Chapter 3: Analyzing Consumer Markets

Chapter 3: Analyzing Consumer Markets   Topics 1. Identify the factors influencing consumer behavior : internal (personal and psychological) vs. external (cultural, social, and situational) factors 2. Explain each step in the Five-Stage Model of the Consumer Buying process with one example...

Chapter 3: Analyzing Consumer Markets   Topics 1. Identify the factors influencing consumer behavior : internal (personal and psychological) vs. external (cultural, social, and situational) factors 2. Explain each step in the Five-Stage Model of the Consumer Buying process with one example 3. Recap important points  Consumer Behavior: the study of how individuals, groups, and organizations select buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants  What Influences Consumer Behavior? : internal (=personal and psychological) and external (=cultural, social, and situational) factors/characteristics 1. Internal factors 1) Personal factors: age, education, occupation, income, lifestyle and values(e.g., heath- conscious eating, single parent home…), gender, and personality (a set of unique personal qualities that produce distinctive responses across similar situations)… 2) Psychological factors: motivation (needs/wants), perception, emotions, and memory Motivation (see the next slide—Maslow’s Hierarchy of Needs: his theory suggests that individuals will NOT be interested in luxuries unless their basic needs are met), perception, attitude, memory, etc. Maslow’s Hierarchy of Needs  What Influences Consumer Behavior? 2. External factors 1) Cultural factors: cultural values, subcultures (e.g., Hispanics, African-American, Asians… in the U.S.)… 2) Social factors: family and reference groups (groups that have a direct/indirect influence on one’s attitudes or behavior (e.g., family, friends, co-workers, neighbor, church-goers, opinion leaders*…) *Opinion leader/influencer: the person who offers informal advice or information about a specific product or product category, such as which of several brands is best or how a particular brand product may be used highly confident, socially active, frequent users of the product category e.g.,) influencers on social media 3) Situational factors: physical surroundings (e.g., lighting, color, location of a retailing store) and personal circumstances (e.g., ready-meal options for time-pressured dual income couples)  Five-Stage Model of the Consumer Buying Process (the Consumer Decision-Making Process) and/or need Recognition *Not all consumers go through the five-stage process (i.e., can go through different steps depending on the product/service, personality, or situations a consumer purchases) Successive Sets Involved In Consumer Decision  Steps between Evaluation of Alternatives Making and a Purchase Decision  Five-Stage Model of the Consumer Buying Process-1 1. Problem and/or Need Recognition: hunger, thirst, security, self-fulfillment, killing time… (see Maslow’s Hierarchy of Needs) 2. Information Search  Information sources  Personal(personal associations): family, friends, co-workers, neighbors..  Commercial (market-created information): advertising, web sites, salespeople…  Public (independent): mass media, social media…  Experiential(personal experience): handling, examining, trial or using the product…  Five-Stage Model of the Consumer Buying Process-2 3. Evaluation of Alternatives : Consumers evaluate products as bundles of attributes: brand attributes (e.g., image, reputation, safety…), product features (e.g., hybrid, fuel economy…), prices… 4. Purchase Decision: forming an intention to purchase the preferred brand/product/service and the actual act of buying what, where, when, and how. Steps Between Evaluation of Alternatives and a Purchase Decision *Intervening Factors: 1)Opinions of others: a close friend’s (or family member’s) negative toward your preferred alternative, positive/negative customer reviews in blogs/Yelp/Amazon.com…., 2)Situational factors: losing a job, moving a different state,…  Five-Stage Model of the Consumer Buying Process-3 5. Post-purchase Behavior Post-purchase satisfaction/dissatisfaction  post-purchase action: silence, return, complain, and/or switch. Post-purchase dissonance(i.e., doubt or anxiety due to dissatisfaction or uncertainty after purchase or a feeling of anxiety, regret, discomfort, or uneasiness that a customer may experience after making a purchase): usually high-involvement & large purchases *The level of involvement influences on the decision process : High involvement products/purchases: e.g.,) a new home/car—take longer and additional information vs. Low involvement products/purchases: e.g.,) pen—consumers are not prompted to value new information (little or no interest in the information)  Cognitive(=Post-purchase) Dissonance (watch the first 2 minutes and 40 seconds) : low----------------------------high : continuum  Recap important points 1.Factors influencing consumer behavior 2. Each step in the Five-Stage of the Consumer Buying Process with an example (Do not forget to read the textbook and watch the video)  Steps Between Evaluation of Alternatives and Successive Sets Involved In Consumer Decision a Purchase Decision Making Steps Between Evaluation of Alternatives and A Purchase Decision *Be sure to understand post-purchase dissonance(or cognitive dissonance)