1 ENT4310 Business Economics and Marketing Consumer Behavior Arild Aspelund IØT, NTNU

2 Outline A model for consumer behavior Factors influencing consumer behavior Theories of motivation The buying decision process –A five-step model

3 A Model for Consumer Behavior

4 Key Factors Influencing Consumer Behavior Cultural Factors Social Factors Personal Factors

5 Culture The fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions

6 Subculture influence Nationalities Religions Racial groups Geographic regions Special interests

7 Social Factors Reference groups –A reference group is all individuals or institutions that have direct or indirect influence on a person’s attitudes or behavior Family –The most influential reference group –Influence varies over a person’s life time Social roles and statuses –Individuals belong to several groups –To each group one is associated with a certain social role and status

8 Reference Groups Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups

9 Personal Factors Age Values Life cycle stage Occupation Personality Self- concept Wealth Lifestyle

10 Key Psychological Processes Motivation MemoryLearning Perception

11 Motivation 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

12 Motivation - Maslow’s Hierarchy of Needs

13 Motivation - Herzberg’s Two-Factor Theory

14 Perceptions Selective attention –A cognitive screening process to save your brain from information overload Selective distortion –Tendency to interpret information to fit with your preconceptions Selective retention –Tendency to remember the good about the things you like, and forget the good about those you don’t Subliminal perception –Messages to your subconscious

15 Buying Decision Processes - A Five-Stage Model Problem recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

16 Successive Sets

17 Buying Decision Processes - Conversion Rates AwarenessFamiliarityAmbassadorConsiderationPurchaseLoyalty

18 Summary and Continuation Summary –In this lecture we have presented some factors that influence consumer behavior Culture Social Personal –We have also presented some fundamental theories of motivation Freud Maslow Herzberg –Finally, we have presented a five-step model to the purchase decision process Continuation –Segmentation and targeting