1.  Copyright 1999 Prentice Hall 5-1 Chapter 5 PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong Consumer Markets and Consumer Buyer Behavior

2.  Copyright 1999 Prentice Hall 5-2 Consumer Buying Behavior Consumer Buying BehaviorConsumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption. All of these final consumers combine to make up the consumer market

3.  Copyright 1999 Prentice Hall 5-3 How do Consumers respond to various marketing efforts the company might use ?

4.  Copyright 1999 Prentice Hall 5-4 Model of Consumer Behavior Marketing and Other Stimuli Marketing and Other Stimuli Buyer’s Black Box Buyer’s Response Product Price Place Promotion Economic Technological Political Cultural Characteristics Affecting Consumer Behavior Buyer’s Decision Process Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

5.  Copyright 1999 Prentice Hall 5-5 Characteristics Affecting Consumer Behavior Buyer Psychological Personal Social Culture

6.  Copyright 1999 Prentice Hall 5-6 Factors Affecting Consumer Behavior: Culture Social Class People within a social class tend to exhibit similar buying behavior. Occupation Income Education Wealth Social Class People within a social class tend to exhibit similar buying behavior. Occupation Income Education Wealth Most basic cause of a person's wants and behavior. Values Perceptions Most basic cause of a person's wants and behavior. Values Perceptions Subculture Groups of people with shared value systems based on common life experiences. Hispanic Consumers African American Consumers Asian American Consumers Mature Consumers Subculture Groups of people with shared value systems based on common life experiences. Hispanic Consumers African American Consumers Asian American Consumers Mature Consumers

7.  Copyright 1999 Prentice Hall 5-7 Factors Affecting Consumer Behavior: Social Groups Membership Reference Groups Membership Reference Family Husband, wife, kids Influencer, buyer, user Family Husband, wife, kids Influencer, buyer, user Roles and Status Social Factors

8.  Copyright 1999 Prentice Hall 5-8 Factors Affecting Consumer Behavior: Personal Personal Influences Age and Life Cycle Stage Age and Life Cycle Stage Occupation Economic Situation Life style Identification Activities Opinions Interests Personality & Self-Concept

9.  Copyright 1999 Prentice Hall 5-9 VALS 2 Principle Oriented Status Oriented Action Oriented Achievers Actualizers Strugglers Strivers Fulfilleds Believers Experiencers Makers Abundant Resources Minimal Resources

10.  Copyright 1999 Prentice Hall 5-10 Factors Affecting Consumer Behavior: Psychological Psychological Factors Motivation P erception Learning Beliefs and Attitudes Beliefs and Attitudes

11.  Copyright 1999 Prentice Hall 5-11 Psychological Factors Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Maslow ordered needs based on how pressing they are to the consumer

12.  Copyright 1999 Prentice Hall 5-12 Maslow’s Hierarchy of Needs Esteem Needs ( self-esteem, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) Self Actualization (Self-development )

13.  Copyright 1999 Prentice Hall 5-13 Psychological Factors Perception Perception is the process by which people select, organize, and interpret information Perception Includes: –Selective attention »Consumers screen out information –Selective distortion »People interpret to support beliefs –Selective retention »People retain points to support attitudes

14.  Copyright 1999 Prentice Hall 5-14 Types of Buying Decisions Complex Buying Behavior Dissonance- Reducing Buying Behavior Variety- Seeking Behavior Habitual Buying Behavior High Involvement Significant differences between brands Few differences between brands Low Involvement

15.  Copyright 1999 Prentice Hall 5-15 The Buyer Decision Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behavior

16.  Copyright 1999 Prentice Hall 5-16 The Buyer Decision Process Step 1. Need Recognition External Stimuli TV advertising Magazine ad Radio slogan Stimuli in the environment External Stimuli TV advertising Magazine ad Radio slogan Stimuli in the environment Internal Stimuli Hunger Thirst A person’s normal needs Internal Stimuli Hunger Thirst A person’s normal needs Need Recognition Difference between an actual state and a desired state Need Recognition Difference between an actual state and a desired state

17.  Copyright 1999 Prentice Hall 5-17 The Buyer Decision Process Step 2. Information Search Family, friends, neighbors Most influential source of information Advertising, salespeople Receives most information from these sources Mass Media Consumer-rating groups Handling the product Examining the product Using the product Personal Sources Commercial Sources Public Sources Experiential Sources

18.  Copyright 1999 Prentice Hall 5-18 The Buyer Decision Process Step 3. Evaluation of Alternatives Product Attributes Evaluation of Quality, Price, & Features Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes. Evaluation Procedures Choosing a product (and brand) based on one or more attributes.

19.  Copyright 1999 Prentice Hall 5-19 The Buyer Decision Process Step 4. Purchase Decision Purchase Intention Desire to buy the most preferred brand Purchase Intention Desire to buy the most preferred brand Purchase Decision Attitudes of others Unexpected situational factors

20.  Copyright 1999 Prentice Hall 5-20 The Buyer Decision Process Step 5. Postpurchase Behavior The Buyer Decision Process Step 5. Postpurchase Behavior Consumer’s Expectations of Product’s Performance Consumer’s Expectations of Product’s Performance Dissatisfied Customer Satisfied Customer! Satisfied Customer! Product’s Perceived Performance Cognitive Dissonance

21.  Copyright 1999 Prentice Hall 5-21 Buyer Decision Process for New Products New Products –Good, service or idea that is perceived by customers as new. Stages in the Adoption Process –The mental process through which an individual passes from first hearing about and innovation to final adoption. –Marketers should help consumers move through these stages.

22.  Copyright 1999 Prentice Hall 5-22 Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption

23.  Copyright 1999 Prentice Hall 5-23 Adoption of Innovations Percentage of Adopters Time of Adoption Early Late Innovators Early Adopters Early Majority 2.5% 13.5% 34% 16% Laggards Late Majority

24.  Copyright 1999 Prentice Hall 5-24 Influences on the Rate of Adoption of New Products Divisibility Can the innovation be used on a trial basis? Compatibility Does the innovation fit the values and experience of the target market? Complexity Is the innovation difficult to understand or use? Relative Advantage Is the innovation superior to existing products? Communicability Can results be easily observed or described to others? Product Characteristics

25.  Copyright 1999 Prentice Hall 5-25 Buyer Decision Process for New Products International Consumer Behavior –Values, 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.