Discuss an example of an organization that you believe truly understands the buying behavior of its target market. Explain your rationale. For the

MAR 3211, Consumer Behavior 1

Course Learning Outcomes for Unit I Upon completion of this unit, students should be able to:

1. Discuss how the field of marketing is influenced by the actions of consumers. 1.1 Analyze how the actions of consumers impact an organization.

3. Explain how consumers interpret information about products and people.

3.1 Describe factors that will impact how consumers view and ultimately purchase products and services.

7. Explain the steps of the consumer decision-making process.

7.1 Explain the steps in the consumer decision-making process and how they relate to consumer behavior.

Course/Unit

Learning Outcomes Learning Activity

1.1

Unit Lesson PowerPoint Presentation Foxall and Sigurdsson (2013) article Article Review

3.1

Unit Lesson PowerPoint Presentation Shateri, Nayebzadeh, and Roknabadi (2016) article Article Review

7.1 Unit Lesson PowerPoint Presentation Article Review

Reading Assignment In order to access the following resources, click the links below. Click here to access the Unit I PowerPoint presentation. (Click here to access a PDF version of the presentation.) Foxall, G. R., & Sigurdsson, V. (2013). Consumer behavior analysis: Behavioral economics meets the

marketplace. The Psychological Record, 63(2), 231–238. https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=http://search.ebscohost.com/logi n.aspx?direct=true&db=a9h&AN=87083913&site=ehost-live&scope=site

Shateri, F., Nayebzadeh, S., & Roknabadi, A. D. (2016). Evaluating advertisement: The role of customer's

decision-making style, innovativeness, and ideology. International Journal of Information, Business and Management, 8(4), 159–177. https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=http://search.proquest.com.library resources.columbiasouthern.edu/docview/1814292332?accountid=33337

UNIT I STUDY GUIDE Introduction to Consumer Behavior and Decision-Making

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UNIT x STUDY GUIDE Title

Unit Lesson When you think of consumer behavior, what thoughts come to your mind? Why do you think that there is a consumer behavior course included in most marketing degree programs? There are many definitions of consumer behavior, but the main concepts involve studying how people choose goods and services to fulfill any wants or needs they may experience. Consumer behavior is truly an ongoing process in which marketers attempt to understand behaviors in order to fulfill the needs of the consumer. Another focus of consumer behavior is the spending habits of consumers. There is a need for organizations to understand this behavior as it relates to consumer buying. Identifying the stages of the consumption process provides a good perspective on how organizations accomplish this, beginning with the pre-purchase stage where marketers need to understand how a consumer begins the buying process. Providing valuable information on the worthiness of the product or service might be effective during this stage. Subsequently, during the purchase stage, the marketer should look to make the experience a pleasant one. Finally, during the post-purchase stage, the consumer decides if the product or service has truly fulfilled his or her need. Think about a product that you purchased recently. Was it a pleasant experience? Did the product fulfill your needs? Would you recommend it to friends? These are all questions that the marketer is asking.

As marketers look to examine the needs of consumers, it is important to understand that the most economical and effective method for an organization to meet consumer needs is to identify a target market. The target market is the group of people on which marketers will focus their marketing efforts. You are probably wondering why marketers would not prefer to target everyone, which seemingly would reach a larger market and provide greater exposure. The simple answer is that marketing departments do not have unlimited marketing budgets. It is not financially feasible to attempt to reach everyone. A better method is to focus on a certain group of individuals who would most likely be interested in a company’s product or service. Understanding the needs and

wants of this group is paramount. The process of identifying the target market begins with segmentation. This involves dividing a broad population into subsets of consumers based on several criteria. The first criterion we will discuss is demographics, which involves looking at characteristics such as age, gender, family structure, social class/income, and race/ethnicity. Another criterion could be geographic, which speaks to the region of the country or world, region in a country, neighborhood, or even the size of the city in which the consumer lives. The psychographic criterion relates to personal values that will drive perception and motivations. Finally, the behavioral criterion utilizes the specific interests, rate of use, and brand familiarity of the consumer. Once a marketer has completed this segmentation process, he or she can better identify a detailed description of the target market.

Consumer at coffee shop (Pexels, 2016)

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UNIT x STUDY GUIDE Title

Criteria Characteristics Example Demographic Age, gender, family structure,

social class/income, family life cycle, race/ethnicity

Identifies who the consumer is and where he or she is in life

Geographic Region of the country or world, region in a country, neighborhood, size of city the consumer resides

Location in world or country in which the consumer lives

Psychographic Personality, perceptions, values, beliefs

Reflect for weeks on a purchase or buy quickly

Behavioral Special interests, rate of use, brand familiarity

Soccer player, traveler, healthy living

Table 1.1: Segmentation criteria Involvement refers to the relevance in the consumer decision-making process. What this suggests is that the consumer’s perceived familiarity with the product, message, or situation will have an impact. Product involvement is simply the consumer’s level of interest in a particular product; in contrast, message involvement refers to the influence that media vehicles have on the consumer. Finally, situational involvement refers to whether the consumer is in a store, on a website, or at a location where the product or service is consumed. Think about the theme stores and restaurants that we frequent and how that theme encourages us to stay longer and enjoy the environment or situation. Through all of this, perceived risk is important—the greater the risk, the less likely the consumer will be to make the purchase. Perceived risk refers to any negative consequence associated with the decision. This can involve monetary risk, functional risk, physical risk, social risk, or psychological risk. As expected, the monetary risk involves a poor choice associated with the exchange of too much money. Functional risk relates to a situation when the product does not function as expected, and physical risk is one that may physically harm the consumer. Social risk involves a results that may affect the consumer’s self-esteem, confidence, or image. Finally, psychological risk reflects on the loss of self-respect with a poor buying decision. The goal of the marketer is to reduce these perceived risks as much as possible in order to encourage and influence the consumer. Employing the segmentation and target marketing concepts allows the organization to most effectively position its organization and products/services. Positioning refers to how the company would like to be perceived in the minds of the target market. It portrays a distinct image that differentiates the organization and its product or service offerings from its competitors. This is also referred to as unique selling proposition (USP), which encompasses why the consumer will purchase one product over another. The consumer decision-making process provides a model by which marketers can better understand the process that a consumer moves through as he or she makes decisions to buy or not buy a product or service. The process is complicated even more in today’s world as there are so many options for the consumer to choose. Additionally, so many factors influence the process. Look at the consumer decision-making process below.

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UNIT x STUDY GUIDE Title

Generally, marketers apply a rational perspective in attempting to understand decision-making. This implies that marketers gather, integrate, and interpret as much information about consumers as possible. The study of the consumer decision-making process suggests that marketers are studying exactly how consumers are making decisions that lead to buying. Within this continuous attempt to understand consumer behavior, technology has played an important role. These advances seem to be arriving at a faster pace every day. Technology has played a role in consumer behavior throughout history from the advent of the telephone to the television and now to the 24/7 access to the Internet. One thing that has not changed is the marketer’s need to understand and fulfill the consumer’s value proposition. The value proposition is defined as the value perceived by the consumer—not the marketer. Through observation and the use of sophisticated tracking system technology, marketers can now view and record shoppers’ behavior and reactions to different products, displays, and situations. In any business, the consumer is the most important person in the transaction. It is logical to assume that as marketers increase their understanding of what makes the consumer tick, the better prepared they are to meet the needs of that consumer. The fields of psychology, sociology, and anthropology all play a role in this level of understanding. Consumer behavior is continuously evolving, as human beings are extremely complex beings. It is also important to remember that as consumers buy, not only the organization benefits, but also the overall health of the economy benefits.

Reference Pexels. (2016). Adult, bar, coffee machine [Photograph]. Pixabay. https://pixabay.com/en/adult-bar-coffee-

machine-1846748/

Table 1.2: Think of a recent purchase you made and how you might have proceeded through the consumer decision- making process without even realizing it. Now, think about how a marketer might use this model in putting together effective marketing strategies for an organization.

Problem recognition: This is the first step where a consumer becomes aware of the need for a new product/service.

Information search: The consumer is now actively gathering information and facts about products/services that might fulfill his or her needs.

Evaluation of alternatives: The consumer reviews and evaluates, giving it a mental try.

Product choice: The consumer makes a decision to purchase the product/service.