6 Analyzing Consumer Markets Marketing Management 13 th

6 Analyzing Consumer Markets Marketing Management, 13 th ed

Chapter Questions • How do consumer characteristics influence buying behavior? • What major psychological processes influence consumer responses to the marketing program? • How do consumers make purchasing decisions? • How do marketers analyze consumer decision making? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -2

Figure 6. 1 Model of Consumer Behavior Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -3

What Influences Consumer Behavior? • Cultural factors • Social factors • Personal factors Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -4

What is Culture? Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -5

Subcultures • • Nationalities Religions Racial groups Geographic regions Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -6

Fast Facts About American Culture • The average American: • • chews 300 sticks of gum a year goes to the movies 9 times a year takes 4 trips per year attends a sporting event 7 times each year Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -7

Social Classes • • Upper uppers Lower uppers Upper middles Middle Working Upper lowers Lower lowers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -8

Characteristics of Social Classes • Within a class, people tend to behave alike • Social class conveys perceptions of inferior or superior position • Class may be indicated by a cluster of variables (occupation, income, wealth) • Class designation is mobile over time Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -9

Social Factors • • Reference groups: Family Social roles Statuses Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -10

Reference Groups • Membership groups: 1. Primary groups: Family 2. Secondary groups: Friends • Aspirational groups: those hope to join • Disassociative groups: those whose value reject Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -11

Family Distinctions Affecting Buying Decisions • Family of Orientation: Parents which we acquire s the orientation towards religion, politics, economic and ambition • Family of Procreation; Husband , wife and children, the Purchasing role of husband wife Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -12

Personal Factors • • Age Life cycle stage Occupation Wealth • • Personality Values Lifestyle Self-concept Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -13

Brand Personality; Human traits that we can attribute to particular brand • • • Sincerity: honest , cheerful Excitement; imaginative Competence; reliable Sophistication; upper class and charming Ruggedness; outdoorsy, Levi’s Actual self-conception; how we view our self • Ideal self-conception; how we would like to view our self • Other self-conception; how we think other see us. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -14

Key Psychological Processes • Motivation: is the driving force within individuals that impels them to action. • Perception: The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world • Learning: The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior • Memory : (LTM& STM) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -15

Motivation Herzberg’s Two-Factor Freud’s Theory Behavior is guided by Behavior motivating is guided by is driven by and hygiene unconscious & lowest, Factors; subconscious unmet need motivations Most important Extrinsic: Salary Intrinsic; Growing need Maslow’s Hierarchy of Needs Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -16

Maslow’s Hierarchy of Needs Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -17

Perception • Selective attention: Heightened awareness when stimuli meet their needs • Selective retention: Remember positive point ignore negative one • Selective distortion: interpret the information to fit our preconception • Subliminal perception: Stimuli that are too weak or too brief to be consciously seen or heard may be strong enough to be perceived by one or more receptor cells. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -18

Figure 6. 4 Consumer Buying Process • • • Problem recognition Information search Evaluation Purchase decision Postpurchase behavior Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -19

Sources of Information • • Personal Commercial Public Experiential Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -20

Non-Compensatory Models of Choice • Conjunctive: Choose the alternative which meets the minimum of all attributes • Lexicographic: A noncompensatory decision rule - consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important • Elimination-by-aspects: eliminate any brand that don’t meets minimum acceptable cutoffs for each atributes Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -21

Perceived Risk • • • Functional: Poor product Perform Physical: Health risk Financial: is not worth the price paid Social: Embracement from other Psychological: Affect the mental well- being • Time: The failure product and the time cost needed to find another Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 -22

7 Analyzing Business Marketing Management, 13 th ed

Chapter Questions • What is the business market, and how does it differ from the consumer market? • What buying situations do organizational buyers face? • Who participates in the business-tobusiness buying process? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -24

Chapter Questions • How do business buyers make their decisions? • How can companies build strong relationships with business customers? • How do institutional buyers and government agencies do their buying? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -25

What is Organizational Buying? Organizational buying refers to the decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -26

Characteristics of Business Markets • Fewer, larger buyers • • Close supplier • customer • relationships • • Professional • purchasing • Many buying • influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -27

Buying Situation • Straight rebuy • Modified rebuy • New task Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -28

The Buying Center • • Initiators Users Influencers Deciders • Approvers • Buyers • Gatekeepers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -29

Of Concern to Business Marketers • Who are the major decision participants? • What decisions do they influence? • What is their level of influence? • What evaluation criteria do they use? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -30

Stages in the Buying Process: Buyphases • • Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -31

Forms of Electronic Marketplaces • Catalog sites: e-procurement • Vertical markets: Specialized web site • Pure play auction sites: online marketplace e-buy. • Spot markets: • Private exchanges • Barter markets • Buying alliances Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -32

Order Routine Specification • Stockless purchase plans: Blanket contracts not periodical • Vendor-managed inventory: sourcing to another company supplier • Continuous replenishment Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -33

Establishing Corporate Trust and Credibility • Expertise: the ability of company to produce and sell products • Trustworthiness: Honesty dependable • Likability: Likable attractive Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -34

Trust Dimensions • Transparent: Honest information • Product/Service Quality: good or bad • Incentive: Fairness • Partnering with customers: help to customers to learn • Cooperating design: customers help in design products • Product comparison: No biased in comparing • Supply chain: No conflict • Pervasive advocacy: All function work together Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -35

What is Opportunism? Opportunism is some form of cheating or undersupply relative to an implicit or explicit contract. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 -36