2. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Consumer Behaviour 1 The actions a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions What makes the consumer tick? What buttons must the marketer press?

3. Chapter 4: Consumer Buying Behaviour Consumer Behavior Why people choose one product or brand over another How they make these choices How companies use this knowledge to provide value to consumers Copyright © 2010 Pearson Education Canada2

4. Chapter 4: Consumer Buying Behaviour purchase decision process Behind the visible act of making a purchase lies a decision process that must be investigated The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. Copyright © 2010 Pearson Education Canada3

5. Chapter 4: Consumer Buying Behaviour Consumer purchase decision process Certain variables influence behaviour— We cannot be certain which ones actually trigger a response – The purchase of a particular brand of product could be the result of an endorsement by a celebrity of a friend – It could be based on past experience with the product – It could be the delivery of a free sample Copyright © 2010 Pearson Education Canada4

6. Chapter 4: Consumer Buying Behaviour Consumer purchase decision process Five Stages of Consumer Behavior – problem recognition, – information search, – alternative evaluation, – purchase decision, and – post-purchase behavior. Copyright © 2010 Pearson Education Canada5

7. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Purchase Decision Process 6 Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Post-purchase Evaluation

8. Chapter 4: Consumer Buying Behaviour Problem recognition: Perceiving a Need Problem recognition is caused by a difference between the consumer’s ideal state and actual state. There are various causes of sources of problem recognition 1. Out of stock 2. Dissatisfaction 3. New needs/wants 4. Related products/purchases 5. Marketer induced problem recognition 6. New products Copyright © 2010 Pearson Education Canada7

9. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Information Search 8 Time and money determine the nature of the purchase decision; the time spent evaluating alternatives. Routine Limited Complex Does not involve much time or money More expensive and time consuming Capital investment; much time and effort

10. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Post-Purchase Evaluation 9 “Second thoughts” often follow a complex buying decision. Did I make the right decision? The unsettled state of mind experienced by an individual after a decision has been made is called cognitive dissonance.

11. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Influences on Consumer Behaviour 10 Psychological Personal Social Cultural Consumer Marketing Mix Product Price Marketing Communications Distribution Company Image Reputation

12. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Needs and Motivation Theory 11 Need Motive Absence of something useful Condition prompting action to satisfy a need

13. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Maslow’s Hierarchy of Needs Physiological needs (food, water, shelter) Physiological needs (food, water, shelter) 1 Safety needs (security, protection) Safety needs (security, protection) 2 Social needs (sense of belonging, love from family and friends) Social needs (sense of belonging, love from family and friends) 3 Esteem needs (self-esteem, status, recognition) Esteem needs (self-esteem, status, recognition) 4 Self- actualization (self-development, fulfillment, personal growth) Self- actualization (self-development, fulfillment, personal growth) 5 Lower level Higher level

14. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Personality: a person’s distinguishing psychological characteristics that is influenced by self-perceptions, needs, culture, family and reference groups. Real Self: it is you as you really are Real Self: it is you as you really are Self- Image: It is the role you play Self- Image: It is the role you play Looking- Glass Self: how you think others see you Looking- Glass Self: how you think others see you Ideal Self: how you would like to be Ideal Self: how you would like to be Self-Concept Components Personality and Self-Concept

15. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Attitudes 14 An individual’s feelings, favourable or unfavourable, toward an idea or object (Product or service). Gaining acceptance is easier if the product idea fits with the attitudes of the target market. A hearty Angus burger at Harvey’s appeals to a 20-something male with a big appetite! A salad on the side does not!

16. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada People receive and interpret messages differently. Massages received depend on three levels of interest and need requirement : Selective Exposure: we notice only information that interests us Selective Perception: screen out information that conflicts with previously learned attitudes and beliefs Selective Perception: screen out information that conflicts with previously learned attitudes and beliefs Selective Retention: we remember only what we want to remember Perceptions

17. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Lifestyle 16 A person’s pattern of living expressed in terms of activities, interests, opinions and values. Independent research companies conduct surveys and place people in lifestyle segments. Each segment is motivated by a unique set of attitudes and beliefs. Source: Millward Brown Goldfarb

18. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Technology 17 Technology has changed buying behaviour. Time- pressed “connected” consumers are conducting research online and buying online. 1.Technology makes the transaction process more convenient for consumers. 2.Companies are re-evaluating media alternatives in order to follow their customers; more digital media and less traditional media is the trend.

19. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Reference Groups 18 A group, class, or category of people to which individuals believe they belong. Co-workers Sports teams Hobby clubs Schoolmates Reference groups (peers) are a strong influence among young people. The hip hop community (hip hop musicians) is one of the biggest brand building communities in the world.

20. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Family 19 Family members influence buying decisions. 1.Major decisions are shared decisions. 2.Major retailers are reconfiguring to appeal more to women. 3.Wal-Mart Supercentres are specifically designed for women 30 to 45 with 2 or 3 children, a husband and a career. 4.Children influence $20 billion in family spending each year in Canada.

21. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Social Class 20 The division of people in ordered groups based on similar values, lifestyles and behaviours. Social class is determined by income, occupation, education, and inherited wealth Upper-Upper Lower-Upper Upper-Middle Lower-Middle Upper-Lower Lower-Lower As a person moves through life he/she can move in and out various social classes.

22. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Cultural Influences 21 Culture refers to “behaviour learned from external sources such as family, the workplace, and education— that help form the value systems an individual lives by.  Gen X, Gen Y, Boomers  Ethnic Groups  French Quebec Marketing strategies must be tailored to the unique needs of different groups.

23. Chapter 4: Consumer Buying Behaviour Copyright © 2010 Pearson Education Canada Regional Influence 22 Location and culture have an influence on attitudes and values. Canada is a diverse country. Atlantic Quebec Ontario Prairies B.C. 1.Identify common and unique characteristics in each region (within regions there are urban and rural considerations). 2.National strategies don’t always work. 3.Implement regional strategies if profitable (costs versus benefits).