KEY CONCEPTS Purchase decision process: 1.Problem recognition 2.Information search 3.Alternative evaluation 4.Purchase decision 5.Post-purchase behavior Maslows Hierarchy of Needs Brand loyalty Reference groups Family life cycle Social class
What is CONSUMER BEHAVIOR ? = the actions taken by an individual to purchase & use products & services Actions include mental & social processes that come before & after these actions. Behavioral sciences help explain WHY & HOW choices are made. Organizations use this knowledge to provide value to consumers, and to influence their choices.
Its complicated … Consumers make many buying decisions every day. What? Where? How? How much? When? Why? How do consumers respond to various marketing efforts?
Stimulus-Response Model of Buyer Behavior Marketing Product Price Place Promotion Other Economic Technological Political Cultural Marketing & other stimuli Buyers black box Buyer character- istics Buyer decision process Buyer responses Product choices Brand choices Dealer choices Purchase timing Purchase amount
The purchase decision process
can be stimulated by marketing activity, or by simple observation
Internal search -relevant information in memory External search -personal sources -public sources -marketer sources
Evaluative criteria objective & subjective attributes Consideration set group of brands consumer finds acceptable (i.e. short list)
1.Where to buy? (i.e. from whom) 2.When to buy?
Experience versus Expectations Cognitive dissonance Customer satisfaction studies: satisfied - tell 3 people dissatisfied - tell 9 people
= feeling of post-purchase psychological tension or anxiety Consumers alleviate cognitive dissonance by seeking affirmation –ask friends to applaud choice –read ads of rejected brands to confirm why they were not chosen –companies follow up with phone calls or ads to reinforce or confirm buyers good decision, e.g. Arent you really glad you bought a Buick? Cognitive Dissonance
1.The purchase task –reason for decision –personal use or gift, i.e. social visibility 2.Social surroundings –others present during purchase, e.g. consumers with children buy 40% more than consumers shopping alone 3.Physical surroundings –ambiance; crowds 4.Time –time of day, e.g. grocery shoppers before lunch time buy more than when they are not hungry; time available 5.Pre-existing conditions –mood, e.g. shopping therapy; cash-on-hand, e.g. shoppers using credit cards buy more than those using debit cards or cash Impact of The Situation
NEEDS - biological & psychological MOTIVES Freud - believed people are largely unconscious of real psychological forces shaping their behavior. Buying decisions are affected by subconscious motivation. Maslow - wanted to explain why people are driven by particular needs at particular times. Human needs are arranged in a hierarchy, with most pressing at the bottom, and least pressing at the top. Psychological Factors 1. Motivation & Personality
Maslows Hierarchy of Needs Physical needs Psychological needs Satisfaction of needs
Key traits = the unique psychological characteristics that lead to relatively consistent and enduring responses to an environment e.g. assertiveness, extroversion, compliance, dominance, aggression Traits are formed at a young age, & usually remain fairly intact. Self-concept - actual & ideal Psychological Factors 1. Motivation & Personality
= process by which people select, organize & interpret information, to form a meaningful picture of the world Selective perception = selective attention + selective distortion + selective retention Selective attention / exposure = tendency for people to screen out most information to which they are exposed Selective distortion / comprehension = tendency to interpret information in ways that support what a person already believes Selective retention = remember good features of preferred brands; forget good features about competing brands Psychological Factors 2. Perception
A stunning steel sculpture was created in honor of Nelson Mandela. Up close it looks like 50 rods of steel. Step back and it looks much different. Perception - its all a matter of perspective
= exposure to advertising messages without being aware of that exposure Consumer concern that subliminal advertising will affect them without their knowing it. Australia, Britain, Canada, California - banned subliminal advertising Subliminal Perception
-changes in a persons behavior resulting from experience + reasoning -most human behavior is learned -marketers can build up demand for a product by associating it with strong drives, using motivating cues, & providing positive reinforcement -reduce perceived risk endorsement seals of approval free trial / sample Instructions warranty / guarantee Psychological Factors 3. Learning brand loyalty ?
These are all learned, beginning at a young age. Values – can be personal or group Beliefs – consumers subjective perception of product performance; beliefs affect buying behavior Attitudes – consumers consistent or inconsistent feelings & tendencies toward a product; hard to change Psychological Factors 4. Values, Beliefs & Attitudes
= mode of living identified by how people spend their time & resources, what they consider important in their environment, what they think of themselves & the world around them Psychographics = analysis of consumer lifestyles -combines psychology, lifestyle & demographics -useful for segmenting & targeting markets Psychological Factors 5. Lifestyles
1.Personal influence 2.Reference groups 3.Family 4.Social class 5.Culture & subculture Sociocultural Factors
Consumer purchases are often influenced by others. Opinion leaders = people who exert direct or indirect social influence over others -considered knowledgeable about particular products, services or brands -often sports figures or celebrities Word-of-mouth = influence via communications between target buyers and their circle of acquaintance (friends, family, neighbors, associates) Sociocultural Factors 1. Personal Influence
= people to whom an individual looks for self-appraisal or as a source of personal standards - affect luxury product & brand choices, but not necessities Membership group - membership by choice or by birth; e.g. social clubs, fraternities/sororities; family Aspiration group - membership is desired in this group; e.g. professional society, professional sports team Dissociative group - membership is avoided, due to differences in values or behaviors Sociocultural Factors 2. Reference groups
Family is most important buying organization in society. - buying roles change; consumer lifestyles evolve - family life cycle - in US, wife traditionally made majority of purchase decisions about food, household products, clothing; now men make 40% of food-shopping purchases - in US, women make almost 85% of all purchases; $6 trillion a year Sociocultural Factors 3. Family
= relatively permanent, homogeneous divisions of society into which people sharing similar values, interests & behavior can be grouped - determined by occupation, source (not size) of income, & education - almost everywhere in the world - media preferences differ: tabloids (lower & working); fashion, romance, celebrity (middle); literary, travel, news (upper) Sociocultural Factors 4. Social Class UPPER MIDDLE LOWER MIDDLEUPPER
Upper Uppers (1%) Social elite; live on inherited wealth; give large sums to charity; own more than one home; children go to finest schools Lower Uppers (2%) Earned high income or wealth through exceptional ability; active in civic affairs; buy expensive homes, education, cars Upper Middles (12%) Professionals, independent businesspeople, corporate managers with neither family status nor unusual wealth; believe in education, are joiners & highly civic-minded; want better things in life Middle Class (32%) Average-pay white- & blue-collar workers; live on the better side of town; buy popular products to keep up with trends; better living means owning a nice home in a nice neighborhood with good schools Working Class (38%) Working-class lifestyle, whatever their income, school background or occupation; depend heavily on relatives for economic & emotional support, advice on purchases, assistance in times of trouble Upper Lowers (9%) The working poor. Living standard is just above poverty; strive toward higher class; often lack education; poorly paid for unskilled work Lower Lowers (7%) Visibly poor; often poorly educated unskilled laborers; often out of work; some depend on public assistance; tend to day-to-day existence
Important American subcultures: Hispanic e.g. Cuban, Mexican, Puerto Rican, Latin American –tend to buy more branded, higher-quality, not generics –family shopping; brand loyal African American –growing affluence & sophistication; more price conscious; quality & selection important; most fashion-conscious ethnic group; enjoy shopping Asian Americans e.g. Chinese Americans, Filipinos, Japanese Americans, Asian Indians, Korean Americans –fastest-growing & most affluent segment; shop frequently; most brand conscious but least brand loyal; most tech savvy segment Mature consumers as the US population ages –more time & money - leisure marketers; anti-aging products & services Sociocultural Factors 5. Culture & Subculture
Next class (class #7): Services Preparation: Read Ch. 12 (pages below) Homework: Super Bowl advertisement