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INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer research

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Consumer Psychology (PSY - 514)
VU
Lesson 02
INTRODUCTION TO CONSUMER PSYCHOLOGY
(IMPLEMENTING THE MARKETING CONCEPT)
OBJECTIVES:
Introducing Implementation of the Marketing Concept
o  The role of Consumer Research
o  Overview of Strategic Tool for Implementing the Marketing Concept
Market Segmentation
Market Targeting
Market Positioning
Implementing the Marketing Concept
The wide spread adoption of marketing concept in the American business Industry provided impetus for the study
of consumer behavior. To identify unsatisfied needs companies had to engage in extensive marketing research.
The needs of customers differ dramatically across different segments of society.
1. Consumer research
Consumer Research is a collection of tools & methods to study Consumer Behavior. Broadly speaking there are
two theoretical perspectives that guide the development of consumer research methodology.
Consumer
Research
Interpretivist Approach
Positivist Approach
A. Positivist Approach
Objective and Empirical.
Studies are conducted to research the causes of behavior that could be generalized to larger populations
Consumer research designed to provide data to be used for strategic managerial decisions falls into this
category
B. Interpretivist Approach
Tends to be qualitative and based upon small samples.
Interpretivists view each consumption situation as unique and non-predictable
Search for common patterns of operative values and meanings across consumption situations
2. STRATEGIC TOOLS FOR IMPLEMENTING THE MARKETING CONCEPT
Focus of the Marketing Concept is consumer needs. At the same time recognizing high degree of diversity among us,
consumer researchers seek to identify the many similarities ­ or constants- that exist among the people of the
world.
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Consumer Psychology (PSY - 514)
VU
For example we all have similar biological needs, no matter where we are born ­ the needs for food,
nourishment, for water, for air and for shelter all remain the same.
We also develop acquired needs after we are born. These needs are shaped by our culture, and environment in
which we live, by our education and our experiences. The interesting thing about acquired needs is that there are
usually many people who develop the same needs. This commonality of needs enables the marketers to
target consumers with specifically designed products and /or promotional appeals that satisfy the needs of that
segment.
The three element of this strategic framework are:
Market segmentation
Market Targeting and;
Market Positioning
1. Market Segmentation
Market Segmentation is dividing the market into subsets of consumers with common needs. Consumers are
grouped together according to some criteria, such that those within a group will respond similarly to a marketing
action and those in different groups will respond differently. Some of the potential segmentation variables may by:
Sex
Age
Race
Income
Marital Status
No. of Children
Usage History
Advantages of Customer Segmentation
Focuses efforts on who to find out more about
Are the segments identifiable
Is the segment large enough
The geographical concentration of the segment
How price sensitive are the individuals
How competitive is the segment
How vulnerable is the segment to additional entrants
Once the relevant segments of the market are identified these are accordingly targeted. The nature of marketing
effort changes according to the type of segment targeted
2. Market Targeting
"Market Targeting is selecting one or more of the segments identified for the company to pursue"
Prerequisites for Targeting:
Following questions may be considered before targeting a particular segment:
Is there sufficient heterogeneity in preferences amongst the consumer in a particular segment?
Is the segment properly identifiable?
Is the segment large enough to be worthwhile?
How competitive is the segment
3. Market Positioning
Market Positioning is developing a distinct image for the product or service in the mind of the consumer - the
image that will differentiate the offering from the competing ones and squarely communicate to consumers that
the particular product or service will fulfill their needs better than competing brands.
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Consumer Psychology (PSY - 514)
VU
Successful positioning centers around two main principles:
Communicating the benefits that the product will provide rather than the product's features
Unique Selling Proposition a distinct benefit or point of difference ­ for the product or service
Choosing a Positioning Strategy:
Following points may be considered while choosing a positioning strategy
Identifying possible competitive advantages
Products, services, channels, people or image can be sources of differentiation.
o
Choosing the right competitive advantage
How many differences to promote?
o
Unique selling proposition
Positioning errors to be avoided
Which differences to promote?
o
Criteria for Meaningful Differences:
Different kinds of criteria for meaningful differences may be developed to rank the product in comparison with its
competitors. Such criteria usually consist of the following points
 Important
 Superior
 Preemptive
 Distinctive
 Communicable
 Affordable
 Profitable
Positioning along many dimensions:
Positioning may be done on many dimensions. Some of which may be:
Product Attributes
Effects
Price
User
Usage
Relation to other products
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Table of Contents:
  1. INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer Behavior
  2. INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer research
  3. INTRODUCTION TO CONSUMER PSYCHOLOGY:Marketing Mix, Product, Price
  4. INTRODUCTION TO CONSUMER PSYCHOLOGY:Customer Value, Perceived Value
  5. VALUE AND RETENTION FOCUSED MARKETING AND CONSUMER DECISION MAKING PROCESS
  6. CONSUMER RESEARCH:Quantitative Research, Qualitative Research
  7. MAJOR STEPS IN CONSUMER RESEARCH PROCESS:Design of Primary research
  8. QUANTITATIVE RESEARCH DESIGNS & DATA COLLECTION METHODS
  9. QUANTITATIVE RESEARCH DATA COLLECTION TECHNIQUES:ATTITUDE SCALES
  10. QUALITATIVE RESEARCH DESIGNS & DATA COLLECTION METHODS
  11. CUSTOMER SATISFACTION MEASUREMENT, SAMPLING, AND DATA ANALYSIS AND REPORTING
  12. MARKET SEGMENTATION AND ITS BASES:Geographical Segmentation
  13. BASES FOR SEGMENTATION: DEMOGRAPHIC SEGMENTATION PSYCHOGRAPHIC SEGMENTATION
  14. BASES FOR SEGMENTATION: SOCIOCULTURAL SEGMENTATION USE RELATED SEGMENTATION USAGE SITUATION SEGMENTATION
  15. BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Intrinsic Cues
  16. BASES FOR SEGMENTATION: HYBRID SEGMENTATION STRATEGIES
  17. MARKET SEGMENTATION IMPLEMENTING SEGMENTATION STRATEGIES ENVIRONMENTAL INFLUENCES CULTURE
  18. HOW CULTURE IS LEARNT ENVIRONMENTAL INFLUENCES:Formal Learning
  19. CULTURE AND ITS MEASUREMENT ENVIRONMENTAL INFLUENCES
  20. MEASUREMENT OF CULTURE ENVIRONMENTAL INFLUENCES:Consumer Fieldwork
  21. SUBCULTURE CHAPTER 4: ENVIRONMENTAL INFLUENCES
  22. AGE AND GENDER SUBCULTURE CHAPTER 4: ENVIRONMENTAL INFLUENCES
  23. BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Market Segmentation
  24. SOCIAL CLASS CHAPTER 4: ENVIRONMENTAL INFLUENCES:Occupation
  25. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Affluent Consumer
  26. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Membership Group
  27. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Shopping Groups
  28. UNDERSTANDING PERSONALITY CHAPTER 5: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOR
  29. CONSUMER PERSONALITY, TRAIT THEORY AND SELF IMAGES
  30. CONSUMER MOTIVATION:Needs, Goals, Generic Goals
  31. UNDERSTANDING LEARNING:Intentional and Incidental Learning, Implications for Marketers
  32. INSTRUMENTAL CONDITIONING, INFORMATION PROCESSING AND MEMORY
  33. ATTITUDES:Characteristics of Attitudes, Attitudes have consistency
  34. ATTITUDE FORMATION AND CHANGE:How attitudes are learned?
  35. ATTITUDE CHANGE STRATEGIES:Resolving two conflicting attitudes
  36. INTRODUCTION TO CONSUMER DECISION MAKING:Decision Complexity
  37. Problem Recognition, Search and Evaluation and Decision and Purchase
  38. Decision and Purchase:Consumer Decision Rules, Output, Relationship Marketing
  39. Decisions Related to Post Purchase:Product Set up and Use
  40. Marketing Implications of Decisions Related to Post Purchase:Understanding
  41. Post Purchase Evaluation:Determinants of Satisfaction, Consumer Complaint Behavior
  42. Post Purchase Dissonance:Dissonance Reduction, Marketing Implications
  43. Consumerism:Roots of Consumerism, The Nature of Consumerism
  44. Consumerism Issues and Responses:Environmental Concerns, Consumer Privacy
  45. Review Consumer Psychology Course:Consumer Research, Consumerism