Chapter 7 Analyzing Consumer Markets and Buyer Behavior

Chapter Objectives § In this chapter, we focus on two questions: § How do the buyers’ characteristics – cultural, social, personal, and psychological – influence buying behavior? § How does the buyer make purchasing decisions? 2 Copyright © 2003 Prentice-Hall, Inc.

Influencing Buyer Behavior § The field of consumer behavior studies how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires. § Understanding consumer behavior and “knowing customers” is never simple. § Studying customers behavior provides clues for developing new products, product features, prices, channels, messages, and other marketing mix elements. 3 Copyright © 2003 Prentice-Hall, Inc.

Influencing Buyer Behavior § A Consumer’s buying behavior is influenced by: § Cultural factors

(1) Cultural Factors: § Culture, subculture and social class are important in buying behavior. § Culture is the fundamental determinant of a person’s wants and behavior. § Each culture consists of subcultures that provide more specific identification and socialization for their members (nationalities, religions, racial groups, geographic regions) § Social classes are those divisions in the community who share the same values, interests and behavior. § Social classes reflect income, education, occupation and residence. § Social classes differ in dress, speech patterns, recreational preferences and many other characteristics. § Social classes show distinct product and brand preferences in many areas including clothing, home furnishings, leisure activities and autombiles. 5 Copyright © 2003 Prentice-Hall, Inc.

(2) Social Factors: § Reference Groups: § Consumer’s buying behavior is influenced by social factors as reference groups, family, and social roles and statuses. § Membership groups are groups having a direct influence on a person (family, friends, neighbors and co-workers) with whom the person interacts continuously and informally. § Secondary groups takes more formal and requires less continuous interaction (religious, professional and trade unions). § Reference groups influence a person’s buying behavior by exposing him to new behavior or lifestyles, brand choice and self concept. § People influenced by groups to which they do not belong (Aspirational groups & dissociative groups). § Opinion leader is the person who offers advice or information about a specific product or service. 6 Copyright © 2003 Prentice-Hall, Inc.

(2) Social Factors: § Family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group. § There are to kinds of families in buyer’s life: family of orientation (parents and siblings), and family of procreation (spouse and children). § Internet ethics for targeting kids. § § Roles and Statuses: A role consists of the activities a person is expected to perform. Each role carries a status. People choose products that communicate their roles and statuses. 7 Copyright © 2003 Prentice-Hall, Inc.

(2) Personal Factors: § Age and stage in the life cycle: § People buy different goods and services over a lifetime. § Marketers should pay close attention to changing life circumstances, divorce, widowhood, remarriage and their effect on consumption. § Occupation and economic circumstances: § Consumption and buying behavior influenced by occupation, income, savings, debts, borrowing power. § Lifestyle: § Marketers should search for relationship between their products and lifestyle groups. § Psychographics is the science of using psychology and demographics to better understand consumers. 8 Copyright © 2003 Prentice-Hall, Inc.

(2) Personal Factors: § Personality and self-concept: § Consumers are likely to choose brands whose personalities match their own. § Brand personality is the specific mix of human traits that my be attributed to a particular brand. § Self-concept theory has had a mixed record of success in predicting consumer responses to brand images. 9 Copyright © 2003 Prentice-Hall, Inc.

Psychological Factors § Motivation § Perception § Learning § Beliefs and attitudes 10 Copyright

Psychological Factors § Motivation: § A need becomes a motive when it is aroused to a sufficient level of intensity. § A motive is a need that is sufficiently pressing to drive the person to act. § Three theories of human motivation for consumer analysis and marketing strategy: § Freud’s Theory. § Maslow’s Theory. § Hersberg’s Theory. 11 Copyright © 2003 Prentice-Hall, Inc.

Psychological Factors § Freud’s Theory: § Psychological forces are unconscious and a person can’t understand his own motivations. § Laddering technique: trace a person’s motivations from the instrumental ones to the more terminal ones. § Methods used to uncover deeper motives are: word association, sentence completion, picture interpretation and role playing. 12 Copyright © 2003 Prentice-Hall, Inc.

Psychological Factors § Maslow’s Theory: helps marketers understand how various products fit into the

Psychological Factors § Herzberg’s Theory § Dissatisfiers: factors that cause dissatisfaction. § Satisfiers: factors that cause satisfaction. § The absence of disatisfier is not enough, satisfiers must be actively present to motivate a purchase. § Two implications of theory: § Sellers should avoid disatisfiers. § Manufacurers should identify the major satisfiers of purchase in the market and then supply them. 14 Copyright © 2003 Prentice-Hall, Inc.

Psychological Factors § Perception § In marketing, the people’s perceptions are more important than the reality. § People differ in their perceptions of the same object because of three perceptional processes: 1. Selective attention § People are more likely to notice stimuli than relate to a current need § People are more likely to notice stimuli than they anticipate § People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli § Selective distortion § Selective retention 15 Copyright © 2003 Prentice-Hall, Inc.

Psychological Factors § Learning is produced through the interplay of drivers, stimuli, cues, responses, and reinforcement. § A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds (ex. IBM). § Discrimination means that a person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly. § Marketers should build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement. 16 Copyright © 2003 Prentice-Hall, Inc.

Psychological Factors § Beliefs and Attitudes § A belief is a descriptive thought that a person holds about something. § Attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. § People’s beliefs about a product or brand influence their buying decisions. § Brand beliefs exist in consumer’s memory. § A company should fit its product into existing attitudes rather than to try to change people’s attitudes. 17 Copyright © 2003 Prentice-Hall, Inc.

The purchase of a product from a Company A turns out to be a positive experience. You are looking for a loosely related product, which is also offered by Company A. Do you assume that you will again have a positive experience with Company A’s offering, or do you look for the “best of breed, ” regardless of which company offers it? 18 Copyright © 2003 Prentice-Hall, Inc.

The Buying Decision Process § Buying Roles § Initiator: suggest the idea of buying. § Influencer: whose views influence the decision. § Decider: who decide whether, what, how, where to buy. § Buyer: who makes the actual purchase. § User: consumes/uses the product/service. § Buying behavior § Consumer decision making varies with the type of buying decision. 19 Copyright © 2003 Prentice-Hall, Inc.

Table 7. 3: Four Types of Buying Behavior High Involvement Low Involvement Significant Differences between Brands Complex buying behavior Variety-seeking buying behavior Few Differences between Brands Dissonance-reducing buying behavior Habitual buying behavior 20 Copyright © 2003 Prentice-Hall, Inc.

What marketers can do? (strategies) § Complex Buying Behavior § Understand consumers’ information gathering ad evaluation behavior. § Assist buyer to learn about the product’s attributes and importance. § Differentiate brand’s features, use print media and motivate sales personnel. § Dissonance-Reducing Buyer Behavior § Marketing communication should supply beliefs and evaluations that help buyer feel good about his/her brand choice. § Habitual Buying Behavior § Use price and sales promotions to stimulate product trial (TV advertising). § Variety-Seeking Buying Behavior § Offering lower prices, deals, coupons, free samples and advertising. 21 Copyright © 2003 Prentice-Hall, Inc.

Stages in the Buying Decision Process § How marketers learn about the stages? § Introspective method: think about how they themselves would act. § Retrospective method: interview a small number of recent buyers and ask them to recall the events making their choice. § Prospective method: locate consumers who plan to buy and ask them to think out loud about their buying process. § Prescriptive method: ask consumer about the ideal way to buy. § Understanding by mapping the customer’s § Consumption system § Customer activity cycle § Customer scenario § Metamarket § Metamediaries 22 Copyright © 2003 Prentice-Hall, Inc.

Stages of the Buying Decision Process § Problem recognition § Information search § Personal sources § Commercial sources § Public sources § Experiential sources Figure 7. 4: Five-Stage Model of the Consumer Buying Process 23 Copyright © 2003 Prentice-Hall, Inc.

Figure 7. 5: Successive Sets Involved in Customer Decision Making 24 Copyright © 2003

The Buying Decision Process § Evaluation of Alternatives § There is no single process used by one/all consumers in all buying situations. § Brand beliefs § Brand image 25 Copyright © 2003 Prentice-Hall, Inc.

The Buying Decision Process § Purchase Decision Figure 7. 6: Steps Between Evaluation of

The Buying Decision Process § Informediaries § Consumer Reports § Zagats § § § § Unanticipated situational factors Perceived risk Brand decision Vendor decision Quantity decision Timing decision Payment-method decision 27 Copyright © 2003 Prentice-Hall, Inc.

The Buying Decision Process § Postpurchase Behavior § Postpurchase Satisfaction § Disappointed § Satisfied § Delighted § Postpurchase Actions § Postpurchase Use and Disposal 28 Copyright © 2003 Prentice-Hall, Inc.