Consumer Markets and Consumer Buyer Behavior Chapter 5

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Consumer Markets and Consumer Buyer Behavior Chapter 5 1

Consumer Markets and Consumer Buyer Behavior Chapter 5 1

Learning Goals 1. Learn the consumer market and construct model of consumer buyer behavior

Learning Goals 1. Learn the consumer market and construct model of consumer buyer behavior 2. Know the four factors that influence buyer behavior 3. Understand the types of buying decision behavior and stages in the process 4. Comprehend the adoption and diffusion process for new products

Definitions p Consumer buyer behavior refers to the buying behavior of final consumers –

Definitions p Consumer buyer behavior refers to the buying behavior of final consumers – individuals and households who buy goods and services for personal consumption p All of these final consumers combine to make up the consumer market Goal 1: Learn the consumer market & construct model of buyer behavior

Consumer behavior Focuses on how individuals make decisions p p p What they buy?

Consumer behavior Focuses on how individuals make decisions p p p What they buy? Why they buy it? When they buy it? Where they buy it? How often they use it? p How they evaluate it after the purchase? p How they dispose of it?

Stimulus-Response Model of Consumer Behavior . Goal 1: Learn the consumer market & construct

Stimulus-Response Model of Consumer Behavior . Goal 1: Learn the consumer market & construct model of buyer behavior

Characteristics Affecting Consumer Behavior Culture The set of basic values, Key Factors perceptions, wants

Characteristics Affecting Consumer Behavior Culture The set of basic values, Key Factors perceptions, wants and n p p p Cultural Social Personal Psychological behaviors learnt by a member of society from family and other important institutions. p Forms a person’s wants and behavior n Subculture p Groups with shared value systems based on common life experiences and situations n Social Class p Relatively permanent and ordered divisions in a society whose members share similar values, interests and behaviors. Goal 2: Know the four factors that influence consumer buying behavior

Characteristics Affecting Consumer Behavior Key Factors p p Cultural Social Personal Psychological n Groups

Characteristics Affecting Consumer Behavior Key Factors p p Cultural Social Personal Psychological n Groups p Membership p Reference p Opinion Leaders n Family p Many influencers n Roles and Status Goal 2: Know the four factors that influence consumer buying behavior

Characteristics Affecting Consumer Behavior Key Factors Age and life cycle n n p p

Characteristics Affecting Consumer Behavior Key Factors Age and life cycle n n p p Cultural Social Personal Psychological n n n Occupation Economic situation Lifestyle p. Activities, interests and opinions p. Lifestyle segmentation Personality and self-concept Goal 2: Know the four factors that influence consumer buying behavior

Characteristics Affecting Consumer Behavior p Lifestyle n p Personality n p A person’s pattern

Characteristics Affecting Consumer Behavior p Lifestyle n p Personality n p A person’s pattern of living as expressed in his or her activities, interests, opinions. The unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Brand personality n The specific mix of human traits that may be attributed to a particular brand.

Characteristics Affecting Consumer Behavior Brand Personality Dimensions p p Sincerity Ruggedness p p p

Characteristics Affecting Consumer Behavior Brand Personality Dimensions p p Sincerity Ruggedness p p p Excitement Competence Sophistication Goal 2: Know the four factors that influence consumer buying behavior

Characteristics Affecting Consumer Behavior Key Factors p p Cultural Social Personal Psychological n n

Characteristics Affecting Consumer Behavior Key Factors p p Cultural Social Personal Psychological n n Motivation Perception Learning Beliefs and attitudes Goal 2: Know the four factors that influence consumer buying behavior

Psychological Factors Motivation p A motive is a need that is sufficiently pressing to

Psychological Factors Motivation p A motive is a need that is sufficiently pressing to direct the person to seek satisfaction p Theories of Sigmund Freud suggest that a persons buying behavior is affected by subconscious motives that even the buyer may not fully understand. p Theories of Abraham Maslow suggest that human needs are arranged in a hierarchy from the most pressing at the bottom to the least pressing at the top. Goal 2: Know the four factors that influence consumer buying behavior

Maslow’s hierarchy of needs

Maslow’s hierarchy of needs

Psychological Factors Perception p p Perception is the process by which people select, organize,

Psychological Factors Perception p p Perception is the process by which people select, organize, and interpret information People can form different perceptions of the same stimulus because of the following: n Selective attention p n Selective distortion p n Consumers screen out information People interpret to support beliefs Selective retention p People retain points to support attitudes Goal 2: Know the four factors that influence consumer buying behavior

Psychological Factors Learning p Learning describes changes in an individual’s behavior arising from experience

Psychological Factors Learning p Learning describes changes in an individual’s behavior arising from experience p Learning occurs through: n Drives p n Stimuli p n Objects that move drive to motive Cues p n Internal stimulus that calls for action Minor stimuli that affect response Reinforcement p Feedback on action Goal 2: Know the four factors that influence consumer buying behavior

Psychological Factors Beliefs and Attitudes p Belief n n n p A descriptive thought

Psychological Factors Beliefs and Attitudes p Belief n n n p A descriptive thought that a person holds about something May be based on real knowledge, opinion, or faith May or may not carry emotional charge. Attitude n n Describes a person’s relatively consistent evaluations, feelings and tendencies toward an object or idea. They are difficult to change Goal 2: Know the four factors that influence consumer buying behavior

Types of Buying Decision Behavior p Complex n n p Dissonance-reducing n n p

Types of Buying Decision Behavior p Complex n n p Dissonance-reducing n n p Highly involved, little brand differences Example – carpeting Habitual n n p Highly involved, significant brand differences Example – computer Low involvement, little brand differences Example – salt Variety-seeking n n Low involvement, significant perceived brand differences Example – cookies Goal 3: Understand types of buying decisions and stages in the process

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior p Needs can be triggered by: n Internal stimuli p Normal needs become strong enough to drive behavior n External stimuli p Advertisements p Influence of friends or others Goal 3: Understand types of buying decisions and stages in the process

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior p p p Consumers exhibit heightened attention or actively search for information. Sources of information: n Personal n Commercial n Public n Experiential Word-of-mouth Goal 3: Understand types of buying decisions and stages in the process

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior p p p Evaluation procedure depends on the consumer and the buying situation. Most buyers evaluate multiple attributes, each of which is weighted differently. At the end of the evaluation stage, purchase intentions are formed. Goal 3: Understand types of buying decisions and stages in the process

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior p Two factors intercede between purchase intentions and the actual decision: n Attitudes of others n Unexpected situational factors Goal 3: Understand types of buying decisions and stages in the process

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation

The Buyer Decision Process p p p Process Stages Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior p Satisfaction is important: n Delighted consumers engage in positive word-of-mouth. n Unhappy customers tell on average 11 other people. n It costs more to attract a new customer than it does to retain an existing customer. p Cognitive dissonance is common Goal 3: Understand types of buying decisions and stages in the process

Buyer Decision Process for New Products p New Products n p Good, service or

Buyer Decision Process for New Products p New Products n p Good, service or idea that is perceived by customers as new. Stages in the Adoption Process n Marketers should help consumers move through these stages. Goal 4: Comprehend the diffusion & adoption process for new products

Buyer Decision Process for New Products Stages in the Adoption Process Awareness p Evaluation

Buyer Decision Process for New Products Stages in the Adoption Process Awareness p Evaluation p Interest p Trial p p Adoption Goal 4: Comprehend the diffusion & adoption process for new products

Buyer Decision Process for New Products p Individual Differences in Innovativeness n p Consumers

Buyer Decision Process for New Products p Individual Differences in Innovativeness n p Consumers can be classified into five adopter categories, each of which behaves differently toward new products. Product Characteristics and Adoption n Five product characteristics influence the adoption rate. Goal 4: Comprehend the diffusion & adoption process for new products

Adopter Categorization

Adopter Categorization

Buyer Decision Process for New Products Product Characteristics p p Relative Advantage Compatibility p

Buyer Decision Process for New Products Product Characteristics p p Relative Advantage Compatibility p p p Complexity Divisibility Communicability Goal 4: Comprehend the diffusion & adoption process for new products