Topic 4: Buyer Behavior PDF

Topic 4 1. Introduction to Buyer Behavior Definition: o Buyer behavior refers to the study of consumers’ actions and decision-making processes when purchasing, using, or disposing of products and services. o It encompasses individual (personal preferenc...

Topic 4 1. Introduction to Buyer Behavior Definition: o Buyer behavior refers to the study of consumers’ actions and decision-making processes when purchasing, using, or disposing of products and services. o It encompasses individual (personal preferences) and group (social or cultural) influences. Importance in Marketing: o Helps in understanding: ▪ What drives consumers to make purchasing decisions. ▪ How to position products to meet customer needs effectively. ▪ How external factors like advertising and cultural trends impact choices. Core Objective: o To predict consumer behavior accurately and use insights to craft targeted marketing strategies. 2. Models of Buyer Behavior A. The Stimulus-Response Model Explanation: o Consumers react to external stimuli (e.g., marketing campaigns or environmental factors) that influence their decision-making. Components: 1. Input (Stimulus): ▪ Marketing stimuli: Product features, price, promotion, place. 1|Page Summarized By Marwa Mohamed  ▪ Environmental stimuli: Economic, social, and cultural factors. 2. Black Box (Consumer’s Mind): ▪ Internal processes like perception, motivation, and attitudes. 3. Output (Response): ▪ The final purchase decision or post-purchase behavior. B. Consumer Decision-Making Process 1. Problem Recognition: o Identifying a gap between a current state and a desired state. o Example: Realizing a need for a new phone due to outdated features. 2. Information Search: o Internal Search: Using past experiences or memories. o External Search: Researching through reviews, advertisements, or recommendations. 3. Evaluation of Alternatives: o Comparing features, prices, and benefits of different options. o Marketers influence this stage through clear product differentiation. 4. Purchase Decision: o Deciding to buy a product based on preferences, availability, or promotions. o Example: Choosing a product during a limited-time discount. 5. Post-Purchase Behavior: o Assessing satisfaction and forming opinions about the purchase. o Positive experiences lead to loyalty; negative experiences may result in complaints or returns. C. The Theory of Planned Behavior Explanation: o Consumer behavior is driven by: 1. Attitudes: Positive or negative evaluations of the product. 2|Page Summarized By Marwa Mohamed  2. Subjective Norms: Social pressures influencing the decision. 3. Perceived Behavioral Control: Confidence in the ability to perform the action. 3. Psychological Variables Influencing Buyer Behavior A. Perception The process by which consumers interpret and organize sensory information to form a meaningful understanding of a product. Selective Perception: o Consumers filter information based on relevance, ignoring irrelevant or contradictory messages. Marketing Application: o Use consistent branding and impactful visuals to grab attention. B. Motivation Maslow’s Hierarchy of Needs: 1. Physiological Needs: Basic survival (e.g., food, water). 2. Safety Needs: Security and stability. 3. Social Needs: Belonging and relationships. 4. Esteem Needs: Recognition and self-worth. 5. Self-Actualization: Personal growth and fulfillment. Marketing Application: o Identify which need level your product addresses and tailor messaging accordingly. C. Learning Learning impacts purchasing decisions through reinforcement and past experiences. 3|Page Summarized By Marwa Mohamed  Marketing Application: o Encourage trial usage and reward repeat purchases to reinforce positive behaviors. D. Attitudes and Beliefs Attitudes reflect a consumer’s consistent feelings toward a product, while beliefs are their perceptions of product attributes. Marketing Application: o Align branding with consumer values to strengthen positive attitudes. E. Lifestyle and Personality Consumers’ choices are influenced by their lifestyle (activities, interests, opinions) and personality traits (e.g., extroversion, conscientiousness). Psychographic Segmentation: o Dividing the market based on psychological traits rather than demographics. 4. Social and Cultural Influences A. Reference Groups Groups that influence an individual’s attitudes and behavior, such as family, friends, or celebrities. Marketing Application: o Use influencers or testimonials to leverage the power of social proof. B. Culture and Subculture Culture shapes beliefs, values, and behaviors. Subcultures (e.g., ethnic groups, social classes) offer unique market opportunities. 4|Page Summarized By Marwa Mohamed  Marketing Application: o Localize campaigns to align with cultural norms and preferences. C. Social Status Consumers’ decisions often reflect their social standing or aspirations. Example: Luxury brands like Rolex appeal to individuals seeking prestige. 5. Applications of Buyer Behavior Insights A. Hofacker’s Online Information Processing Focuses on how consumers process information in digital environments: o Attention: Catchy visuals and headlines. o Comprehension: Clear and concise messaging. o Yielding: Persuasive arguments that resonate with values. o Retention: Reinforce messages to create lasting impressions. B. Behavior Change Strategies (Unilever’s Five Levers) 1. Make it Understood: Clearly communicate product benefits. 2. Make it Easy: Simplify the buying process. 3. Make it Desirable: Appeal to aspirations and values. 4. Make it Rewarding: Provide incentives like discounts or loyalty points. 5. Make it a Habit: Reinforce usage through consistency and reminders. 6. Buyer Behavior in the Digital Age Post-PC and Post-Mobile Consumers 5|Page Summarized By Marwa Mohamed  Increasing reliance on AI assistants (e.g., Alexa, Siri) and voice search for decision- making. Marketers must optimize for digital touchpoints and conversational interactions. Trust and Convenience Trust is a key factor in digital purchases; consumers prefer brands with secure payment systems and transparent policies. Convenience drives behavior, with fast delivery and easy returns enhancing customer loyalty. 7. Metrics and Measuring Buyer Behavior 1. Conversion Rate: o Measures the percentage of consumers who take a desired action (e.g., completing a purchase). o Formula: Conversion Rate=(Total Visitors/ Total Conversions)×100 o Importance: Indicates the effectiveness of marketing efforts. 2. Customer Satisfaction (CSAT): o Gauges how happy consumers are with their purchase or interaction. o Example: Surveys asking customers to rate their experience. 3. Customer Lifetime Value (CLV): o Predicts the total revenue a customer will generate over their relationship with the brand. 4. Churn Rate: o Measures the percentage of customers lost over a specific period. o Formula: Total Customers/Lost Customers) ×100 6|Page Summarized By Marwa Mohamed