INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer Behavior

INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer research >>

Consumer Psychology (PSY - 514)

Lesson 01

INTRODUCTION TO CONSUMER PSYCHOLOGY

OBJECTIVES:

Definition and Scope of Consumer Psychology

Consumer Behavior

Development of Marketing Concept and the fields of Consumer Psychology and Consumer Behavior

Production Concept

Product Concept

Selling Concept

Marketing Concept

Marketing Concept and the Three Business Leaders

1. Definition and Scope of Consumer Psychology:

Basic Questions

The field of Consumer Psychology seeks to understand that how individuals make decisions to spend their

available resources (time, effort and money) on consumption related items. The important questions facing the

consumer psychologists include:

What do consumers buy?

Why they buy it?

When the buy it?

Where they buy it?

How often they use it?

How they evaluate products after the purchase?

Impact of such evaluations on future purchase behavior

How they dispose off the products?

Psychology

"Psychology is the science of behavior and mental processes"

Consumer

Person who consumes, especially one who uses a product

Purchaser of goods or services

Consumer Psychology

"Consumer psychology is the study of how people relate to the products and services that they purchase

or use".

Consumer psychologists study virtually all psychological and behavioral responses that can occur within the

context of a person's role as a consumer. And consistent with the goals of psychologists from other areas, research

carried out by consumer psychologists is designed to describe, predict, explain, and/or influence consumer

responses to product- and service-related information and experiences.

Research in Consumer Psychology may be used to:

Provide information to companies and consumers on what the public needs or wants

Help an organization (either profit or nonprofit) effectively develop and market products, services, or

ideas

Guide the work of government agencies that are responsible for product safety, identity of brand names,

evaluation of advertising claims, and assessment of ethical marketing practices

Consumer Psychology (PSY - 514)

Representations in Consumer Psychology

Consumer psychology contains a broad range of theoretical, conceptual, and methodological perspectives.

However, currently the strongest representation comes from researchers in the areas of cognitive psychology,

social psychology, marketing, and advertising.

Social Psychology

Influence of social situations on human mind and thoughts

Cognitive Psychology:

Study of mental representations and information processing

Advertising:

Draw favorable attention to goods or services in a public medium to promote sales

Marketing

2. Consumer Behavior

Consumer behavior is the study of the behavior that consumers display during the processes of searching for,

purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

Consumer Behavior describes two kinds of consuming entities:

The Personal Consumer and;

The Organizational Consumer

Personal Consumer

Buys goods for his/her own use, for the use of household or as gift for friends/families

Organizational Consumer

Includes profit and not-for-profit businesses, government agencies and institutions

3. Development of Marketing Concept and the Disciplines of Consumer Psychology and

Consumer Behavior

The fields of Consumer Psychology and Consumer Behavior are rooted in the development of Marketing

Concept, a business Orientation that evolved in the 1950's through several alternative approaches toward doing

business, referred to, respectively, as the production concept, product concept and the selling concept.

A. Production Concept:

Focus

Cheap, efficient production and intensive distribution

Basic Assumption

Consumers are more interested in obtaining the product than they are in specific features

Problem

Ignored the consumers in terms of required product features

B. Product concept:

Focus

The product

Strive constantly to improve the quality of product and add new features that are technically feasible

Basic Assumption

Consumers will buy products that offer them the highest quality, best performance and the most features

Consumer Psychology (PSY - 514)

Problem

Product Orientation ignores whether or not the consumers really want the new features

C. Selling concept:

Focus

Needs of sellers

Sell the products that a company makes

Profit through sales volume

Basic Assumption

Consumers are unlikely to buy a product unless they are aggressively persuaded

Problem:

Fails to consider customer satisfaction, Customers are induced to buy products; they do not want or need

D. Marketing Concept

Focus

Needs and wants of customers

Profits through customer satisfaction

Basic Assumption

Determine needs and wants of specific target markets and deliver the desired satisfaction better than the

competition

4. Development of Marketing Concept

Three Business Leaders

A. Alfred P. Sloan

Founder Chairman, General Motors

Company Strategy:

"A car for every purse and purpose"

Product Innovation:

Cars for rich people

Cars for poor people

Innovative Marketing Concept:

Market Segmentation

B. Colonel P. Sanders

Founder, Kentucky Fried Chicken (KFC)

Company Strategy:

Re-engineer the public perception of a

Motel

Innovation Marketing Concept:

Franchise the cooking methods and chicken recipe

Product Repositioning

Consumer Psychology (PSY - 514)

C. Ray Korc

Partner, McDonald Brothers

Company Strategy:

Thousands of McDonald's outlets in the country

Outlets close to churches to target customers

Innovative Marketing Concept:

Hamburger University, centralized facility to train the company's employees

Market Targeting

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