MODULE 1: UNDERSTANDING CONSUMER BEHAVIOR

Consumer behavior: the totality of consumers’ decisions with respect to the acquisition, consumption and
disposition of goods, services, time and ideas, by human decision making units (over time). - Acquisition: the process by
which a consumer comes to own an offering. - Usage: the process by which a consumer uses an offering. - Disposition:
the process by which a consumer discards an offering.

Consumer behavior also includes consumers’ use of services, activities, experiences and ideas. How we use time
reflects who we are, what our lifestyles are like and how we are both the same and different from others. Offering is the
term used to encompass these entities. An offering is a product, service, activity, experience or idea offered by a
marketing organization to consumers.

Consumer behavior is a dynamic process and involves: - Many people (like group purchases or taking different
roles in purchase process); - Many decisions (like what offering to acquire, why an offering is not used, how to dispose
an offering); - Emotions and coping (like stress because of a purchase decision).

Consumer behavior encompasses four domains: 1. The consumer’s culture: Social influences, like reference
groups (a group of people consumers compare themselves with for information regarding behavior, attitudes or values),
consumer diversity, household and social class influences and psychographics like values and lifestyles. 2. The
psychological core: Motivation, Ability and Opportunity (MAO), exposure, attention, perception and comprehension,
memory and knowledge and forming and changing attitudes. 3. The process of making decisions: Problem recognition
and information search, making judgments and decisions and post-decision processes/evaluations. 4. Consumer
behavior outcomes and issues: Innovations, symbolic consumer behavior and marketing, ethics and social responsibility.

Marketing implications of consumer behavior illustrate how marketers apply consumer behavior concepts: -
Developing and implementing customer-oriented strategy; - Making promotion and marketing communication
decisions; - Making pricing decisions; - Making distribution decisions;

Consumer Behavior is affected by the consumer’s culture and by the typical or expected behaviors, norms, and
ideas of a particular group. Consumers belong to a number of groups, share their cultural values and beliefs, and use
their symbols to communicate group membership. Household and social class influences are involved in consumer
behavior, as are each individual’s values, personality, and lifestyles. Consumer behavior can be symbolic and express an
individual’s identity. It is also indicative of how quickly an offering spreads throughout a market. Further, ethics and
social responsibility play a role in consumer behavior.

Consumer Behavior Research Methods Types of Data 1. Primary data: data originating from a researcher and collected
to provide information relevant to a specific research project. 2. Secondary data: data collected for some other purpose
that is subsequently used in a research project.

Research Methods Used - Survey: a method of collecting information from a sample of customers,
predominantly by asking questions. - Focus group: a form of interview involving 8 to 12 people; a moderator leads the
group and asks participants to discuss a product, concept, or other marketing stimulus. - Storytelling: a research method
by which consumers are asked to tell stories about product acquisition, usage or disposition experiences. These stories
help marketers gain insights into consumer needs and identify the product attributes that meet these needs. -
Experiments: laboratory testing and field experiments with consumers, which is one way to research new products and
marketing trends. - Market test (field research): a study in which the effectiveness of one or more elements of the
marketing mix is examined by evaluating sales of the product in an actual market, e.g. a specific city. - Conjoint analysis:
a research technique to determine the relative importance and appeal of different levels of an offering’s attributes. -
Ethnographic research: in-depth qualitative research using observations and interviews (often over-repeated occasions)
of consumers in real-world surroundings. Often used to study the meaning that consumers ascribe to a product or
consumption phenomenon. - Data mining: searching for patterns in a company database that offer clues to customer
needs, preferences and behaviors. - Netnography: observing and analyzing the online behavior and comments of
consumers.
 Marketers study consumer behavior to gain insights that will lead to more effective marketing strategies and
tactics. Ethicists and advocacy groups are keenly interested in consumer behavior, as are public policy makers and
regulators who want to protect consumers from unsafe or inappropriate offerings. Consumers and society can both
benefit as marketers learn to make products more user-friendly and to show concern for the environment. Finally,
studying consumer behavior helps marketers understand how to segment markets and how to decide which to target,
how to position an offering, and which marketing-mix tactics will be most effective.

ACTIVITY: SHORT ESSAYS. Answer each question in 3 to 4 paragraphs. 1. How is Marketing defined in Consumer
Behavior? (15 points) 2. How can public policy decision makers, advocacy groups, and marketing managers use
consumer research? (15 points)

REFERENCES: Hoyer, Wayne D., Maccinis, Deborah J., and Pieters, Rik (2013). Consumer Behavior in the 21st Century
2nd Edition. Cengage Learning Asia Pte Ltd, Unit 2105-2106 Raffles Corporate Center, Esmerald Avenue, Ortigas Avenue,
Pasig City, Philippines 1605 https://s3.studentvip.com.au/notes/5692-sample.pdf

MODULE 2: PERCEPTION
Sensation and Perception Sensation refers to the immediate response of our sensory receptors (eyes, ears, nose,
mouth, fingers, skin) to basic stimuli such as light, color, sound, odor, and texture. Perception is the process by which
people select, organize, and interpret these sensations. The study of perception, then, focuses on what we add to these
raw sensations to give them meaning. Our brains receive external stimuli, or sensory inputs, on a number of channels.
We may see a billboard, hear a jingle, feel the softness of a cashmere sweater, taste a new flavor of ice cream, or smell a
leather jacket. These inputs are the raw data that begin the perceptual process. Sensory data from the external
environment (e.g., hearing a tune on the radio) can generate internal sensory experiences; a song might trigger a young
man’s memory of his first dance and bring to mind the smell of his date’s perfume or the feel of her hair on his cheek.
Marketers’ messages are more effective when they appeal to several senses. For example, in a recent study one group
read ad copy for potato chips that only mentioned the taste, whereas another group’s ad copy emphasized the
product’s smell and texture, in addition to its taste. The participants in the second group came away thinking the chips
would taste better than did those whose ad message only focused on taste.

Sensory Marketing In new era of sensory marketing, companies think carefully about the impact of sensations
on our product experiences. From hotels to carmakers to brewers, companies recognize that our senses help us decide
which products appeal to us—and which ones stand out from a host of similar offerings in the marketplace. a. Vision -
Marketers rely heavily on visual elements in advertising, store design, and packaging. They communicate meanings on
the visual channel through a product’s color, size, and styling. b. Dollars and Scents - Odors stir emotions or create a
calming feeling. They invoke memories or relieve stress. This form of sensory marketing takes interesting turns as
manufacturers find new ways to put scents into products, including men’s suits, lingerie, detergents, and aircraft cabins.
c. Sound - Music and other sounds affect people’s feelings and behaviors. Some marketers who come up with brand
names pay attention to sound symbolism; the process by which the way a word sounds influences our assumptions
about what it describes and attributes, such as size. For example, consumers are more likely to recognize brand names
that begin with a hard consonant like a K (Kellogg’s) or P (Pepsi). d. Touch - Encouraging shoppers to touch a product
encourages them to imagine they own it, and researchers know that people value things more highly if they own them:
This is known as the endowment effect. One set of researchers reported that participants who simply touched an item
(an inexpensive coffee mug) for 30 seconds or less created a greater level of attachment to the product; this connection
in turn boosted what they were willing to pay for it. Researchers are starting to identify the important role the haptic
(touch) sense plays in consumer behavior. Haptic senses appear to moderate the relationship between product
experience and judgment confidence. e. Taste - Our taste receptors obviously contribute to our experience of many
products. So-called “flavor houses” develop new concoctions to please the changing palates of consumers. Cultural
factors also determine the tastes we find desirable. A food item’s image and the values we attach to it (such as how
vegans regard beef menu items, which is not kindly) influence how we experience the actual taste.
 The Stages of Perception Stage 1: Exposure occurs when a stimulus comes within the range of someone’s
sensory receptors. Consumers concentrate on some stimuli, are unaware of others, and even go out of their way to
ignore some messages. We notice stimuli that come within range for even a short time—if we so choose. However,
getting a message noticed in such a short time (or even in a longer one) is no mean feat. The figure below shows the
overview of the perceptual process starting with Exposure.

Stage 2: Attention refers to the extent to which processing activity is devoted to a particular stimulus. As you
know from sitting through both interesting and “less interesting” lectures, this allocation can vary depending on both the
characteristics of the stimulus (i.e., the lecture itself) and the recipient (i.e., your mental state at the time).

Although we live in an “information society,” we can have too much of a good thing. Consumers often live in a
state of sensory overload; we are exposed to far more information than we can process. In our society, much of this
bombardment comes from commercial sources, and the competition for our attention steadily increases. The average
adult is exposed to about 3,500 pieces of advertising information every single day—up from about 560 per day 30 years
ago.

A large proportion of teens report that they engage in multitasking, where they process information from more
than one medium at a time as they alternate among their cell phones, TVs, and laptops.63 One study observed 400
people for a day and found that 96 percent of them were multitasking about a third of the time they used media.

Stage 3: Interpretation Interpretation refers to the meanings we assign to sensory stimuli. Just as people differ in
terms of the stimuli that they perceive, the meanings we assign to these stimuli vary as well. Many of these meanings
depend on our socialization within a society: Even sensory perception is culturally specific. A team of anthropologists
created a “kit” of stimuli to compare what people around the world perceive; this included color chips, scratch-and-sniff
cards, sounds recorded at different frequencies, and so on. When they exposed the same stimuli to people in more than
20 different cultures, the results were dramatic: For example, prior research on mostly English speaking people indicated
that the typical person is not good at identifying the smell of everyday things like coffee, peanut butter, and chocolate;
they usually identify about half of them correctly. However, people who live on the Malay Peninsula were more
accurate.

Interpretational Biases: The Eye of the Beholder The Gestalt perspective provides several principles that relate
to the way our brains organize stimuli: - The closure principle states that people tend to perceive an incomplete picture
as complete. That is, we tend to fill in the blanks based on our prior experience. This principle explains why most of us
have no trouble reading a neon sign even if several of its letters are burned out. The principle of closure is also at work
when we hear only part of a jingle or theme. Marketing strategies that use the closure principle encourage audience
participation, which increases the chance that people will attend to the message. - The similarity principle tells us that
consumers tend to group together objects that share similar physical characteristics. Green Giant relied on this principle
when the company redesigned the packaging for its line of frozen vegetables. It created a “sea of green” look to unify all
of its different offerings. - The figure-ground principle states that one part of a stimulus will dominate (the figure), and
other parts recede into the background (the ground). This concept is easy to understand if one thinks literally of a
photograph with a clear and sharply focused object (the figure) in the center. The figure is dominant, and the eye goes
straight to it. The parts of the configuration a person will perceive as figure or ground can vary depending on the
individual consumer, as well as other factors. Similarly, marketing messages that use the figure-ground principle can
make a stimulus the focal point of the message or merely the context that surrounds the focus.

Semiotics: The Meaning of Meaning Some marketers turn to semiotics, a discipline that studies the
correspondence between signs and symbols and their roles in how we assign meanings.91 Semiotics is a key link to
consumer behavior because consumers use products to express their social identities. Products carry learned meanings,
and we rely on marketers to help us figure out what those meanings are. As one set of researchers put it, “Advertising
serves as a kind of culture/consumption dictionary; its entries are products, and their definitions are cultural meanings.
 From a semiotic perspective, every marketing message has three basic components: an object, a sign (or
symbol), and an interpretant. The object is the product that is the focus of the message (e.g., Marlboro cigarettes). The
sign is the sensory image that represents the intended meanings of the object (e.g., the Marlboro cowboy). The
interpretant is the meaning we derive from the sign (e.g., rugged, individualistic, American).

According to semiotician Charles Sanders Peirce, signs relate to objects in one of three ways: They can resemble
objects, connect to them, or tie to them conventionally. An icon is a sign that resembles the product in some way (e.g.,
the Ford Mustang has a galloping horse on the hood). An index is a sign that connects to a product because they share
some property (e.g., the pine tree on some of Procter & Gamble’s Spic and Span cleanser products conveys the shared
property of fresh scent). A symbol is a sign that relates to a product by either conventional or agreed-on associations
(e.g., the lion in Dreyfus Fund ads provides the conventional association with fearlessness and strength that it carries [or
hopes to carry] over to the company’s approach to investments).

Hyperreality One of the hallmarks of modern advertising is that it creates a condition of hyperreality. This refers
to the process of making real what is initially simulation or “hype.” Advertisers create new relationships between objects
and interpretants when they invent connections between products and benefits, such as when an ad equates Marlboro
cigarettes with the American frontier spirit. In a hyperreal environment, over time it’s no longer possible to discern the
true relationship between the symbol and reality. The “artificial” associations between product symbols and the real
world take on lives of their own.

Perceptual Positioning When a marketer understands how consumers think about a set of competing brands, it
can use these insights to develop a positioning strategy, which is a fundamental component of a company’s marketing
efforts as it uses elements of the marketing mix (i.e., product design, price, distribution, and marketing communications)
to influence the consumer’s interpretation of its meaning in the marketplace relative to its competitors. For example,
although consumers’ preferences for the taste of one product over another are important, this functional attribute is
only one component of product evaluation. Marketers can use many dimensions to carve out a brand’s position in the
marketplace. These include: - Lifestyle. Grey Poupon mustard is a “higher-class” condiment. - Price leadership. L’Oréal
sells its Noisôme brand face cream in upscale beauty shops, whereas its Plenitude brand is available for one-sixth the
price in discount stores—even though both are based on the same chemical formula. - Attributes. Bounty paper towels
are “the quicker picker-upper.” - Product class. The Spyder Eclipse is a sporty convertible. - Competitors. Northwestern
Insurance is “the quiet company.” - Occasions. Wrigley’s gum is an alternative at times when smoking is not permitted. -
Users. Levi’s Dockers target men in their 20s to 40s. - Quality. At Ford, “Quality is job 1.”

ACTIVITY: Prepare a Narrative Report (50 points) 1. Choose One (1) of your favorite products that you have been
buying for some years. How has it changed over the years? Is it better, bigger, smaller, easier to use, better tasting?
Narrate your personal experiences with the product throughout the years by applying the concepts and principles
that you have learned.

REFERENCES: Solomon, Michael R. (2018). Consumer Behavior: Buying, Having, and Being, Twelfth Edition, Global
Edition. Pearson Education Limited, Edinburgh Gate, Harlow, Essex CM20 2JE, England