Analyzing Consumer Markets Model of Buyer Behavior Factors

Analyzing Consumer Markets

Model of Buyer Behavior

Factors Influencing Consumer Behavior

Culture l Culture is the most basic cause of a person's wants and behavior, and it includes basic values, perceptions, wants, and behaviors. l l Chinese: 孝順、風水、4 or 10 Taiwan: appreciation of the hair → PANTENE Pro-V Esso in Japan & Thailand 中國白象牌(white elephant)電池 → India & USA

Subculture l Subculture: Groups of people with shared value systems based on common life experiences. l l l Hispanic market (42 million), e. g. Sears. African-American market (39 million), e. g. Hallmark’s Mahogany. Asian-American market (12. 5 million), e. g. Wal. Mart in Seattle, Firstrade.

Case: Mattel l l 1959 – Barbie 1968 – Christie (African-American) 1988 – Theresa (Latin-American) 1990 – Kira (Asian-American)

Social Factors l Reference Groups l Family Roles and Statuses l

Reference Group l l A person’s reference groups consist of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior. Reference group l l l Opinion leader l l l Membership group: primary group & secondary group Non-membership group: aspirational group & dissociative group 1/10 Buzz marketing, e. g. Hebrew National; Hasbro Games; Big Fat Promotions for beer. Balance Theory (Heider, 1958): P-O-X

Family l l l Whereas women make up 40% of drivers, they influence more than 80% of car-buying decisions. In all, women make almost 85% of all purchases, spending 6 trillion each year. l Lowe’s l Anti-smoking campaign in Thailand Children’s influence

Roles and Status l l l A role consists of the activities people are expected to perform according to the people around them. Each role carries a status reflecting the general esteem given to it by society. People often choose products that show their status in society. Marketers must be aware of the status-symbol potential of products and brands. Examples: Singapore’s 5 Cs (Career, Condominium, Car, Credit card, County club membership); Mitsukoshi.

Personal Factors l Age and life-cycle stage l l l Occupation Economic situation Lifestyle l l Baby boomers, generation X or Y Family life cycle SRI’s VALS, e. g. Iron City Beer. Personality and self-concept l Brand personality, e. g. sincerity, excitement, competence, sophistication, ruggedness.

VALS

Psychological Factors l l Motivation Perception Learning Beliefs and Attitudes

Motivation l l A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction. Freud’s theory, Maslow’s hierarchy of needs, and Herzberg’s two-factor theory.

Freud’s Theory l l l Assume that people are largely unconscious the real psychological forces shaping their behavior. Motive research: qualitative research designed to probe consumers’ hidden, subconscious motivations, e. g. archetype research (原型研究). Tools: free association, inkblot interpretation.

Chrysler PT Cruiser

Ads with Sexual Hint

Maslow’s Hierarchy of Needs l l Human needs are arranged in a hierarchy. A person tries to satisfy the most important need first.

Herzberg’s Two-Factor Theory l l l Dissatisfiers of hygiene factors (factors that cause dissatisfaction) & satisfiers of motivation factors (factors that cause satisfaction) Sellers should do their best to avoid dissatisfiers. Sellers should identify the major satisfiers or motivators of purchase in the market and then supply them.

Perception l l Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. E. g. Country-of-origin effect, Beer in China. Subliminal advertising Selective attention, selective distortion (e. g. the influence of expectations), and selective retention.

Ad Examples of Direction and Motion

Learning l l l Learning describes changes in an individual’s behavior arising from experience. Classical Conditioning Operant Conditioning l l l Methods Reinforcement schedules Cognitive Learning l Rehearsal and Elaboration

Operant Conditioning Methods Name Operation Performed after Behavior Effects Positive reinforcement Present positive consequences Increases the prob. of behavior Negative reinforcement Remove aversive consequences Increases the prob. of behavior Extinction Neutral consequences occur Decreases the prob. of behavior Punishment Present aversive consequence Decreases the prob. of behavior

Reinforcement Schedules l Three types of schedule l l Continuous reinforcement schedule Fixed ratio reinforcement schedule Variable ratio reinforcement schedule For approximately one-third the cost of the continuous schedule, the same amount of behavior was sustained.

Beliefs and Attitudes l l l A belief is a descriptive thought that a person has about something. Attitudes describe a person’s relatively consistent evaluation, feelings, and tendencies toward an object or idea. E. g. National Milk Processors Education Program – 01, 02, 03.

Buyer Decision Process 1. 2. 3. 4. 5. Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

Decision Rules l Compensatory l l l Simple Additive Rule Weighted Additive Rule Noncompensatory l l l The Lexicographic Rule The Elimination-by-Aspects Rule The Conjunctive Rule

Decision Rules – Compensatory l l Simple Additive Rule Weighted Additive Rule l Fishbein-Ajzen Model k: consumer, j: brand, i: attribute, n: number of attribute, W: weight, B: belief, A: attitude. l The Idea-Point Model

A Consumer’s Brand Beliefs about Computers Computer Attribute Memory Capacity Graphics Capability Size and Weight Price A 10 8 6 4 B 8 9 8 3 C 6 8 10 5 D 4 3 7 8

Marketing Strategies l l l Alter beliefs about the brand: psychological repositioning, e. g. Extra, Rejoice. Alter beliefs about competitor’s brands: competitive positioning, e. g. Pepsi. Alter the important weights, e. g. 台灣啤酒, 薄酒萊, 德恩奈抗敏感牙膏. Call attention to neglected attributes, e. g. KFC, Online Store, 德恩奈. Redesign the product: repositioning, e. g. Arm & Hammer.

Decision Rule – Noncompensatory l The Lexicographic Rule l l The Elimination-by-Aspects Rule (Tversky, 1972) l l l The brand on the most important attribute is selected. Brands are evaluated on the most important attribute, and specific cutoffs are imposed. Compromise effect, e. g. 菜單上最貴的的菜色(HBR中文版 June 2008, p. 38). The Conjunctive Rule l Cutoffs are established for each attribute.

A Consumer’s Brand Beliefs about Computers Computer Attribute Memory Capacity Graphics Capability Size and Weight Price A 10 8 6 4 B 8 9 8 3 C 6 8 10 5 D 4 3 7 8

When do consumers tend to use noncompensatory decision rule?

Stages in the Adoption Process 1. 2. 3. 4. 5. Awareness Interest Evaluation Trial Adoption

Adopter Categorization on the Basis of Relative Time of Adoption of Innovations

Characteristics of Innovators l l l Relatively younger, better educated, higher income. More receptive to unfamiliar things, rely more on their own values and judgment, more willing to take risk Less brand-loyal, more likely to take advantage of special promotions such as discounts, coupons, and samples.

Forrester Research Inc.

Influence of Product Characteristics on Rate of Adoption l Relative advantage: Is the innovation superior to existing products? l l E. g. cellular phone, color television, Wii. Compatibility: Does the innovation fit the values and experience of the target market? l E. g. Dvorak keyboard vs. QWERT keyboard; 秘魯村 落燒開水計畫; 在天主教國家推廣保險套.

Influence of Product Characteristics on Rate of Adoption l Complexity: Is the innovation difficult to understand or use? l l Divisibility: Can the innovation be used on a limited basis? l l E. g. i. Pod. E. g. 垃圾不落地→再資源回收→資源分類→購買專 用垃圾袋. Communicability: Can results be easily observed or described to others? l Counterexample – walkband

Do you think that 7 -11’s icash card is successful? Why or why not?