1. Consumer Markets andConsumer Buyer BehaviorChapter 5

2. Definitions Consumer buyer behavior refersto the buying behavior of finalconsumers individuals andhouseholds who buy goods andservicesfor personalconsumption All of these final consumerscombine to make uptheconsumer market5-2 3. Model of Buyer Behavior:Stimulus Response ModelEnter ProduceHow they Affectsperceive buyerstimulibehavior Marketers must try to identify whats goingon in the buyers black box.5-3 4. Factors InfluencingConsumer Behavior5-4 5. Characteristics AffectingConsumer BehaviorCulture Set of values & perceptions thatformsa persons wants and Keybehavior Locating cultural shifts can beFactors profitableCulturalSubcultureSocial Groups with shared value systemsbased on common life experiencesPersonalSocial ClassPsychological Societyspermanent & ordereddivisions who share similar values,interests and behaviors Composed of income, education,occupation, wealth & others Upper, middle, working & lower55-class 6. Characteristics Affecting Consumer Behavior Groups Membership- Have direct influence to which a person belongsKeyReference-Servesas point comparison such as aspirational groupof Factors Opinion Leaders/Influentials- Person within a reference group exert influenceCultural on others. Deploy- Buzz marketingSocial FamilyPersonal Important buying organization with many influencersPsychologica Roles and Statusl Roles- activities expected to perform Status- general esteem given to a role by society 5-6 7. Characteristics Affecting Consumer Behavior Age and life cycle Occupation Economic situation Key Lifestyle A persons pattern of living expressedFactors as activities, interests and opinionsCultural Lifestyle segmentation Personality and self-conceptSocial Psychological characteristics that leadPersonalto consistent & lasting responses Brand personality- mix of human traitsPsychological attributed to a brand Five brand personality traits areSincerity, Excitement (MTV),Competence (CNN), Sophistication &Ruggedness (Levis) Self-concept reflects possessions thatreflect identities5-7 8. VALS Lifestyle Classifications Innovators(can exhibit all three High Resourcesprimary motivations in varying degrees) High InnovationPrimary MotivationIdeals (guided by Achievement Self-expressionknowledge & (guided by success) (desire activity, principles) variety & risk)Thinkers Achievers Experiencers Believers Strivers Makers Survivors(do not exhibit primary Low Resources motivations) Low Innovation5-8 9. Characteristics Affecting Consumer Behavior Motivation Needs turns into motives Motivation research designed toKey Factorsprobe motivationscustomers hidden Perception Process helps to select, organize,Cultural & interpret information to form aSocial meaning Selectiveattention, selectivePersonal distortion, selective retention Learning Changes in an individuals behavior Psychologic from experience Occurs through drives, stimuli, alcues, responses and reinforcement5-9 Beliefs and attitudes 10. Perception & Learning Selective attention Tendency to screen out most of the information to which customers are exposedKey FactorsSelective distortion Tendency to interpret information in a way which supports theirSelective attentionbelieveSelective distortion Selective retentionSelective retention Tendency to remember good pointsDrives of a brand customers favor &Cues forget about the good points of competing brandsResponses Drives- internal stimulus calls for actionReinforcementCues- determine when, where & how person responds Reinforcement-goodexperience 5will - 10 reinforce to buy more & in variety 11. Types of Buying BehaviorLow InvolvementHigh Involvement Significant Complex buying Variety-seeking differencesbehavior (PCs & buying behavior between brands cars)(cookies) Dissonance- Few differencesHabitual buying reducing buying between brands behavior (salt)behavior (carpet) Consumers are highly involved when the product is expensive, risky,purchased infrequently & highly self-expressive. After-sale service and communication is vital to reduce dissonance. Most low-cost & frequently purchased products show habit thanloyalty. Brand familiarity & brand conviction works better. Lots of switching for variety. Leaders go for shelf-space & challengersoffer low price, samples & coupons etc.5 - 11 12. The Buyer Decision Process5 - 12 13. The Buyer Decision ProcessProcess Stages Needs can be triggered by:Need recognition Internal stimuliInformation search Normal needsEvaluation of alternatives(hunger, thirst)Purchase decision become strongPostpurchase behavior enough to drivebehavior External stimuli Advertisements Friends of friends5 - 13 14. The Buyer Decision ProcessProcess Stages Consumersexhibit heightened attention or actively search forNeed recognitionInformation search information.Evaluation of alternatives Sources of information:Purchase decision Personal (friends &Postpurchase behaviorfamily) Commercial (ads) Public (mass media) Experiential (examining or using the product)5 - 14 15. The Buyer Decision ProcessProcess Stages Evaluation procedure depends on the consumer and the buying situation.Need recognitionInformation searchEvaluation of alternatives Mostbuyers evaluatePurchase decisionmultiple attributes, each ofPostpurchase behaviorwhich is weighted differently. At the end of the evaluation stage, purchase intentions are formed. 5 - 15 16. The Buyer Decision ProcessProcess Stages Two factorsintercede between purchase intentions and the actualNeed recognitionInformation search decision:Evaluation of alternatives Attitudes of othersPurchase decision UnexpectedPostpurchase behavior situational factors 5 - 16 17. The Buyer Decision Process Satisfaction is important:Process Stages Delightedengageinconsumers positiveword-of-mouth.Need recognition Unhappy customers tellInformation searchon average 11 otherEvaluation of alternativespeople.Purchase decision It costs more to attractPostpurchase behavior a new customer than itdoesto retainanexisting customer. Cognitive dissonance is common as there is post- purchase conflict 5 - 17 18. Buyer Decision Process for New ProductsNew Products Good, service or idea that isperceived by customers as new.Stages in the Adoption Process Mental process which an individualpasses from hearing about aproduct to final adoption. Marketers should help consumersmove through these stages.5 - 18 19. Buyer Decision Process for New ProductsStages in the Adoption ProcessAwareness: Consumers become aware but lacksinformationInterest: Consumers seeks informationEvaluation: Consumers consider whether trying newproduct makes senseTrial: Tries new product on a small scale to improveevaluation of valueAdoption: Decides full & regular use 5 - 19 20. Buyer Decision Processfor New ProductsIndividual Differences in Innovativeness Consumers can be classified into five adoptercategories, each of which behaves differentlytoward new products. Innovators - venturesome, try new ideas at some risk Early adopters- guided by respect & act as opinionleaders Early majority- deliberate & try before averageperson Late majority- skeptical & try only after majorityhave tried Laggards - tradition bound & suspicious of change 5 - 20 21. Adopter Categories Basedon Relative Time of Adoption5 - 21 22. Product Characteristics and Adoption Rate Five product characteristics influence the adoption rate. Relative advantage: Degree to which innovation is superior to existing products Compatibility: Degree to which innovation fits customers expectations Complexity: Degree to which innovation is difficult to understand or use Divisibility: Degree to which innovation may be tried on limited basis Communicability: Degree to which innovation can be described or communicated Others such as initial & ongoing cost, risk & social approval also affect adoption rate. 5 - 22