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Chapter 1

ADM 3321 Chapter Notes - Chapter 1: Consumer Behaviour, Market Segmentation, Business Ethics

Course Code
ADM 3321
Michael Mulvey

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Introduction to Consumer Behaviour
Consumer Behaviour: People in the Marketplace
!As a consumer you can be described and compared with others in
various ways:
!!Objectively measurable descriptive characteristics of a
!!Age, gender, etc.
!! Psychological information about the consumer.
"!Includes aspects of a person’s lifestyle, interests,
attitudes, values and personality.
!A lot of product information, as well as recommendations to use or
avoid particular brands, is transmitted by conversations among real
people rather than by ways of TV commercials, magazines,
billboards, or even bizarre websites.
o!E.g. online consumption communities
!Shared cultural values and beliefs of a large society about the way
world should be structured.
Shared values in Subcultures: e.g. French Canadians.
!Using market segmentation strategies means targeting a brand
only to a specific group of consumers rather than to everybody.
!Brands often have clearly defined images or “personalities”
created by product advertising, packaging, branding, and other

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marketing strategies that focus on positioning a product a certain
!People often choose a product because they like its image or
because they feel that its personality somehow corresponds to their
!When a product succeed in satisfying a consumer’s specific needs or
desires, it may be rewarded with many years of brand loyalty.
!A change in the consumer’s life situation or self-concept would be
required to weaken this brand loyalty, thus creating opportunities
for competitors.
!Consumer’s evaluation of products are affected by products’
appearance, taste, texture, or smell.
!Symbolism used in a brand name or in an ad.
!These judgments are affected by and often reflect how a society
feels that people should define themselves at that point of time.
!Our opinions and desires are increasingly shaped by input from
around the world.
!Consumers often prize products and services that “transport”
them to different places and allow them to experience the diversity
of other cultures.
What is Consumer Behaviour?
!Consumer behaviour: It 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
!Consumer Behaviour is a Process
o!Before: consumer behaviour was often referred to as buyer
!!Interaction between consumers and producers at the
time of purchase.
o!Now: consumer behaviour as an ongoing process.
o!The exchange in which two or more organizations or people
give and receive something of value, is an integral part of
o!Some issues that arise during stages in the consumption
!!1. Prepurchase Issues

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"!Consumer’s perspective
!How does a consumer decide that he or she
needs a product?
"!Marketer’s perspective
!How are consumer attitudes toward
products formed and changed?
!!2. Purchase Issues
"!Consumer’s perspective
!Is acquiring a product stressful or pleasant
experience? What does the product say
about the consumer?
"!Marketer’s perspective
!How do situational factors, such as time
pressure or store display, affect the
consumer’s purchase decision?
!!3. Postpurchase Iusses
"!Consumer’s perspective
!Does the product provide pleasure or
perform its intended function?
"!Marketer’s perspective
!What determines weather a consumer will
be satisfied with a product and weather he
or she will buy is again?
Understanding consumer behaviour is good business.
!Firms exist to satisfy consumers’ needs.
!These needs can be satisfied only to the extent marketers
understand their consumers and do so better than their
Consumer response is the ultimate test of weather a marketing strategy
will succeed.
Data about consumers help marketers define the market and identify threats
to a brand and opportunities for it.
Segmenting Consumers
!Marketing Segmentation: identifies groups of consumers who are
similar to one another in one or more ways and then devises
marketing strategies that appeal to one or more groups.
!Delivery through specialized channels.
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