Presentation on theme: "Consumer Markets and Consumer Buyer Behavior"— Presentation transcript:
1 Consumer Markets and Consumer Buyer Behavior Chapter 5Consumer Markets and Consumer Buyer Behavior
2 Schedule – Before Midterm 4Oct.8/9Consumer Markets and Consumer Buyer BehaviorCh.5Case 35Oct.15/16Business Markets and Business Buyer BehaviorCh.6Case 46Oct.22/23Marketing Information SystemCh.4Case 5
3 Learning GoalsDefine the consumer market and construct a model of consumer buyer behaviorName the four factors that influence buyer behaviorList and understand the types of buying decision behavior and stages in the processDescribe the adoption and diffusion process for new products
4 Case Study Harley Davidson Measuring SuccessCurrently 22% of all U.S. bike salesDemand above supplySales doubled in the past 5 years with earnings tripledBuilding SuccessUnderstanding the customers’ emotions and motivationDetermining the factors of loyaltyTranslating this information to effective advertising5 - 4
5 Learning GoalsDefine the consumer market and construct a model of consumer buyer behaviorName the four factors that influence buyer behaviorList and understand the types of buying decision behavior and stages in the processDescribe the adoption and diffusion process for new products
6 DefinitionsConsumer buyer behavior refers to the buying behavior of final consumers – individuals and households who buy goods and services for personal consumptionAll of these final consumers combine to make up the consumer market
8 Learning GoalsDefine the consumer market and construct a model of consumer buyer behaviorName the four factors that influence buyer behaviorList and understand the types of buying decision behavior and stages in the processDescribe the adoption and diffusion process for new products
10 Characteristics Affecting Consumer Behavior CultureForms a person’s wants and behaviorSubcultureGroups with shared value systemsSocial ClassSociety’s divisions who share values, interests and behaviorsKey FactorsCulturalSocialPersonalPsychological
12 This advertiser knows teens are strongly influenced by groups when purchasing fashion items
13 Characteristics Affecting Consumer Behavior Age and life cycleOccupationEconomic situationLifestyleActivities, interests and opinionsLifestyle segmentationPersonality and self-conceptKey FactorsCulturalSocialPersonalPsychological
14 Personal FactorsFamily Life Cycle stages throughout which families pass as they mature over timeStages in family life cycle:1.bachelor stage2.newly married couples, no children3.full nest 1; youngest child under 64.full nest 2; youngest child 6 or over5. full nest 3; older married couples with dependent children6.empty nest 1; older married couples no children with them7. empty nest 1; older married couples no children at home;retired8.solitary survivor, working9.solitary survivor, retired
15 Personal FactorsPersonality ğ a person’s unique characteristics that lead to relatively consistent and lasting responses to his environmentSelf-concept ğ the self image or general picture that people have of themselves
16 Personal FactorsLifestyle a person’s pattern of living as expressed in his activities, interests and opinionsPsychographics ğ technique of measuring lifestyles and developing lifestyle classificationsMajor dimensions measured are:Activities (work, hobbies, social events, entertainment, shopping, sports,vacation)Interests (family, home, job, recreation, fashion, food, media, achievements)Opinions (themselves, social issues, politics, business, economics, products, future)
17 Values and Lifestyles (VALS) ActualizersHigh ResourcesHigh InnovationFulfilledsAchieversExperiencersMakersBelieversStriversStrugglersLow ResourcesLow Innovation
19 Characteristics Affecting Consumer Behavior Key FactorsMotivationPerceptionLearningBeliefs and attitudesCulturalSocialPersonalPsychological
20 Psychological Factors Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfactionMotivation research is based on Freud. Looks for hidden and subconscious motivationMaslow ordered needs based on how pressing they are to the consumer
22 This ad demonstrates a product meeting physiological and social needs
23 DiscussionWhat consumer products might fulfill multiple levels of the Hierarchy of Needs?There are many products that fit several levels. Hotels, for instance, will satisfy basic physiological needs, but the best room at the Ritz Carlton may meet many higher levels.
24 Psychological Factors Perception Perception is the process by which people select, organize, and interpret information.Perception Includes:Selective attentionConsumers screen out informationSelective distortionPeople interpret to support beliefsSelective retentionPeople retain points to support attitudes
25 Discussion Question Perception How many ads were you exposed to today?Which ones do you remember? Why?Did students include Internet ads, logos on clothing, ads in the subway, billboards, logos on drinks, in the classroom, TV or radio ads?This should prompt discussion of selective attention, distortion and retention. Was it that they are loyal to these brands? Did they break through the clutter? Were they bombarded by a particular brand message?
26 Psychological Factors Learning Learning describes changes in an individual’s behavior arising from experienceLearning occurs throughDrivesInternal stimulus that calls for actionStimuliObjects that move drive to motiveCuesMinor stimuli that affect responseReinforcementFeedback on action
27 Psychological Factors Beliefs and Attitudes a descriptive thought about a brand or servicemay be based on real knowledge, opinion, or faithAttitudedescribes a person’s evaluations, feelings and tendencies toward an object or ideaThey are difficult to change
28 Learning GoalsDefine the consumer market and construct a model of consumer buyer behaviorName the four factors that influence buyer behaviorList and understand the types of buying decision behavior and stages in the processDescribe the adoption and diffusion process for new products
31 The Buying Roles 5 roles people might play in a buying decision Initiator ğ who first gives the idea of buying the product or serviceInfluencer ğwhose view or advice influences the decisionDecider ğwho decide on any component of buying decisionBuyer ğwho makes the actual purchaseUser ğwho uses the product or sevice purchased
33 The Buyer Decision Process Needs can be triggered by:Internal stimuliNormal needs become strong enough to drive behaviorExternal stimuliAdvertisementsFriends of friendsProcess StagesNeed recognitionInformation searchEvaluation of alternativesPurchase decisionPostpurchase behavior
34 The Buyer Decision Process Consumers exhibit heightened attention or actively search for informationSources of information:PersonalCommercialPublicExperientialWord-of-mouthProcess StagesNeed recognitionInformation searchEvaluation of alternativesPurchase decisionPostpurchase behavior
35 Information Search Personal Sources Commercial Sources Public Sources Family, friends, neighborsMost effective source ofinformationAdvertising, salespeopleReceives most informationfrom these sourcesExperiential SourcesMass MediaConsumer-rating groupsHandling the productExamining the productUsing the product
36 The Buyer Decision Process Evaluation procedure depends on the consumer and the buying situation.Most buyers evaluate multiple attributes, each of which is weighted differently.At the end of the evaluation stage, purchase intentions are formed.Process StagesNeed recognitionInformation searchEvaluation of alternativesPurchase decisionPostpurchase behavior
37 Evaluation of Alternatives Consumer May Use CarefulCalculations & Logical ThinkingConsumers May Buy on Impulse andRely on IntuitionConsumers May Make Buying Decisionson Their Own.Consumers May Make Buying DecisionsOnly After Consulting Others.Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives
38 Decision Making Sets Total Set Aware- ness Consid- Set eration Set ChoiceSetDecision
39 The Buyer Decision Process Process StagesTwo factors intercede between purchase intentions and the actual decision:Attitudes of othersUnexpected situational factorsNeed recognitionInformation searchEvaluation of alternativesPurchase decisionPostpurchase behavior
40 Buyer Decision Process for New Products Good, service or idea that is perceived by customers as new.Stages in the Adoption ProcessMarketers should help consumers move through these stages.
41 Stages in the Adoption Process Awareness: Consumer is aware ofproduct, but lacks information.Stages in the Adoption ProcessInterest: Consumer seeksInformation about new product.Evaluation: Consumer considerstrying new product.Trial: Consumer tries newproduct on a small scale.Adoption: Consumer decides to make regular use of product.
42 Buyer Decision Process for New Products Individual Differences in Innovativeness:Consumers can be classified into five adopter categories, each of which behaves differently toward new products
43 Adopter Categories Early Majority Late Majority Innovators Early AdoptersPercentage of AdoptersLaggards34%34%13.5%16%2.5%EarlyTime of AdoptionLate
44 Buyer Decision Process for New Products Product Characteristics influencing the adoption rate:Relative Advantage ğ Is the innovation superior to existing products?Compatibility ğ Does the innovation fit the values and experience of the target market?Complexity ğ Is the innovation difficult to understand or use?Divisibility ğ Can the innovation be used on a trial basis?Communicability ğ Can results be easily observed or described to others?
45 Buyer Decision Process for New Products International Consumer BehaviorValues, attitudes and behaviors differ greatly in other countries.Physical differences exist which require changes in the marketing mix.Customs vary from country to country.Marketers must decide the degree to which they will adapt their marketing efforts.
46 Discussion QuestionHow is a site like Consumer Reports used in the decision- making process?Go to the site and ask students which type of decision this is best for. They should agree that the site is helpful for highly involved products. It is used in the information search to determine what attributes are important. It then helps them evaluate the alternatives as they can see how the brands compare.
47 Discussion QuestionWhy might the adoption process be slow for a home robot?Computers are doing more for us at home. We already have TiVo-type products which scan databases and decide what to record. Other products include the Roomba and other home vacuum systems. New robots can conduct an orchestra (Sony) and assist the blind.Source: Business WeekSource: Business Week
48 The Buyer Decision Process Process StagesSatisfaction is important:Delighted consumers engage in positive word-of-mouth.Unhappy customers tell on average 11 other people.Cognitive dissonance is commonNeed recognitionInformation searchEvaluation of alternativesPurchase decisionPostpurchase behavior
49 Learning GoalsDefine the consumer market and construct a model of consumer buyer behaviorName the four factors that influence buyer behaviorList and understand the types of buying decision behavior and stages in the processDescribe the adoption and diffusion process for new products