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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 2

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INFLUENCING BUYER BEHAVIOR § Cultural Factors Culture is the most fundamental determinant of a person’s wants and behavior. The growing child acquires a set of values, perceptions, preferences and behaviors through his or her family and other key institution. Subculture Each culture consists of smaller subcultures that provide more specific identification and socializing for their members. Subculture includes nationalities, religions, racial groups and geographic regions. Social classes Virtually all-human societies exhibit social stratification. Social classes do not reflect income alone, but also other indicators such as occupation, education and area of 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 furnishing, leisure activates and automobiles. 8

SOCIO-ECONOMIC CLASSIFICATION (SEC) § Marketing professionals use socio-economic classification (SEC) of urban consumers as an indicator of the propensity of a consumer to purchase different items. § SEC A&B : Hi; SEC C: Mid; SEC D&E : Lo § Basis : Education + Occupation of CWE 9

Socioeconomic Classification (SEC) Matrix—India (Urban) 10

SEC Matrix—India (Rural) 11

Socioeconomic Class-wise Distribution of Households (%) 12

Indian Households by Income Groups 13

Age Distribution of Population—India 14

INFLUENCING BUYER BEHAVIOR § Social Factors § Reference Groups § Membership groups § Primary groups § Secondary groups § Aspirational groups § Dissociative groups § Opinion leader Reference Groups A person’s reference group consists of all the groups that have direct or indirect influence on the person’s attitudes or behavior. People are significantly influenced by their reference groups in at least three ways. • Reference groups expose an individual to new behavior and lifestyles. • They influence attitudes and self-concept. • And they create pressures for conformity that may affect actual product and brand choices 15

Opinion leader People -within a reference group who, because of special skills, knowledge, personality or other characteristics, exert influence on others. 16

INFLUENCING BUYER BEHAVIOR Family The family is the important consumer buying organization in society. We can distinguish between two families in buyer’s life. The family of orientation consists of one’s parents and siblings. More direct influence on everyday buying behavior is one’ family of procreation- namely, one’s spouse and children. Marketers are interested in the roles and relative influence of the husband, wife and children in the purchase of a large variety of products and services. These roles vary widely in different countries and social classes Roles and Statuses A person participates in many groups- family, clubs, and organization. The person’s position in each group can be defined in term of role and status. A role consists of the activities that a person is expected to perform. Each role carries a status. Marketers are aware of the status symbol potential of products and brands. 17

INFLUENCING BUYER BEHAVIOR § Personal Factors § Age and Stage in the Life Cycle § Family life cycle § Occupation and Economic Circumstances 18

Stages in the Family Life Cycle 1. Bachelor stage: Few financial burdens. Fashion opinion leaders. Young, single, not living Recreation oriented. Buy: basic home equipment, furniture, cars, equipment for the at home mating game; vacations. 2. Newly married couples: Young, no children Highest purchase rate and highest average purchase of durables: cars, appliances, furniture, vacations. 3. Full nest I: Youngest child under six Home purchasing at peak. Liquid assets low. Interested in new products, advertised products. Buy: washers, dryers, TV, baby food, chest rubs and cough medicines, vitamins, dolls, wagons, sleds, skates. 4. Full nest II: Youngest child six or over Financial position better. Less influenced by advertising. Buy larger-size packages, multiple -unit deals. Buy: many foods, cleaning materials, bicycles, music lessons, pianos. See text for complete table 19

DISCUSSION QUESTION With the “graying” of the populace, marketers have begun to shift images and cultural references in advertising from things that are relevant to the twenty-somethings to images of active seniors, and soundtracks from the sixties and seventies. Can you identify any particular ad campaigns that fit this pattern? 20

INFLUENCING BUYER BEHAVIOR § Personality and Self-Concept § Personality § Brand personality § § § Sincerity Excitement Competence Sophistication Ruggedness § Self-concept § § § Person’s actual self-concept Ideal self-concept Others’ self-concept 21

The VALS segmentation system: An 8 -part typology § Groups with High Resources 1. Actualizers 2. Fulfilleds 3. Achievers 4. Experiencers § Groups with Lower Resources 1. 2. 3. 4. Believers Strivers Makers Strugglers 22

INFLUENCING BUYER BEHAVIOR § Psychological Factors § Motivation § Motive § Freud’s Theory § Laddering § Projective techniques 23

INFLUENCING BUYER BEHAVIOR § Ernest Dichter’s research found: § Consumers resist prunes because prunes are wrinkled looking and remind people of old age. § Men smoke cigars as an adult version of thumb sucking. § Women prefer vegetable shortening to animal fats because the latter arouse a sense of guilt over killing animals. 24

INFLUENCING BUYER BEHAVIOR § Maslow’s Theory Maslow’s Hierarchy of Needs 25

INFLUENCING BUYER BEHAVIOR § Herzberg’s Theory § Dissatisfiers § Satisfiers 26

INFLUENCING BUYER BEHAVIOR § Perception § 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 27

INFLUENCING BUYER BEHAVIOR § Learning § Drive § Cues § Discrimination § Beliefs and Attitudes § Belief § Spreading activation § Attitude 28

INFLUENCING BUYER BEHAVIOR § Learning When people act they learn. Learning involves changes in an individual’s behavior arising from experience. Most human behavior is learned. Learning theorists believe that learning is produced through the interplay of drives, stimuli, cues, responses and reinforcement. § A drive is a strong internal stimulus impelling action. § Cues are minor stimuli determine when, where and how a person respond. § Beliefs and Attitudes Through doing and learning, people acquire beliefs and attitudes. These it turn influence buying behavior. A belief is a descriptive thought that a person holds about something. Beliefs may be based on knowledge, opinion, or faith. They may or may not carry an emotional charge. Of course, manufacturers are very interested in the beliefs people carry in their heads about their products and services. These beliefs make up product and brand images, and people act on their images. An Attitude is a person’s enduring favorable or unfavorable evaluations, emotional feeling and action tendencies toward some object or idea. 29

THANK YOU 30