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MKT 400
Ida Berger

Chapter 1 Notes: Introduction to Consumer Behaviour Consumer Behaviour: -study of the process involved when individuals or groups select, purchase, use or dispose of products, services, ideas, or experiences to satisfy needs and desires -consumers take many forms, such as an 8year old begging her mom for a Barbie doll to a large corporation choosing a multimillion dollar computer system -items consumed can include anything from canned peas to a massage, democracy to a hip hop -needs and desires to be satisfied range from hunger to thirst to love, status etc -consumer behaviour is an ongoing process, not what happens the moment when a consumer hands over money/credit card and in turn receives a good or service -exchange is when 2 or more organizations or people give and receive something of value -consumer is generally thought of a person who identifies a need or desire, makes a purchase, and then disposes the product during the 3 stages in the consumption process (pre-purchase issue, purchase issue, post-purchase issues) -consumers may also be organizations/groups in which one person may make the decision involved in purchasing products that will be used by many EX: when a purchasing agent orders a companys office supplies which will be used by many -purchase decisions may also be made by large groups of people EX: company accountants, designers, engineers, sales personnels -very simple and good understanding of consumer behaviour equals good business Basis marketing concept states that firms exist to satisfy consumer needs, these needs can be satisfied only to the extent that marketers understand the people/org. that will use the products and services they are trying to sell which results in doing better than their competitors -purpose of understanding consumer is to predict the future, anyone can see what is happening at present, however in consumer behaviour we are also focused on what happens tomorrow Segmenting Consumers: -marketing segmentation identifies groups of consumers who are similar to one another in 1 or more ways and then devises marketing strategies that appeal to one or more groups -building loyalty to a brand is a very smart marketing strategy so sometimes companies define market segments by identifying their most faithful customers or heavy users -demographics are statistics that measure aspects of a population, such as birth rate, age distribution and income The changes and trends revealed in demographics studies are of great interest to marketers because data can be used to locate and predict the size of markets for many products, ranging from home mortgages to brooms and can openers -demographic dimensions include: Age- different age groups have different needs and wants Gender- many products are targeted at either men or women Family Structure- persons family and marital status is another important demographic because it has such a big effect on a consumers spending priorities Social Class and Income- people are grouped within social class are mostly equal in terms of their income and social standing in the community, the distribution of wealth has a great interest to marketers because it determines which groups have the greatest buying power and market potential Ethnicity- multiculturalism and Canada go hand in hand, Canada accepts nearly 1 million immigrants and refugees every 4 years, by far the highest per capita rate of immigration in the world Geography- climate change drastically from region to region, makes segmenting some products by region obvious. Ex: more snow blowers and fur costs are sold more east of the Rocky Mountain; more umbrellas are rain coats to the west. Lifestyles (Beyond Demographic) consumers have a very different lifestyle, even if they share same characteristics such as gender/age. The way they feel about themselves, what they like to do in their spare time The Dark Side of Consumer Behaviour: -consumer desires, choices and actions sometimes result in negative consequences to the individual or society -some customer activities form social pressure such as drinking or cigarette smoking, and the cultural value placed upon money can encourage activities such as shoplifting or insurance frauds -sometimes exposure to unattainable media ideals of beauty and success can create dissatisfaction with self -Dark Side Includes: Addictive Consumption: consumer addiction is a physiological or psychological dependency on products or services. This type of addiction includes alcohol, drugs, cigarettes, and many companies profits by selling addictive products or selling solutions to addiction Technology can also be addicting such as Blackberry, some people even call it crackberry now since it is so hard to stop checking your phone. Internet addiction is already a big problem in South Koreans. Compulsive Consumption: refers to a repetitive shopping, often excessive, done as an antidote to tension, anxiety, depression or boredom. Shopaholics turn shopping in much the same way as those with addiction to drugs These consumers shop because they are compelled to do so rather than because shopping is a pleasurable or functional task, the act of shopping itself is an addicting experience for some consumers Gambling is an example of consumption to addiction that touches every segment of consumer society, whether it takes form of casino gambling, playing slots, betting on sports, buying lottery tickets. Excessive gambling can be quite destructive Illegal Activities: includes consumer theft, anti-consumption and many more etc Consumer Theft can occur online and offline. Online by receiving emails offering us fabulous riches if we help to recover a lost fortune from a back account etc. In North America, a retail theft happens every 5 seconds. Shrinkage is the industry term for inventory and cash losses from shoplifting and employee theft Exchange and Return Policies- is another growing factor. Big companies like Guess and Staples are using softwares that lets them track shoppers track record of bring items back. They are trying to crack down serial wardrobes that buy an outfit, wear it once, and return it. Also, customers who change price tags on items return one item for the higher amount and shoppers who use fake or old receipts when making a return. Anti consumption- products and services are deliberately defaced or mutilated. Can range from product tampering where innocent consumers are hurt or killed, to graffiti on buildings and subways. Can also take form of political protest, where activists alter or destroy billboards and other advertisements that promote which they feel are unhealthy or unethical acts. For EX: Alcohol advertising Consumer Behaviour as a Field of Study: -consumer researchers can be found from anywhere we find consumers -consumer researchers work for manufacturers, retailers, marketing research firms, governments and not for profit organizations, colleges and universities -they may conduct focus groups or run large scale polling operations, they work on many types of topics from everyday household products to high tech installations to professional services, museum exhibits -consumer behaviour can be influenced by many different perspectives, people with trainings from different fields such as psychophysiology to literature can be found doing consumer research -look at the pyramid of consumer behaviour it gives some of an understanding of the disciplines working in the field and at the level of which each approaches research issues Field closer to the top of the pyramid concentrates on the individual consumer (micro issues), while those towards the base are interested in aggregate activities that occur amount larger groups of people (macro issues) Chapter 2: Perception Perception: -where ever we turn to we are bombarded by a symphony of colours, sounds, and odors -some of the notes in this symphony such as loud barking of a dog, the shades of the evening sky or the smell of a rose occur naturally -sensation is the immediate response of our sensory receptors (eyes, ears, nose, mouth, and fingers) to such basic stimuli as light, colour, and sound -Perception is the process by which these sensations are selected, organized, and interpreted, study of perception focuses on what we add or take away from these raw sensations as we choose which to notice and then go about assigning meaning to them -like computers, people undergo stages of information processing in which stimuli are input and stored however, unlike computers consumers do not passively process whatever information happens to be present -there are 3 stages that make up the process of perception Exposure Attention Interpretation Sensory Systems: -external stimuli or sensory inputs can be received on a number of channels -inputs picked up by our 5 senses constitute the raw data that generate many types of response For EX: hearing a song on the radio can generate internal sensory experiences when the song on the radio triggers a young mans memory of his first dance and brings to mind the smell of his
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