Consumer Markets and Buyer Behavior PDF

Chapter 5 Consumer Markets and Buyer Behavior Part I & II  Consumer Buyer Behavior Consumer buyer behavior refers to the buying behavior of final consumers – individuals and households that buy goods and services for personal consumption. All these final consumers make...

Chapter 5 Consumer Markets and Buyer Behavior Part I & II  Consumer Buyer Behavior Consumer buyer behavior refers to the buying behavior of final consumers – individuals and households that buy goods and services for personal consumption. All these final consumers make up consumer market. learning about the whys behind consumer buying behavior is not so easy—the answers are often locked deep within the consumer’s mind. Often, consumers themselves don’t know exactly what influences their purchases. This figure shows that marketing and other stimuli enter the consumer’s “black box” and produce certain responses. 2 Presentation title 20XX 3 Presentation title 20XX  Characteristics Affecting Consumer Behavior 4 Presentation title 20XX  Buyer Characteristics Cultural Factors Culture: Culture is the most basic cause of a person’s wants and behavior. Human behavior is largely learned. Marketers are always trying to spot cultural shifts so as to discover new products that might be wanted. 5 Presentation title 20XX  Buyer Characteristics Cultural Factors Subculture: Each culture contains smaller subcultures or groups of people with shared value systems based on common life experiences and situations. Ex. Nationalities, religions, racial groups, and geographic regions. Many subcultures make up important market segments and marketers often design products and marketing programs tailored to their needs. 6 Presentation title 20XX  Buyer Characteristics Cultural Factors Subculture: Total market strategy refers to the practice of integrating ethnic themes and cross-cultural perspectives within their mainstream marketing. A total market strategy appeals to consumer similarities across subcultural segments rather than differences. Ex. Featuring interracial families and couples. 7 Presentation title 20XX  Buyer Characteristics Cultural Factors Social class: Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Social class is not determined by a single factor, but is measured as a combination of occupation, income, education, wealth, and other variables. 8 Presentation title 20XX  Buyer Characteristics Social Factors Groups and social networks: Many small groups influence a person’s behavior. Membership groups are groups that have a direct influence and to which a person belongs. Reference groups serve as direct (i.e., face-to-face interactions) or indirect points of comparison or reference in forming a person’s attitudes or behavior. Ex. Basketball team. 9 Presentation title 20XX  Buyer Characteristics Social Factors Groups and social networks: Word-of-mouth influence have powerful impact on consumer buying behavior. Ex. Family or friends. Opinion leaders (i.e., influential or leading adopters) are people within a reference group who because of special skills, knowledge, personality, or other characteristics exert social influence on others. 10 Presentation title 20XX  Buyer Characteristics Social Factors Groups and social networks: Online social networks are online communities where people socialize or exchange information and opinions. Ex. Blogs, social media sites, and communal shopping sites. Marketers are working to harness the power of these social networks and other opportunities to promote their products and build customer relationships. 11 Presentation title 20XX  Buyer Characteristics Social Factors Family: The family is the most important consumer buying organization in society. Marketers are interested in the role and influence of all family members. Roles and 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. Ex. Consider the various roles a working mother plays. 12 Presentation title 20XX  Buyer Characteristics Personal Factors Occupation: A person’s occupation affects the goods and services bought. Ex. Executives buy more business suits. Age and life stage: People change the goods and services they buy over their lifetimes. The family life-cycle is the stages through which families might pass as they mature over time. Buyer Characteristics 13 Presentation title 20XX  Buyer Characteristics Personal Factors Economic situation: A person’s economic situation will affect his or her store and product choices. Marketers watch trends in spending, personal income, savings, and interest rates. Ex. “Expect More, Pay Less” positioning promise by Target 14 Presentation title 20XX  Buyer Characteristics Personal Factors Lifestyle: Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It involves measuring consumers’ major AIO dimensions including activities (e.g., work, hobbies, shopping), interests (e.g., food, fashion, family), and opinions (e.g., about themselves, social issues, products). It profiles a person’s whole pattern of acting and interacting in the world. 15 Presentation title 20XX  Buyer Characteristics Personal Factors Personality and self-concept: Personality refers to the unique psychological characteristics that distinguish a person or group such as self-confidence, sociability, and aggressiveness. A brand personality is the specific mix of human traits that may be attributed to a particular brand. Ex. Gucci associated with class and sophistication. Self-concept (i.e., self-image) is another concept related to personality 16 Presentation title 20XX  Buyer Characteristics Psychological Factors Motivation: A motive (i.e., drive) is a need that is sufficiently pressing to direct the person to seek satisfaction. Psychologists have developed theories of human motivation. Sigmund Freud assumed that people are largely unconscious about the real psychological forces shaping their behavior. Ex. A baby boomer buying BMW 17 Presentation title 20XX Buyer characteristics Psychological Factors Motivation: Abraham Maslow sought to explain why people are driven by particular needs at particular times. Why does one person spend a lot of time and energy on personal safety and another on gaining the esteem of others?  Buyer Characteristics Psychological Factors Perception: Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus. Selective attention is the tendency for people to screen out most of the information to which they are exposed. 19 Presentation title 20XX  Buyer Characteristics Psychological Factors Perception: Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe. Selective retention means that consumers remember good points made about a brand they favor and forget good points made about competing brands. Because of selective attention, distortion, and retention, marketers must work hard just to get their messages through. 20 Presentation title 20XX  Buyer Characteristics Psychological Factors Learning: Learning describes changes in an individual’s behavior arising from experience. Learning occurs through the interplay of drives, stimuli, cues, responses, and 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. Ex. A person’s drive for self-actualization might motivate him or her to look into buying a camera. 21 Presentation title 20XX  Buyer Characteristics Psychological Factors Learning: Cues are minor stimuli that determine when, where, and how the person responds. Ex. The camera buyer might spot several camera brands in a shop window, hear of a special sale price, or discuss cameras with a friend. If the experience is rewarding, the consumer will probably use the camera more and more and his or her response will be reinforced. Ex. Consumer buys a Sony camera. 22 Presentation title 20XX  Buyer Characteristics Psychological Factors Beliefs and attitudes: A belief is a descriptive thought that a person holds about something. Beliefs may be based on real knowledge, opinion, or faith and may or may not carry an emotional charge. An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Ex. Creativity and self-expression are among the most important things in life. 23 Presentation title 20XX  Types of Buying Decision Behavior 1- Complex Buying Behavior Consumers undertake complex buying behavior when they are highly involved in a purchase and perceive significant differences among brands. Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self expressive. This buyer will pass through a learning process, first developing beliefs about the product, then attitudes, and then make a thoughtful purchase choice. For example, someone buying a new car might not know what models, attributes, and accessories to consider or what prices to expect. 24 Presentation title 20XX  Types of Buying Decision Behavior 2- Dissonance-Reducing Buying Behavior Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase but see little difference among brands. For example, consumers buying carpeting may face a high-involvement decision because carpeting is expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the same. After the purchase, consumers might experience post-purchase dissonance (after- sale discomfort) when they notice certain disadvantages or hear favorable things about brands not purchased. 25 Presentation title 20XX  Types of Buying Decision Behavior 3- Habitual Buying Behavior Habitual buying behavior occurs under conditions of low-consumer involvement and little significant brand difference. Ex: table salt Consumers do not pass through the usual belief-attitude-behavior sequence. Ex. Consumers have little involvement in buying table salt because they simply go to the store and reach for a brand. 26 Presentation title 20XX  Types of Buying Decision Behavior 4- Variety-Seeking Buying Behavior Variety-seeking buying behavior occurs in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching. For example, when buying cookies, a consumer may hold some beliefs, choose a cookie brand without much evaluation, and then evaluate that brand during consumption. But the next time, the consumer might pick another brand out of boredom or simply to try something different. Brand switching occurs for the sake of variety rather than because of dissatisfaction. 27 Presentation title 20XX  Types of Buying Decision Behavior 28 Presentation title 20XX Presentation title  Buyer Decision Process Need Recognition Need recognition occurs when the buyer recognizes a problem or need. The need can be triggered by internal stimuli when one of the person’s normal needs rises to a level high enough to become a drive or external stimuli. Ex. An advertisement or a discussion with a friend might get you thinking about buying a new car. 30 Presentation title 20XX  Buyer Decision Process Information Search Information search occurs when the consumer is motivated to search for more information. Consumers can obtain information from several sources such as personal sources (e.g., family and friends), commercial sources (e.g., advertising, salespeople, and packaging), public sources (e.g., social media and peer reviews), and experiential sources (e.g., examining and using the product). The relative influence of these sources varies with the product and the buyer. 31 Presentation title 20XX  Buyer Decision Process Alternative Evaluation Alternative evaluation occurs when the consumer uses information to evaluate alternative brands in the choice set. How consumers go about evaluating purchase alternatives? Ex. Suppose a consumer narrowed car choices to three brands. 32 Presentation title 20XX  Cont., How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation. In some cases, consumers use careful calculations and logical thinking. At other times, the same consumers do little or no evaluating. Instead, they buy on impulse and rely on intuition. Sometimes consumers make buying decisions on their own; sometimes they turn to friends, online reviews, or salespeople for buying advice. 33 Presentation title 20XX  Buyer Decision Process Purchase Decision Purchase decision occurs when consumers decide which brand to purchase. Two factors can come between the purchase intention and decision. The first factor is the attitudes of others. Ex. 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. The second factor is unexpected situational factors. Ex. The economy might get worse or a competitor might drop its price. 34 Presentation title 20XX  Buyer Decision Process Post-Purchase Behavior Post-purchase behavior occurs when consumers take further action after purchases based on their satisfaction or dissatisfaction. Almost all major purchases, result in cognitive dissonance or discomfort caused by post-purchase conflict. Why is it so important to satisfy the customer? 35 Presentation title 20XX  Cont., 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 compet ing brands and advertising, and buy other products from the company. 36 Presentation title 20XX  Buyer Decision Process for New Products A new product is a good, service, or idea that is perceived by some potential customers as new. The adoption process is defined as the mental process through which an individual passes from first learning about an innovation to final adoption. Adoption refers to the decision by an individual to become a regular user of the product or service 37 Presentation title 20XX  Buyer Decision Process for New Products Stages in the Adoption Process Awareness – Consumer is aware of the new product but lacks information. Interest – Consumer seeks information about the new product. Evaluation – Consumer considers whether trying the new product makes sense. Trial – Consumer tries the new product on a small scale to improve his or her estimate of its value. Adoption – Consumer decides to make full and regular use of the new product. 38 Presentation title 20XX  Buyer Decision Process for New Products Influence of Product Characteristics on Rate of Adoption The characteristics of the new product affect its rate of adoption. Some products catch on almost overnight. Ex. Apple’s iPod, iPhone, and iPad flew off retailers’ shelves at an astounding rate from the day they were first introduced. Others take a longer time to gain acceptance. Ex, electric cars were first introduced in the U.S. in 2010. However, electric vehicles still account for 1 % of U.S. sales. What are the especially important characteristics in influencing an innovation’s rate of adoption? 39 Presentation title 20XX  Cont., Five characteristics are especially important in influencing an innovation’s rate of adoption: 1- Relative advantage. The degree to which the innovation appears superior to existing products. 2- Compatibility. The degree to which the innovation fits the values and experiences of potential consumers. 3- Complexity. The degree to which the innovation is difficult to understand or use. 4- Divisibility. The degree to which the innovation may be tried on a limited basis. 5- Communicability. The degree to which the results of using the innovation can be ob served or described to others. 40 Presentation title 20XX Presentation title Thank you