Analyzing Consumer Markets Marketing Management, 13 th ed 6

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-2 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? How do marketers analyze consumer decision making?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-3 Figure 6.1 Model of Consumer Behavior

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-4 What Influences Consumer Behavior? Cultural factors Social factors Personal factors

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-5 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 © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-6 Subcultures Nationalities Religions Racial groups Geographic regions

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-7 Fast Facts About American Culture The average American: chews 300 sticks of gum a year goes to the movies 9 times a year takes 4 trips per year attends a sporting event 7 times each year

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-8 Social Classes Upper uppers Lower uppers Upper middles Middle Working Upper lowers Lower lowers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-9 Characteristics of 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) Class designation is mobile over time

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-10 Social Factors Reference groups: Family Social roles Statuses

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-11 Reference Groups Membership groups: 1. Primary groups: Family 2. Secondary groups: Friends Aspirational groups: those hope to join Disassociative groups: those whose value reject

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-12 Family Distinctions Affecting Buying Decisions Family of Orientation: Parents which we acquire s the orientation towards religion, politics, economic and ambition Family of Procreation; Husband,wife and children, the Purchasing role of husband and wife

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-13 Personal Factors Age Life cycle stage Occupation Wealth Personality Values Lifestyle Self-concept

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-14 Brand Personality; Human traits that we can attribute to particular brand Sincerity: honest,cheerful Excitement; imaginative Competence; reliable Sophistication; upper class and charming Ruggedness; outdoorsy, Levi’s Actual self-conception; how we view our self Ideal self-conception; how we would like to view our self Other self-conception; how we think other see us.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-15 Key Psychological Processes Motivation: is the driving force within individuals that impels them to action. Perception: The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world Learning: The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior Memory : (LTM& STM)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-16 Motivation Freud’s Theory Behavior is guided by unconscious & subconscious motivations Maslow’s Hierarchy of Needs Behavior is driven by lowest, unmet need Most important need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene Factors; Extrinsic: Salary Intrinsic; Growing

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-17 Maslow’s Hierarchy of Needs

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-18 Perception Selective attention: Heightened awareness when stimuli meet their needs Selective retention: Remember positive point ignore negative one Selective distortion: interpret the information to fit our preconception Subliminal perception: Stimuli that are too weak or too brief to be consciously seen or heard may be strong enough to be perceived by one or more receptor cells.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-19 Figure 6.4 Consumer Buying Process Problem recognition Information search Evaluation Purchase decision Postpurchase behavior

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-20 Sources of Information Personal Commercial Public Experiential

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-21 Non-Compensatory Models of Choice Conjunctive: Choose the alternative which meets the minimum of all attributes Lexicographic: A noncompensatory decision rule - consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important Elimination-by-aspects: eliminate any brand that don’t meets minimum acceptable cutoffs for each atributes

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6-22 Perceived Risk Functional: Poor product Perform Physical: Health risk Financial: is not worth the price paid Social: Embracement from other Psychological: Affect the mental well- being Time: The failure product and the time cost needed to find another

Analyzing Business Markets Marketing Management, 13 th ed 7

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-24 Chapter Questions What is the business market, and how does it differ from the consumer market? What buying situations do organizational buyers face? Who participates in the business-to- business buying process?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-25 Chapter Questions How do business buyers make their decisions? How can companies build strong relationships with business customers? How do institutional buyers and government agencies do their buying?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-26 What is Organizational Buying? Organizational buying refers to the decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-27 Characteristics of Business Markets Fewer, larger buyers Close supplier- customer relationships Professional purchasing Many buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-28 Buying Situation Straight rebuy Modified rebuy New task

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-29 The Buying Center Initiators Users Influencers Deciders Approvers Buyers Gatekeepers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-30 Of Concern to Business Marketers Who are the major decision participants? What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-31 Stages in the Buying Process: Buyphases Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-32 Forms of Electronic Marketplaces Catalog sites: e-procurement Vertical markets: Specialized web site Pure play auction sites: online marketplace e-buy. Spot markets: Private exchanges Barter markets Buying alliances

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-33 Order Routine Specification Stockless purchase plans: Blanket contracts not periodical Vendor-managed inventory: sourcing to another company supplier Continuous replenishment

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-34 Establishing Corporate Trust and Credibility Expertise: the ability of company to produce and sell products Trustworthiness: Honesty dependable Likability: Likable attractive

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-35 Trust Dimensions Transparent: Honest information Product/Service Quality: good or bad Incentive: Fairness Partnering with customers: help to customers to learn Cooperating design: customers help in design products Product comparison: No biased in comparing Supply chain: No conflict Pervasive advocacy: All function work together

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-36 What is Opportunism? Opportunism is some form of cheating or undersupply relative to an implicit or explicit contract.