Consumer markets and consumer buyer behavior Chapter 5 Consumer markets and consumer buyer behavior

Consumer buyer behavior Consumer buyer behavior: the buying behavior of final consumers- individuals and households that buy goods and services for personal consumption Consumer market: all the individuals and households who buy or acquire goods and services for personal consumption

The model of consumer behavior

Characteristics affecting consumer behavior

Cultural factors Culture: the set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important institutions Subculture: smaller groups of people within each culture with shared value systems based on common life experiences and situations Social class: society's relatively permanent and ordered divisions whose members share similar values, interests and behaviors

Social factors Reference Group Opinion leader: buzz marketing- word of mouth influence Online social networks Family Roles and status

Personal factors Age and lifecycle stage Occupation Economic situation Lifestyle Personality: brand personality

Psychological factors Motive: a need that is sufficiently pressing to direct the person to seek satisfaction of the need. Perception: the process by which people select, organize, and interpret to form a meaningful picture of the world (types of perception) Learning: changes in an individual’s behavior arising from experience. Belief: a descriptive thought that a person holds about something. Attitude: a person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

Psychological factors Maslow’s hierarchy of needs

Types of buying decision behavior High involvement Low involvement Complex buying behavior Variety seeking buying behavior Dissonance reducing buying behavior Habitual buying behavior Significant differences between brands Few differences between brands

Types of buying decision behavior Complex buying behavior: consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands. Typically consumers have much to learn about the product category before purchase decision. This buyer will pass through a learning process, first developing beliefs about the product, then attitudes and then making a thoughtful purchase choice. For example: a PC buyer will need to study the attributes such as, brand, price, software, style, memory storage, service contract etc. Variety seeking buying behavior: consumer buying behavior in situations characterized by low consumer involvement in a purchase but significant perceived differences among brands. In such cases, consumers often do a lot of brand switching. For instance, when buying biscuits, a consumer may hold some beliefs, choose a biscuit brand without much evaluating and then evaluate that brand during consumption. But the next time, the consumer may pick another brand out of boredom or simply to try a different brand. Brand switching occurs for the sake of variety rather than because of dissatisfaction.

Types of buying decision behavior Habitual buying behavior: consumer buying behavior in situations characterized by low consumer involvement in a purchase and few significantly perceived differences among brands. For example, when buying salt, a consumer will have low involvement in the product category, will simply go to the store and reach for a brand. If they keep reaching for the same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have low involvement with most low cost, frequently purchased products. Dissonance reducing buying behavior: consumer buying behavior in situations characterized by high consumer involvement in a purchase but few perceived differences among brands. For instance, consumers buying furniture or curtain material may face a high involvement decision because they are expensive and self expressive. Yet buyers may consider most brands selling furniture or curtain material in a given price range to be the same. Since perceived brand differences are not large, buyers may shop around to learn what is available but buy relatively quickly. After the purchase consumers may experience post-purchase dissonance.

The buyer decision process

Buyer decision process for new products Adoption process Adoption process: 5 stages: Awareness Interest Evaluation Trial Adoption

Factors that influence the rate of adoption Relative advantage: the more the relative advantages of a product is, the faster will be the adoption rate Compatibility: the more compatible the product is with lifestyle, personality etc, the faster would be the rate of adoption Complexity: the more complex the product is, the more time it will take for consumers to adopt it Divisibility: the more divisible the product is, the faster would be the adoption rate Communicability: if consumers can easily communicate about the product, the adoption rate will be faster

Adopter Categorization