Chapter 3 Consumer Behavior

Key Terms Culture, Subcultures, Social Class, Reference Groups, Product, Price, Promotion, and Place Influences, Family Life Cycle, Situational Influences, Product Knowledge, Product Involvement, Extensive, Limited, and Routine Decision Making, Need Recognition, Perceived Risk, Cognitive Dissonance

Understanding Consumer Behavior An understanding of consumers, their needs and purchasing behaviors shapes successful marketing No single theory of consumer behavior can totally explain why consumers’ behave the way they do

An Overview of the Buying Process (Figure 3.1)

Social Influences on Consumer Decision Making Culture, social class, and reference groups can have both direct and indirect effects on the buying process Direct effect - Direct communication between the individual and other members of society Indirect effect - Influence of society on an individual’s basic values and attitudes

A Summary of American Cultural Values (Marketing Insight 3-1)

Culture and Subculture Cultural values are transmitted through three basic organizations Family Religious organizations Educational institutions Marketing managers should: Adapt the marketing mix to cultural values Constantly monitor value changes and differences in both domestic and global markets

Culture and Subculture Subcultures - Exist when people have more frequent interactions than with the population at large and thus tend to think and act alike in some respects Age groups are increasingly becoming important Teen market Baby boomers Mature market

Social Class Upper Americans - 14 percent of the population Middle class - 34 percent of the population Working class - 38 percent of the population Lower Americans - 16 percent of the population

Reference Groups and Families Primary reference groups - Include family and close friends Secondary reference groups - Include fraternal and professional organizations

Reference Groups and Families Family constitutes an important reference group - The household rather than individual is the relevant unit Family life cycle - Useful way of classifying and segmenting individuals and families Combines trends in earning power with demands placed on income

Marketing Influences Product influences - Marketers differentiate their products from their competitors and create perception of a worthwhile product purchase Price influences - Value-conscious consumers may buy products more on the basis of price than other attributes

Marketing Influences Promotion influences - Marketing communications plays a critical role in informing consumers about products and services Place influences: Convenience increases probability of products sold in exclusive outlets and increase brand equity Nonstore methods create perceptions of innovativeness & exclusiveness

Situational Influences Physical features - Most readily apparent features of a situation Social features - Provides additional depth to a description of a situation Time - A dimension of situations that may be specified in units

Situational Influences Task features - Includes intent or requirement to select, shop for, or obtain information about a purchase Current conditions - Are momentary moods or conditions rather than chronic individual traits

Psychological Influences Product knowledge - Amount of information a consumer has stored in his or her memory about a product Group, marketing, and situational influences determine level of product knowledge Product involvement - A consumer’s perception of the importance or personal relevance of an item

The Consumer Decision-Making Process (Figure 3.2)

Consumer Decision Making Extensive decision making - Requires high degrees of time and effort as the purchase is complex, expensive, or has high importance to the consumer Limited decision making – Requires moderate time and effort, but may involve some time and effort to search for and compare alternatives

Consumer Decision Making Routine decision making - The way people purchase most packaged goods Products are simple, inexpensive and familiar Consumers may develop favorite brands

Need Recognition Activation and recognition of needs and wants can be through internal or external stimuli Maslow’s Hierarchy of needs Physiological needs - Primary needs of the human body Safety needs - Protection from physical harm, ill health, economic disaster and avoidance of the unexpected

Need Recognition Belongingness and love needs - Related to social and gregarious nature of humans and need for companionship Esteem needs - Consists of need for both self-esteem and actual esteem from others Self-actualization needs - Desire to become everything one is capable of becoming

Alternative Search Internal sources Group sources Marketing sources Public sources Experiential sources

Alternative Search Exact nature of individuals processing information is not fully understood In general, it is viewed as a four-step process Exposed to information Becomes attentive to the information Understands the information Retains the information

Ethical Conduct toward Customers (Marketing Insight 3-3)

Alternative Evaluation Consumer has information about a number of brands in a product class Some brands are perceived as viable alternatives for satisfying a recognized need Each of these brands has a set of attributes (quality, color, size)

Alternative Evaluation A set of these attributes is relevant to the consumer The brand that is perceived as offering the greatest number of desired attributes in the desired amounts and desired order will be the brand the consumer will like best The best-liked brand is the one the consumer will intend to buy

Purchase Decision Traditional risk theorists believe that consumers tend to make risk-minimizing decisions based on their perception of risk associated with a particular purchase Consumers generally try to reduce their risk by: Reducing negative consequences Reducing perceived uncertainty

Postpurchase Evaluation Cognitive dissonance - Inconsistency or disharmony with cognitions, or attitudes and beliefs after decision Anxiety will be greater when: Decision is important psychologically, financially, or both Number of foregone alternatives appear plentiful Forgone alternatives have many favorable features

Postpurchase Evaluation Disconfirmation paradigm - Satisfaction with products and brands as a result of: Prepurchase product expectations Difference between these expectations and postpurchase perception of product performance

Factors Affecting Information Search by Customers (Marketing Insight 3-4)