6 - 0 Consumer Markets and Consumer Buyer Behavior.

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Consumer Markets Consumer Markets and Consumer Buyer and Consumer Buyer

BehaviorBehavior

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Definitions

• Consumer Buying BehaviorConsumer Buying Behavior Buying behavior of individuals Buying behavior of individuals

and households that buy and households that buy products for personal products for personal consumption.consumption.

Factors Influencing Buying Decisions

Social Factors

PersonalFactors

Psycho-logical Factors

Cultural Factors

CONSUMERDECISION-MAKINGPROCESS

BUY /

DON’T BUY

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Characteristics Affecting Consumer

Behavior

• CulturalCultural

• SocialSocial

• PersonalPersonal

• PsychologicalPsychological

• CultureCulture• SubcultureSubculture

Hispanic Hispanic consumersconsumers

African AmericansAfrican Americans Asian AmericansAsian Americans Mature consumersMature consumers

• Social ClassSocial Class

Key Factors Key Factors

Definition of Culture

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Culture Represents the behavior, beliefs, the way we act learned by interacting or observing other members of society. Shared behavior, passed along from one member of society to another.

Culture in MarketingThe philosophy of a company, a way to do business to insure customer satisfaction.

Components of Culture

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MythsMyths

LanguageLanguage

ValuesValues

CustomsCustoms

RitualsRituals

LawsLaws

Core American Values

SuccessSuccess

MaterialismMaterialism

FreedomFreedom

ProgressProgress

YouthYouth

CapitalismCapitalism

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• HispanicsHispanics 35 million consumers purchase 35 million consumers purchase

$425 billion worth of goods and $425 billion worth of goods and services.services.

Expected to grow 64% in 20 Expected to grow 64% in 20 years.years.

Spanish media makes group Spanish media makes group easy to reach.easy to reach.

Brand loyal group.Brand loyal group.

Subculture

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HISPANIC POPULATIONClick on a state to view related charts and data.

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• African AmericansAfrican Americans

35 million consumers purchase $527 35 million consumers purchase $527 billion worth of goods and services.billion worth of goods and services.

Growing more affluent / sophisticated.Growing more affluent / sophisticated. Price and brand name conscious; quality Price and brand name conscious; quality

and selection are important.and selection are important. Certain media target this group.Certain media target this group.

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AFRICAN-AMERICAN POPULATIONClick on a state to view related charts and data.

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• Asian AmericansAsian Americans 10 million consumers purchase $229 10 million consumers purchase $229

billion worth of goods and services.billion worth of goods and services. Fastest growing, most affluent Fastest growing, most affluent

subculture.subculture. Many nationalities comprise this group.Many nationalities comprise this group. Consumer packaged goods companies Consumer packaged goods companies

now target this group more heavily.now target this group more heavily.

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ASIAN POPULATIONClick on a state to view related charts and data.

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• Mature ConsumersMature Consumers 75 million consumers aged 50+ will 75 million consumers aged 50+ will

grow to 115 million within 25 years.grow to 115 million within 25 years. Mature consumers control 50% of all Mature consumers control 50% of all

discretionary income.discretionary income. Attractive market for travel, Attractive market for travel,

restaurant, and cosmetics products, restaurant, and cosmetics products, among others. among others.

Social Class Measurements

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WealthWealth

Other VariablesOther Variables

IncomeIncome

EducationEducation

OccupationOccupation

Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Social Class and Education

19Copyright 2010 by Cengage Learning Inc. All Rights Reserved

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Behavior


• SocialSocial



• GroupsGroups MembershipMembership ReferenceReference

Aspirational groupsAspirational groups Opinion leadersOpinion leaders

• FamilyFamily Children can Children can

influenceinfluence

• Roles and StatusRoles and Status


Social Influences

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Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily

Members


A group in society that

influences an individual’s

purchasing behavior.

Movie stars Sports figures Celebrities Political figures

Social Factors

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LO6

Direct IndirectReferenceGroups Primary Secondary Aspirational Non-aspirational

OpinionLeaders

Peopleyou know

Socialization Process

Family

Celebrities/Political

Initiators Decision Makers

Influencers Purchasers

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Behavior


• SocialSocial



• Age and life cycleAge and life cycle• OccupationOccupation• Economic situationEconomic situation• LifestyleLifestyle

Activities, interests, Activities, interests, and opinionsand opinions

• Personality and self-Personality and self-conceptconcept Brand personalityBrand personality


Family Life Cycle Stages

Full Nest IFull Nest IFull Nest IFull Nest I

Single ParentsSingle ParentsSingle ParentsSingle Parents

Divorced and AloneDivorced and AloneDivorced and AloneDivorced and Alone

Middle-aged MarriedMiddle-aged MarriedMiddle-aged MarriedMiddle-aged Married

Full Nest IIFull Nest IIFull Nest IIFull Nest II

Empty NestEmpty NestEmpty NestEmpty Nest

Older SingleOlder SingleOlder SingleOlder Single

BachelorBachelorBachelorBachelor

Nine stages with

different buying behavior

Nine stages with

different buying behavior

Young MarriedYoung MarriedYoung MarriedYoung Married

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Behavior


• SocialSocial



• Age and life cycleAge and life cycle• OccupationOccupation• Economic situationEconomic situation• LifestyleLifestyle

Activities, interests, Activities, interests, and opinionsand opinions

• Personality and self-Personality and self-conceptconcept Brand personalityBrand personality


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Behavior


• SocialSocial



• MotivationMotivation Needs provide motives for Needs provide motives for

consumer behaviorconsumer behavior Motivation researchMotivation research Maslow’s hierarchy of needsMaslow’s hierarchy of needs

• PerceptionPerception Selective attention, selective Selective attention, selective

distortion, selective distortion, selective retentionretention

• LearningLearning Drives, stimuli, cues, Drives, stimuli, cues,

responses and reinforcementresponses and reinforcement

• Beliefs and attitudesBeliefs and attitudes


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Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs


Behavior

Self-actualizationSelf-actualization

Esteem NeedsEsteem Needs

Social NeedsSocial Needs

Safety NeedsSafety Needs

Physiological NeedsPhysiological Needs

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Examples

• LunestaLunesta- “Soothing rest for mind - “Soothing rest for mind and body and body

• ““VolvoVolvo-Protect the body ignite the -Protect the body ignite the soul” soul”

• Smackers Lip Gloss “All the Smackers Lip Gloss “All the flavor of being a girl”flavor of being a girl”

• LexusLexus automobiles “The relentless automobiles “The relentless pursuit of perfection” pursuit of perfection”

• DePaul University- DePaul University- “Turning goals “Turning goals into acomplishments” into acomplishments”

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What Level of Maslow’s Hierarchy is this ad?

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Objectives

• Understand the major types Understand the major types of buying decision behavior of buying decision behavior and the stages in the buyer and the stages in the buyer decision process.decision process.

• Be able to describe the Be able to describe the adoption and diffusion adoption and diffusion process for new products.process for new products.

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• Five Stages:Five Stages: Need recognitionNeed recognition Information searchInformation search Evaluation of alternativesEvaluation of alternatives Purchase decisionPurchase decision Postpurchase behaviorPostpurchase behavior

The Buyer Decision Process

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• Need recognitionNeed recognition

• Information searchInformation search

• Evaluation of Evaluation of alternativesalternatives

• Purchase decisionPurchase decision

• Postpurchase behaviorPostpurchase behavior

• Needs can be Needs can be triggered by:triggered by: Internal stimuliInternal stimuli

Recall information in Recall information in memorymemory

External stimuliExternal stimuli AdvertisementsAdvertisements Friends of friendsFriends of friends

Process Process Stages Stages

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• Consumers exhibit Consumers exhibit heightened attention heightened attention or actively search for or actively search for information.information.

• Sources of information:Sources of information: PersonalPersonal CommercialCommercial PublicPublic Experiential/ConceptualExperiential/Conceptual

• Word-of-mouthWord-of-mouth


Consumer Buying Decisions andConsumer Involvement

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

Five Factors of Consumer Involvement

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1. Level of consumer involvement1. Level of consumer involvement

2. Length of time to make decision2. Length of time to make decision

3. Cost of good or service3. Cost of good or service

4. Degree of information search4. Degree of information search

5. Number of alternatives considered5. Number of alternatives considered

Copyright 2010 by Cengage Learning Inc. All Rights ved Reser

Types of Learning

ExperientialExperiential

ConceptualConceptual

An experience changes behaviorAn experience changes behavior

Not learned through direct experience

Not learned through direct experience

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• Evoked Brands: Group Evoked Brands: Group of brands resulting from of brands resulting from an information searchan information search

• Most buyers evaluate Most buyers evaluate multiple attributes, multiple attributes, each of which is each of which is weighted differently.weighted differently.

• At the end of the At the end of the evaluation stage, evaluation stage, purchase intentions are purchase intentions are formed.formed.


Evaluation of Alternativesand Purchase

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Evoked SetEvoked Set

Purchase!Purchase!

Analyze product attributesAnalyze product attributes

Rank attributes byimportance

Rank attributes byimportance

Use cutoff criteriaUse cutoff criteria


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• Two factors Two factors intercede between intercede between purchase purchase intentions and the intentions and the actual decision:actual decision: Attitudes of othersAttitudes of others Unexpected Unexpected

situational factorssituational factors


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• Satisfaction is Satisfaction is important:important: Delighted consumers Delighted consumers

engage in positive word-engage in positive word-of-mouth.of-mouth.

Unhappy customers tell Unhappy customers tell on average 11 other on average 11 other people.people.

It costs more to attract a It costs more to attract a new customer than it new customer than it does to retain an existing does to retain an existing customer.customer.

• Cognitive dissonance is Cognitive dissonance is commoncommon


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Cognitive DissonanceCognitive Dissonance

Did I make a good decision?Did I make a good decision?

Did I buy the right product?Did I buy the right product?

Did I get a good value?Did I get a good value?

Consumer post purchase evaluation process

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LO3


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Buyer Decision Process for New

Products• New ProductsNew Products

Good, service or idea that is Good, service or idea that is perceived by customers as new.perceived by customers as new.

• Stages in the Adoption ProcessStages in the Adoption Process Marketers should help consumers Marketers should help consumers

move through these stages.move through these stages.

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Stages in the Adoption Stages in the Adoption ProcessProcess


Products

• AwarenessAwareness

• EvaluationEvaluation

• InterestInterest

• TrialTrial

• AdoptionAdoption

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Products• Individual Differences in InnovativenessIndividual Differences in Innovativeness

Consumers can be classified into five Consumers can be classified into five adopter categories, each of which behaves adopter categories, each of which behaves differently toward new products.differently toward new products.

• Product Characteristics and AdoptionProduct Characteristics and Adoption Five product characteristics influence the Five product characteristics influence the

adoption rate.adoption rate.

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Adopter CategoriesAdopter Categories


Products

• InnovatorsInnovators

• Early MajorityEarly Majority

• Early AdoptersEarly Adopters

• Late MajorityLate Majority

• LaggardsLaggards

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Innovators – venturesome, educated, creative, multiple information sources

Early adopters – social leaders, popular, educated; try out new ideas but in a careful way

Early majority –thoughtful people, careful but accepting change more quickly than the average

Late majority – skeptical, traditional, lower socio-economic status; accepts new products when the majority are using it

Laggards – traditional people, caring, but like “the old ways,” are critical of new ideas, neighbors and friends are main information sources, may also have a fear of debt.

Decision Making Process

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