of at least 50,000
inhabitants and a total MSA population of at least 100,000. In all,
there are about 270 MSA's in the U.S. They account for approximately
75 percent of the population. Governmental agencies and numerous
other organizations, such as universities and foundations, collect
large volumes of data about population, income, expenditures, and other
variables in the MSA's.

Most companies focus their attention on specific groups of people.
Some travel agencies concentrate on senior citizens. Several soft
drink producers target consumers who are in their 20's. Various
handgun producers have designed one line for men and another for
women. These companies study these specific population groups, then,
rather than analyzing the entire population.

PROBLEM 1

A company that plans to introduce a new line of infant's wear should
begin its study of consumer behavior by examining:

A. The population in each region in the country.
B. The number of mothers in each region in the country.
C. Population broken down by age, in each region of the country.
D. Incomes in each region in the country.

WORKED

If a company wants to introduce a new line of infant's wear,
management would want to determine what areas the company effort
should target first. This could be accomplished by examining  the
age breakdown of the population, categorized by MSA. This would
reveal how many infants reside in each MSA, and would be useful
in indicating where the company should concentrate its efforts.
There are substantial differences in the age distribution of the
country, from one area to another, so this analysis could be very
revealing.

ANSWER C

INSTRUCTIONS Answer this question: "Why do consumers buy goods and services?"
Then pursue this section to find answers.

EXAMPLE

Facing a steady decline in birthrates since the late 1970's, a
large producer of infant and preschool toys, cut back its advertising
programs. But then in the mid-1980's, the preschool market suddenly
became more attractive, due to a resurgence in the birthrate: the
"baby boomers" of the 1950's were beginning to have children. As it
had in the past, the company began to astutely tailor its marketing
strategies to meet these new trends. Agressive marketing efforts by
competitors have made this segment one of the most hotly-contested
in the toy industry.

The company made several agressive moves in the mid-1990's. With
at least 60 new toys presented at the 1995 February Toy Fair trade
show in New York, the director of advertising predicted that 1996
would be a very bright year for the company. To augment the new
line of products the company increased its advertising budget by
over 90 percent.

DETAILS

There are many theories of consumer behavior. Some come from economics;
others derive from psychology and sociology. Which one is correct?
Which one predicts consumer behavior better than the others? The
answer to these questions is "They all do." Some aspects of consumer
behavior are best explained by psychological theories. Others are
best explained by sociological theories. It is necessary, then, for
us to be familiar with a number of theories in order to understand
consumer behavior. No one theory will explain everything.

All of the theories use some form of the following model:

             Stimuli--Mental Processes--Behavior

This simple model indicates that stimuli or cues trigger mental
processes of the consumer and that this results in behavior. Stimuli
are objects or events that take place and spur consumers to alter
their thinking. Mental process are the thoughts that consumers
experience because of the stimuli and their past experiences. Examples
of mental processes are perception, memory, and reflection. In turn,
the combination of the stimuli and the mental processes produces some
form of behavior, such as making a purchase.

All of the theories follow this general pattern. They differ in what
stimuli, mental processes, and behavior they study and how they
organize these three elements.

PROBLEM 2

A fast food chain employs billboard to direct motorists to their
restaurants. In this case the billboards serve as:

A. Mental processes.
B. Behavior.
C. Stimuli.
D. Models.

WORKED

When a fast food chain employs billboards to direct motorists to
their restaurants, the billboards serve as stimuli. The chain
can use other stimuli, as well, of course. These other stimuli
include distinctive signs, attractive exteriors, and aromas of
food cooking.

One of the major things that marketers do is to introduce stimuli
to consumers, as a means of influencing their behavior. A cereal
marketer relies heavily on stimuli. It sponsors advertisements in
magazines and television, which bring company products to the
attention of consumers and attempt to convince them that these
offerings taste better than competitors' cereals. The firm has
engaged packaging consultants to design packages which help sell
the products on store shelves and build a quality image among
consumers. The product itself serves as a stimulus. Its taste,
consistency, and composition all affect how consumers react.

ANSWER C

INSTRUCTIONS Answer this question: "Why do consumers buy goods and services?"
Then pursue this section to find answers.

EXAMPLE

Facing a steady decline in birthrates since the late 1970's, a
large producer of infant and preschool toys, cut back its advertising
programs. But then in the mid-1980's, the preschool market suddenly
became more attractive, due to a resurgence in the birthrate: the
"baby boomers" of the 1950's were beginning to have children. As it
had in the past, the company began to astutely tailor its marketing
strategies to meet these new trends. Agressive marketing efforts by
competitors have made this segment one of the most hotly-contested
in the toy industry.

The company made several agressive moves in the mid-1990's. With
at least 60 new toys presented at the 1995 February Toy Fair trade
show in New York, the director of advertising predicted that 1996
would be a very bright year for the company. To augment the new
line of products the company increased its advertising budget by
over 90 percent.

DETAILS

Explorers of consumer behavior have proposed a number of models
describing buying processes and how these processes develop. A
model is simply an abstraction of the phenomenon it is intended
to represent. In effect, it specifies the essential elements that
the analyst deems to be important, represents the interrelationships
between them, and spells out how behavior results from these
elements.

While no consumer behavior model is perfect, models offer several
advantages making them worth using. They provide frames of reference
for analyzing variables related to consumer behavior and the
interrelationships of these variables. They furnish a means of fitting
together information in a meaningful way. They serve as guides for
future research. Models also provide guides for establishing marketing
plans and actions.

Most marketing managers find that no single model of consumer behavior
explains everything. By using several of these together, however,
considerable understanding of the consumer is made possible.

PROBLEM 3

A producer of headache remedies uses several psychological models
to explain consumer behavior. These models do not:

A. Serve as guides for future research.
B. Provide guides for establishing marketing plans.
C. Furnish a means of fitting together information in a meaningful way.
D. Predict consumer behavior perfectly.

WORKED
A producer of headache remedies uses several psychological models
to explain consumer behavior. The models can be very useful but
they  are only abstractions of reality. Consequently, they
cannot be expected to predict consumer behavior perfectly. The
study of consumer behavior is an inexact science, unlike other
fields such as physics and biology.

A producer of headache remedies has found that several psychological
models are useful in predicting how consumers will react to company
advertising efforts. The models predicted that the firm should run
its television commercials over many times (a repetition strategy)
in order to change consumer attitudes substantially. This strategy
has been successful and management is now a strong believer in the
usefulness of repetition.

ANSWER  D

INSTRUCTIONS Answer this question: "Why do consumers buy goods and services?"
Then pursue this section to find answers.

EXAMPLE

Facing a steady decline in birthrates since the late 1970's, a
large producer of infant and preschool toys, cut back its advertising
programs. But then in the mid-1980's, the preschool market suddenly
became more attractive, due to a resurgence in the birthrate: the
"baby boomers" of the 1950's were beginning to have children. As it
had in the past, the company began to astutely tailor its marketing
strategies to meet these new trends. Agressive marketing efforts by
competitors have made this segment one of the most hotly-contested
in the toy industry.

The company made several agressive moves in the mid-1990's. With
at least 60 new toys presented at the 1995 February Toy Fair trade
show in New York, the director of advertising predicted that 1996
would be a very bright year for the company. To augment the new
line of products the company increased its advertising budget by
over 90 percent.

DETAILS

Some students of consumer behavior believe that different models can
be integrated by using some overall theory of consumer behavior.
One of these is the problem solving model. It proposes that all
consumers make purchase decisions in a fashion that resembles the
processes that people use to solve problems

Problem    ___ Search for___Sources of ___Decision___Post Purchase
Recognition    Solution     Information              Activities

According to this model the consumer recognizes a problem-a difference
between desired behavior and actual behavior. It could be that the
problem is that a family's hot water heater is not producing enough
hot water for everyone. It seemed to work well before, but this is
no longer the case.

In search of a solution, the husband drains the tank and cleans it.
This does not correct the problem, however, so he confers with several
friends. They advise him that the appliance probably should be replaced.
He calls a plumbing and heating retailer, who echoes the advice--it
should be replaced.

The sources of information in this case could be many. These would
include the friends, the plumbing and heating dealer, advertisements,
brochures, other dealers, "Consumer Reports" magazine and, of course,
the past experience of the consumer that is stored in memory.

The consumer probably will check with several dealers for the best
price and quality combination. This will result in a decision to
buy a particular model from a particular dealer.

The consumer behavior process does not end here. There are various
post-purchase activities that will take place and affect the
response of the consumer toward the product and retailer. The
activities include delivery, installation, and billing. If these
are accomplished effectively the consumer is likely to be satisfied.
In turn, he may tell other friends about the positive outcome.

This model brings together the various steps that consumers go through
when they make a purchase. It probably describes the processes that
most people employ for this purpose.

PROBLEM 4

A sales representative for a resin manufacturer is calling upon
another manufacturer that makes kayaks, canoes, and other boats
for consumers. Based on the model of consumer behavior, the first
task of the sales representative is to:

A. Provide sources of information.
B. Show the buyer that action is necessary.
C. Convince the buyer that a problem exists.
D. Carry out post-purchase activities.

WORKED

A sales representative for a resin manufacturer is calling upon
another manufacturer that makes kayaks, canoes, and other boats
for consumers. Based on the model of consumer behavior, the first
task of the sales representative is to convince the buyer that a
problem exists. The sales representative might point out that the
buyer is paying too much for competing resins or is getting an
inferior product or substandard service. The goal is to show that
there is a substantial difference between a desired state (high
quality goods and services at a reasonable price) and the actual
state of the buyer. Once the problem is recognized, other steps
will logically follow.

ANSWER  C