Understanding Consumer Behavior

Consumer Behavior Defined:

• Consumer behavior examines the processes individuals, groups, or organizations use to select, secure, and dispose of products, services, or ideas.
• This aims to satisfy needs and understand the impacts on consumers and society.
• Consumer behavior blends elements of psychology, sociology, social anthropology, and economics.
• Analyzing decision-making processes of buyers.
• Studies demographics and behavioral variables to understand consumer wants.

Factors Influencing Consumer Behavior:

• Four main categories exist: cultural, social, personal, and psychological factors.

Cultural Factors Explained:

• Culture includes basic values, perceptions, wants, and behaviors learned from family and important institutions.
• Culture greatly influences individual needs and behaviors.
• Cultural influences on buying habits can vary from country to country or even region to region.
• Cultural monitoring helps discover new product opportunities.

Sub-Culture Detailed:

• Subcultures consist of groups sharing value systems based on life experiences and situations.
• Subcultures include nationalities, religions, ethnic groups, age groups, gender, and geographic regions.
• Brands segment markets by subculture to tailor products and communication.

Social Class Defined:

• Social classes are relatively permanent divisions where members share similar values, interests, and behaviors.
• Seven American social classes includes upper upper class, lower upper class, upper middle class, middle class, working class, upper lower class, and lower lower class.
• Social class affects buying behavior, thus marketers are interested.

Importance of Social Factors:

• Consumer behavior is influenced by: small groups, social networks, family, social roles, and status.

Groups and Social Network Information:

• Membership groups are social groups to which an individual belongs, influencing their choices.
• Membership groups are often related to social origin, age, residence, work, hobbies, or leisure activities.
• Consumption trends are commonly observed among members of the same group.
• Understanding group features allows brands to tailor marketing.
• Reference groups expose individuals to new behaviors and lifestyles, influencing attitudes, self-concept and creating pressure to conform, impacting product and brand choices.
• Aspirational groups influence consumers to buy products to emulate the group.
• Word-of-mouth from trusted sources impacts buying behavior.
• Opinion leaders exert social influence due to their skills or knowledge.
• Online social networks are platforms for socializing and exchanging information.

Impact of Family:

• Family members strongly influence buying behavior and is the most important consumer buying organization in society.
• Marketers focus on roles and influence of family members in purchasing.
• Changing roles within families present new marketing challenges.

Roles and Status

• Social role is a set of attitudes and activities expected based on profession, position, gender, and surrounding expectations.
• Social status reflects the importance of a role in society and its varying value.
• Social role and status significantly influence consumer behavior.

Personal Factors Defined:

• Personal characteristics, including occupation, age, economic situation, lifestyle, personality, and self-concept greatly impact a buyer's decisions.

Career Choice:

• A job greatly impacts a person’s buying habits.
• Marketers focus on occupational groups with high interest in their products.

Age & The Lifecycle:

• Consumers do not consistently buy the same products or services.
• As consumers age, lifestyles, values, and habits change.
• Social value of a brand may affect purchasing decisions at different ages.

Understanding Economic Standing:

• Purchasing power decisively influences behavior and decisions based on income/capital.
• Economic situation impacts affordability and importance of price, also influencing retailers and brands chosen.
• Some consumers seek social value in products to display their income level or purchasing power.

Lifestyle Consumption:

• Lifestyle encompasses activities, interests, values, and opinions.
• It influences purchasing decisions and consumer behavior.
• Healthy lifestyles lead to preferences for organic products and specific stores, also influencing sports attire purchases.

The Self

• Personality distinguishes and defines an individual
• Personality is composed of confidence, charisma, ambition, curiosity, and adaptability.
• Brands also possess personalities, affecting consumer choices as individuals choose brands with match their own self image.
• The "self-concept" is also known as the desired self image
• Brands develop a fitting image to attract target consumer groups.

Psychological Influences

• Four major psychological factors further shape buying choices: motivation, perception, learning, beliefs, and attitudes.

Motivation Defined:

• Motive: The need sufficiently pressing to direct a person toward satisfaction.
• Motivation typically functions subconsciously and is hard to measure.
• Prominent theories come from Sigmund Freud and Abraham Maslow.

Perception Overview:

• Perception is the process of organizing and interpreting information to create meaningful understanding.
• Varying experiences, personal characteristics, and beliefs causes different perceptions among individuals.

Beliefs and Attitudes Explained:

• Belief: The descriptive thought about something.
• Marketers are concerned with beliefs about products/services, and how it shapes brand image and affects buying behavior.
• Attitude: A consistently unfavorable or favorable evaluation is part of consumer personality.
• Both are difficult to change, deeply rooted, and greatly affect consumer actions.

Components of the Buyer Decision Process:

• This contains the steps consumers take when buying a product Need Recognition Information search Evaluation of Alternatives Purchase decision Post-purchase

Societal Marketing Concepts

• Actual state and desired state both influence the need for a product
  • Need is triggered by internal stimuli, friends influence, or advertisments

Gaining Market Information

• Internal and external sources drive information searching
• Sources such as experience, the public, commercial entities, and personal connections.

Consumer Choice

• The evaluation takes attributes of the product into consideration

How People Buy

• Both expected and unexpected factors shape intent
  • These consist of outside opinions and other situational challenges that alter plans

Post Shopping Habits

• The process that follows to determine buyer experience and satisfaction
  • Success requires purchase meets customer expectations and avoids creating Cognitive Dissonance.