MarketingMarketing ConceptsConcepts

Consumer Consumer Behavior Behavior

MKTG 3110-004Spring 2014

Mrs. Tamara L. Cohen

Classes #5-6

KEY TERMSKEY TERMS

• Cognitive dissonance

• Motivation • Personality• Traits• Self-concept

• Perception• Selective perception• Subliminal perception

• Attitudes• Beliefs• Values

• Lifestyle

• Opinion leaders• Word of mouth

• Subcultures

KEY CONCEPTSKEY CONCEPTS

Purchase decision process:1. Problem recognition

2. Information search

3. Alternative evaluation

4. Purchase decision

5. Post-purchase behavior

• Maslow’s Hierarchy of Needs

• Brand loyalty• Reference groups• Family life cycle• Social class

What is What is CONSUMER BEHAVIOR CONSUMER BEHAVIOR

??= the actions taken by an individual to purchase

& use products & services

Actions include mental & social processes that come before & after these actions.

Behavioral sciences help explain WHY & HOW choices are made.

Organizations use this knowledge to provide value to consumers, and to influence their choices.

It’s complicated …It’s complicated …

Consumers make many buying decisions every day.

What?

Where?

How?

How much?

When?

Why?

How do consumers respond to various marketing efforts?

Stimulus-Response Stimulus-Response Model Model

of Buyer Behaviorof Buyer Behavior

Marketing & other stimuli Buyer’s ‘black box’ Buyer responses

Product choicesBrand choicesDealer choicesPurchase timingPurchase amount

The purchase decision The purchase decision processprocess

• can be stimulated by marketing activity, or by simple observation

Internal search

- relevant information in memory

External search

- personal sources

- public sources

- marketer sources

Evaluative criteria• objective & subjective attributes

Consideration set• group of brands consumer finds

acceptable (i.e. short list)

1. Where to buy? (i.e. from whom)

2. When to buy?

• Experience versus Expectations

• Cognitive dissonance

• Customer satisfaction studies:

satisfied - tell 3 people dissatisfied - tell 9 people

= feeling of post-purchase psychological tension or anxiety

Consumers alleviate cognitive dissonance by seeking affirmation– ask friends to applaud choice– read ads of rejected brands to confirm why

they were not chosen– companies follow up with phone calls or ads to reinforce

or confirm buyer’s good decision, e.g. “Aren’t you really glad you bought a Buick?”

Cognitive DissonanceCognitive Dissonance

1. The purchase task – reason for decision

– personal use or gift, i.e. social visibility

2. Social surroundings – others present during purchase, e.g. consumers with children buy

40% more than consumers shopping alone

3. Physical surroundings – ambiance; crowds

4. Time – time of day, e.g. grocery shoppers before lunch time buy more than

when they are not hungry; time available

5. Pre-existing conditions – mood, e.g. “shopping therapy”; cash-on-hand, e.g. shoppers using

credit cards buy more than those using debit cards or cash

Impact of “The Situation”Impact of “The Situation”

1.1.Motivation & PersonalityMotivation & Personality

2.2.PerceptionPerception

3.3.LearningLearning

4.4.Values, Beliefs & AttitudesValues, Beliefs & Attitudes

5.5.LifestyleLifestyle

Psychological FactorsPsychological Factors

NEEDS - biological & psychological

MOTIVES

Freud - believed people are largely unconscious of real psychological forces shaping their behavior. Buying decisions are affected by subconscious motivation.

Maslow - wanted to explain why people are driven by particular needs at particular times. Human needs are arranged in a hierarchy, with most pressing at the bottom, and least pressing at the top.

Psychological FactorsPsychological Factors

1. Motivation 1. Motivation & & PersonalityPersonality

Maslow’s Hierarchy of Maslow’s Hierarchy of Needs Needs

Physical needs

Psychological needs

Key traits = the unique psychological characteristics that lead to relatively consistent and enduring responses to an environment

e.g. assertiveness, extroversion, compliance, dominance, aggression

Traits are formed at a young age, & usually remain fairly intact.

Self-concept - actual & ideal

Psychological FactorsPsychological Factors

1.1. Motivation & Motivation & PersonalityPersonality

= process by which people select , organize & interpret information, to form a meaningful picture of the world

Selective perception = selective attention + selective distortion + selective retention

Selective attention / exposure = tendency for people to screen out most information to which they are exposed

Selective distortion / comprehension = tendency to interpret information in ways that support what a person already believes

Selective retention = remember good features of preferred brands; forget good features about competing brands

Psychological FactorsPsychological Factors

2. Perception2. Perception

A stunning steel sculpture A stunning steel sculpture was created in honor of was created in honor of Nelson Mandela.Nelson Mandela.

Up close it looks like 50 rods Up close it looks like 50 rods of steel.of steel.

Step back and it looks much Step back and it looks much different.different.

Perception - it’s all a Perception - it’s all a matter of perspectivematter of perspective

= exposure to advertising messages without being aware of that exposure

Consumer concern that subliminal advertising will affect them without their knowing it.

Australia, Britain, Canada, California - banned subliminal advertising

Subliminal PerceptionSubliminal Perception

- changes in a person’s behavior resulting from experience + reasoning

- most human behavior is learned- marketers can build up demand for a product by

associating it with strong drives, using motivating cues, & providing positive reinforcement

- reduce perceived risk endorsement seals of approval free trial / sample Instructions warranty / guarantee

Psychological FactorsPsychological Factors

3. Learning3. Learning

brand loyaltybrand loyalty

??

These are all learned, beginning at a young age.

Values – can be personal or group

Beliefs – consumer’s subjective perception of product performance; beliefs affect buying behavior

Attitudes – consumer’s consistent or inconsistent feelings & tendencies toward a product; hard to change

Psychological FactorsPsychological Factors4. Values, Beliefs & 4. Values, Beliefs &

AttitudesAttitudes

= mode of living identified by how people spend their time & resources, what they consider important in their environment, what they think of themselves & the world around them

Psychographics = analysis of consumer lifestyles- combines psychology, lifestyle & demographics- useful for segmenting &

targeting markets

Psychological FactorsPsychological Factors

5. Lifestyles5. Lifestyles

1.1.Personal influencePersonal influence

2.2.Reference groupsReference groups

3.3.FamilyFamily

4.4.Social classSocial class

5.5.Culture & subcultureCulture & subculture

Sociocultural FactorsSociocultural Factors

Consumer purchases are often influenced by others.

Opinion leaders = people who exert direct or indirect social influence over others- considered knowledgeable about particular products,

services or brands- often sports figures or celebrities

Word-of-mouth= influence via communications

between target buyers and their circle of acquaintance (friends, family, neighbors, associates)

Sociocultural FactorsSociocultural Factors

1. Personal Influence1. Personal Influence

= people to whom an individual looks for self-appraisal or as a source of personal standards

- affect luxury product & brand choices, but not necessities

Membership group - membership by choice or by birth; e.g. social clubs, fraternities/sororities; family

Aspiration group - membership is desired in this group; e.g. professional society, professional sports team

Dissociative group - membership is avoided, due to differences in values or behaviors

Sociocultural FactorsSociocultural Factors

2. Reference groups2. Reference groups

Family is most important buying organization in society.

- buying roles change; consumer lifestyles evolve

- family life cycle - in US, wife traditionally made majority of purchase

decisions about food, household products, clothing; now men make 40% of food-shopping purchases

- in US, women make almost 85% of all purchases; $6 trillion a year

Sociocultural FactorsSociocultural Factors

3. Family3. Family

= relatively permanent, homogeneous divisions of society into which people sharing similar values, interests & behavior can be grouped

- determined by occupation, source (not size) of income, & education

- almost everywhere in the world

- media preferences differ: tabloids (lower & working); fashion, romance, celebrity (middle); literary, travel, news (upper)

Sociocultural FactorsSociocultural Factors

4. Social Class4. Social Class UPPER

MIDDLE

LOWER

LOWER MIDDLE UPPER

Upper Uppers (1%)Social elite; live on inherited wealth; give large sums to charity; own more than one home; children

go to finest schools

Lower Uppers (2%)Earned high income or wealth through exceptional ability; active in civic affairs; buy expensive

homes, education, cars

Upper Middles (12%)Professionals, independent businesspeople, corporate managers with neither family status nor

unusual wealth; believe in education, are joiners & highly civic-minded; want ‘better things in life’

Middle Class (32%)Average-pay white- & blue-collar workers; live on ‘the better side of town’; buy popular products to

keep up with trends; better living means owning a nice home in a nice neighborhood with good schools

Working Class (38%)‘Working-class lifestyle’, whatever their income, school background or occupation; depend heavily

on relatives for economic & emotional support, advice on purchases, assistance in times of trouble

Upper Lowers (9%)The working poor. Living standard is just above poverty; strive toward higher class; often lack

education; poorly paid for unskilled work

Lower Lowers (7%)Visibly poor; often poorly educated unskilled laborers; often out of work; some depend on public

assistance; tend to day-to-day existence

Important American subcultures:• Hispanic e.g. Cuban, Mexican, Puerto Rican, Latin American

– tend to buy more branded, higher-quality, not generics

– family shopping; brand loyal

• African American– growing affluence & sophistication; more price conscious; quality &

selection important; most fashion-conscious ethnic group; enjoy shopping

• Asian Americans e.g. Chinese Americans, Filipinos, Japanese Americans, Asian Indians, Korean Americans

– fastest-growing & most affluent segment; shop frequently; most brand conscious but least brand loyal; most tech savvy segment

• Mature consumers as the US population ages

– more time & money - leisure marketers; anti-aging products & services

Sociocultural FactorsSociocultural Factors

5. Culture & 5. Culture & SubcultureSubculture

Next class (class #7): Services

Preparation: Read Ch. 12 (pages below)

Homework: Super Bowl advertisement