Chapter 4 - Consumer Buying Behavior PDF

Chapter 4 Analyzing Consumer markets and consumer buying behavior  Topic Outline — Model of Consumer Behavior — Characteristics Affecting Consumer Behavior — The Buyer Decision Process — Types of Buying Decision Behavior — The Buyer Decision Process for New Products  Model of...

Chapter 4 Analyzing Consumer markets and consumer buying behavior  Topic Outline — Model of Consumer Behavior — Characteristics Affecting Consumer Behavior — The Buyer Decision Process — Types of Buying Decision Behavior — The Buyer Decision Process for New Products  Model of Consumer Behavior Consumer buyer behavior : the buying behavior of final consumers, individuals and households, who buy goods and services for personal consumption Consumer market : all the individuals and housholds that buy goods for their personal consumption.  Model of consumer behavior — Consumers make many buying behavior every day and the buying decision is the focal point of the marketer ‘s effort. — Most large companies research buying decisions in great detail to answer question about : — what consumers buy ? — Where they buy ? — How and how much they buy and when they buy and why ? Model of Consumer Behavior Characteristics affecting consumer behavior — Consumer purchases are influenced strongly by cultural , social , personal and psychological characteristics. Characteristics Affecting Consumer Behavior Factors Influencing Consumer Behavior Characteristics Affecting Consumer Behavior Culture is the learned values, perceptions, wants, and behavior from family and other important institutions Characteristics Affecting Consumer Behavior Subculture are groups of people within a culture with shared value systems based on common life experiences and situations — Hispanic American — African American — Asian American — Cross-Cultural Characteristics Affecting Consumer Behavior Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors — Measured by a combination of occupation, income, education, wealth, and other variables  Characteristics Affecting Consumer Behavior Groups and Social Networks Membership Aspirational Reference Groups Groups Groups Groups with Groups an Groups that direct individual form a influence wishes to comparison and to belong to or reference which a in forming person attitudes or belongs behavior Characteristics Affecting Consumer Behavior Groups and Social Networks — Word-of-mouth influence and buzz marketing ◦ Opinion leaders are people within a reference group who exert social influence on others ◦ Also called influentials or leading adopters ◦ Marketers identify them to use as brand ambassadors Characteristics Affecting Consumer Behavior Groups and Social Networks — Online Social Networks are online communities where people socialize or exchange information and opinions — Include blogs, social networking sites (facebook), virtual worlds (second life) The Buyer Decision Process Buyer Decision Making Process — The buyer decision processes consist of five stages. — The figure suggests that consumer pass through all five stages with every purchase. But in routine purchases , consumers often skip or reverse some of these stages. 1- Need recognition — The buying process starts with need recognition. — It occurs when the buyer recognizes a problem or need triggered by: ◦ Internal stimuli ◦ External stimuli — The need can be triggered by internal stimuli when one of the person’s normal needs – hunger , thirst rises to a level high enough to become a drive. — A need can also be triggered by an external stimuli ex: an advertisement or discussion with a friend might get you about buying a new car.  2- Information Search — The consumer may store the need in memory or undertake an information search related to the need. — Consumers can obtain information from any of several sources ; these include : Ø Personal sources: ( family , friends , neighbors ) Ø Commercial sources ( advertising , salespeople , dealer websites , packaging and display ) Ø Public sources ( mass media , dealer websites , packaging and displays ) Ø Experiential sources ( handling , examining , using the product ) the relative influence of these information sources varies with the product and the buyer. — As information is obtained , the consumer’s awareness and knowledge of the available brands and features increase. — The information might also help you keep drop certain brands from consideration. — A company must design its marketing mix to make prospects aware of and knowledgeable about its brand.  3- Evaluation Of Alternatives — The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. — In some cases the consumer uses careful calculations and logical thinking. — At other times the same consumers buy on impulse and rely on intuition. Sometimes they make consumer make buying decisions on their own , sometimes they turn to a friends , consumer guides or sales people for buying advice. 4- Purchase Decision — The act by the consumer to buy the most preferred brand — The purchase decision can be affected by: ◦ Attitudes of others ◦ Unexpected situational factors — Attitudes of others : if someone important to you thinks that you should buy the lowest priced car. Then the chance more expensive car are reduced. — Unexpected situational factors.the consumer may form a purchase intention based on factors such as expected income , expected price and excepted product benefits. — However unexpected events may change the purchase intention. — Ex: the economy might take a turn for the worse. 5- Post purchase behavior — The marketer’s job does not end when the product is bought. After purchasing the product , the consumer will be satisfied or dissatisfied and will engage in postpurchase behavior of interest to the marketer. What determines whether the buyer is satisfied or dissatisfied with the purchase ?  Post-Purchase Decision — The satisfaction or dissatisfaction that the consumer feels about the purchase — Relationship between: ◦ Consumer’s expectations ◦ Product’s perceived performance — The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction — Cognitive dissonance is the discomfort caused by a post-purchase conflict Customer satisfaction is a key to building profitable relationships with consumers— to keeping and growing consumers and reaping their customer lifetime value Types of Buying Decision Behavior Complex buying behavior Dissonance-reducing buying behavior Habitual buying behavior Variety-seeking buying behavior Types of Buying Decision Behavior Four Types of Buying Behavior  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. — Ex: the PC buyer may not know the attributes to consider. Many product features carry no real meaning such as 3.4 GHz. Dissonance reducing buying behavior — It occurs when consumers are highly involved with expensive , infrequent or risky purchase , but see little differences among brands. — Ex: consumers buying carpeting may face high involvement decision because carpeting is expensive and self expressive. Habitual buying behavior — It occurs under condition of low consumer involvement and the significant brand difference. For example take salt. — Consumers have little involvement in this product category , they simply go to the store and reach for a brand, if they keep reaching for the same brand , it is out of habit rather than brand loyalty.  Variety seeking buying behavior — Consumers undertake variety seeking behavior in situations characterized by low consumers involvement but significant perceived brand differences. — In such cases , consumers often do a lot of brand switching. — Ex: when buying cookies , a consumer may hold a beliefs choose a cookie brand without much evaluations and then evaluate that brand during consumption. But the next time , the consumer may pick another brand out of boredom or simply trying something different.  The Buyer Decision Process for New Products Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use. Stages in the process include: Awareness Interest Evaluation Trial Adoption Stages in the Adoption Process — Consumers go through five stages in the process of adopting a new product: — Awareness: The consumer becomes aware of the new product but lacks information about it. — Interest: The consumer seeks information about the new product. — Evaluation: The consumer considers whether trying the new product makes sense. — Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value. — Adoption: The consumer decides to make full and regular use of the new product. — This model suggests that new-product marketers should think about how to help consumers move through these stages. For example, Best Buy recently developed a unique way to help concerned customers get past a hurdle in the buying process and make a positive buying decision for new televisions. The Buyer Decision Process for New Products Differences in InnovativenessAdopter Categories — Innovators — Early Adopters — Early Majority — Late Majority — Laggards — People can be classified into the adopter categories shown in Figure 5.7. This adopter classification suggests that an innovating firm should research the characteristics of innovators and early adopters in their product categories and direct initial marketing efforts toward them. — Innovators are defined as the first 2.5 percent of buyers to adopt a new idea — the early adopters are the next 13.5 percent (between one and two standard deviations); and so forth. — The five adopter groups have differing values. — Innovators are venturesome—they try new ideas at some risk. — Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully. — The early majority is deliberate—although they rarely are leaders, they adopt new ideas before the average person. — The late majority is skeptical—they adopt an innovation only after a majority of people have tried it. — Finally, laggards are tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself. Adopter categories The Buyer Decision Process for New Products Influence of Product Characteristics on Rate of Adoption Relative Compatibility Complexity advantage Divisibility Communicability