Module Final Review II

Learning Outcomes Identifying the Customer Investigating the Customer Understanding Customer Behaviour Predicting and Influencing Customer Behaviour

Basic Framework Motivation Perception Search Evaluation Choice Learning

Motivation: Consumer Behaviour: “… the inner drive that reflects goal -directed behaviour” Consumer Behaviour: The drive to satisfy needs and wants through the purchase and use of products and services

Bases of Motivation Physiological + Psychological needs and wants

e.g. Maslow’s Hierarchy of needs

Functional Symbolic + Experience

Functional Buying things for what they do Physiological

Functional Buying things for what they do Physiological

Symbolic Buying things for what they mean Psychological

Experiential The value from the experience Physiological + Psychological

Perception “How we see the world around us”

Elements of Perception Sensation Absolute threshold Differential threshold Subliminal perception

Sensation Direct response of sensory organs to stimuli Absolute threshold is the lowest level at which an individual can experience a sensation

Weber’s Law The stronger the initial stimulus, the greater the intensity for the second stimulus to be perceived as different Basis for “habituation”

Perceptual Selection Consumers selective in what they perceive Selection depends on - nature of stimulus - expectations - motives

Aspects of Selection Selection Organisation Interpretation

Perceptions and Marketing Basis for marketing decisions – strategy and operational e.g. product positioning communications media and message

Search

Stages of Search and Choice Information Search – seeking values Evaluation of Alternatives – assessing value Purchase decision – buying value Post Purchase – value in use

Stages of Search and Choice Information Search – seeking values Evaluation of Alternatives – assessing value Purchase decision – buying value Post Purchase – value in use

Routine Problem Solving Almost a Habit Little effort in buying process Low priced, frequently used products

Limited Problem Solving Moderate effort Buyer has little time or effort to spend

Extended Problem Solving All stages of decision making process used Time and effort spent on search and evaluation High involvement purchases

Information Search Internal - memory of previous External experiences External - personal sources - public sources - marketing sources

Alternative Evaluation – Assessing Value Consumers evaluation criteria represent Objective / functional attributes of product Symbolic/subjective factors

Five Situational Influences Purchase Task Social surroundings Physical surroundings Temporal effects States (Mood)

Purchase and Post-Purchase

Post – Purchase Evaluation learned outcome from use/consumption “cognitive dissonance” Satisfaction / dissatisfaction

Cognitive Dissonance Inner tension that consumer experiences after recognisng an inconsistency between expectation and experience

Dissonance and Post-Purchase Did I make a good decision? Did I buy the right product? Did I get good value?

Satisfaction Consumer discovers after purchase that the product: Unexpected features / benefits Performs at a higher level than expected

Dissatisfaction Consumer discovers after purchase that product: Does not have all expected features Fails to perform as expected Is defective or flawed

Learning A process that creates changes in behaviour, immediate or expected, through experience and practice

Impact of Learning Brand Loyalty Lifetime Customer Value (LCV)

Brand Loyalty No Preference Brand Switcher Brand Loyal Brand Champion

Lifetime Customer Value The total value of spending by a customer – and the impact of customer recommendation on revenue – over the period customer is in a market

External Influences on Consumer Behaviour

External Influences: Culture Subculture Demographics Social Status Reference groups Family Marketing activities

Culture and Subculture … the way we do things around here”

Culture: Set of Values, ideas and attitudes that are accepted by a group of people and are passed on to the next generation

Culture and Consumers Influences values, perceptions, decisions Is Learned Provides “boundaries” for thought and action Mostly unaware of culture

Sub Cultures Groups within the larger/ national culture with unique values, ideas and attitudes Each group displays specific social and cultural behaviour affecting buyer behaviour

The subculture may be distinctive because of: age of its members, their race, ethnicity, class gender

Culture and Subcultures A major influence on Marketing activity through the determination of Consumer Values, Perceptions and Behaviour in exchange

Group Influences on Consumers (Ref. Chapter 6 and 7)

Group Influences include: Primary Groups – family, friends Secondary Groups – work groups, neighbours

Family The Household is the basic consumption unit for most consumer purchases More than one consumer involved in decision - making

The Family Life Cycle Households go through distinct stages – based on composition of members of household Consumption patterns change at different stages

Family Purchases Family members can play different roles in decisions: Initiator Information gatherer Influencer Decision – maker Purchaser

Reference Groups A group whose perspectives or values are being used by an individual as the basis for their current behaviour

e.g. Types of groups Consumption subculture- activity groups Brand Communities – Apple users Virtual Communities – Internet groups

Reference Groups influence: Information Expectations Identification