MKTG20001 Consumer Behaviour

Pao Franco

LECTURE 1

Introduction and
Overview
Today
1. Subject Information and Administration

2. Introduction to Consumer Behaviour

3. The Consumer Decision-Making Process

A. Context: The Current Situation
B. Problem Recognition

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Subject Information
and Administration
Subject Coordinator
Pao Franco
• franco.p@unimelb.edu.au
• Level 9 The Spot
• Best way to contact me is via email.

Who am I?
• Final Year PhD Candidate
• Consumer Researcher
• Technology Adoption
• Family Consumption
• Collecting

MKTG20001 | Lecture 1 - Introduction and Overview 4

Subject Resources
Subject Guide
• Important Information such as the lecture and
tutorial schedules, assessment information etc.

LMS
• Please have a look through our LMS.
• All materials for the subject and useful
information is all up there!
• From time to time I’ll post announcements
there too.

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Subject Resources
Lecture Slides
• Uploaded to LMS in ‘blocks’ prior to
starting the particular section of the
subject.
• Note: The uploaded slides will not
have all the examples I’ll go through
during the lecture.

Lecture Recordings
• Available at latest 1-2 days after the
lecture.
• ‘Lecture Capture’ Link via LMS.

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Subject Resources
Textbook
• Ling, P., D’Alessandro, S., & Hume, W. (2015).
Consumer Behaviour in Action. Melbourne:
Oxford University Press.

Other Materials (LMS)

• ‘Lecture Materials’
• Non-Textbook Lecture Readings
• ‘Tutorial Materials’
• Tutorial Readings and Cases

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Lecture Schedule
Lectures 1 – 3
The Consumer Decision-Making Process Lectures 4 – 7
Consumers as Individuals
Situation/Context
Problem Personality and Learning and
Attitudes Perception
Self-Concept Memory
Recognition

Information
Mid-Semester Break
Search

Lectures 8 – 11
Evaluation &
Consumers as Social Beings
Selection
Technology and
Family and Social Innovative Culture and
Store Choice Symbolic Consumption
Influences Consumption Consumption
& Purchase Behaviours

Post-Purchase Lecture 12: Subject Review and Exam Preparation

Processes

MKTG20001 | Lecture 1 - Introduction and Overview 8

Assessment

Assessment Weighting

Tutorial Assignments 10% (2 x 5%)

Group Assignment 30%

End of Semester Exam 60%

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Tutorial Assignments (10%)
Each tutorial…
• will have a reading or case activity each week.
• will be split into 4 groups (4-5 students per group)

Each group…
• is assigned one reading and one case to submit
during the tutorial (5% of your final mark each)

Each student…
• submits their reading or case individually, typed and
printed for their tutor.

More information on the above is on LMS and

will be discussed next week at your first tutorial!

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 Group Assignment (30%)
“Extraordinary Consumption Experiences”
• Overview of the assignment and instructions
are available on LMS.
• More detail on this next week during the
lecture.
• Groups will be formed during your first
tutorial next week.
• Week 3 tutorial we’ll discuss the assignment
in more detail.

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End-of-Semester Exam (60%)
More information available later in the
semester.
• Past exams available on LMS.

Readings and cases will be very important

for the exam.

Look at the 2017 exam as a guide to how

the readings are used in the exam.

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My Tips on How to Do Well in this Subject
Remember:
• The theories we unpack in this course are
representations of the world, trying to
capture how we think everything works.
• They aim to give us insight.
• They put a small selection of aspects to
the forefront of their explanation of the
phenomena they’re trying to explain.
• What the authors think is most
important/useful/helpful thing in best
understanding the phenomena.
• Across theories they’ll usually each take a
different aspect and put that at the centre of
our understanding.

MKTG20001 | Lecture 1 - Introduction and Overview 13

My Tips on How to Do Well in this Subject

Apply the course to your everyday life!

• Things you encounter on a daily basis.
• Your passions, hobbies, social life…

The concepts from this course can help

us think about so many aspects of our
lives!

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My Tips on How to Do Well in this Subject
For the Ideas We’ll Talk About…
• First: Try to see where the author is coming from and the internal
logic of their idea/theory.
• Always start your response with this, before diving into your thoughts.
• From There: Do you buy it?
• Holes in the ‘internal logic’ of it?
• Can you think of counter examples?
• What complexities can’t the theory handle?
• This’ll tell you more about its limitations.
• Even Better: What does the literature say? (Hint: Assignments)

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 Introduction to
Consumer Behaviour

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 What do we study in this subject?
Consumers
• “Problem Solvers” Managerial Focus to
Consumption and Consumers
• A decision-making unit attempting to
develop, maintain and/or change their
lifestyle (Quester et al., 2007).

Consumption Consumption as a Lens to

view our Current Social
Conditions and Time
• Interactions of people (consumers) with
their social world.
• Involving the acquisition, use/possession,
disposal of goods and patronage of services.

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 Understanding consumer behaviour
What do we study in this subject?
Basic definitions (Schiffman et al.,
2008):
Consumer Behaviour
What they
• • Consumer
Behaviours that consumers Behaviour:
display/enact buy &
consume
when searchingbehaviour that consumers
for, purchasing, using,
evaluating anddisplay/enact
disposing ofwhen
theirsearching
products, How
Why
for, purchasing, using, often
services and ideas that they
evaluating seek to satisfy
and disposing of
Study of
their needs. products, services and ideas Consumer
Behaviour
• that theyisseek
Consumer behaviour usedtoto
satisfy their
encapsulate
needs.
how consumers think, feel and behave. How When
• Consumer ‘behaviour’
Schiffman et al. encapsulates
(2008) how consumers: Where
think, feel and behave.

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 Consumer Behaviour is Complex!

The payer, shopper and user

might be different people for
the same product or service!

We need to understand how

these roles interplay.

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 Consumer Behaviour is Interdisciplinary
Contemporary consumers are (mostly) tech-
savvy and the way they are doing things is
constantly changing.

Many disciplines are interested in this!

• Psychology, Sociology, Anthropology, Philosophy,
Economics…

We draw from, and contribute insights to

these and many other fields!

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 As Marketers where do we even begin?
Segmentation
• Figure out the similarities and disparities
between consumers to draw boundaries that are
useful for our understanding and to make our
marketing efforts more practical and achievable.

Traditional Segmentation Variables

• Age, race, gender, income, status, values, and
beliefs.

We combine different combinations of these

to get a ‘picture’ of who are our target
consumers for our brands.
• Helps us design our products/services and
position our brand.

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 Developing Consumer Insights
Segmentation and the development of
marketing strategies requires consumer
insights, developed through research.
• Being connected to the consumer is an
integral component of every successful
market-oriented strategy

Over 80% of new product development

fails – why?
VoxPop and Netnography are two popular approaches to
market research.

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Context: Setting the Scene
Global

National
Consumers don’t live in a vacuum –
they act and are influenced by their
Local &
Cultural
context.
• We’ll expand on this in the second half
of the lecture.

Situational

Corbin & Strauss (2008)

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 Social Context: Culture of Consumption
In a consumerist society, people use
consumption to construct their identity and
advertise their values and beliefs
• Brands have material and symbolic meaning.

Consumers build their own environments

using these products and invest their own
meaning into it
• This is a brandscape.

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 Social Context: Culture of Consumption
We gain a sense of meaning,
satisfaction and self from what and
how we shop, spend, buy and
consume (Belk, 2008).

We form groups with likeminded

people- these are brand
communities and communities of
consumption

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 Social Context: Culture of Consumption

The proportion of our personality

taken up with symbols has grown
substantially…

… But let’s keep in mind that our

consumer identity is one facet of
our overall sense of self.

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The Consumer Decision-Making Process
Lectures 1 – 3 Problem Recognition:
The Consumer Decision-Making Process • A disparity between our desired state and our current state. This is often
accompanied by a state of tension (Lecture 1).
Situation/Context
Problem
Information Search:
Recognition
• Internal or External, Low or High Involvement (Lecture 2).

Information
Search Evaluation & Selection:
• Individual evaluation criteria (Lecture 2).
Evaluation &
Selection
Store Choice & Purchase:
• The moment of truth when a decision is made and actions are taken by the
Store Choice consumer (Lecture 2).
& Purchase

Post-Purchase Post-Purchase Processes:

Processes • Use, evaluation, disposal & re-purchase (Lecture 3).

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Understanding Consumer Behaviour Holistically

This decision-making process and

consumption more broadly is
influenced by...
• Individual Factors – Things about
the consumer themselves.
• Societal Factors – The consumer
and consumption activity situated
around others in society.

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Understanding Consumer Behaviour Holistically
Lectures 1 – 3
The Consumer Decision-Making Process Lectures 4 – 7
Consumers as Individuals
Situation/Context
Problem Personality and Learning and
Attitudes Perception
Self-Concept Memory
Recognition

Information
Mid-Semester Break
Search

Lectures 8 – 11
Evaluation &
Consumers as Social Beings
Selection
Technology and
Family and Social Innovative Culture and
Store Choice Symbolic Consumption
Influences Consumption Consumption
& Purchase Behaviours

Post-Purchase Lecture 12: Subject Review and Exam Preparation

Processes

MKTG20001 | Lecture 1 - Introduction and Overview 29

 Context: The Current Situation

MKTG20001 | Lecture 1 - Introduction and Overview

The Situation/Context
The Consumer Decision-Making Process

Situation/Context
Problem
Recognition

Information
Search
What might shape all of the
Evaluation &
Selection
following stages?
Store Choice
& Purchase

Post-Purchase
Processes

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The Situation/Context
The momentary situation / environment
impacts upon consumer decision-making:
• While the ethically-minded individual may enter
the shopping environment with a purchase
intention, the actual buying decision is made
within the store (Stern, 1962).
• The purchasing environment has “a demonstrable
effect upon current behavior” (Belk, 1975, p. 158).
• In the context of consumer behavior, situations
represent “momentary encounters with those
elements of the total environment which are
available to the individual at a particular time”
(Belk, 1975. p. 157).

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The Situation/Context

Physical E.g., The Physical Marketing Environment

Surroundings

Social
Object E.g., Shopping with Someone Else
Surroundings
Environmental
Stimulus
Temporal E.g., Time Available
Situational
Perspective

Task Definition E.g., Shopping for Self, Gift etc.

Antecedent E.g., Mood

States

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 The Situation/Context
The Consumer Decision-Making Process

Situation/Context The consumer response to these

Problem situational factors can be
Recognition
Physical physical, psychological and/or
Surroundings
Information
emotional.
Social
Object
Surroundings Search
Environmental
Stimulus
Situational
Temporal
Perspective Evaluation &
The situational context will
Selection impact upon the entire consumer
Task Definition decision-making process to the
Antecedent
Store Choice left here.
States & Purchase

The same consumer will behave

Post-Purchase
Processes
differently in different situations.

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Managerial Implications
• Situations are complex, interrelated, and a difficult element of the
marketing mix.
• Understanding the influence of situations can assist markets to
successfully position their products to meet specific situations.
Physical Social Temporal Antecedent
Task Definition
Surroundings Surroundings Perspectives States
Communication
Purchase
Usage
Disposal

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 Problem Recognition

MKTG20001 | Lecture 1 - Introduction and Overview 36

Problem Recognition
The Consumer Decision-Making Process

Situation/Context
Problem A consumer ‘problem’ arises where there is a
Recognition misalignment/discrepancy between their desired
Information
state and their perception of actual state.
Search

Evaluation &
Selection

Store Choice
& Purchase
Their decision process is
Post-Purchase
Processes
activated when this happens.

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Types of Consumer Needs

Innate / Primary Needs: Biological/Physiological

• These are needs that we often fulfil to stay alive, and
are ones we are general aware/conscious of.
• Examples: water, shelter, air, safety, food… (NATURE)

Acquired / Secondary Needs: Psychological

• These are needs that are often learned in response to
our cultural and environmental contexts (NURTURE).
• Examples: Need for recognition, self-esteem,
belonging, status, etc…
• We are often not fully conscious or aware of these
underlying needs or motivations.

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Understanding Needs
Some needs are
seemingly easy to But appeals to secondary needs can make it more complex…
understand…

Thirst

Sophistication Athletic Altruism /

/ Status Performance Helping Others

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Maslow’s Hierarchy of Needs

Self
Actualisation

Ego Needs
(Prestige, Status)

Social Needs
(Affection, Friendship,
Belonging

Safety and Security Needs

(Protection, Order, Stability)

Physiological Needs
(Food, Water, Air, Shelter, Clothing, Sex)

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Criticisms of Maslow’s Hierarchy

• Cannot be tested empirically; impossible to measure how satisfied one

need is before another is activated.
• Can’t deal with understanding heroic and altruistic behaviors.
• Not possible to predict an individual’s dominant need at any one time (e.g.,
social needs vs. hunger)

• But it’s still useful for Marketing Managers:

• Segmentation (by Needs)
• Positioning (finding an unsatisfied need)
• Designing Promotional strategies

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Brand Positioning – ‘Need States’

Understanding consumer needs

enables product category
segmentation, brand positioning
and brand differentiation.

Make sure not to ‘sit in the middle’,

without a clear positioning for your
brand…

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Level of Desire / Motivation to Act

The level of drive / motivation

the consumer has to resolve the
perceived ‘problem’ is
determined by:
• The size of the ‘gap’ between their
desired and actual state;
• The relative importance of the
problem.

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Positive / Negative Motivation
Positive Motivation Negative Motivation
Driving the individual TOWARDS an Driving the individual AWAY FROM
object or condition… an object or condition…

Needs, wants, Fears,

desires… aversions…

Approach Goal: Avoidance Goal:

A (generally) positive goal A (generally) negative goal from
toward which behavior is
directed. which behavior is directed away.

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Motivation is Highly Dynamic
• Existing needs are rarely completely or
permanently satisfied.
• E.g., Hunger, Power

• How these needs are manifested into goals

may change.

• New, higher order needs emerge to be

fulfilled (see Maslow’s Hierarchy of Needs).

• People who achieve their goals set new and

higher goals for themselves, raising their
level of aspiration.

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Consumer Goals
While an individuals’ underlying acquired needs and
motives may be subconscious, they are generally
aware of how these are manifest in what they
want…

Goals are a tangible expression of a method to

reduce the tension of an unsatisfied need.

Marketers may have little direct influence over

consumer needs, but they have considerable
influence in providing the ‘best solutions’ to
consumers’ problems.

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Consumer Goals
Generic
Goals are internal representations of
desired states.

They range from simple biological states

(e.g., reduce body temperature in hot
weather) to complex desired states (e.g.,
career success).
Product-Specific

Consuming goals can be generic or

product-specific.

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Consumer Goal Selection
Consumers select their goals
based upon:
• Personal Experience E.g., Underpinned by a need for
• Physical Capacity self-esteem, social acceptance
• Cultural Norms and Values and physical wellbeing, I have
an overall need to be physically
• Accessibility in the Physical and fit…
Social Environment
• Symbolic Self-Image and Identity How do I select generic and
Desires product-specific goals?

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Failing to Achieve Goals
Sometimes, due to internal and external barriers,
consumers are not able to achieve their consuming
goals… what happens then?

Substitute Goals are selected to relieve the tension

created by the unfulfilled need.

Defensive Mechanisms to reduce frustration:

• Methods employed by individuals to protect their egos
from feelings of failure and inadequacy;
• E.g., aggression, withdrawal, rationalization and
projection.

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Marketing Implications
Placing / facilitating consumers into a state of problem recognition
may stimulate / start the decision process.

(1) Create a new ideal or desired state

OR
(2) Create dissatisfaction with their actual state...

AND then offer brands as solutions to these problems.

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Marketing Implications
Understanding underlying consumer needs and
motivations is core to a market-oriented
approach:
• Needs, wants, desires inform the consumer’s
desired state, and through problem recognition
triggers the decision-making process.

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Marketing Implications
Managers should think about…
• Measuring
• Responding
• Be aware of conscious problems (size & importance), which
consumers have these problems, and in which situations these
problems arise.
• Activation
• Influence rather than react to problem recognition.
• Suppression

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Summary
• The context and situation at-hand will influences the
consumer decision-making process.
• When a consumer experiences problem recognition,
the consumer decision-making process is triggered.
• Understanding consumers’ needs, motivations and
goals are high-priorities for marketing managers.

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Next Week in Tutorials
First Tutorial
• Subject Overview
• Introductions
• Reading/Case Group Formation and Allocation of Assignment Weeks

Group Formation for your Group Assignment

• Note: This group is different to your reading/case assignment group.
• Start talking to classmates about forming teams!
• Teams will be finalised during the Week 3 tutorial.
• You’ll need to submit a ‘Group Registration Form’ to your tutor during Week 3.
• More on this in tutorials and in next week’s lecture.

MKTG20001 | Lecture 1 - Introduction and Overview 54

 Next Time:
Information
Search, Evaluation
and Selection

MKTG20001 | Lecture 1 - Introduction and Overview 55