Consumer Markets and Consumer Buyer Behavior PDF

Chapter 5: Consumer Markets and Consumer Buyer Behavior 1. Overview of Consumer Buyer Behavior Consumer Buyer Behavior: The behavior of final consumers (individuals and households) who purchase goods and services for personal use. Consumer Market: Made up of all final consumers who buy pr...

Chapter 5: Consumer Markets and Consumer Buyer Behavior 1. Overview of Consumer Buyer Behavior Consumer Buyer Behavior: The behavior of final consumers (individuals and households) who purchase goods and services for personal use. Consumer Market: Made up of all final consumers who buy products or services for personal consumption. Large companies study consumer buying behavior to answer key questions: ○ What do consumers buy? ○ Why do they buy it? ○ How, when, and where do they make purchases? Marketers aim to understand consumer responses to marketing efforts and the underlying factors influencing these responses. 2. Model of Consumer Behavior Stimulus-Response Model: Marketing stimuli (product, price, place, promotion) and other major stimuli (economic, technological, social, cultural) enter the consumer's "black box," producing responses (purchase choice, brand choice, timing, amount). The central question for marketers is how consumers respond to different marketing strategies. 3. Characteristics Affecting Consumer Behavior There are four major categories of factors that influence consumer behavior: Cultural, Social, Personal, and Psychological. A. Cultural Factors Culture: The set of values, perceptions, preferences, and behaviors learned from family and other key institutions. ○ Example: American culture values individualism, achievement, and freedom. Cultural Shifts: Marketers study these shifts to identify opportunities (e.g., the shift toward health and fitness leading to growth in wellness products). Subculture: Smaller groups within a culture with distinct value systems, often based on ethnicity, religion, or geography. ○ Examples: Hispanic Americans, African Americans, Asian Americans. Companies tailor products and marketing to resonate with these subcultures. Social Class: Relatively permanent societal divisions whose members share similar values, interests, and behaviors. ○ Determined by factors such as income, education, and occupation. ○ Social class affects preferences for products like cars, clothing, and entertainment. B. Social Factors Groups: People belong to various groups that directly influence their behavior. ○ Membership Groups: Groups to which a person belongs and that have a direct influence. (e.g. friends, family, classmates) ○ Aspirational Groups: Groups to which a person wishes to belong (e.g., celebrities, professional organizations). ○ Reference Groups: Groups that serve as points of comparison for attitudes and behavior. (e.g. using someone as a guide) Opinion Leaders: Individuals within a reference group who exert influence over others; often targeted in “buzz marketing” to create positive word-of-mouth. (e.g. influencers) Family: The most significant consumer-buying organization, influencing individual preferences and brand loyalty. Roles and Status: A person's position in groups (family, clubs, work) affects their behavior and purchasing choices, as people often buy products that reflect their social status. C. Personal Factors Age and Life-Cycle Stage: Needs and wants change with age, family life cycle, and major life changes. ○ Example: RBC Royal Bank categorizes stages: Youth (under 18), Getting Started (18-35), Builders (35-50), Accumulators (50-60), and Preservers (over 60). Occupation: Affects the types of products people buy (e.g., professional clothing for business people). Economic Situation: Income levels, savings, and interest rates impact consumer purchasing power. ○ Following economic downturns, companies may redesign, reposition, or reprice products. Lifestyle: Describes a person’s pattern of living in terms of activities, interests, and opinions (AIOs). ○ Marketers segment markets based on lifestyle differences to target specific groups. Personality and Self-Concept: Each individual’s unique psychological traits that influence behavior. ○ Brand Personality: Five primary traits used by brands to convey personality—sincerity, excitement, competence, sophistication, and ruggedness (e.g., Apple embodies excitement; Ford trucks represent ruggedness). D. Psychological Factors Motivation: A need that is pressing enough to direct an individual toward satisfying it. ○ Motivation Research: Uses qualitative methods to uncover consumers' subconscious motivations. ○ Maslow’s Hierarchy of Needs: Model describing needs from basic physiological needs up to self-actualization.  Perception: The process by which individuals select, organize, and interpret information. ○ Selective Attention: Consumers screen out most information they are exposed to. Focus on the information that is more relevant to them. ○ Selective Distortion: Consumers interpret information in a way that aligns with their beliefs. ○ Selective Retention: Consumers retain information that supports their attitudes. Learning: Changes in behavior arising from experience. ○ Consumers learn through drive (internal stimulus), cues (external signals), response, and reinforcement. ○ Marketers use this understanding to encourage product trials and brand loyalty. Beliefs and Attitudes: Descriptive thoughts (beliefs) and consistent evaluations (attitudes) that shape consumer preferences and buying choices. ○ Marketers often try to shape or adapt to consumer attitudes toward their products. 4. Types of Buying Decision Behavior Complex Buying Behavior: High involvement, significant differences between brands (e.g., buying a new car). Dissonance-Reducing Buying Behavior: High involvement, few perceived differences among brands (e.g., choosing a brand of carpet). Habitual Buying Behavior: Low involvement, minimal brand differences (e.g., buying grocery items like salt or soap). Variety-Seeking Buying Behavior: Low involvement, significant perceived differences between brands, often driven by desire for variety rather than dissatisfaction (e.g., trying different snack brands). 5. Buyer Decision Process Need Recognition: Occurs when a consumer identifies a need, triggered by internal or external stimuli. Information Search: The consumer looks for information on the product. ○ Sources include personal sources (friends, family), commercial sources (advertising), public sources (reviews, mass media), and experiential sources (personal experience). Evaluation of Alternatives: Consumers assess alternatives, using criteria like brand reputation, quality, and price. Purchase Decision: Decision made, but may be affected by factors like others’ opinions or unexpected events. Post-Purchase Behavior: Reflects the consumer's satisfaction or dissatisfaction, influenced by the relationship between expectations and perceived product performance. ○ Cognitive Dissonance: Post-purchase discomfort due to conflicting expectations and reality, often prompting a need for reassurance. 6. The Buyer Decision Process for New Products Adoption Process: The mental stages a consumer goes through from learning about a new product to adopting it. Stages in the Process: ○ Awareness: Consumers become aware of the product. ○ Interest: Consumer seeks information about it. ○ Evaluation: Consumer considers whether it makes sense. ○ Trial: Consumer tries the product on a small scale. ○ Adoption: Consumer decides to use the product regularly. Categories of Adopters: ○ Innovators: First to adopt, willing to take risks. ○ Early Adopters: Opinion leaders who carefully adopt new ideas. ○ Early Majority: Adopts before the average person, but after early adopters. ○ Late Majority: Skeptical and adopts only after the majority has tried it. ○ Laggards: Last to adopt, preferring tradition over innovation. Influence of Product Characteristics on Rate of Adoption: ○ Relative Advantage: How superior it is to existing products. ○ Compatibility: How well it fits into consumers' lives. ○ Complexity: How difficult it is to understand or use. ○ Divisibility: Whether it can be tried on a limited basis. ○ Communicability: How easily its benefits can be described or observed.