Arab World Edition Kotler, Keller, Hassan, Baalbaki, and Shamma Marketing Management Arab World Edition Kotler, Keller, Hassan, Baalbaki, and Shamma Chapter 6 Analyzing Consumer Markets

Chapter Questions How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? Copyright © 2012 Pearson Education 6-2

Chapter Questions Consumer behavior The study of how individuals, groups and organization select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Copyright © 2012 Pearson Education 6-3

What Influences Consumer Behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? What Influences Consumer Behavior? Cultural factors Social factors Personal factors Copyright © 2012 Pearson Education 6-4

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? 1- Cultural Factors What is culture? Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions. Copyright © 2012 Pearson Education 6-5

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? Cultural Factors Subcultures Nationalities Religions Racial groups Geographic regions Copyright © 2012 Pearson Education 6-6

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? 2- Social Factors social classes: Within a class, people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Individuals can move up or down the social-class ladder over time Copyright © 2012 Pearson Education 6-7

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? Social Factors Social factors affect our buying behavior, including: Reference groups Family Social role and Status Role ; the activities someone excepted to perform Status ; one’s position within his own culture Copyright © 2012 Pearson Education 6-8

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? Social Factors Reference groups are all the groups that have a direct (face-to-face) or indirect influence on an individual’s attitudes or behavior. These include: Membership groups : direct influence Primary groups : interact continuously & informally (family) Secondary groups : vs professional Aspirational groups : hope to join Disassociative groups : VS Copyright © 2012 Pearson Education 6-9

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? Social Factors Family distinctions affecting buying decisions: Family of Orientation Family of Procreation Copyright © 2012 Pearson Education 6-10

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? 3- Personal Factors A buyer’s decisions are influenced by personal characteristics: Personality : set of distinguishing psychological traits Values : The belief systems underline consumer attitudes and behavior Lifestyle A person’s pattern of living in the world as expressed in activities, interests, and opinions Age Life cycle stage Occupation Wealth Copyright © 2012 Pearson Education 6-11

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? Personal Factors A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions. Marketers search for relationships between their products and life style groups. The “convenience involvement segment” of the food market is receptive to time-saver products such as Indomie noodles, which allow them to easily and quickly prepare a hot meal. Copyright © 2012 Pearson Education 6-12

How do consumer characteristics influence buying behavior? Chapter Question 1: How do consumer characteristics influence buying behavior? Personal Factors Brand personality is the specific mix of human traits that we can attribute to a particular brand. The following traits have been identified : Sincerity (down-to-earth, honest, wholesome, and cheerful). Quaker Excitement (daring, spirited, imaginative, and up-to-date). MTV Competence (reliable, intelligent, and successful). CNN Sophistication (upper-class and charming) Ruggedness (outdoorsy and tough). Levi’s Copyright © 2012 Pearson Education 6-13

Key Psychological Processes Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Key Psychological Processes Fig. 6.1: Model of Consumer Behavior Copyright © 2012 Pearson Education 6-14

Key Psychological Processes Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Key Psychological Processes Motivation Perception Learning Memory Copyright © 2012 Pearson Education 6-15

Motivation: Freud, Maslow, Herzberg Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Motivation: Freud, Maslow, Herzberg Freud’s Theory Behavior is guided by subconscious motivations Maslow’s Hierarchy of Needs Behavior is driven by lowest, unmet need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene factors Copyright © 2012 Pearson Education 6-16

Key Psychological Processes Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Key Psychological Processes Copyright © 2012 Pearson Education 6-17

Motivation: Maslow’s Hierarchy of Needs Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Motivation: Maslow’s Hierarchy of Needs Physiological needs Safety needs Social needs Esteem needs Self-actualization needs Fig. 6.2: Maslow’s Hierarchy of Needs Copyright © 2012 Pearson Education 6-18

Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Perception Perception : the process by which an individual selects, organizes, interprets information to create a meaningful picture of the world. People can emerge with different perceptions of the same object because of three perceptual processes: Selective attention: screening out with noticing others Selective retention: recall good points for product you like VS Selective distortion : fits consumer perception Copyright © 2012 Pearson Education 6-19

Perception https://www.youtube.com/watch?v=H4oZlwvvcMM Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Perception https://www.youtube.com/watch?v=H4oZlwvvcMM Copyright © 2012 Pearson Education 6-20

Learning When we act, we learn Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Learning When we act, we learn Learning causes changes in behavior, arising from experience Learning theory can be used by marketers to understand consumer behavior Copyright © 2012 Pearson Education 6-21

Fig. 6.3: Hypothetical Mental Map for Chipsy Chapter Question 2: What major psychological processes influence consumer responses to the marketing program? Memory Short-term memory (STM)—a temporary and limited repository of information Long-term memory (LTM)—a more permanent, essentially unlimited repository Memory encoding—how and where information gets into memory Memory retrieval—how and from where information gets out of memory Example of Chipsy: Fig. 6.3: Hypothetical Mental Map for Chipsy Copyright © 2012 Pearson Education 6-22

The Buying-Decision Process: The Five-Stage Model Chapter Question 3: How do consumers make purchasing decisions? The Buying-Decision Process: The Five-Stage Model Fig. 6.4: Five-Stage Model of the Consumer Buying Process Copyright © 2012 Pearson Education 6-23

How do consumers make purchasing decisions? Chapter Question 3: How do consumers make purchasing decisions? Problem Recognition The buying process starts when the buyer recognizes a problem or need Copyright © 2012 Pearson Education 6-24

Fig. 6.5: Successive Sets Involved in Consumer Decision Making Chapter Question 3: How do consumers make purchasing decisions? Information Search Information sources: Personal: Family Commercial : Ad Public : Mass M Experiential Use Search dynamics: Fig. 6.5: Successive Sets Involved in Consumer Decision Making Copyright © 2012 Pearson Education 6-25

Evaluation of Alternatives Chapter Question 3: How do consumers make purchasing decisions? Evaluation of Alternatives We can often segment the market for a product according to attributes important to different consumer groups. Tetra Pak changed consumers’ attitudes towards dairy products with it’s Tasbeera snacks. Copyright © 2012 Pearson Education 6-26

Expectancy-Value Model Chapter Question 3: How do consumers make purchasing decisions? Expectancy-Value Model Consumers evaluate products and services by combining their brand beliefs, positive and negative, according to their weighted importance. Table 6.2: A Consumer’s Brand Beliefs about Laptop Computers Copyright © 2012 Pearson Education 6-27

How do consumers make purchasing decisions? Chapter Question 3: How do consumers make purchasing decisions? Purchase Decision Non-compensatory models of choice: Conjunctive set of minimum B Lexicographic most important attribute C Elimination-by-aspects Intervening factors Two general factors can intervene between the purchase intention and the purchase decision: Attitudes of others Unanticipated situational factors Fig. 6.6: Steps Between Evaluation of Alternatives and a Purchase Decision Copyright © 2012 Pearson Education 6-28

How do consumers make purchasing decisions? Chapter Question 3: How do consumers make purchasing decisions? Purchase Decision Perceived risk: Functional performance Physical threat Financial price Social embarrassment Psychological mental Time opportunity cost Copyright © 2012 Pearson Education 6-29

Other Theories of Consumer Decision Making Chapter Question 3: How do consumers make purchasing decisions? Other Theories of Consumer Decision Making Level of Consumer Involvement Elaboration Likelihood Model Low-involvement marketing strategies Variety-seeking buying behavior Decision Heuristics and Biases Availability Representativeness Anchoring and adjustment Copyright © 2012 Pearson Education 6-30

How do consumers make purchasing decisions? Chapter Question 3: How do consumers make purchasing decisions? Mental Accounting Consumers tend to… Segregate gains Integrate losses Integrate smaller losses with larger gains Segregate small gains from large losses Copyright © 2012 Pearson Education 6-31

Profiling the Customer Buying-Decision Process Chapter Question 4: How do marketers analyze consumer decision making? Profiling the Customer Buying-Decision Process How can marketers learn about the stages in the buying process for their product? Introspective method – how would they act themselves? Retrospective method – ask buyers to recall the events leading to their purchase Prospective method – ask consumers who plan to buy a product about the steps in their buying process Prescriptive method – the ideal way to buy Trying to understand the customer’s behavior in connection with a product has been called mapping the customer’s consumption system. Copyright © 2012 Pearson Education 6-32

Credits Slide 1 Christian Short Photography, photographersdirect.com Slide 13 Art Directors and TRIP Photo Library: Helene Rogers Slide 14 LOHAS Market Segments, www.lohas.com. Reproduced with permission Slide 18 Motivation and Personality, 3rd edition, Prentice Hall (Maslow, A.H., and Frager, R.D., Fadiman, J. (eds), 1987) Slide 26 Logo courtesy TetraPak. Reproduced with permission