 Hi, welcome. This is Unit 3 on consumer behavior of your strategic marketing course. Here is the course layout and we're looking at consumer behavior. And then here are the Unit 3 learning outcomes. Explain the importance of consumer behavior for developing marketing strategies, assess cultural, social, and personal factors that influence consumer behavior, look at the motivational theories of Freud, Maslow, and Hertzberg to consumer behavior, and then explain the five steps in the consumer buying decision process, differentiate low, limited, and high levels of consumer involvement in the buying process, and then recommend four marketing strategies for influencing consumer behavior. Why are learning outcomes so important? So every one of these learning outcomes ties directly back into your course materials and your content. This includes your assessments and also test preparation. Here are the Unit 3 overview topics of everything that we're going to discuss in this presentation, and they are based on your learning outcomes. So we'll look at consumer behavior and marketing strategies. We're going to assess cultural, social, and personal factors, motivational theories of Freud, Maslow, and Hertzberg, the consumer buying decision process, consumer involvement in the buying process, and influencing consumer behavior. And then this is the vocabulary for this unit, which we will discuss in this presentation. When you're developing a marketing strategy, it's important to consider consumer behavior. This will give you a better understanding of how consumers use a product, and then how that information might be utilized in the marketing plan. There are numerous ways this might be completed. You may conduct observation research, interviews or surveys with consumers, or conduct a pilot study. By identifying needs and wants of the consumer, you can better create a marketing plan that leads to a purchase. A consumer wants and needs influence them to make either or refuse to make a purchase. By better understanding why that they may make or not make a purchase, you can better focus your marketing strategy. Many consumers may be loyal to a brand and make a product purchased based on this information solely. So it's important to consider this when you're creating a marketing plan. So this is the consumer decision buying process. And we've all gone through it, whether it's a $20 purchase that we're making in the grocery store or a general merchandise store, or if it's a car or a home. We may go through this process faster if it's a lower amount for the purchase, but we still go through each of these steps. So first we recognize that we have a need. And then we go through an information search. I don't know about you guys, but I can spend, I remember before I bought my last car, I probably spent three months of research just looking at different things, looking at the overall car, looking at the product, looking at the color, just everything. And then there are other things that we go through every one of these in five minutes because we're like, oh yeah, I already know what I want. We might evaluate alternatives and look at other things that are similar. You can see there on the left-hand side where it says simple decision-making and then more complex decision-making. We may then make a selection at that point or a purchasing decision, where are you going to buy it? Where are we going to go to buy it? Yeah, and then you've got your post-purchase behavior. Either you're truly happy with your purchase or maybe you're having a little bit of doubt, a little bit. Let's say it's a car, you buy it, you are really happy, but 10 years from now you have to figure out what are my disposal options. Do I try to sell this? Do I go in and just sell it back to the dealer when I buy a new car? Do I list it somewhere and then try to sell it myself and get a couple of thousand dollars more out of the sale? It can be depending on the purchase. It can be a really simple decision process, simple decision-making process, or it might be more complex. And usually that's related to cost. The lower the cost, then the more simple the decision-making we may go through. Whereas the higher the cost, it may be more complex. A consumer may be in to buy numerous things before making a purchase. These consumer behavior influences might include cultural, social, or personal factors. An example of a consumer's social influence might that might occur is if a friend purchases a new phone and then tells you and all of their friends about how great it is. So most likely if one of those friends is in the market for a new phone they may take the recommendation and buy the same phone. A cultural influence may come in many forms when it comes to consumer behavior. These may be religious, maybe they're related to education, related to language, or maybe location. For example, in some parts of the United States, some people call Pepsi or Coke products soda or pop. This may make a difference in the marketing. And if they do call it one or the other, you have to be very well aware in that area of the country what it is so that you can develop a marketing plan that's appropriate to it. Another interesting cultural influence is what people believe about certain numbers being lucky or not lucky. For example, in Japan, the number four is considered bad luck. So using the number four in marketing would not be recommended in that area. Understanding the different cultural influences are important when you're considering consumer behavior and developing a marketing plan. One personal factor that should be considered is timing. So some people may be ready to make certain purchases while others are not. And personal factors may influence when they are ready. For example, a couple may not wish to purchase a new home until they can comfortably afford it. No matter how much they may want or need the home, timing will play a part in their decision making process. As you can see, many factors may influence consumer behavior. Understanding the factors that may affect behavior is important when you're putting together a marketing plan or strategy. Motivational theories are another way to understand consumer behavior, and there's several theories out there that may work. So one is Maslow's hierarchy of needs. And we actually have a slide coming up here that we'll discuss this one in more detail. But essentially, he believes that your basic needs must be met first before your higher level needs will be considered. For example, a lower level need is security. So once you feel like, okay, I've got a roof over my head. I know where my next meal is coming from. Only then can you move on to the next level and even begin to consider buying a phone or a car or a home once those things are met. So that's Maslow's hierarchy of needs. And then we have Hertzberg's two factor theory, which demonstrates how satisfied or dissatisfied a consumer is with their job. And this may have an impact on their employment motivation level. So when a consumer is not satisfied with their job, this leads to instability. And this consumer may not be ready to make any large purchases as a result. And then we have Freud's motivational theory. So this states that unconscious factors shape the behavior of the individual. Freud believed that consumers buying habits may be related to unconscious decision making. For example, if you're on your way to work and you see a billboard for Pepsi, you may not think very much about it. Then as you're walking into work, you see someone drinking a Pepsi. And then a few hours later, when you're ordering your lunch, Pepsi, the Pepsi logo on the menu, and then you order a Pepsi. This may be unconscious, but it occurs because your brain has adapted to these signals all day. And now you're like, huh, that sounds good. You think you're making a conscious decision. But really it's unconscious because you've been bombarded with images of it all day. So by better understanding these motivational theories, you can better understand which consumer behavior will allow you to create a more targeted strategic marketing plan. Okay, so this is Maslow's hierarchy of needs. And so when I was saying, you know where your next meal's coming from. You're looking at your physiological needs first. Then once those have been met, you go to the next one. So you might look at safety. Is my health good? Is my house secure? Once those needs have been met, then and only then, according to Maslow, can you move on to the next one, which is love and belonging. So you might be more likely to meet those needs once the physiological and the safety needs have been met. And then and only then can you move up to the next one, which would be esteem and then self-actualization. According to Maslow, very few people meet this self-actualization level because they very rarely can get through all of these other stages. Interesting, actually. The consumer buying decision has five distinct stages. And these include recognizing that they're a problem, completing research about the problem, reviewing potential alternatives, making a purchasing decision, and then evaluating that product after purchase. So depending on the consumer's specific situation, these stages may take place very quickly or they may take months. A simple process may be, what are you going to have for lunch? So that decision might be made in a matter of seconds because it's relatively cheap. You're not going to spend a lot on it and you want to get on with your day. And then buying a home or a car can take months if not years for some people to save for and prepare for. It's important to understand these steps and relate it to the product that's being sold. So from a marketing perspective, these are important to consider because they're going to influence the consumer's buying process. So by focusing on one or more of these stages in the consumer buying process, a marketer can better focus their product or brand marketing strategic plan. There are different levels of involvement in the consumer buying process that need to be considered. Depending on the product and the situation, the level of involvement may change. These levels include low, limited, and high. It's important for a marketer to understand what the level of involvement that may be applied for a specific product or brand. For example, if a product is not very expensive, then a low level of consumer involvement is required. Because the product does not cost very much, the risk to the consumer is low. Their level of involvement will also be low. When a consumer is deciding to buy a new home, then the level of involvement will be considerably higher because of the risks associated with that purchase and they increase with the cost. The more risk a consumer feels, the more involvement they may need in the decision making process. Another type of involvement is limited and this is between low and high on the consumer involvement levels. For example, a limited involvement might include buying a higher priced vacuum cleaner. This, a customer might spend a couple of hours of research before committing to a specific product and while it cannot be compared to purchasing a car, it would require more involvement than a $20 low involvement item. A marketer should understand the differences in these consumer levels of involvement and how they might apply to the consumer decision making process. By better understanding these strategies, a better marketing plan can be developed and a company can better service the consumer to build customer loyalty. So these include engaging with the customer, so maybe more targeted ads, maybe solving a problem that they have, understanding their needs. So here's a resolution to your problem, using visually appealing marketing. So you might start with a small request, please complete this survey and ask for more information about our products or ensuring that your company is available to quickly respond to consumer questions. Okay, so here is everything that we covered in this presentation. So we looked at the importance of consumer behavior for developing marketing strategies. We talked about different cultural, social and personal factors that might influence consumer behavior. We looked at three motivational theories. We explained the five steps in the consumer buying process and then also talked about the low, limited and high levels of consumer involvement in the buying process. And then we looked at marketing strategies for influencing consumer behavior. And then what's next? So Unit 4 is about brand strategies. My name is Dr. Marcy Stone and I just wanted to say thanks for listening.