Consumer Behaviour and Food Marketing

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Consumer Behaviour and Food Marketing

• Week 1 30 April 2003

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Consumer Behaviour Food Marketing (AE 613)

• BSc Agricultural EconomicsBSc Rural Resource
  ManagementBSc Agricultural and Business
  ManagementBSc Food Marketing Economics
• Module convenor
• Mario Mazzocchi (Room 310 ext. 6484
  m.mazzocchi_at_rdg.ac.uk)
• Module is held on Wednesday 11am-1pm in the Nike
  lecture theatre (Ag building)

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Module content

• Behavioural theories of consumer choice and
  models of consumer decision-making process
• Factors influencing consumer choice with respect
  to foods
• Implications of such factors for marketing of
  food products

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Learning outcomes

• The module aims at providing you with
• An understanding of the consumer decision-making
  process
• An understanding of internal and external
  influences on consumer choice
• An appreciation of the relevance of the consumer
  choice process to food marketing
• An understanding of how market research methods
  relate to elements of the consumer
  decision-making process

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Module structure
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Module assessment

• The assessment will take the form of a
  presentation (20) essay (80) which relates
  consumer behaviour to the marketing of food
  products.
• Choice among any of the topics covered in the
  course
• Groups of 3 students
• Max 2500 words
• Deadline 3 July 2002 (end WK10)

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Presentation and Essay Development

• Presentation will start from week 4
• Essay questions are given (available on the web)
• The following week a 3-people team will give a
  short Powerpoint presentation (15-20 minutes)
• The presentation will origin the essay to be
  delivered at the end of the course
• Schedule of presentation

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Presentation and essay writing basic guidelines

• Try to be concise and communicative
• Base your answers to essay questions on sources
  given at the end of the lecture, but also make
  use of library resources to research
  independently
• Use your own words to interpret sources through
  a case study
• All sources must be correctly referenced in the
  text

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Suggested reading

• The course will be mainly based on the following
  textbooks
• East (1997). Consumer Behaviour Advances and
  Applications in Marketing. London Prentice-Hall.
• Further references will be given for each class.
  A reading list is under preparation.
• Food-specific books (in the Library)
• Marshall (1995, ed.). Food Choice and the
  Consumer. London Blackie Academic Professional
• Meiselman and McFie (1996, eds.). Food Choice,
  Acceptance and Consumption. Blackie Academic
  Professional

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Consumer Behaviour (East)

• How and why people buy and use products
• How they react to prices, advertising and other
  promotional tools
• What underlying mechanisms operate to help and
  hinder consumption

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Food plays a central role in peoples lives

• Food preferences are culturally bound and
  socially influenced
• Source of nutrition
• Source of hedonistic experience
• Social function
• Cultural function
• Central economic role
• Complexity
• Multidisciplinary approach

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Economic FactorsMicroeconomic theory

• Demand is a function of prices, income and
  preferences - but preference changes are
  difficult to measure
• Effects of income and price changes on demand,
  under given preferences
• Unresolved issue quality and preferences

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The Engel Law

• As income grows, the household expenditure share
  for food decreases
• Share not quantity
• Saturation of food consumption
• Healthy foods
• Functional foods
• Marketing and differentiation (product bundle)

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Food share on Italian household expenditure
Exp. share for food ()
Total expenditure
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Real value of food consumption
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But ...

• How do preferences form?
• Why do they change?
• How are decisions made?
• Do income and prices influence preferences too?
• These questions are central to marketing
  strategies
• How can consumer decisions be influenced?

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Long-term change of consumer preferences
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Foods for which consumption has changed
(1990-2000, NFS)
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Models of Consumer Behaviour

• Types of consumption
• Purchase paradigms
• Modelling food consumption behaviour
• Most of the topics of this lecture are covered by
  East (Chap. 1)

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What determines food choice?

• There are three types of influences on preference
  and choices for food
• Characteristics of the product
• Characteristics of the individual
• Characteristics of the environment

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Types of consumption

• Important purchases
• Repetitive consumption
• Involuntary consumption
• Group consumption

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Important purchases

• Product purchased for the first time
• Infrequently purchased products
• Time and effort to choose
• Little experience
• High involvement
• Going to a new restaurant

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Repetitive consumption

• Frequent purchase
• (Low price)
• Little conscious attention
• Low involvement
• Experience goods
• Sugar at the supermarket

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Involuntary consumption

• Unavoidable consumption
• Petrol for the car
• Telephone
• Repair of roads (social form, public goods)
• Choice between brands?
• Tap water

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Group consumption

• Purchase based on some group influence process
• Family expenditures
• Company purchases
• Mineral water

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Purchase paradigms, theories and models
Paradigm (perspective, framework)
Theory
MODEL
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Purchase paradigms

• Are not mutually exclusive
• Subjective preferences
• Appropriateness for particular conditions

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Purchase paradigms

• Cognitive paradigm (US)
• Purchase as the outcome of problem-solving
• Reinforcement paradigm (UK)
• Purchase as learned behaviour
• Habit paradigm
• Pre-established pattern of behaviour

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The Cognitive paradigm

• Decision-making as an explanation for consumer
  behaviour
• The cognitive consumer is credited with the
  capacity to receive and handle considerable
  quantities of information, to engage actively in
  the comparative evaluation of alternative
  products and brands, and to select rationally
  among them Foxall

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Cognitive paradigm

• Does it work?
• Typical purchase (especially for food)
• Few alternatives
• Little external search
• Few evaluative criteria
• Engel, Blackwell and Miniard (1995)

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Extended Problem Solving

• New and important purchases

Problem/need recognition
Search for information
Evaluation of alternatives
Purchase
Consumption
Post-consumption evaluation
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Limited problem solving

• Even in new purchase there are no time, resource
  and motivation to the search
• Search for information and evaluation of
  alternatives are limited

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Habitual decision-making

• Loyalty to the brand
• Inertia
• The need is satisfied, but there is no special
  interest in the product
• Food products
• Satisficing behaviour
• Accept the first solution that is good enough to
  satisfy your need, even if a better solution may
  be missed

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Satisficing behaviour (Simon, 1957 Klein, 1989)
Need recognition
Evaluation of single Option
NO
Purchase?
YES
END
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The Reinforcement paradigm

• Reinforcer an experience which raises the
  frequency of responses associated with it
• Punisher an experience which reduces the
  frequency of such response
• Skinner, 1938 1953

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The learned behaviour theory

• Past behaviour teaches us, and after learning we
  can modify later behaviour
• Satisfaction/unsatisfaction with a product
• It is valid for both the reinforcement and habit
  paradigm

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Some types of learning

• Classic conditioning (Pavlovs dog)
• Learning is generalised
• Use of an existing brand for a new product
• Use of stimuli packaging, brand names, colours,
  smells, music, context of purchase/consumption
• Reinforcement learning
• Trial and error learning
• Shaping (behaviour changed by reinforcing the
  performances that show change in a desired
  direction)

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The satiation effect

• Heavily used reinforcements lose power (satiation
  effect)
• Wearout in advertisement
• Desensitisation stimulus satiation

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Stimuli and reinforcement learning

• Continuous and Intermittent learning
• Continuous is quicker
• Intermittent has a larger final effect
• Extinction period after the end of reinforcement
  is longer for intermittent learning

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Punishment and reinforcement learning

• Food poisoning consequences
• One failure is enough
• Undiscovered later improvements of the product
• Effect is long-lasting

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Reinforcement and marketing strategy

• Control stimuli to direct behaviour
• Reinforcers
• Pleasure
• Information
• Degree of opennes (range of activities
  available to the consumer)
• Environment affects behaviour

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The Habit paradigm

• While the cognitive and reinforcement paradigms
  are based on dynamics and change, the habit one
  is related to aggregate stable markets, where
  behaviour is seen as relatively unchanging.
• The habit paradigm excludes problem-solving or
  planning
• Judgment comes after purchase and habits may be
  broken

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The involvement factor

• Involvement
• Importance of purchase
• Risks involved
• Potential costs
• Irreversibility of the decision
• Type of cognitive process that is generated

Example beef consumption after the BSE crisis
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Frustration factor

• Frustration as blocked motivation
• No options are available
• Minor frustrations in using products may lead to
  change products
• New products should be designed to avoid
  frustration

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Managerial control and the purchase paradigms

• Cognitive paradigm
• Provide information and persuasion
• Suitable for one-off decisions
• Reinforcement paradigm
• Change the environment and stimuli
• Habit paradigm
• Packaging
• Advertising

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Food properties and quality (Hooker, Caswell,
1996)
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Problem/need recognition

• In general, individuals recognise they have a
  need for something when there is a discrepancy
  between their actual state and ideal state.

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Need recognition and marketing strategy

• Advertising
• In-store promotion
• Visibility

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Need recognition