1. Marketing Dynamics Understanding Consumer Behavior

2. Objectives  List the three categories of influences on consumers.  Explain how a need leads to an action.  List Maslow’s hierarchy of needs in order.  Explain how marketers use needs to develop products and promotions.

3. Objectives  List six buying motives and the basis for each one.  Describe the consumer decision process.  List and explain the four levels of consumer buying decisions.

4. Key Marketing Terms  psychological influences psychological influences  motive motive  motivate motivate  buying motive buying motive  social influences social influences  word-of-mouth publicity word-of-mouth publicity  reference group reference group  peer pressure peer pressure  situational influences situational influences  impulse purchase impulse purchase  routine buying decision routine buying decision  limited decision making limited decision making  extensive decision making extensive decision making

5. Understanding Consumer Behavior  Influences on consumer buying behavior  psychological  social  situational What might influence these people to buy the products they see?

6. Psychological Influences  Psychological influences Psychological influences  influence from within the person –needs –such as hunger and thirst –wants –such as a hamburger or coffee Describe a situation in which a psychological factor influenced what you purchased.

7. Psychological Influences  Need  a lack within a person that must be filled  examples –lack of food, water, or shelter  If the need is not satisfied  it leads to a drive  A drive is an internal force that leads to action  the purpose of the action is to fulfill the need

8. Hierarchy of Needs  Motive Motive  an internal drive that causes people to act –based on needs  Motivate Motivate  to prompt a person to take action –something marketers try to do  Maslow’s hierarchy of needs  states that basic physical needs must be satisfied first

10. Needs into Wants  The human mind usually turns needs into wants  Marketers try to turn those wants into buying motives  Buying motive Buying motive  the reason that a customer seeks a product

11. Types of Buying Motives

12. Wants into Buying Motives  Salespeople try to understand customers’ buying motives  so that they can do a better job of encouraging the customer to buy the product

13. Wants into Buying Motives  Many times, salespeople organize buying motives into pairs  Physical (Hungry) vs. psychological (We are talking here not about just physical needs being serviced but the need for nutritious food) Campbell’s Soup: “Mmm, Mmm, good”  Rational (I need to get from point A to point B) vs. emotional (I sure do look good in that Mustang)  Product (A sweatshirt) vs. patronage (A sweater from your favorite store) Think of a recent purchase. What were your buying motives?

14. Social Influences  Social influences Social influences  influences from the people around you –rather than from within yourself  Three categories  culture  family  friends and coworkers

15. Culture  Culture  affects every aspect of a person’s life  Culture Includes: – the material objects of a society (footballs, autos, religious texts, etc.) – ideas and values (belief in freedom, etc.) – institutions (legal, political, business, etc.) – symbols (McDonald’s hamburgers, French champagne, etc.) – the ways we dress, think, eat, and spend our leisure time. How does your culture influence what you buy?

16. Culture

17. Family  Family can influence buying behavior  Children often buy the same brands as their parents  Traditional Family Life Cycle –Stage I: Bachelorhood –Stage II: Honeymooners –Stage III: Parenthood –Stage IV: Post-parenthood (empty-nesters) –Stage V: Dissolution (Retired) Do you buy the same brands as your parents?

18. How do your friends influence what you buy?

19. Friends and Coworkers  If you buy a product that your friends admire  you might feel more self- confident  your self-esteem might increase  To have the same things as others have  satisfies the human need for belonging and acceptance

20. Friends and Coworkers  Word-of-mouth publicity Word-of-mouth publicity  informal conversation people have about their experience with a business or product Describe a purchase you made based on word-of-mouth publicity.

21. My Tire Story (Word-of-Mouth) »Sam’s Club MICHELIN Hydro-Edge $125 a tire ($500) »Wait varies (could get it done now might have to come back?) »Same tire $70 a tire ($280) »Wait (be there by 7:30am Sat) »No more customers after 1:30pm week days

22. Friends and Coworkers  Reference group Reference group  group of people who influence a consumer’s buying decisions  Examples  older students, celebrities, models, and people on TV shows

23. Friends and Coworkers  Peer pressure Peer pressure  social influence from the people your age –with whom you interact daily  can influence buying decisions –because most people have a strong need to fit in and be accepted by their peer group Give examples of good and bad peer pressure.

24. Situational Influences  Situational influences Situational influences  influences from the environment –Weather (I don’t feel like shopping it’s cold outside) or (winter is here get a fireplace) –store location (close or far away) –Advertising  Buyer’s mood, physical condition, and financial condition  can also be considered situational

25. How much thought do you put into deciding which product to buy?

26. The Consumer Decision Process  How does a consumer make the decision to buy?  marketers think that many consumers use a six-step decision process

27. The Consumer Decision Process 1.Awareness of need or problem 2.Information search 3.Evaluation of options 4.Decision to buy 5.Purchase 6.Post-purchase evaluation Do you think consumers use all six steps for every purchase?

28. Workout  Your Consumer Decision Process  Use the worksheet to consider an order you went through when making a purchase.  THIS IS ON THE CLASS WEBSITE

29. The Consumer Decision Process  Four levels of consumer purchase decisions  Impulse –(Point of Purchase) waiting in line at woodman's Oh! Heck I’ll grab that soda  Routine –Toothpaste, household cleaning supplies, a particular brand you always buy, (Arrow dress shirts)  Limited –Usually products you never purchased before. E.g. coffeemaker (you research then buy)  Extensive –Your first new car. You consider what you can afford, your needs, style etc….

30. Impulse Decision  Impulse purchase Impulse purchase  made with no planning or research  To encourage impulse purchases  marketers display products near checkout counters Describe an impulse purchase.

31. Routine Decision  Routine buying decision Routine buying decision  made quickly without much thought  Consumers make routine buying decisions when they have  previous experience with the product  brand loyalty What products do you buy routinely?

32. Limited Decision  Limited decision making Limited decision making  involves some research and planning  usually for a more expensive or complex product

33. Extensive Decision  Extensive decision making Extensive decision making  involves a great deal of research and planning  used for purchases that will greatly impact your life, safety, and finances

34. Extensive Decision  Example: steps in buying a car  researching cars on the Internet  test-driving at several dealerships  analyzing your finances  arranging for financing  getting the license plate(s) and insurance  buying the car

35. Workout  Consumer Behavior Worksheet.

36. Review  List the three categories of influences on consumers and give an example of each.  Describe Maslow’s hierarchy of needs.  Why are salespeople interested in buying motives?  List the four levels of purchase decisions and describe when you would use each.

37. Glossary  buying motive. Reason that a consumer seeks a product.  extensive decision making. Consumer buying decision that involves a great deal of research and planning.  impulse purchase. Consumer buying decision made with no planning or research. Back

38. Glossary  limited decision making. Consumer buying decision that is made with some research and planning.  motivate. To provide the internal push that results in action.  motive. Internal push, based on needs, that causes a person to act. Back

39. Glossary  peer pressure. Social influence that comes from the people your age with whom you interact daily.  psychological influences. Influences that come from within a person.  reference group. Group of people who influence a consumer’s buying decisions. Back

40. Glossary  routine buying decision. Consumer buying decision that is made quickly and without much thought.  situational influences. Influences that come from the environment.  social influences. Influences that come from the society in which you live. Back

41. Glossary  word-of-mouth publicity. Informal conversation people have about their experience with a business and its products. Back