Welcome to Mark529

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Welcome to Mark529

• Professor Jaideep Sengupta
• PhD UCLA
• MBA BTech (Electrical Engg)
• Teaching in the MBA program the last few years
  (including Shenzhen)
• Taught executives in UCLA, HK (Kellogg-HKUST
  EMBA)
• Telephone [phone]
• Email mkjaisen_at_ust.hk
• Course packet available with MBA office

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TodaySession 1

• Administrative details
• Case discussion New Coke
• A Model of Consumer Behavior

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Admin Stuff What is this course about?

• Understanding Consumers Behavior
• Definition of Consumer Behavior
• Those activities directly involved in obtaining,
  consuming, and disposing of products and
  services, with special emphasis on the mental
  processes that precede and follow these actions
• Mental processes important
• E.g., not just what brand/ad we like or dislike,
  but why we like or dislike it
• Some illustrative examples which highlight the
  importance of understanding mental processes

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Example 1.

• Real estate agents in Vancouver, Canada are able
  to command higher prices for house numbers which
  contain the number 8, and lower prices for
  number 4
• Why?

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Example 2

• During periods when consumers are not shopping
  much (e.g., bad economy), store managers often
  play slow music within stores
• During busy periods (e.g., holiday season), fast
  music is played
• Why?

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Example 3.

• In the US, the Marlboro cowboy is usually shown
  alone
• Ad.

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Example 3.

• In Japan, the Marlboro cowboy is usually shown as
  part of a group
• Ad.

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WHY??
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Solution.

• Culture has an influence on consumer behavior
• US culture importance of individual not true
  in Asia
• Japanese consumers think a single cowboy looks
  lonely and poor
• Just an ordinary worker on a farm

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In general, important to understand consumer
psychology to design successful marketing tactics

• And that is what this course is all about

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Course Description

• Marketing applications stressed but
• Focus is on understanding the consumers
  psychology
• Note all marketing courses mouth the cliché
  about customer is king, but very few courses
  actually follow that focus!
• This course corrects that bias
• Advertising the key tool used to explain many of
  the concepts
• Advertising is the managerial tool that works off
  an understanding of consumer psychology
• Also, advertising model very similar to consumer
  behavior model

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Admin StuffTeaching Style

• Classes lecture case
• During Lecture
• I sometimes speak fast Stop me!!
• Questions VERY welcome during the lecture. Again,
  just stop me and ask!
• If one of you asks a question, others should also
  feel free to add their comments
• For cases
• Break out rooms (in groups) discuss and provide
  a 1 page written answer
• 25-30 minutes
• Then general discussion

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Admin StuffTextbook

• Consumer Behavior (4th edition) Hoyer and
  MacInnis
• Chapter readings specified please read before
  class (quick skim will suffice)
• Book is a complement to the class lecture and
  discussion (not a substitute)
• Will find book useful for group project

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Admin StuffGroup formation

• Several aspects of the course involve group work
• Project
• Case discussion
• In-class assignments
• Form your own groups of 5-6 today!
• Please email me list next week (names, ID, email,
  group contact person)
• Contact me if not part of group will randomly
  assign

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Admin StuffGrading Criteria

• Class Participation 50
• Group Project Report 40
• Will describe later today
• Project Presentation 10

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Admin StuffClass Participation

• Quality, not quantity!
• Insightful comments will receive greater credit
• In next class, please give me an index card with
  following details
• Photograph
• Name
• Email address
• Contact phone number
• Short statement describing work experience

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Admin stuffClass Guidelines

• Please arrive on time participation points!!
• 5 minutes leeway
• Lecture handout on webpage AFTER class
• Any questions before we go to case?

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Case Introducing New Coke

• The importance of understanding your consumers
• FORM GROUPS OF 4-5 (DOESNT HAVE TO BE THE FINAL
  GROUPS!!)

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Case Introducing New Coke(FORM GROUPS)

• What factors led to Coca-Colas huge initial
  popularity?
• What was Pepsis strategy?
• Coca-Cola responded with New Coke what happened
  as a result? (summarize facts from case)
• How did Coca-Cola end up making such a big
  mistake?
• What would you have done?
• Discuss in break-out rooms in groups 1 page of
  bullet-points TOTAL (write your names also)
• 1 qn per group (and all groups think about qn 5)

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Big Take-away

• Marketing cannot be driven only by the product,
  or the competition, or the channel
• Marketing is about understanding the consumers
  side
• why they like/dislike something
• Coke was popular, but management did not
  understand why! Not the taste
• More (recent) scientific evidence (not taste, but
  brand name)
• In other words, important to understand Consumer
  Behavior!

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End of case discussion
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Session 1 Introduction to Consumer Behavior

• Definition (what goes on in consumers mind)
• Importance why is CB important?
• Consumer Behavior (CB) dictates Marketing Tactics
• Lack of knowledge of CB big mistakes!
• New Coke
• Marlboro ad in Japan
• Knowledge of CB Successful Marketing tactics
• Pepsi

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Next Session

• Model of CB course layout
• Lecture Perception
• Case DeBeers
• Lunch!!