Understanding Consumer Behavior

• Consumer behavior encompasses the psychological, social, and physical actions of potential customers as they become aware of, purchase, consume, and provide feedback about products and services.

Psychological Factors

• Motivation relates to the needs and wants that drive consumers to act.
• Perception is how consumers interpret information and make sense of the world.
• Learning involves changes in behavior arising from experience.
• Attitudes are feelings about products or services.
• Beliefs are thoughts that consumers hold about products or services.

Social Factors

• Culture includes the values, beliefs, customs, and tastes valued by a group of people.
• Social class is determined by income, occupation, and education.
• Reference groups directly or indirectly influence a person's attitudes or behavior.
• Opinion leaders influence others because of their expertise, knowledge, or social skills.
• Word-of-mouth influence involves personal communications about products and services between target buyers and neighbors, friends, family, and associates.

Economic Factors

• Personal income affects what consumers can buy.
• Family income influences household spending patterns.
• Consumer spending patterns vary based on economic conditions.

Purchasing Decisions

• Need recognition is the beginning of the buying process, where the consumer recognizes a problem or need.
• Information search involves seeking information about potential solutions.
• Evaluation of alternatives involves assessing different options based on the information gathered.
• Purchase decision is when the consumer decides to buy the product.
• Post-purchase behavior involves evaluating the satisfaction with the purchase.

Types of Buying Decisions

• Complex buying behavior is when consumers are highly involved in a purchase and perceive significant differences among brands.
• Dissonance-reducing buying behavior is when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands.
• Habitual buying behavior is when consumers have low involvement and little significant brand difference.
• Variety-seeking buying behavior is when consumers have low involvement but perceive significant brand differences.

The Consumer Decision Process

• Problem recognition occurs when a buyer becomes aware of a difference between a desired state and an actual condition.
• Information search: Consumers seek information about a product.
• Internal search involves recalling information from memory.
• External search involves seeking information from outside sources.
• Evaluation of alternatives involves using information to evaluate different brands in the choice set.
• Purchase decision: The buyer chooses which product to buy.
• Post-purchase evaluation: The consumer evaluates the product after the purchase.
• Cognitive dissonance is buyer discomfort caused by post-purchase conflict.

Influences on the Consumer Decision Process

• Marketing mix factors are product, price, place, and promotion.
• Psychological factors include motivation, perception, learning, attitudes, and beliefs.
• Situational factors include purchase reason, time available, and social surroundings.
• Social factors include culture, social class, reference groups, and family.

Organizational Buying Behavior

• Organizational buying is 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.
• Business markets have fewer customers and suppliers, but larger transactions.
• Business buying involves professional purchasing efforts.
• Business buying decisions are more complex.

Stages of the Business Buying Process

• Problem recognition is when someone in the company recognizes a need.
• General need description describes the characteristics and quantity of the needed item.
• Product specification involves the technical specifications of the item.
• Supplier search involves identifying the right suppliers.
• Proposal solicitation involves requesting proposals from qualified suppliers.
• Supplier selection is when the company reviews proposals and selects a supplier.
• Order-routine specification includes the final order with the chosen supplier and lists the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.
• Performance review involves assessing supplier performance.

Factors Influencing Organizational Buying

• Environmental factors include the economic outlook, technological changes, political developments, and competitive developments.
• Organizational factors include objectives, policies, procedures, organizational structure, and systems.
• Interpersonal factors include influence, expertise, and dynamics.
• Individual factors include job position, motivation, personality, preferences, and buying style.

E-Commerce and Consumer Behavior

• E-commerce has transformed how consumers search for products.
• Online reviews influence consumer purchase decisions.
• Social media marketing impacts consumer brand perceptions.
• Mobile commerce allows consumers to purchase products from anywhere.