CONSUMER BUYING BEHAVIORPRINCIPLES OF MARKETING WEEK 06/07

LEARNING OBJECTIVES

• Consumer Buying Behavior• Decision Making Process• Consumer Buying Process• Other Influences

CONSUMER BUYING BEHAVIOR

What is Consumer Buying Behavior?

• Buying behavior is the decision processes and acts of people involved in buying and using products.

• Important to understand:• Why consumers make the purchases that they make?• What factors influence consumer purchases?• The changing factors in our society

CONSUMER BUYING BEHAVIOR

Why Analyze Buying Behavior?

• Firms need to analyze buying behavior because of the following:

• Buyers reactions to marketing strategy has a huge impact on a company’s success

• The company must provide a satisfactory marketing mix and they must understand how, where, what, when and why consumers buy.

• Can predict how consumers will respond to marketing strategies.

CONSUMER BUYING BEHAVIOR

What affects buying behavior?

• Affect• Mood or emotion

• Effects on memory (sunny vs. cloudy day)• Effects on judgment• Effects on behavior

• Example?

• Motivation• What motivates consumers to act?• How strongly motivated are consumers to act?

• Intensity of motivation is guided by the consumers perception of the degree of personal relevance of an object or event

• Example?

CONSUMER BUYING BEHAVIOR

Types of Consumer Buying Behavior

• Four types:• Routine Response/Programmed Behavior

• Frequently purchased low cost items• Little search necessary, purchased almost

automatically• Examples include snack foods, milk, etc.

• Limited Decision Making • Buying product occasionally• Requires a moderate level of involvement and

information gathering• Examples include clothes

• Extensive Decision Making

DECISION MAKING PROCESS

Types of Purchases

• Deliberate Purchases• Can involve repetitive, hedonistic, and symbolic

purchase

• Spontaneous Purchases• Usually a result of promotional interference, casual

purchase behavior, impulse purchases, and exploratory purchases.

DECISION MAKING PROCESSTypes of Purchase Motives

• Functional• Problem solving• Quality and Performance• Price and Value• Familiarity• Convenience • Normal Depletion

• Psycho Social• Social approval• Self Expression• Variety and change• Emotional stimulation• Intellectual stimulation• Sensory gratification

DECISION MAKING PROCESS

Grid for Common Product Purchases

HIGH INVOLVEMENT

LOW INVOLVEMENT

THINK FEEL

Life Insurance

Digital Camera

Washer/Dryer

Television

Suntan Lotion

Bleach Salad Dressing

Disposable Razor

Paper Towels

Sports Car

Stereo Component

Expensive Watch

Wine

Jeans

Toothpaste Greeting Card

Beer

Salty Snacks

DECISION MAKING PROCESS

Need Arousal

• Affect

DECISION MAKING PROCESS

Information Acquisition

• On Going Search• Motivated by intrinsic enjoyment of the search process and

the desire to build an information bank • Example?

• Pre-purchase Search• Motivated by the desire to make better purchase decisions

• Internal (experiences & attribute information) • External

DECISION MAKING PROCESS

Information Acquisition

• External• Environmental and Situational Variable

• Number of Alternatives• Product Differences• Store Distance• Time Pressure

• Product Characteristics• Price• Social Visibility (style and appearance)• Perceived Risk• Number of Crucial Attributes

• Consumer Characteristics• Prior knowledge and Experience• Involvement• Positive Attitude toward search• Education• Income• Age

DECISION MAKING PROCESS

Alternative Evaluation

• In order for a product or store to be chosen, it has to be in the consumer’s consideration set

• Example• Name the coffee/tea/drink that you bought this morning

• List all the brands in that category that you were aware of prior to making the purchase (awareness set)

• Which brands did you consider buying? (consideration set)

• Which brands were you indifferent to? (inert set)• Which brands did you know you didn’t want (inept set)

• Think about the influences on those choices

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Six stages of the process—usually for complex decisions only. Not all decisions include all 6 stages.

1. Problem Recognition2. Information Search3. Evaluation of Alternatives4. Purchase Decision5. Purchase6. Post Purchase Evaluation

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Problem Recognition• Awareness of need• Determining the difference between the desired state and

actual condition.• Hunger = Food• Can be stimulated through product information

• Ie: commercial for a pair of shoes stimulates recognition that you need a new pair of shoes

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Information Search• Internal search, memory• External search if you need more information. Friends and

relatives (word of mouth). Comparison shopping, public sources

• A successful information search leaves a buyer with possible alternatives: the evoked set.• Example = Subway

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Evaluation of Alternatives• Establish criteria for evaluation (features the buyer wants

or does not want)• Rank/weight alternatives

• Example• Marketers attempt to influence by “framing” alternatives

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Purchase Decision• Choose buying alternative• Includes product, package, store, method of purchase, etc.

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Purchase• May differ from decision, time lapse between 4 & 5 product

availability

• Post Purchase Evaluation• Outcome = Satisfaction or Dissatisfaction• Cognitive Dissonance means have you made the right

decision• This can be reduced by warranties, after sales

communication etc.

CONSUMER BUYING PROCESS

Stages of the Consumer Buying Process

• Regret and Disappointment• Regret

• Consumers are displeased with purchase because their selection turned out to be inferior—usually associated with self blame

• Disappointment/Dissatisfaction• Consumers are displeased with a purchase because

their pre-purchase expectations were not met, usually associated with other blame.

• Results?

CONSUMER BUYING PROCESS

Types of Consumer Buying Behavior

• Types are determined by • Level of involvement in purchase decision• Importance and intensity of interest in a product or

particular situation• Buyers involvement determines why they are motivated to

seek information about certain products and ignore others.

OTHER INFLUENCES

Environment

• Physical Environment• Collection of non-human elements that comprise the field in

which consumer behavior occurs

• Social Environment• Human activities and interactions

• Culture• Subculture• Social Class• Reference Groups• Family

OTHER INFLUENCES

Subculture

• A segment of society that differs in significant ways from the parent culture as a whole

• Ethnic Groups• Geographic Areas• Age Groups• Religious Affiliations• Socio-economic groups

OTHER INFLUENCES

Social Class

• A hierarchy of social status in a society leading to interactions of people as equals, superiors, and inferiors

• Influenced most by:• Educational credentials• Occupation Prestige level• Income• Area of Residence

OTHER INFLUENCES

Reference Group

• A group of people that serves as a standard of reference in guiding an individual’s thoughts, feelings, and actions

Families

• Families vs. Households• Family is defined as two or more persons residing together

who are related by blood, adoption, or marriage• Household is one or more persons sharing the same

housing unit.• Consumer behavior varies over the family life cycle

• Age, marital status, number of children and their ages

OTHER INFLUENCESThe Family Life Cycleyoung single 8.2 %

young married without children 2.9 %

other young• married with children 17.1 %• divorced with kids 1.9 %• divorced with no kids 0.1 %

middle-aged (35-65)• married with children 33.0 %• married with no dependent children 5.5 %• married with no children 4.7 %• divorced with no kids 0.3 %• divorced with kids 1.9 %

older (65+)• married, spouse present 5.2 %• unmarried, no spouse present 2.0 %

all others 17.2 %

HOMEWORKIn this week’s homework you will be expected to complete the following:

Industry Analysis

A description that includes, but is not limited to a definition of the industry, industry life cycle (growth or decline), industry history (how old), historical financial performance, industry trends (cyclical or seasonal, increased competition etc), influential factors (does economy, government, competition affect industry), primary competitors, etc.

HOMEWORKIn this week’s homework you will be expected to complete the following:

Executive Summary

A description or overview of the marketing plan. The executive summary briefly addresses each topic in

the plan and gives a concise explanation of the marketing plan. It may also be used to provide information to people outside the organization, especially those who might be considering investing in the company.

FINAL PROJECT SPECSThe final project is the culminating academic endeavor of the class’s research over the quarter.

It will provide you with the opportunity to explore a problem or issue of particular personal or professional interest and to address it in a thorough focused study and applied research.

This project should demonstrate your ability to synthesize and apply the knowledge and skills acquired through the class, and it should not only exemplify your ability to think critically, but should utilize the variety of research methods introduced to come to a cohesive and logical conclusion.

FINAL PROJECT SPECS» Sections

Executive Summary

Industry Analysis

Marketing Research

SWOTT Analysis

Hypothesis/Problem Statement/Purpose

Research Objectives

Limitations

Methodology

Sample Questionnaire

Data Analysis

Conclusions