1/5/20
Consumer Behavior
Professor Wendy Liu
MGT 477 Winter 2020
FT MBA and Flex MBA
UCSD Rady School of Management
Session 1
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1/5/20
About the Professor
§ Stanford, UCLA, UCSD
§ Specialization
§ Economic information processing and
decisions
§ Social influence and emotions
§ Branding
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1/5/20
Class Support
§ My office: 3W115
§ Email me: wendy.liu@rady
§ Office Hours: by appointment
§ TA: Ariel Fridman
[email protected]
§ Slides provided in each class
Course Objective
§ Framework of Customer Insight
§ Learn critical frameworks and concepts
§ Unpack problems
§ Gain insights from social science
§ Use behavioral marketing research methods
§ Inform marketing strategy and tactics
§ Complement to Marketing Research and Data
Analytics courses
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1/5/20
Class Structure
§ Overview
§ Macro behavior (sessions 1-4)
§ Micro behavior (sessions 5-9)
§ Summary
Levels of Customer Understanding
Macro
Anthropology § Cultures
History
§ Subcultures
Sociology § Demographics
§ Psychographics
§ Need-based segmentation
Psychology § Individuals
§ Actions, behaviors
Neuroscience § Brain Functions
§ Neurons
Micro
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Course Syllabus
§ Matt Penfield (Session 7)
§ VP of Customer Insight @ Zynga
§ Tuesday 2/18: 6:30pm - 8:30pm
Guest Lectures § FT: no class Wednesday PM
§ Michael Diamond (Session 8)
§ SVP & General Manager @ Mitek (B2B)
§ Tuesday 2/25: 6:30pm - 8:30pm
§ FT: no class Wednesday PM
§ Unfortunately, no taping is allowed per
guest request
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Focusing on
Customer Insight
11
Calyx
&
Corolla
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SWOT Analysis
§ Strengths
§ Weaknesses
§ Opportunities
§ Threats
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If you were an investor…
§ How good an opportunity is Calyx?
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1/5/20
If you were a management
consultant…
§ What would you advise Calyx to do?
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SWOT Analysis
(Customer-Insight Perspective)
§ Strengths
§ Weaknesses
§ Opportunities
§ Threats
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1/5/20
What do people look for in
flowers?
§ Is this a good question to ask?
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What are better questions?
§ When do people buy flowers?
§ What happens when they buy flowers?
§ Behavioral questions are highly
contextualized
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What should the company
do?
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What happened next?
§ In 1994, 1995, Calyx & Corolla
received large VC funding
§ Ran TV ads in large-scale efforts for
growth
§ Brand today:
§ Brand suffers from low customer
retention and declining sales
§ Sold multiple times over the last 30
years
§ Latest owner (2015) aims to focus
on customer retention
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Key Take-Aways
§ A general business perspective vs. a deep
marketing perspective
§ Business decisions involve multiple
perspectives (e.g., operations, finance,
marketing)
§ It can be difficult to “frame switch”
from the starting perspective
§ Be sure to “frame switch” to give
sufficient depth to each perspective
§ Be highly contextualized for deeper
customer insight
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Framework
for
Customer
Insights
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Levels of Customer Understanding
Macro
Anthropology § Cultures
History
§ Subcultures
Sociology § Demographics
§ Psychographics
§ Need-based segmentation
Psychology § Individuals
§ Actions, behaviors
Neuroscience § Brain Functions
§ Neurons
Micro
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Macro Insights
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Levels of Customer Understanding
Macro
Anthropology § Cultures
History
§ Subcultures
Sociology § Demographics
§ Psychographics
§ Need-based segmentation
Psychology § Individuals
§ Actions, behaviors
Neuroscience § Brain Functions
§ Neurons
Micro
25
Cultures
§ What is culture?
§ Culture is the characteristics and
knowledge of a particular group of
people, defined by everything from
language, religion, cuisine, social habits,
music and arts.
§ How deep is culture?
26
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1/5/20
The Iceberg Model of Culture
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How to be a good
anthropologist of cultures?
§ Clean slate
§ Slow down
§ Attention to details
§ (Appropriate) generalization and
interpretation
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1/5/20
Meanings
§ Wade Davis: The Worldwide Web of Belief
and Ritual
§ http://www.ted.com/talks/wade_davis_on_
the_worldwide_web_of_belief_and_ritual
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Values, Knowledge,
Practices, Habits
§ Jiro Dreams of Sushi
§ What are some key knowledge, values,
practices and habits in Japan as seen in
this video?
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Knowledge, Values,
Practices, Habits
§ P&G in Japan
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P&G in Japan
§ Global expansion to Western Europe
1930’s to 1980’s met with success
§ Entering Japan in 1972
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P&G in Japan
§ Entering Japan in 1972
§ Deregulation of foreign entry
§ 2 months of marketing research in 1968
revealed
§ 15% growth in detergent purchase
§ High standards for personal cleanliness
and order
“Cleanliness = Godliness”
§ Washed laundry twice per day
§ Consumed twice the amount of
cleaning supplies as the US household
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Entry Strategy
§ Typical strategy: Use a local joint venture
for production, introduction to distribution
§ Which brand to introduce?
§ In Japan people typically use cold or
tepid wash
§ All-temperature detergent: Cheer
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Entry Strategy
§ Introduced other products to leverage
distribution
§ Market research revealed only one
promising category
§ Pampers disposable diapers
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Early Success
§ Pampers
§ Free samples, TV Blitz
§ High premium pricing
§ Increased adoption of disposable
diapers from 2% to 10%
§ Built a local production plant in Akashi
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Big Troubles
§ Pampers met the quality standards for
the US, but not in Japan
§ Protests and boycotts for occasional
failures
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Behavioral Insight
§ Japanese mothers changed diapers more
frequently (14 times/day!)
§ What does this imply for the product?
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Smart Local Competition
§ 1981: Competitor Uni-Charm introduced
Moony at a 40% premium and gained
23% share in one year
§ Slimmer, fitted, less load
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Reassess
§ After 12 years, P&G Japan was in debt,
with Cheer and Pampers trailing local
competitors
§ Would take more than a year to retool the
Akashi plant
§ Decision
§ “Compete with them in their own
backyard, for you will eventually compete
with them at home…we cannot afford to
be anything but successful there.”
Ed Artzt, then head of P&G
International, later to become CEO
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“The Great Flying Leap”
§ Pampers was upgraded 4 times in 3 years
§ The Akashi plant lead global R&D for
diapers
§ Pampers became world’s thinnest
disposable diaper
§ Share rose from 10% to 27% in 9 years,
regained #1 in Japan
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Lessons from Japan
§ Products not tailored to local culture leave
room for competition
§ Utilize strength of a culture for global
competitiveness
§ Japan produced several of P&G’s CEO’s
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Today’s Summary
§ Understanding cultures: knowledge,
values, practices and habits
§ Consumer products need to tightly cater
to knowledge, values and practices in
local culture
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Group Assignment:
”A Good Life” in 3 Cultures
§ Form groups of 3-5 people, email Ariel your group membership today
§ Ariel will assign you (randomly) one of three books to read:
§ China: The Path
§ Read Page xiii (foreword) to Page 86. Go fast through the foreword
and preface, focus on Confucius and Mencius chapters
§ Denmark: The Little Book of Hygge
§ Read Page vi (intro) to Page 88. Go fast on the intro, focus on the
chapters (page 1-88)
§ India: Embrace the Chaos
§ Read Page 1-86. Go fast on the intro, focus on the chapters (page
11-86)
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Group Assignment:
”A Good Life” in 3 Cultures
§ Based on the book (your best inference from the book), create a
5-7 minute presentation addressing all of the below:
1. What knowledge do people in this culture have about “a good
life”?
2. Values: How important are different things to “a good life” in
this culture (name 3 most important things and 3 less
important things)?
3. What are some practices and habits people have to pursue “a
good life” in this culture?
4. Imagine you are a new brand of mattress in the US (for
concreteness, think “Casper”). You are considering entering
this foreign market. Design an ad campaign strategy for this
market.
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Group Assignment:
Comparing 3 Cultures
§ Due Week 3 in class
§ Give your 5-7 presentation in class as a group
§ No need to submit the slides
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Next Session
§ Demographic segmentation
§ Prepare case: Eileen Fisher
§ Who are Eileen Fisher’s existing
customers (at the time of the case)?
§ What should be Eileen Fisher’s
segmentation, targeting and positioning
strategy going forward?
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The End
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