Consumer Markets and Consumer Buying Behavior CHAPTER 6

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Consumer Markets and Consumer Buying Behavior CHAPTER 6 Kotler, Bowen, and Makens. Marketing for

Consumer Markets and Consumer Buying Behavior CHAPTER 6 Kotler, Bowen, and Makens. Marketing for Hospitality and Tourism. 6 e. Pearson Higher Education. 2014

How do consumers respond to the marketing stimuli that a company might use? Product

How do consumers respond to the marketing stimuli that a company might use? Product features Price Place Promotion

Example Female business travelers 1970: 1% 1991: 25% Deliver a bundle of services, amenities,

Example Female business travelers 1970: 1% 1991: 25% Deliver a bundle of services, amenities, and facilities that elicit an emotional response from the guest Security measures: lighting in parking lots, escorts, non-connecting rooms, no mention of room numbers at check in Comfort Empowerment

Buying Behavior THE critical task of marketers is understanding buyer behavior Consumer behavior is

Buying Behavior THE critical task of marketers is understanding buyer behavior Consumer behavior is dynamic; it is always changing Must understand behavior and wants so we can make effective marketing mix strategies Us market: 300 million consumers worth $12 trillion Grows every year by a few million consumers, and $100 billion

How to understand / predict consumer responses We want to know what they will

How to understand / predict consumer responses We want to know what they will choose to buy, which brand, from where / whom, at what time, and how much of it

Personal Characteristics that Affect Consumer Behavior

Personal Characteristics that Affect Consumer Behavior

Cultural Factors -Culture Most basic determinant of a person’s wants and behaviors Based on

Cultural Factors -Culture Most basic determinant of a person’s wants and behaviors Based on shared history and experience basic values, perceptions, preferences, and behaviors that a person learns continuously in a society From formal institutions, social institutions, family, church, school, government, those around you Mental programming Culture changes, and marketers try to catch it in time to take advantage Healthy food and fitness, metrosexuality, manliness

Hofstede’s Dimensions Kültürel Boyutlar Country Culture Comparisons: Hofstede Insights Geert. Hostede. com Individualism Indulgence

Hofstede’s Dimensions Kültürel Boyutlar Country Culture Comparisons: Hofstede Insights Geert. Hostede. com Individualism Indulgence Long-term orientation Masculinity Power Distance Uncertainty Avoidance

Cultural Factors - Subculture Groups of people with shared value systems based on common

Cultural Factors - Subculture Groups of people with shared value systems based on common life experiences and situations Nationality, religion, race, geography Turkish culture Istanbul subculture, Adana subculture… Health culture vegetarian subculture, vegan, pescatarian, carb-free, protein only… Turkish culture Turks, Kurds, Arabs, Greek, Circassian, Laz

Examples of Effects of International Culture Germans: punctuality Japanese: don’t appreciate friendly service, or

Examples of Effects of International Culture Germans: punctuality Japanese: don’t appreciate friendly service, or formal service Arab countries: treat men differently than women Americans: ice in our drinks! Israelis: kosher food Turks: no pork products Failing to understand such things can lead to disaster

Cultural Factors - Social class Relatively permanent and ordered divisions in a society whose

Cultural Factors - Social class Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors In the US Upper uppers 1% Lower uppers 2% Upper middles 12% Middle 32% Working 38% Upper lowers 9% Lower lowers 7% Determined by income and other factors (occupation, education, wealth) Tend to exhibit similar behaviors

Example Uppers : Four Seasons Lowers: motel 6, hostels Uppers: TV drama and news

Example Uppers : Four Seasons Lowers: motel 6, hostels Uppers: TV drama and news Lowers: soap operas and sports Uppers: Starbucks Lowers: Mc. Donalds, Dunkin Donuts, Amigo

Personal Characteristics that Affect Consumer Behavior

Personal Characteristics that Affect Consumer Behavior

Social Factors - Reference Groups 1. set and enforce standards 2. act as points

Social Factors - Reference Groups 1. set and enforce standards 2. act as points of reference for individuals to compare their behaviors (Bowie and Buttle, 2004) 3. expose consumers to new behaviors and lifestyles (Kotler, Bowen, Makens, 2013)

Social Factors - Reference Groups Membership Group – person belongs to it and has

Social Factors - Reference Groups Membership Group – person belongs to it and has a direct influence Primary: regular, informal interaction Family, friends, neighbors, coworkers, classmates Secondary: more formal, less regular Religious groups, professional associations, trade groups Religion: alcohol, food, modesty, attitudes towards women, purchase patterns

Social Factors - Reference Groups Aspirational group: indirect; do not belong, but really want

Social Factors - Reference Groups Aspirational group: indirect; do not belong, but really want to Sports teams, exclusive social clubs, patrons of certain clubs or hotels, professional achievement Emulate what they do, wear, buy… Your aspirational groups? Private versus public use of products

Social Factors - Reference Groups Disassociative groups

Social Factors - Reference Groups Disassociative groups

Social Factors - Reference Groups Opinion leaders: exert strong social influence on others based

Social Factors - Reference Groups Opinion leaders: exert strong social influence on others based on some skills, knowledge, personality, or other factor Knowledgeable in one category typically This word-of-mouth credibility is incredibly valuable, and marketers try to identify these people Could be religious group leaders, celebrities, bloggers, local socialites Within own friend group Youtube, bloggers, Inatagram

Social Factors - Reference Groups Buzz marketing: company enlists or creates its own opinion

Social Factors - Reference Groups Buzz marketing: company enlists or creates its own opinion leaders to spread word-of-mouth More active approach “brand ambassadors”: extremely common in the states at universities, host events, recruit student leaders Jet Blue Crew. BLue John Heald at Carnival

Social Factors - Reference Groups Online Social Networks Provide new, digital platform for opinion

Social Factors - Reference Groups Online Social Networks Provide new, digital platform for opinion leaders, fans, brand ambassadors to interact in two-way communication with company Blogs, Facebook, Twitter Promotes even more word of mouth influence John Heald blog for Carnival

Social Factors - Family Most important consumer buying organization Buying roles Changing: traditionally wife

Social Factors - Family Most important consumer buying organization Buying roles Changing: traditionally wife did food and clothing shopping Changing: traditionally men made car – related decisions Children often the main influencer, even though they don’t have money Gate-keeper, Decision maker Vacation or restaurant marketers rethink where they might deliver their advertising

Social Factors - Roles and Status Role: consists of the activities a person is

Social Factors - Roles and Status Role: consists of the activities a person is expected to perform according to those around him/her Do you act differently at a restaurant depending on who you are with? Would you vacation in the same place if you go with your friends vs a religious group Coworkers vs friends

Social Factors - Role and Status Every role carries a status that reflects the

Social Factors - Role and Status Every role carries a status that reflects the esteem given to it by society Status symbols prevail in every industry Your status affects your buying behavior because you want to maintain this perception How does the type of hotel you stay at depend on society’s perception? Rental car, Type of wine, First class

Social Factors -Status many consumers seek travel opportunities based on the status that they

Social Factors -Status many consumers seek travel opportunities based on the status that they confer Drivers of status consumption pursuit of social esteem, desire for experiential travel avoidance of rituality

Personal Characteristics that Affect Consumer Behavior

Personal Characteristics that Affect Consumer Behavior

Personal Factors - Age and Life-Cycle Stage The types of things people buy depends

Personal Factors - Age and Life-Cycle Stage The types of things people buy depends on how old they are Text e. g. : features like assistance bars in the bathroom, large text print, good lighting usually not listed in advertising

Personal Factors - Age and Life-Cycle Stage Family life cycle stages Young and single:

Personal Factors - Age and Life-Cycle Stage Family life cycle stages Young and single: more freedom to spend, few financial obligations, spend on entertainment Young and married w/out kids: most likely to eat out at a restaurant, high discretionary income Married with kids: dining out less, carry out Cancun, Mexico in spring, or Ibiza promotes itself for families or the elderly? Think of your customers as lifetime guests

Personal Factors - Occupation What the person does for work can affect what they

Personal Factors - Occupation What the person does for work can affect what they buy Do you think construction workers and politicians eat at the same kind of places at lunch time?

Personal Factors - Economic situation Keep track of personal income, savings, and interest rate

Personal Factors - Economic situation Keep track of personal income, savings, and interest rate trends If one of these factors fluctuates amongst a target market, will affect their purchase behavior On the downturn, the value and price-conscious restaurants took advantage

Personal Factors - Lifestyle Even people coming from the same subculture, social class, and

Personal Factors - Lifestyle Even people coming from the same subculture, social class, and occupation may have quite different lifestyles Lifestyle: a person’s pattern of living as expressed in his or her activities, interests, and opinions (Hollywood or rock star lifestyle) E. g. : people who purchase all-inclusive vacations have a different lifestyle characteristics than those who arrange everything independently Goes beyond geography, demographics to predict behavior VALS: Values and Lifestyles System Psychographics Intangible Idea is if you know what they are thinking, you can make marketing mix for them

 Available Resources: income, education, intelligence, emotional support Primary motivation: what drives the person

Available Resources: income, education, intelligence, emotional support Primary motivation: what drives the person Knowledge, achievement, being social SBI: http: //www. strategicbusinessinsights. co m/vals/ustypes. shtml

 Innovators – The class of consumer at the top of the vals framework.

Innovators – The class of consumer at the top of the vals framework. They are characterized by High income and high resource individuals for whom independence is very important. They have their own individual taste in things and are motivated in achieving the finer things in life. Thinkers – A well educated professional is an excellent example of Thinkers in the vals framework. These are the people who have high resources and are motivated by their knowledge. These are the rational decision making consumers and are well informed about their surroundings. These consumers are likely to accept any social change because of their knowledge level.

 Believers: principle-oriented consumers with average income. Conservative and predictable Favor domestic brands with

Believers: principle-oriented consumers with average income. Conservative and predictable Favor domestic brands with decent reputation Hold the family, religion, community, and country in high regard Achievers: very successful and devoted to their jobs and families Politically conservative, conform to authority, and maintain status quo, norms Favor well-established products that reflect their status

 Strivers – Low resource consumer group which wants to reach some achievement are

Strivers – Low resource consumer group which wants to reach some achievement are known as strivers. These customers do not have the resources to be an achiever. But as they have values similar to an achiever, they fall under the striver category. If a striver can gain the necessary resources such as a high income or social status then he can move on to becoming an achiever. Experiencers – The group of consumers who have high resources but also need a mode of self expression are known as Experiencers. Mostly characterized by young adults, it consists of people who want to experience being different. This class of consumers is filled up with early adopters who spend heavily on food, clothing and other youthful products and services Marketin 91. com

 Makers – These are consumers who also want self expression but they are

Makers – These are consumers who also want self expression but they are limited by the number of resources they have. Thus they would be more focused towards building a better family rather than going out and actually spending higher amount of money. Making themselves into better individuals and families becomes a form of self expression for the Makers. Survivors – The class of consumers in the Vals framework with the least resources and therefore the least likely to adopt any innovation. As they are not likely to change their course of action regularly, they form into brand loyal customers. An example can include old age pension earners living alone for whom the basic necessities are important and they are least likely to concentrate on anything else Marketing 91. com

Personal Characteristics that Affect Consumer Behavior

Personal Characteristics that Affect Consumer Behavior

Psychological Factors - Motivation A person has many needs at any given time A

Psychological Factors - Motivation A person has many needs at any given time A need becomes a motive when it is aroused to a sufficient level of intensity Maslow Seeks to explain why people are driven by particular needs at particular times E. g. : a starving man will not have a need to know the latest news in the world of art or fashion

Maslow’s Theory

Maslow’s Theory

 Self Actualization Human Need: a felt state of deprivation Maslow’s Hierarchy Esteem Social

Self Actualization Human Need: a felt state of deprivation Maslow’s Hierarchy Esteem Social Safety / Security Physiological • Realization of potential, creativity, spontaneity, problem-solving • Respect of others, respect by others , autonomy, recognition, status • Acceptance, affection, belonging, friendship • Protection from physical / emotional harm’ security of employment, family, resources, morality, property • Food, water, shelter, sex

Psychological Factors - Motivation Frederick Herzberg’s Two-factor theory Dissatisfiers Satisfiers Remove one and add

Psychological Factors - Motivation Frederick Herzberg’s Two-factor theory Dissatisfiers Satisfiers Remove one and add the other AT THE SAME TIME Will not purchase something just because there is an absence of dissatisfiers only

Psychological Factors - Perception A motivated person is ready to act. How that person

Psychological Factors - Perception A motivated person is ready to act. How that person acts is influenced by his or her perception of the situation Perception: process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world Two consumers placed in the same situation with the same motivation, to eat at a restaurant for example, will act differently based on how they perceive things Friendly, talkative waiters Too casual, unsophisticated Cheerful and spontaneous and genuine American would like it, Japanese would hate it Fast-talking sales representative Aggressive, sneaky, insincere Knowledgeable, helpful

Psychological Factors - Perception

Psychological Factors - Perception

Psychological Factors - Perception People are exposed to a tremendous amount of daily stimuli:

Psychological Factors - Perception People are exposed to a tremendous amount of daily stimuli: over 1, 500 ads a day Since you can’t possibly attend to all of these, most stimuli is screened out—a process called selective attention means that marketers have to work hard to attract consumers’ notice seçici dikkat

Psychological Factors - Perception Selective distortion is the tendency to twist information into personal

Psychological Factors - Perception Selective distortion is the tendency to twist information into personal meanings and interpret information in a way that will fit our preconceptions Can’t really do anything about it seçici çarpıtma

Psychological Factors - Perception People forget most of what they hear, but remember information

Psychological Factors - Perception People forget most of what they hear, but remember information that supports or confirms their attitudes or beliefs seçici saklama

Questions Explain why marketers study buyer behavior and discuss characteristics affecting consumer behavior. Which

Questions Explain why marketers study buyer behavior and discuss characteristics affecting consumer behavior. Which characteristics do you think would have the greatest impact on your decision to select a restaurant to celebrate a special occasion, such as a birthday or anniversary? Discuss when the family can be a strong influence on buying behavior regarding the choice of restaurants.

Buyer Decision Process Need Recognition Purchase Decision Information Search Evaluation of Alternatives Postpurchase Behavior

Buyer Decision Process Need Recognition Purchase Decision Information Search Evaluation of Alternatives Postpurchase Behavior

Buyer Decision Process 1. Need Recognition Pre-Encounter Stage Buyer recognizes a problem or need,

Buyer Decision Process 1. Need Recognition Pre-Encounter Stage Buyer recognizes a problem or need, and the marketer must determine what triggers it Internal and external stimuli Service Encounter Stage Basic e. g. : feel hungry vs seeing ad for restaurant E. g. : Black Friday Christmas shopping Post-Encounter Stage

Buyer Decision Process 2. Information Search Extent of information search can vary by product

Buyer Decision Process 2. Information Search Extent of information search can vary by product and person Impulsive purchases have short search period, like stopping to eat somewhere as you walk down the street Vacations would have much longer period, and be more involved

Buyer Decision Process 2. Information Search Sources Personal Family, friends, neighbors, people you know

Buyer Decision Process 2. Information Search Sources Personal Family, friends, neighbors, people you know l. Commercial Advertising, salespeople, product packaging, displays Public Reviews and critiques, editorials in travel magazines or trade publications, consumer-rating organizations Internet Company website, user reviews and comments in various places Which are the most important in hospitality / travel products?

Buyer Decision Process 3. Evaluating Alternatives Based on idea that consumers see a product

Buyer Decision Process 3. Evaluating Alternatives Based on idea that consumers see a product as a bundle of product attributes Restaurant Food quality, menu selection and variety, service quality, atmosphere, location, price Consumers assign an importance weight to attributes based on their needs Develop a short list of options, and rank them Consumer develops a set of beliefs about how each brand can best deliver on those attributes (brand image) Devlops purchase intentions

Buyer Decision Process 3. Evaluating Alternatives Dominos example of a response Ranked high in

Buyer Decision Process 3. Evaluating Alternatives Dominos example of a response Ranked high in delivery speed attribute, but low in taste attribute Conducted market research through Focus Groups, realized how negative people’s beliefs and attitudes were New ad campaign admitting to inferior taste, but showing new chefs and new recipes

Buyer Decision Process 4. Purchase Decision In general, consumers logically choose their preferred brand,

Buyer Decision Process 4. Purchase Decision In general, consumers logically choose their preferred brand, the one that ranks highest in the attributes they want BUT, two factors can affect the transition from Purchase Intention to Purchase Decision

Need Recognition Information Search Purchase Intention Evaluation of alternatives Attitudes of others Unexpected situation

Need Recognition Information Search Purchase Intention Evaluation of alternatives Attitudes of others Unexpected situation factors Purchase Decision Postpurchase behavior Purchase Decision

Buyer Decision Process 5. Post Purchase behavior Determined by level of satisfaction or dissatisfaction,

Buyer Decision Process 5. Post Purchase behavior Determined by level of satisfaction or dissatisfaction, which is determined by the gap between perceived product performance and expectations

Expected Service Customer Gap Perceived Service Listening Gap Service Delivery Communication Gap Performance Gap

Expected Service Customer Gap Perceived Service Listening Gap Service Delivery Communication Gap Performance Gap External Communications to Customers Customer-Driven Service Design and Standards Company Service Design and Standards Gap Company Perceptions of Consumer Expectations

Buyer Decision Process 5. Post Purchase behavior Cognitive Dissonance: discomfort caused by postpurchase conflict

Buyer Decision Process 5. Post Purchase behavior Cognitive Dissonance: discomfort caused by postpurchase conflict Regret Return product, lawsuit, stop buying Marketers can help reduce dissonance How? Reassure them about their good decision later, thank you letter, positive testimonials from others

 Kotler, Bowen, and Makens. Marketing for Hospitality and Tourism. 6 e. Pearson Higher

Kotler, Bowen, and Makens. Marketing for Hospitality and Tourism. 6 e. Pearson Higher Education. 2014.