6 - 0 Consumer Markets and Consumer Buyer Behavior

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6 - 4 Definitions Consumer Buying Behavior Consumer Buying Behavior  Buying behavior of individuals and households that buy products for personal consumption.

Factors Influencing Buying Decisions Social Factors Personal Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

6 - 6 Characteristics Affecting Consumer Behavior Cultural Cultural Social Social Personal Personal Psychological Psychological Culture Subculture  Hispanic consumers  African Americans  Asian Americans  Mature consumers Social Class Key Factors

Definition of Culture Culture Represents the behavior, beliefs, the way we act learned by interacting or observing other members of society. Shared behavior, passed along from one member of society to another. Culture in Marketing The philosophy of a company, a way to do business to insure customer satisfaction.

Components of Culture 8 Myths Language Values Customs Rituals Laws

Core American Values Success Materialism Freedom Progress Youth Capitalism

Hispanics Hispanics  35 million consumers purchase $425 billion worth of goods and services.  Expected to grow 64% in 20 years.  Spanish media makes group easy to reach.  Brand loyal group. Subculture

HISPANIC POPULATION Click on a state to view related charts and data.

African Americans African Americans  35 million consumers purchase $527 billion worth of goods and services.  Growing more affluent / sophisticated.  Price and brand name conscious; quality and selection are important.  Certain media target this group.

AFRICAN-AMERICAN POPULATION Click on a state to view related charts and data.

Asian Americans Asian Americans  10 million consumers purchase $229 billion worth of goods and services.  Fastest growing, most affluent subculture.  Many nationalities comprise this group.  Consumer packaged goods companies now target this group more heavily.

ASIAN POPULATION Click on a state to view related charts and data.

Mature Consumers Mature Consumers  75 million consumers aged 50+ will grow to 115 million within 25 years.  Mature consumers control 50% of all discretionary income.  Attractive market for travel, restaurant, and cosmetics products, among others.

Social Class Measurements 17 Wealth Other Variables Income Education Occupation Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Social Class and Education 18 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Characteristics Affecting Consumer Behavior Cultural Cultural Social Social Personal Personal Psychological Psychological Groups  Membership  Reference  Aspirational groups  Opinion leaders Family  Children can influence Roles and Status Key Factors

Social Influences 20 Reference Groups Opinion Leaders Family Members Copyright 2010 by Cengage Learning Inc. All Rights Reserved A group in society that influences an individual’s purchasing behavior.  Movie stars  Sports figures  Celebrities  Political figures

Social Factors 21 LO 6 DirectIndirect Reference Groups PrimarySecondaryAspirationalNon-aspirational Opinion Leaders People you know Socialization Process Family Celebrities/Political InitiatorsDecision Makers InfluencersPurchasers

Characteristics Affecting Consumer Behavior Cultural Cultural Social Social Personal Personal Psychological Psychological Age and life cycle Occupation Economic situation Lifestyle  Activities, interests, and opinions Personality and self- concept  Brand personality Key Factors

Family Life Cycle Stages Full Nest I Single Parents Divorced and Alone Middle-aged Married Full Nest II Empty Nest Older Single BachelorBachelor Nine stages with different buying behavior Nine stages with different buying behavior Young Married

Characteristics Affecting Consumer Behavior Cultural Cultural Social Social Personal Personal Psychological Psychological Age and life cycle Occupation Economic situation Lifestyle  Activities, interests, and opinions Personality and self- concept  Brand personality Key Factors

Characteristics Affecting Consumer Behavior Cultural Cultural Social Social Personal Personal Psychological Psychological Motivation  Needs provide motives for consumer behavior  Motivation research  Maslow’s hierarchy of needs Perception  Selective attention, selective distortion, selective retention Learning  Drives, stimuli, cues, responses and reinforcement Beliefs and attitudes Key Factors

Maslow’s Hierarchy of Needs Characteristics Affecting Consumer Behavior Self-actualization Esteem Needs Social Needs Safety Needs Physiological Needs

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Examples Lunesta- “Soothing rest for mind and body Lunesta- “Soothing rest for mind and body “Volvo-Protect the body ignite the soul” “Volvo-Protect the body ignite the soul”Volvo-Protect the body ignite the soulVolvo-Protect the body ignite the soul Smackers Lip Gloss “All the flavor of being a girl” Smackers Lip Gloss “All the flavor of being a girl” Smackers Lip Gloss “All the flavor of being a girl” Smackers Lip Gloss “All the flavor of being a girl” Lexus automobiles “The relentless pursuit of perfection” Lexus automobiles “The relentless pursuit of perfection” DePaul University- “Turning goals into acomplishments” DePaul University- “Turning goals into acomplishments”

What Level of Maslow’s Hierarchy is this ad?

Objectives Understand the major types of buying decision behavior and the stages in the buyer decision process. Understand the major types of buying decision behavior and the stages in the buyer decision process. Be able to describe the adoption and diffusion process for new products. Be able to describe the adoption and diffusion process for new products.

Five Stages: Five Stages:  Need recognition  Information search  Evaluation of alternatives  Purchase decision  Postpurchase behavior The Buyer Decision Process

The Buyer Decision Process Need recognition Need recognition Information search Information search Evaluation of alternatives Evaluation of alternatives Purchase decision Purchase decision Postpurchase behavior Postpurchase behavior Needs can be triggered by:  Internal stimuli  Recall information in memory  External stimuli  Advertisements  Friends of friends Process Stages

The Buyer Decision Process Need recognition Need recognition Information search Information search Evaluation of alternatives Evaluation of alternatives Purchase decision Purchase decision Postpurchase behavior Postpurchase behavior Consumers exhibit heightened attention or actively search for information. Sources of information:  Personal  Commercial  Public  Experiential/Conceptual Word-of-mouth Process Stages

Consumer Buying Decisions and Consumer Involvement More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making

Five Factors of Consumer Involvement Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered Copyright 2010 by Cengage Learning Inc. All Rights ved Reser

Types of Learning Experiential Conceptual An experience changes behavior Not learned through direct experience

The Buyer Decision Process Need recognition Need recognition Information search Information search Evaluation of alternatives Evaluation of alternatives Purchase decision Purchase decision Postpurchase behavior Postpurchase behavior Evoked Brands: Group of brands resulting from an information search Most buyers evaluate multiple attributes, each of which is weighted differently. At the end of the evaluation stage, purchase intentions are formed. Process Stages

Evaluation of Alternatives and Purchase 38 Evoked Set Purchase! Analyze product attributes Rank attributes by importance Rank attributes by importance Use cutoff criteria Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Buyer Decision Process Need recognition Need recognition Information search Information search Evaluation of alternatives Evaluation of alternatives Purchase decision Purchase decision Postpurchase behavior Postpurchase behavior Two factors intercede between purchase intentions and the actual decision:  Attitudes of others  Unexpected situational factors Process Stages

The Buyer Decision Process Need recognition Need recognition Information search Information search Evaluation of alternatives Evaluation of alternatives Purchase decision Purchase decision Postpurchase behavior Postpurchase behavior Satisfaction is important:  Delighted consumers engage in positive word-of- mouth.  Unhappy customers tell on average 11 other people.  It costs more to attract a new customer than it does to retain an existing customer. Cognitive dissonance is common Process Stages

Cognitive Dissonance Did I make a good decision? Did I buy the right product? Did I get a good value?

Consumer post purchase evaluation proces s 42 LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Buyer Decision Process for New Products New Products New Products  Good, service or idea that is perceived by customers as new. Stages in the Adoption Process Stages in the Adoption Process  Marketers should help consumers move through these stages.

Stages in the Adoption Process Buyer Decision Process for New Products Awareness Awareness Evaluation Evaluation Interest Trial Adoption Adoption

Buyer Decision Process for New Products Individual Differences in Innovativeness Individual Differences in Innovativeness  Consumers can be classified into five adopter categories, each of which behaves differently toward new products. Product Characteristics and Adoption Product Characteristics and Adoption  Five product characteristics influence the adoption rate.

Adopter Categories Buyer Decision Process for New Products Innovators Innovators Early Majority Early Majority Early Adopters Late Majority Laggards Laggards

Innovators – venturesome, educated, creative, multiple information sources Early adopters – social leaders, popular, educated; try out new ideas but in a careful way Early majority –thoughtful people, careful but accepting change more quickly than the average Late majority – skeptical, traditional, lower socio-economic status; accepts new products when the majority are using it Laggards – traditional people, caring, but like “the old ways,” are critical of new ideas, neighbors and friends are main information sources, may also have a fear of debt.

Decision Making Process