Consumer Markets and Consumer Buyer Behavior

Consumer Markets and Consumer Buyer Behavior
Chapter Five Consumer Markets and Consumer Buyer Behavior

Consumer Markets and Consumer Buyer Behavior
Topic Outline Model of Consumer Behavior Characteristics Affecting Consumer Behavior Types of Buying Decision Behavior The Buyer Decision Process The Buyer Decision Process for New Products Organizational buying

Model of Consumer Behavior
Note to Instructor Discussion Question What 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.

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 consumers Consumers 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 Instructor Discussion Question What 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.

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 often Note to Instructor Figure Understanding the whys of buying behavior is very difficult. Says one expert, “The mind is a whirling, swirling, jumbled mass of neurons bouncing 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.

Characteristics Affecting Consumer Behavior
Many levels of factors affect our buying behavior—from broad cultural and social influences to motivations, beliefs, and attitudes lying deep within us. For example, why did you buy that specific cell phone?

Factors Influencing Consumer Behavior Many levels of factors affect our buying behavior—from broad cultural and social influences to motivations, beliefs, and attitudes lying deep within us. For example, why did you buy that specific cell 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.

Cultural Factors Culture is the values, perceptions, wants, and behavior learned from family and other important institutions Marketers 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.

Cultural Factors Subculture are groups of people within a culture with shared value systems based on common life experiences and situations: - Hispanic American - African American - Asian American - Mature consumers (+50) Note to Instructor Many brands now target specific subcultures—such as Hispanic American, African American, and Asian American consumers—with marketing programs tailored to their specific needs and preferences. For example, P&G’s CoverGirl Queen cosmetics line was inspired by Queen Latifah to “celebrate the beauty of women of color.” Discussion Question What 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.

Cultural Factors Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors Social classes are Measured by a combination of occupation, income, education, wealth, and other variables.

Social Factors Groups and Social Networks A 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 behavior Reference Groups Note to Instructor Groups that have a direct influence and to which a person belongs are called membership 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 Question What groups are you a member of and what are your aspirational groups. How does this influence you as a consumers? Membership Groups Aspirational Groups Groups with direct influence and to which a person belongs groups to which an individual wishes to belong

Social Factors Groups and Social Networks Marketers 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 Instructor Groups that have a direct influence and to which a person belongs are called membership 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 Question What groups are you a member of and what are your aspirational groups. How does this influence you as a consumers?

Social Factors Groups and Social Networks Marketers 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 adopters Marketers identify them to use as brand ambassadors. Note to Instructor It 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?

Social Factors Groups 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 Question How 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 .

Social Factors Family is the most important consumer-buying organization in society Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services. Note to Instructor Discussion Question What brands do you purchase because it is what their parents used? Why do you think this occurs?

Social Factors Social roles and status are results of the groups, family, clubs, and organizations that a person belongs to that can define role and social status A 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 Instructor Discussion Question What brands do you purchase because it is what their parents used? Why do you think this occurs?

Personal Factors Age 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 income Savings Interest rates

Personal Factors Lifestyle is a person’s pattern of living as expressed in his or her psychographics Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment Note to Instructor Discussion Question What 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.

Personal Factors Personality and self-concept Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment Note to Instructor This 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

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. Dominance Aggressiveness Autonomy Defensiveness Adaptability others Note to Instructor It 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 traits 1. 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 choose brands with personalities that match their own Most 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.

Psychological Factors Motivation Perception Learning Beliefs and attitudes

Psychological Factors Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations A 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.

Maslow’s Hierarchy of Needs

Psychological Factors Perception Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes Selective attention Selective distortion Selective retention Note to Instructor Discussion Question If 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?

Psychological Factors Perception Selective 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

Psychological Factors Learning Learning is the change in an individual’s behavior arising from experience, (when people act, they learn). Learning occurs through interplay of: Drives motive Cues Responses Reinforcement A drive is a strong internal stimulus that calls for action. A drive becomes a motive when it is directed toward a particular stimulus object. For example, a person’s drive for selfactualization might motivate him or her to look into buying a camera. The consumer’s response to the idea of buying a camera is conditioned by the surrounding cues. Cues are minor stimuli that determine when, where, and how the person responds. For example, the person might spot several camera brands in a shop window, hear of a special sale price, or discuss cameras with a friend. These are all cues that might influence a consumer’s response to his or her interest in buying the product. Suppose the consumer buys a Nikon camera. If the experience is rewarding, the consumer will probably use the camera more and more, and his or her response will be reinforced. Then the next time he or she shops for a camera, or for binoculars or some similar product, the probability is greater that he or she will buy a Nikon product. The practical significance of learning theory for marketers is that they can build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement.

Psychological Factors Beliefs and Attitudes Belief is a descriptive thought that a person has about something based on: Knowledge Opinion Faith Marketers 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 will want to launch a campaign to correct them.

Psychological Factors Attitudes Attitudes 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.

Types of Buying Decision Behavior
Some purchases are simple and routine, even habitual. Others are far more complex—involving extensive information gathering and evaluation—and are subject to sometimes subtle influences. For example, think of all that goes into a new car buying decision.

Complex buying behavior Dissonance-reducing buying behavior Habitual buying behavior Variety-seeking buying behavior Some purchases are simple and routine, even habitual. Others are far more complex—involving extensive information gathering and evaluation—and are subject to sometimes subtle influences. For example, think of all that goes into a new car buying decision.

Four Types of Buying Behavior Buying behavior varies greatly for different types of products. For example, someone buying an expensive new PC might undertake a full information gathering and brand evaluation process.

The Buyer Decision Process
The actual purchase decision is part of a much larger buying process—starting with need recognition through how you feel after making the purchase. Marketers want to be involved throughout the entire buyer decision process.

Buyer Decision Making Process Consumers pass through five stages with purchase: The actual purchase decision is part of a much larger buying process—starting with need recognition through how you feel after making the purchase. Marketers want to be involved throughout the entire buyer decision process.

Need Recognition Occurs 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 long before the actual purchase and continues long after. In fact, it might result in a decision not to buy. Therefore, marketers must focus 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 drive External stimuli. For example, an advertisement or a discussion with a friend might get you thinking about buying a new car.

Information Search Sources of Information Personal sources—family and friends Commercial sources—advertising, Internet Public sources—mass media, consumer organizations Experiential sources—handling, examining, using the product

Evaluation of Alternatives How the consumer processes information to arrive at brand choices Marketers 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 Instructor This 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.

Purchase Decision The act by the consumer to buy the most preferred brand The 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.

Post-Purchase Decision The satisfaction or dissatisfaction that the consumer feels about the purchase reflects the Relationship between: Consumer’s expectations Product’s perceived performance The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction Cognitive dissonance is the discomfort caused by a post-purchase conflict

Post-Purchase Decision Customer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime value Satisfied 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.

The Buyer Decision Process for New Products

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: Awareness Interest Evaluation Trial Adoption

Organizational Buying

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.

The business market versus the consumer market
Inelastic demand Fluctuating demand Professional purchasing Several buying influences Directed purchasing Reciprocity Leasing Fewer buyers Larger value Close supplier-customer relationship Geographically concentrated buyers Derived demand

Consumer Markets and Consumer Buyer Behavior

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