Chapter 6 Consumer Markets and Consumer Buyer Behaviour

Learning Goals 1. Define the consumer market and construct a simple model of consumer buyer behaviour 2. Name the four major factors that influence buyer behaviour 3. List and understand the types of buying decision behaviour and stages in the buying decision process 4. Describe the adoption and diffusion process for new products Copyright © 2008 Pearson Education Canada 2 Principles of Marketing, Seventh Canadian Edition

Case Study Harley Davidson Measuring Success Building Success • Understanding the customers’ emotions and motivation • Determining the factors of loyalty • Translating this information to effective advertising • 1/5 of all North American motorbike sales, 1/2 of all heavyweight segment • Demand above supply • 19 years of record sales/income Copyright © 2008 Pearson Education Canada 3 Principles of Marketing, Seventh Canadian Edition

Case Study Harley Davidson • No longer just for stereotypical bike “gangs” • Harley’s core clientele: older, affluent, and better educated; “rubbies” • Used focus groups and surveys to identify core values and attitudes of customers • Identified seven customer types • Buying a bike, lifestyle, and an attitude • Independence, freedom, and power Copyright © 2008 Pearson Education Canada 4 Principles of Marketing, Seventh Canadian Edition

Learning Goals 1. Define the consumer market and construct a simple model of consumer buyer behaviour 2. Name the four major factors that influence buyer behaviour 3. List and understand the types of buying decision behaviour and stages in the buying decision process 4. Describe the adoption and diffusion process for new products Copyright © 2008 Pearson Education Canada 5 Principles of Marketing, Seventh Canadian Edition

Definitions • Consumer buyer behaviour refers to the buying behaviour of final consumers – individuals and households who buy goods and services for personal consumption • All of these final consumers combine to make up the consumer market Copyright © 2008 Pearson Education Canada 6 Principles of Marketing, Seventh Canadian Edition

Learning Goals 1. Define the consumer market and construct a simple model of consumer buyer behaviour 2. Name the four major factors that influence buyer behaviour 3. List and understand the types of buying decision behaviour and stages in the buying decision process 4. Describe the adoption and diffusion process for new products Copyright © 2008 Pearson Education Canada 7 Principles of Marketing, Seventh Canadian Edition

Factors Affecting Consumer Behaviour • • • Culture Cultural Social Personal Psychological – Influence a person’s wants and behaviour • Subculture – Smaller groups with shared value systems • Social Class – Society’s divisions who share values, interests and behaviours Copyright © 2008 Pearson Education Canada 8 Principles of Marketing, Seventh Canadian Edition

Factors Affecting Consumer Behaviour • • • Groups Cultural Social Personal Psychological – – – Membership Reference Aspirational Opinion leaders Buzz marketing • Family – Many influencers • Roles and status Copyright © 2008 Pearson Education Canada 9 Principles of Marketing, Seventh Canadian Edition

Factors Affecting Consumer Behaviour • • • Age and life-cycle stage • Occupation • Economic situation • Lifestyle Cultural Social Personal Psychological – AIO - Activities, interests and opinions – VALS – Lifestyle segmentation • Personality and selfconcept Copyright © 2008 Pearson Education Canada 10 Principles of Marketing, Seventh Canadian Edition

Brand Personality Dimensions • The specific mix of human traits that may be attributed to a particular brand • Match brand personality to the consumer’s personality • Brand personality traits – – – Sincerity Excitement Competence Sophistication Ruggedness Copyright © 2008 Pearson Education Canada 11 Principles of Marketing, Seventh Canadian Edition

Factors Affecting Consumer Behaviour • • • Motivation Cultural Social Personal Psychological – A need that drives the person to seek satisfaction of the need • Perception – The process by which people select, organize, and interpret information • Learning – Changes in an individual’s behaviour arising from experience • Beliefs – A descriptive thought about something • Attitudes – A person’s consistently favourable or unfavourable evaluations, feelings, and tendencies towards something Copyright © 2008 Pearson Education Canada 12 Principles of Marketing, Seventh Canadian Edition

Psychological Factors Motivation • A motive is a need that is sufficiently pressing to direct the person to seek satisfaction • Motivation research is based on Freud. Looks for hidden and subconscious motivation • Maslow ordered needs based on how pressing they are to the consumer Copyright © 2008 Pearson Education Canada 13 Principles of Marketing, Seventh Canadian Edition

Discussion Question What consumer products might fulfill multiple levels of the Hierarchy of Needs?

Psychological Factors Perception • Perception is the process by which people select, organize, and interpret information. • Perception Includes: – Selective attention • Consumers screen out information – Selective distortion • People interpret to support beliefs – Selective retention • People retain points to support attitudes Copyright © 2008 Pearson Education Canada 15 Principles of Marketing, Seventh Canadian Edition

Discussion Question Perception ? 1. How many ads were you exposed to today? 2. Which ones do you remember? Why? Copyright © 2008 Pearson Education Canada 16 Principles of Marketing, Seventh Canadian Edition

Psychological Factors Learning • Learning describes changes in an individual’s behaviour arising from experience • Learning occurs through – Drives • A strong internal stimulus that calls for action – Stimuli • Objects that move drive to motive – Cues • Minor stimuli that affect response – Reinforcement • Feedback on action Copyright © 2008 Pearson Education Canada 17 Principles of Marketing, Seventh Canadian Edition

Psychological Factors Beliefs and Attitudes • Belief – a descriptive thought about a brand or service – may be based on real knowledge, opinion, or faith • Attitude – describes a person’s evaluations, feelings and tendencies toward an object or idea – They are difficult to change Copyright © 2008 Pearson Education Canada 18 Principles of Marketing, Seventh Canadian Edition

Learning Goals 1. Define the consumer market and construct a simple model of consumer buyer behaviour 2. Name the four major factors that influence buyer behaviour 3. List and understand the types of buying decision behaviour and stages in the buying decision process 4. Describe the adoption and diffusion process for new products Copyright © 2008 Pearson Education Canada 19 Principles of Marketing, Seventh Canadian Edition

Types of Buying Decision Behaviour • Degree of involvement: – How much the consumer cares about the purchase decision – Higher levels for products that are expensive, risky, purchased infrequently, and highly self-expressive • Degree of perceived differences between brands • The type of decision will influence the promotional strategy most likely to be effective Copyright © 2008 Pearson Education Canada 20 Principles of Marketing, Seventh Canadian Edition

The Buyer Decision Process • Need Recognition – Triggered by internal (person’s normal needs) or external stimuli (advertisements, friends) – Must reach an intensity high enough to become a drive – Needs are basic, wants are learned behaviour to satisfy them Copyright © 2008 Pearson Education Canada 21 Principles of Marketing, Seventh Canadian Edition

The Buyer Decision Process • Information Search – Influenced by level of involvement (interest) in the decision – Memory (internal) search – External search: personal, commercial, public, experiential sources of information – Word-of-mouth sources are most influential (credibility) Copyright © 2008 Pearson Education Canada 22 Principles of Marketing, Seventh Canadian Edition

The Buyer Decision Process • Evaluation of Alternatives – Evaluation procedure depends on the consumer and the buying situation – Attributes and importance weights are chosen as criteria – Alternatives compared against the criteria – Marketers can influence this stage; personal selling Copyright © 2008 Pearson Education Canada 23 Principles of Marketing, Seventh Canadian Edition

The Buyer Decision Process • Purchase Decision – Two factors intercede between purchase intentions and the actual decision: • Attitudes of others • Unexpected situational factors Copyright © 2008 Pearson Education Canada 24 Principles of Marketing, Seventh Canadian Edition

The Buyer Decision Process • Postpurchase Behaviour – What the consumer thinks and does after purchasing and using the product or service – Satisfaction: relationship between consumer expectation and perceived performance • Delighted consumers engage in positive word-ofmouth. • Unhappy customers tell on average 11 other people. – Cognitive dissonance Copyright © 2008 Pearson Education Canada 25 Principles of Marketing, Seventh Canadian Edition

Learning Goals 1. Define the consumer market and construct a simple model of consumer buyer behaviour 2. Name the four major factors that influence buyer behaviour 3. List and understand the types of buying decision behaviour and stages in the buying decision process 4. Describe the adoption and diffusion process for new products Copyright © 2008 Pearson Education Canada 26 Principles of Marketing, Seventh Canadian Edition

Buyer Decision Process for New Products • New Products – Good, service or idea that is perceived by customers as new. • The Adoption Process – Mental process through which an individual passes from first hearing about an innovation to final adoption. • Five Stages in the Adoption Process – Awareness, interest, evaluation, trial, and adoption. Copyright © 2008 Pearson Education Canada 27 Principles of Marketing, Seventh Canadian Edition

Buyer Decision Process for New Products • Individual Differences in Innovativeness – Consumers can be classified into five adopter categories, each of which behaves differently toward new products. Copyright © 2008 Pearson Education Canada 28 Principles of Marketing, Seventh Canadian Edition

Buyer Decision Process for New Products • Influence of Product Characteristics on Rate of Adoption – Relative Advantage – Compatibility – Complexity – Divisibility – Communicability Copyright © 2008 Pearson Education Canada 29 Principles of Marketing, Seventh Canadian Edition

Buyer Decision Process for New Products • Consumer Behaviour Across International Borders – Values, attitudes and behaviours differ greatly in other countries. – Physical differences exist which require changes in the marketing mix. – Customs vary from country to country. – Marketers must decide the degree to which they will adapt their marketing efforts. Copyright © 2008 Pearson Education Canada 30 Principles of Marketing, Seventh Canadian Edition

Learning Goals 1. Define the consumer market and construct a simple model of consumer buyer behaviour 2. Name the four major factors that influence buyer behaviour 3. List and understand the types of buying decision behaviour and stages in the buying decision process 4. Describe the adoption and diffusion process for new products Copyright © 2008 Pearson Education Canada 31 Principles of Marketing, Seventh Canadian Edition