Presentation on theme: "Consumer Markets and Consumer Buyer Behavior"— Presentation transcript:
1 Consumer Markets and Consumer Buyer Behavior Chapter FiveConsumer Markets and Consumer Buyer Behavior
2 Consumer Markets and Consumer Buyer Behavior Topic OutlineModel of Consumer BehaviorCharacteristics Affecting Consumer BehaviorTypes of Buying Decision BehaviorThe Buyer Decision ProcessThe Buyer Decision Process for New ProductsOrganizational buying
3 Model of Consumer Behavior Note to InstructorDiscussion QuestionWhat have you recently purchased that cost over $100? Write down all the reasons you purchased this particular item.Because students are all consumers—it is interesting to start the class with a discussion of products they have recently purchased. When you ask them why they purchased a particular item or product, you can bring them through many topics in this chapter including the characteristics that affect consumer behavior (cultural, social, personal, and psychological). You can also try to determine the process they went through including how and where they searched for information and how they evaluated their alternatives. Finally, ask them how they feel about their purchase (postpurchase behavior). This discussion will lead nicely to the next slide which is the Model of Buyer Behavior.
4 Model of Consumer Behavior Consumer market : All the individuals and households that buy or acquire goods and services for personal consumption (final consumers.Consumer buyer behavior : the buying behavior of final consumersConsumers make many buying decisions every day, and the buying decision is the focal point of the marketer’s effort. Most large companies research consumer buying decisions in great detail to answer questions about what consumers buy, where they buy, how and how much they buy, when they buy, and why they buy.Note to InstructorDiscussion QuestionWhat have you recently purchased that cost over $100? Write down all the reasons you purchased this particular item.Because students are all consumers—it is interesting to start the class with a discussion of products they have recently purchased. When you ask them why they purchased a particular item or product, you can bring them through many topics in this chapter including the characteristics that affect consumer behavior (cultural, social, personal, and psychological). You can also try to determine the process they went through including how and where they searched for information and how they evaluated their alternatives. Finally, ask them how they feel about their purchase (postpurchase behavior). This discussion will lead nicely to the next slide which is the Model of Buyer Behavior.
5 Model of Consumer Behavior This figure shows that marketing and other stimuli enter the consumer’s “black box” and produce certain responses. Marketers must figure out what is in the buyer’s black box.Marketing stimuli consist of the four Ps: product, price, place, and promotion. Other stimuli include major forces and events in the buyer’s environment: economic, technological, political, and cultural. All these inputs enter the buyer’s black box, where they are turned into a set of buyer responses: the buyer’s brand and company relationship behavior and what he or she buys, when, where, and how oftenNote to InstructorFigure Understanding the whys of buying behavior is very difficult. Says one expert, “The mind is a whirling, swirling, jumbled mass of neuronsbouncing around…”It is interesting to talk about the buyer’s black box and one of the largest challenges in marketing is to understand what happens in this black box. Students will enjoy this video by Derren Brown. It is unclear how he obtains his results and how scientific this is, but it will certainly have students realize the mystery of the consumer’s brain.
6 Characteristics Affecting Consumer Behavior Many levels of factorsaffect our buyingbehavior—from broad cultural andsocial influences to motivations, beliefs,and attitudes lying deep within us. Forexample, why did you buy that specificcell phone?
7 Characteristics Affecting Consumer Behavior Factors Influencing Consumer BehaviorMany levels of factorsaffect our buyingbehavior—from broad cultural andsocial influences to motivations, beliefs,and attitudes lying deep within us. Forexample, why did you buy that specificcell phone?Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics. For the most part, marketers cannot control such factors, but they must take them into account.
8 Characteristics Affecting Consumer Behavior Cultural FactorsCulture is the values, perceptions, wants, and behavior learned from family and other important institutionsMarketers are always trying to spot cultural shifts so as to discover new products that might be wanted. For example, the cultural shift toward greater concern about health and fitness has created a huge industry for health-and-fitness services, exercise equipment and clothing, organic foods, and a variety of diets.Look for cultural shifts to discover new product opportunities. For instance, the shift toward a greater concern for fitness results in new foods, fitness centers, equipment, clothing.
9 Characteristics Affecting Consumer Behavior Cultural FactorsSubculture are groups of people within a culture with shared value systems based on common life experiencesand situations:- Hispanic American- African American- Asian American- Mature consumers (+50)Note to InstructorMany brands now target specificsubcultures—such as HispanicAmerican, African American, andAsian American consumers—withmarketing programs tailored totheir specific needs and preferences.For example, P&G’s CoverGirlQueen cosmetics line was inspiredby Queen Latifah to “celebrate thebeauty of women of color.”Discussion QuestionWhat subculture do you belong to? How does this influence you as a consumer?Targeting Hispanic Americans: Burger King sponsors an annual family-oriented FÚTBOL KINGDOM national soccer tour in eight major Hispanic markets across the United States.
10 Characteristics Affecting Consumer Behavior Cultural FactorsSocial classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviorsSocial classes are Measured by a combination of occupation, income, education, wealth, and other variables.
11 Characteristics Affecting Consumer Behavior Social FactorsGroups and Social NetworksA group is two or more people who interact to accomplish individual or mutual goals.serve as direct (face to face) or indirect comparison (reference) in forming a person’s attitudes or behaviorReference GroupsNote to InstructorGroups that have a direct influence and to which a person belongs are calledmembership groups.Reference groups serve as direct (face-to-face) or indirect points of comparison or reference in forming a person’s attitudes or behavior.Aspirational: People often are influenced by reference groups to which they do not belong.Discussion QuestionWhat groups are you a member of and what are your aspirational groups. How does this influence you as a consumers?Membership GroupsAspirational GroupsGroups with direct influence and to which a person belongsgroups to which an individual wishes to belong
12 Characteristics Affecting Consumer Behavior Social FactorsGroups and Social NetworksMarketers try to identify the reference groups of their target markets.Reference groups expose a person to new behaviors and lifestyles, influence the person’s attitudes and self concept, and create pressures to conform that may affect the person’s product and brand choices.Note to InstructorGroups that have a direct influence and to which a person belongs are calledmembership groups.Reference groups serve as direct (face-to-face) or indirect points of comparison or reference in forming a person’s attitudes or behavior.Aspirational: People often are influenced by reference groups to which they do not belong.Discussion QuestionWhat groups are you a member of and what are your aspirational groups. How does this influence you as a consumers?
13 Characteristics Affecting Consumer Behavior Social FactorsGroups and Social NetworksMarketers use the Word-of-mouth influence and buzz marketing. They always search for opinion leaders to use them in this regard.Opinion leaders are people within a reference group who exert social influence on others because of special skills, knowledge … etc.Also called influentials or leading adoptersMarketers identify them to use as brand ambassadors.Note to InstructorIt is a great idea to click through to the Tremor Web site. It is an excellent example of Buzz marketing. Ask students if they tend to have a “go to” person when they want to purchase. Would they consider themselves opinion leaders? A great group to ask about is middle school aged kids. Who are the opinion leaders here? What qualities do they possess?
14 Characteristics Affecting Consumer Behavior Social FactorsGroups and Social Networks- Online Social Networks are online communities where people socialize or exchange information and opinions- Include blogs, social networking sites (Facebook), virtual worlds (second life)Note to Instructor:Discussion QuestionHow can marketers use these networks?This slide should provide a lively discussion for students because they all are users of social networks. Ask students for examples they have seen or experienced. Then be sure to ask if they think the marketing efforts were effective for the marketer and why? The text gives many examples .
15 Characteristics Affecting Consumer Behavior Social FactorsFamily is the most important consumer-buying organization in societyMarketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.Note to InstructorDiscussion QuestionWhat brands do you purchase because it is what their parents used? Why do you think this occurs?
16 Characteristics Affecting Consumer Behavior Social FactorsSocial roles and status are results of the groups, family, clubs, and organizations that a person belongs to that can define role and social statusA role consists of the activities people are expected to perform according to the people around them. Each role carries a status reflecting the general esteem given to it by society. People usually choose products appropriate to their roles and status. Consider the various roles a working mother plays. In her company, she plays the role of a brand manager; in her family, she plays the role of wife and mother; at her favorite sporting events, she plays the role of avid fan. As a brand manager, she will buy the kind of clothing that reflects her role and status in her company.Note to InstructorDiscussion QuestionWhat brands do you purchase because it is what their parents used? Why do you think this occurs?
17 Characteristics Affecting Consumer Behavior Personal FactorsAge and life-cycle stage: People change the goods and services they buy over their lifetimes. Tastes in food, clothes, Furniture are often age related.Occupation affects the goods and services bought by consumers. Blue-collar workers tend to buy more rugged work clothes, whereas executives buy more business suits.Economic situation affects consumer store and product choices. It includes trends in:Personal incomeSavingsInterest rates
18 Characteristics Affecting Consumer Behavior Personal FactorsLifestyle is a person’s pattern of living as expressed in his or her psychographicsMeasures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environmentNote to InstructorDiscussion QuestionWhat categories of products seem to be targeted to consumer’s lifestyles?They will realize many products in addition to cars including food, cosmetics, shampoo also appeal to a consumer’s lifestyles.
19 Characteristics Affecting Consumer Behavior Personal FactorsPersonality and self-conceptPersonality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environmentNote to InstructorThis PC ad from Fall of 2008 shows how PC’s are a fit for many personalities even though Mac has run ads which stereotype the user.Each person’s distinct personality influences his or her buying behavior
20 Characteristics Affecting Consumer Behavior Personality is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality can be useful in analyzing consumer behavior for certain product or brand choices.DominanceAggressivenessAutonomyDefensivenessAdaptabilityothersNote to InstructorIt is interesting to talk about brand personalities and ask students the personality of several brands:A brand personality is the specific mix of human traits that may be attributed to a particular brand.One researcher identified five brand personality traits1. Sincerity (down-to-earth, honest, wholesome, and cheerful)2. Excitement (daring, spirited, imaginative, and up-to-date)3. Competence (reliable, intelligent, and successful)4. Sophistication (upper class and charming)5. Ruggedness (outdoorsy and tough)The idea is that brands also have personalities, and consumers are likely to choosebrands with personalities that match their ownMost well-known brands are strongly associated with one particular trait: Jeep with“ruggedness,” Apple with “excitement,” CNN with “competence,” and Dove with “sincerity.”Hence, these brands will attract persons who are high on the same personality traits.
21 Characteristics Affecting Consumer Behavior Psychological FactorsMotivationPerceptionLearningBeliefs and attitudes
22 Characteristics Affecting Consumer Behavior Psychological FactorsMotivationA motive is a need that is sufficiently pressing to direct the person to seek satisfactionMotivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivationsA person has many needs at any given time. Some are biological, arising from states of tension such as hunger, or thirst. Others are psychological, arising from the need for recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level of intensity.
23 Characteristics Affecting Consumer Behavior Maslow’sHierarchy of Needs
24 Characteristics Affecting Consumer Behavior Psychological FactorsPerceptionPerception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processesSelective attentionSelective distortionSelective retentionNote to InstructorDiscussion QuestionIf you watched television last night, what ads do you remember seeing?Probe to find out why they remember certain ads—was it that they broke through the clutter, that they saw them many times, or that they are in the market for that certain product?
25 Characteristics Affecting Consumer Behavior Psychological FactorsPerceptionSelective attention is the tendency for people to screen out most of the information to which they are exposed Selective distortion (misrepresentation)is the tendency for people to interpret information in a way that will support what they already believe Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands
26 Characteristics Affecting Consumer Behavior Psychological FactorsLearningLearning is the change in an individual’s behavior arising from experience, (when people act, they learn).Learning occurs through interplay of:DrivesmotiveCuesResponsesReinforcementA drive is a strong internal stimulus that calls for action. A drive becomes a motive whenit is directed toward a particular stimulus object. For example, a person’s drive for selfactualizationmight motivate him or her to look into buying a camera. The consumer’sresponse to the idea of buying a camera is conditioned by the surrounding cues. Cues areminor stimuli that determine when, where, and how the person responds. For example, theperson might spot several camera brands in a shop window, hear of a special sale price, ordiscuss cameras with a friend. These are all cues that might influence a consumer’s responseto his or her interest in buying the product.Suppose the consumer buys a Nikon camera. If the experience is rewarding, the consumerwill probably use the camera more and more, and his or her response will bereinforced. Then the next time he or she shops for a camera, or for binoculars or some similarproduct, the probability is greater that he or she will buy a Nikon product. The practicalsignificance of learning theory for marketers is that they can build up demand for aproduct by associating it with strong drives, using motivating cues, and providing positivereinforcement.
27 Characteristics Affecting Consumer Behavior Psychological FactorsBeliefs and AttitudesBelief is a descriptive thought that a person has about something based on:KnowledgeOpinionFaithMarketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect buying behavior. If some of the beliefs are wrong and prevent purchase, the marketer willwant to launch a campaign to correct them.
28 Characteristics Affecting Consumer Behavior Psychological FactorsAttitudesAttitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them. A camera buyer may hold attitudes such as “Buy the best,” “The Japanese make the best electronics products in the world,” If so, the Nikon camera would fit well into the consumer’s existing attitudes.
29 Types of Buying Decision Behavior Some purchases aresimple and routine, evenhabitual. Others are far morecomplex—involving extensiveinformation gathering andevaluation—and are subject tosometimes subtle influences. Forexample, think of all that goes into anew car buying decision.
30 Types of Buying Decision Behavior Complex buying behaviorDissonance-reducing buying behaviorHabitual buying behaviorVariety-seeking buying behaviorSome purchases aresimple and routine, evenhabitual. Others are far morecomplex—involving extensiveinformation gathering andevaluation—and are subject tosometimes subtle influences. Forexample, think of all that goes into anew car buying decision.
31 Types of Buying Decision Behavior Four Types of Buying BehaviorBuying behavior varies greatly fordifferent types of products. For example,someone buying an expensive new PCmight undertake a full information gatheringand brand evaluation process.
32 The Buyer Decision Process The actual purchasedecision is part of a muchlarger buying process—starting withneed recognition through how you feelafter making the purchase. Marketerswant to be involved throughout theentire buyer decision process.
33 The Buyer Decision Process Buyer Decision Making ProcessConsumers pass through five stages with purchase:The actual purchasedecision is part of a muchlarger buying process—starting withneed recognition through how you feelafter making the purchase. Marketerswant to be involved throughout theentire buyer decision process.
34 The Buyer Decision Process Need RecognitionOccurs when the buyer recognizes a problem or need triggered by:Internal stimuli (when one of the person’s normal needs—for example, hunger or thirst—rises to a level high enough to become a drive).- External stimuli (For example, an advertisement or a discussion with a friend might get you thinking about buying a new car).The buying process starts longbefore the actual purchase andcontinues long after. In fact, itmight result in a decision not tobuy. Therefore, marketers mustfocus on the entire buying process,not just the purchase decision.Internal stimuli when one of the person’s normal needs—for example,hunger or thirst—rises to a level high enough to become a driveExternal stimuli. For example, an advertisement or a discussion with a friendmight get you thinking about buying a new car.
35 The Buyer Decision Process Information SearchSources of InformationPersonal sources—family and friendsCommercial sources—advertising, InternetPublic sources—mass media, consumer organizationsExperiential sources—handling, examining, using the product
36 The Buyer Decision Process Evaluation of AlternativesHow the consumer processes information to arrive at brand choicesMarketers should study buyers to find out how they actually evaluate brand alternatives.If marketers know what evaluative processes go on, they can take steps to influence the buyer’s decision.Note to InstructorThis Web link brings you to PriceGrabber—an online comparison shopping site. What is interesting on this site is on the left hand side, you can search by features. These features help a consumer know how to evaluate a product. For instance, this example is laptop computers and one can search by processing speed, processor type, screen size, etc.
37 The Buyer Decision Process Purchase DecisionThe act by the consumer to buy the most preferred brandThe purchase decision can be affected by:Attitudes of others: If someone important to you thinks that you should buy the lowest priced car, then the chances of you buying a more expensive car are reduced.Unexpected situational factors: For example, the economy might take a turn for the worse, a close competitor might drop its price, or a friend might report being disappointed in your preferred car.
38 The Buyer Decision Process Post-Purchase DecisionThe satisfaction or dissatisfaction that the consumer feels about the purchase reflects the Relationship between:Consumer’s expectationsProduct’s perceived performanceThe larger the gap between expectation and performance, the greater the consumer’s dissatisfactionCognitive dissonance is the discomfort caused by a post-purchase conflict
39 The Buyer Decision Process Post-Purchase DecisionCustomer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime valueSatisfied customers buy a product again, talk favorably to others about the product, pay less attention to competing brands and advertising, and buy other products from the company. Many marketers go beyond merely meeting the expectations of customers—they aim to delight the customer.
41 The Buyer Decision Process for New Products Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.Stages in this process include:AwarenessInterestEvaluationTrialAdoption
43 The business market What is Organizational Buying? Business buyer behavior: The buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.Organizational buying: the decision- making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
44 The business market versus the consumer market Inelastic demandFluctuating demandProfessional purchasingSeveral buying influencesDirected purchasingReciprocityLeasingFewer buyersLarger valueClose supplier-customer relationshipGeographically concentrated buyersDerived demand