Team NO 5 CONSUMER MARKETS AND CONSUMER BUYER

Team NO. 5 CONSUMER MARKETS AND CONSUMER BUYER BEHAVIOR 농업경제원서강독 김성훈 교수 님 Part 1. 201302980 김봉수 Part 2. 201303008 조휘용

Chapter Preview We will study the most important element of the marketplace customers. Marketing Customers think and act. Consumer buyer behavior -The buying behavior of final consumers-individuals and households that buy goods and services for personal consumption. Consumer market -All the individuals and households that buy or acquire goods and services for personal consumption. 2

OBJECTIVE OUTLINE 1 2 3 4 Model of consumer behavior Characteristics affecting consumer behavior Types of buying decision behavior The buyer decision process for new products 3

Objective 1 Model of Consumer Behavior Define the consumer market and construct a simple model of consumer buyer behavior. Most large companies research consumer buying decisions in great detail to answer the questions about what consumers buy, how and how much they buy, where, when and why they buy. The starting point is the stimulus-response model of buyer behavior - Model of Buyer Behavior The environment Marketing stimuli Product Price Place Promotion Other Economic Technological Social Cultural Buyer’s black box Buyer’s characteristics Buyer’s decision process Buyer responses Buying attitudes and preferences Purchase behavior: what the buyer buys, when, where and how much Brand company relationship behavior 4

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Consumer purchases are influenced strongly by cultural, social, personal and psychological characteristics. Marketers cannot control such factors, but they must take them into account. Cultural Social Personal Culture Reference groups -Age and life cycle stage -Occupation -Economic situation -Lifestyle -Personality and selfconcept Subculture Social class Family Roles and status Psychological -Motivation -Perception -Learning -Beliefs and attitudes Buyer 5

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Culture Factors Culture factors exert a broad and deep influence on consumer behavior. Culture Factors-Culture is the most basic cause of a person’s wants and behavior. Every group or society has a culture, and culture influences on buying behavior. Marketers are always trying to spot culture shifts so as to discover new products that might be wanted. 6

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Culture Factors-Subculture ( a group of people with shared value systems based on common life experiences and situations. ) Each culture contains smaller subcultures. Subcultures include nationalities, religions, racial groups, and geographic regions. Subcultures make up important market segments. Marketers often design products and marketing programs tailored to their needs. Examples) Hispanic American consumers African American consumers Asian American consumers Mature consumers 7

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Culture Factor-Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Social class is not determined by a single factor, such as income, but it is measured as a combination of occupation, income, education, wealth, and other variables. People within a given social class tend to exhibit similar buying behavior. Upper class Wealth Middle class Working class Lower class Education Occupation Income 8

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Social Factors A consumer’s behavior is influenced by social factors, such as the consumer’s small groups, family, and social roles and status. Social Factors-Groups and Social Networks Small groups influence a person’s behavior. People are influenced by reference groups to which they do not belong. 9

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Word-of-mouth influence and buzz marketing. Word-of-mouth influence can have a powerful impact on consumer buying behavior. The personal words and recommendations of trusted friends, associates, and other consumers tend to be more credible than those coming from commercial sources. I bought… 10

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Marketers of brands subjected to strong group influence must figure out how to reach opinion leaders exert social influence on others. Opinion leader : a person within a reference group who, because of special skills, knowledge, personality, or other characteristics Buzz marketing Online social networks Online communities where people social or exchange information and opinions. It’s blogs, facebook, twitter. . . 11

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Social Factors-Family Social Factors-Roles and Status The person’s position in each group can be defined role and status. People choose products appropriate to their roles and status. 12

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Personal Factors-Age and Life-Cycle stage Buying the goods and services change over their lifetime. Example) toy, doll, computer, camera, car, house. . Personal Factors-Occupation Example) work clothes and trench coat, suit Personal Factors-Economic situation 13

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Personal Factors-Lifestyle is a person’s pattern of living. Activities, interests, opinions. Example) hobbies, shopping, food, sports. Personal Factors-Personality and Self-concept Personality is unique psychological characteristics that distinguish a person or group. A brand personality is the specific mix of human traits. Example) Jeep-ruggedness, Apple-excitement, CNN-competence 14

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Psychological Factors-Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. Social needs Physiological needs Hunger Thirst Self-actualization Sense of belonging Love Safety needs Security Protection Self-development and realization Esteem needs Self-esteem Recognition Status 15

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Psychological Factors-Perception Process by which people select, organize, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus. Example) in theater, buy the popcorn and coke or don’t buy anything. in the yellow dust, eat the pork or buy the mask. Psychological Factors-Learning Changes in an individual’s behavior arising from experience. Example) After using the iphone, and a person like that. A person will buy the iphone 16

Objective 2 Characteristics Affecting Consumer Behavior Name the four major factors that influence consumer buyer behavior. Psychological Factors-Beliefs and Attitudes Belief is a descriptive thought that a person has about something. Attitude is a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Example) The Japanese make the best electronics products in the world. 17

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. <Types of Buying Decision Behavior> High involvement Significant differences between brands Few differences between brands Low involvement Complex buying behavior Varietyseeking buying behavior Dissonancereducing buying behavior Habitual buying bhavior 18

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 1. Complex Buying Behavior Highly involved in a purchase and perceive significant differences among brands. Marketers of high-involvement products must understand the information-gathering and evaluation behavior of high-involvement consumers. 19

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 2. Dissonance-Reducing Buying Behavior Highly involved with an expensive, infrequent, or risky purchase but see little difference among brands. To counter dissonance, the marketer’s after-sale communications should provide evidence and support to help consumers feel good about their brand choices. 20

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 3. Habitual Buying Behavior Low involvement and little significant brand difference. So marketers of low-involvement products with few brand differences often use price and sales promotions to promote buying. 21

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 4. Variety-Seeking Buying Behavior Low involvement but significant perceived brand differences. Brand switching So the marketing strategy may differ for the market leader and minor brands. -Market leader : Try to encourage habitual buying behavior by dominating shelf space, keeping shelves fully stocked, and running frequent reminder advertising. -Minor brands : Encourage variety seeking by offering lower prices, special deals, coupons, free samples, and advertising that presents reasons for trying something new. 22

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. <The Buyer Decision Process> Information search Need recognition Purchase decision Evaluation of alterantives Postpurchase behavior 23

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 1. Need Recognition The stage of the buyer decision process, in which the consumer recognizes a problem or need. Internal stimuli External stimuli hunger thirst Cold advertisement magazine discussion with a friend This stage, the marketer should research consumers to find out what kinds of needs or problems arise. 24

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 2. Information Search The stage of the buyer decision process, in which the consumer is motivated to search for more information. Personal sources Commercial sources Public sources Experiential sources family fiends neighbors acquaintances advertising salespeople dealer web sites packaging displays mass media, consumer rating organization, online searches and peer reviews handling examining using the product Personal sources vs. Commercial sources 25

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 3. Evaluation of alternatives The stage of the buyer decision process, in which the consumer uses information to evaluate alternative brands in the choice set. Product Attributes Degree of Importance Total Product Satisfaction Brand Beliefs Evaluation Procedures Marketers should study buyers to find out how they actually evaluate brand alternatives. If marketers know what evaluative processes go on, they can take steps to influence the buyer's decision. 26

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 4. Purchase Decision The stage of the buyer decision process, in which the buyer's decision about which brand to purchase. Generally, the consumer's will be to buy the most preferred brand, but two factors can come. 1) Attitudes of others 2) Unexpected situational factors(income, price, product benefits) Thus, preferences and even purchase intentions do not always result in an actual purchase choice. 27

Objective 3 Types of Buying Decision Behavior List and define the major types of buying decision behavior and the stages in the buyer decision process. 5. Post purchase Behavior The stage of the buyer decision process, in which consumers take further action after purchase, based on their satisfaction or dissatisfaction. Satisfied consumer Dissatisfied consumer Cognitive dissonance - Buyer discomfort caused by post purchase conflict. 28

Objective 4 The Buyer Decision Process for New Products Describe the adoption and diffusion process for new products. <Stages in the Adoption Process> 1. Awareness : The consumer becomes aware of the new product but lacks information about it. 2. Interest : The consumer seeks information about the new product. 3. Evaluation : The consumer considers whether trying the new product makes sense. 4. Trial : The consumer tries the new product on a small scale to improve his or her estimate of its value 5. Adoption : The consumer decides to make full and regular use of the new product. 29

Objective 4 The Buyer Decision Process for New Products Describe the adoption and diffusion process for new products. <Individual Differences in Innovativeness> <Adopter Categories Based on Relative Time of Adoption of Innovations> 30

Objective 4 The Buyer Decision Process for New Products Describe the adoption and diffusion process for new products. - Innovators : Try new ideas at some risk. - Early adopters : They are opinion leaders in their communities and adopt new ideas early but carefully. - Early mainstream : Although they rarely are leaders, they adopt new ideas before the average person. - Late mainstream : They adopt an innovation only after a majority of people have tried it. - Lagging adopters : They are suspicious of changes and adopt the innovation only when it had become something of a tradition itself. 31

Team NO. 5 Q&A

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