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Consumer Markets and consumer behaviour Consumer buyer behaviour refers to the buying behaviour of final consumers individuals and households - that buy goods and services for personal consumption The consumer market refers to all of the individuals and households that buy or acquire goods and servi...

Consumer Markets and consumer behaviour Consumer buyer behaviour refers to the buying behaviour of final consumers individuals and households - that buy goods and services for personal consumption The consumer market refers to all of the individuals and households that buy or acquire goods and services for personal consumption Marketers can study actual consumer purchases to and out what they buy, where and how much ○ Learning about the whys of consumer buying behaviour is not easy Often consumers themselves do not know exactly what influences their purchases The central question for marketers ○ How do consumers respond to various marketing efforts the company might use? Characteristics affecting consumer behaviour: For the most part, marketers cannot control such factors but they must take them into account 1. Cultural factors: Culture: Set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions Subcultural group: Group of people with shared value systems based on common life experiences and situations Social class: Relatively permanent and ordered divisions in a society, whose members share similar values, interests and behaviours 1. Give examples of cultural shifts that have changed demand or spawned new products coming to market 1. Social factors: Roles and status: People usually choose products appropriate to their roles and status Actions and activities that a person in a particular position is supposed to perform based on expectations of the individual and surrounding persons Family role, work role, role in an organisation Family influences: Family members can strongly influence buyer behaviour Consumer socialisation - the process through which a person acquires the knowledge and skills to function as a consumer Reference group: Any group that positively or negatively affects a persons values attitudes or behaviour Types of reference groups ○ Membership - an individual actually belongs ○ Aspirational - an individual aspires to belong ○ Dissociative - an individual does not want to belong Opinion leaders: A reference group member who provides information about a specific sphere that interest reference group participants 1. How strongly do social factors affect your own buyer behaviour? Social influences: Online social networks ○ Digital interfaces that offer a digital space for consumers to post and share information Culture ○ The accumulation of values, knowledge, beliefs, customs, objects and concepts that a society uses to cope with its environments and passes on to future generations ○ Influences buying behaviour because it permeates our daily lives ○ Cultural changes affect product, development, promotion, distribution and pricing Subculture ○ Groups of individuals whose characteristic values and behaviour patterns are similar, and different from those of the surrounding culture ○ Youth subculture, based on a sense of belonging and a common purpose ○ Subcultures of consumption, based on common interests Describe a situation where your purchase decision was influenced by your culture or subculture. Identify the product purchase Identify which culture/subculture affected your final purchase decision 1. Personal factors: Buyers decisions are influenced by personal characteristics Age and life-cycle stage Occupation Education Economic situation Lifestyle - persons pattern of living as expressed in his or her activities, interests and opinions Personality - is the unique psychological characteristics that distinguish a person or group Self-concept - view of ones self, can be positive or negative 1. Consumers do not just buy products, they buy the values and lifestyles those products represent. What does this mean for marketers? Personal factors and brand personality: Brand personality - is the specific mix of human traits that may be attributed to a particular brand Brand personality traits, identified in selected research ○ Sincerity (down to earth, honest, wholesome and cheerful) ○ Excitement ( daring, spirited, imaginative, and up to date) ○ Competence (reliable, intelligent, and successful) ○ Sophistication (upper-class and charming) ○ Ruggedness (outdoorsy and tough) 1. Psychological factors A persons buying choices are influenced by four main psychological factors: Motivation ○ Motive (drive) is a need that is sufficiently pressing to direct the person to seek satisfaction ○ Two of the most popular theories of human motivation are those of Sigmund Freud and Abraham Maslow ○ Motivation research refers to qualitative research designed to probe consumers hidden, subconscious motivations Perception Learning Beliefs and attitudes Maslow's hierarchy of needs: Psychological factors: Perception Perception - is the process by which people select, organise and interpret information to form a meaningful picture of the world People can form different perceptions of the same stimulus due to three perceptual processes ○ Selective attention ○ Selective distortion ○ Selective retention 1. Marketers often use drama and repetition in sending messages to their market. Why? Do these techniques affect your purchasing behaviour? Learning, beliefs and attitudes: Learning - refers to the changes in an individual behaviours arising from experience Learning occurs through the interplay of drives, stimuli, cues, responses and reinforcement Belief - is a descriptive thought that a person has about something Attitude - refers to a persons consistently favourable or unfavourable evaluations, feelings and tendencies towards an object or idea Can be positive or negative Attitudes comprise three parts: ○ Thoughts and beliefs (cognition) ○ Feelings (affect) an intention to behave in a certain way (conation/behaviour) 1. Why do companies try to fit their products to existing attitudes? The buyer decision process: Need recognition The buyer recognises a problem or need. It can be triggered by internal stimuli (e.g. hunger or thirst) or external stimuli (e.g. advertisement) Occurs when a buyer becomes aware of a difference between a desired state and an actual condition ○ Speed of consumer problem recognition can be rapid or slow ○ Some consumers are unaware of their problems or needs ○ Marketers use sales personnel, advertising, and packaging to help trigger recognition of such needs or problems Give an example when a company intentionally triggers recognition of a particular need through its promotional campaign Information search The buyer seeks out information about products or services with the potential to satisfy the need User-generated content (UGC) is any content, including images, videos, text and audio, voluntarily created and shared online, usually on social media, by individuals fans, or consumer of a brand who are not associated with that brand Internal search ○ Buyers search their memories for information about products that might solve their problem ○ If they cannot retrieve information from memory, they then perform an external search External search ○ Buyers seek information from outside sources (online and offline) ○ They may focus on communication with friends or relatives ○ It can involve comparison between brands ○ Independent sources such as choice magazine can be used Evaluation of alternatives The consumer processes information to arrive at brand choices Marketers should study buyers to find out how they actually evaluate brand alternatives so that they can take steps to assist buyers in their decision making Evoked set ○ A group of brands that a buyer views as alternatives for possible purchase ○ Consumer assign a greater value to a brand that they have heard of than to one they have not Evaluate criteria ○ Objective and subjective characteristics that are important to a buyer (e.g. size, weight and dimensions of a laptop computer) Purchase decision The consumer forms a purchase intention and ultimately makes the purchase Two factors can come between the purchase intention and purchase decision: attitudes of others and unexpected situational factors ○ Buyer chooses the product or brand to be brought ○ Buyer chooses the seller ○ Buyer negotiates the terms of the transaction ○ Buyer makes the purchase - or terminates the process Post purchase behaviour Following the purchase, the consumer will engage in post-purchase behaviour depending on their level of satisfaction or dissatisfaction with the purchase After purchase the buyer evaluates the product: does its actual performance meet expected levels? Cognitive dissonance: ○ A buyers doubts shortly after a purchase about whether the decision was the right one ○ Also known as 'post purchase dissonance' and 'buyers remorse' 1. Give some examples of post-purchase behaviour Give an example of a purchase for which you experienced post-purchase cognitive dissonance. Then explain how you overcame the cognitive dissonance Involvement Level of involvement - degree of interest in a product and the importance of the product for that person High involvement products - products that are visible to others and/or are expensive Low involvement products - products that tend to be less expensive and have less associated social risk Impulse buying: Purchase solely on impulse and not on the basis of any of the three problem-solving processes described earlier An unplanned buying behaviour resulting from a powerful urge to buy something immediately Roles in the buying process: Five different roles can be identified in most buying processes: ○ Initiator - the person who first suggests the idea of buying a particular product or service ○ Influencer - a person whose views or advice carry some weight in making the final buying decision ○ Decider - the person whose views or advice carry some weight in making the final buying decision or any part of it (e.g. whether to buy, what to buy, how or where to buy) ○ Buyer - the person who makes an actual purchase ○ User - the person who consumers or uses the product or service The buyer decision process for new products: The adoption process is the mental process through which an individual passes from first hearing about an innovation to final adoption Consumer go through five stages in the process of adopting a new product: ○ Awareness ○ ○ ○ ○ Interest Evaluation Trial Adoption 1. Describe activities/techniques a marketer could employ to help consumers move through this process to adoption of their product Individual differences in innovativeness ○ People can be classified into five group of adopters: Innovators - are venturesome Early adopters - are opinion leaders in their communities Early majority - are rarely leaders but adopt new ideas before the average person Late majority - are sceptical Laggards - are tradition bound 1. Which of these adopter categories best describes you? Does 'your' category vary? Business markets: The business market is huge. In fact, business markets involve far more dollars and items than do consumer markets Occur when an individual or group purchases a specific kind of product for resale, direct use in producing other products or use in general operation Business marketing includes: ○ Resellers (the reseller market) ○ Manufacturers (the industrial market) ○ Institutional and government markets Market structure and demand ○ Business markets normally have far fewer but far larger buyers ○ Business demand is derived demand It ultimately comes from (derives from) the demand for consumer goods Business market have both: ○ Inelastic demand - i.e. total demand is not affected much by price changes, especially in the short run ○ Fluctuating demand - i.e. demand for business goods and services tends to change more and more quickly, than the demand for consumer goods Business buyer behaviour model: Main types of buying situations: Business markets: The buying centre is all the individuals and units that play a role in the business purchase decision-making process Influences on business buyers: ○ Environmental, organisation, interpersonal, individual Stages of the business buying process Business-to-business digital and social media marketing: In response to customers rapid shift towards online buying, today B2B marketers use a wide range of digital and social media marketing approaches These approaches include: ○ Websites and blogs ○ Mobile apps ○ E-newsletters and proprietary online networks ○ Social media, such as Facebook, LinkedIn, YouTube, Instagram, twitter Digital and social media allow B2B marketers to engage customers and manage customer relationships anywhere anytime