Consumer Markets and Consumer Buyer Behaviour Chapter 6 Consumer Markets and Consumer Buyer Behaviour

Learning Goals Define the consumer market and construct a simple model of consumer buyer behaviour Name the four major factors that influence buyer behaviour List and understand the types of buying decision behaviour and stages in the buying decision process Describe the adoption and diffusion process for new products

Case Study Harley Davidson Measuring Success 1/5 of all North American motorbike sales, 1/2 of all heavyweight segment Demand above supply 19 years of record sales/income Building Success Understanding the customers’ emotions and motivation Determining the factors of loyalty Translating this information to effective advertising

Case Study Harley Davidson No longer just for stereotypical bike “gangs” Harley’s core clientele: older, affluent, and better educated; “rubbies” Used focus groups and surveys to identify core values and attitudes of customers Identified seven customer types Buying a bike, lifestyle, and an attitude Independence, freedom, and power

Learning Goals Define the consumer market and construct a simple model of consumer buyer behaviour Name the four major factors that influence buyer behaviour List and understand the types of buying decision behaviour and stages in the buying decision process Describe the adoption and diffusion process for new products

Definitions Consumer buyer behaviour refers to the buying behaviour of final consumers – individuals and households who buy goods and services for personal consumption All of these final consumers combine to make up the consumer market

Learning Goals Define the consumer market and construct a simple model of consumer buyer behaviour Name the four major factors that influence buyer behaviour List and understand the types of buying decision behaviour and stages in the buying decision process Describe the adoption and diffusion process for new products

Factors Affecting Consumer Behaviour Cultural Social Personal Psychological Culture Influence a person’s wants and behaviour Subculture Smaller groups with shared value systems Social Class Society’s divisions who share values, interests and behaviours

Factors Affecting Consumer Behaviour Cultural Social Personal Psychological Groups Membership Reference Aspirational Opinion leaders Buzz marketing Family Many influencers Roles and status

Factors Affecting Consumer Behaviour Cultural Social Personal Psychological Age and life-cycle stage Occupation Economic situation Lifestyle AIO - Activities, interests and opinions VALS Lifestyle segmentation Personality and self-concept

Brand Personality Dimensions The specific mix of human traits that may be attributed to a particular brand Match brand personality to the consumer’s personality Brand personality traits Sincerity Excitement Competence Sophistication Ruggedness

Factors Affecting Consumer Behaviour Cultural Social Personal Psychological Motivation A need that drives the person to seek satisfaction of the need Perception The process by which people select, organize, and interpret information Learning Changes in an individual’s behaviour arising from experience Beliefs A descriptive thought about something Attitudes A person’s consistently favourable or unfavourable evaluations, feelings, and tendencies towards something

Psychological Factors Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Motivation research is based on Freud. Looks for hidden and subconscious motivation Maslow ordered needs based on how pressing they are to the consumer

Discussion Question ? What consumer products might fulfill multiple levels of the Hierarchy of Needs? There are many products that fit several levels. Hotels, for instance, will satisfy basic physiological needs, but the best room at the Ritz Carlton may meet many higher levels.

Psychological Factors Perception Perception is the process by which people select, organize, and interpret information. Perception Includes: Selective attention Consumers screen out information Selective distortion People interpret to support beliefs Selective retention People retain points to support attitudes

Discussion Question Perception How many ads were you exposed to today? Which ones do you remember? Why? ? Did students include Internet ads, logos on clothing, ads in the subway, billboards, logos on drinks, in the classroom, TV or radio ads? This should prompt discussion of selective attention, distortion and retention. Was it that they are loyal to these brands? Did they break through the clutter? Were they bombarded by a particular brand message?

Psychological Factors Learning Learning describes changes in an individual’s behaviour arising from experience Learning occurs through Drives A strong internal stimulus that calls for action Stimuli Objects that move drive to motive Cues Minor stimuli that affect response Reinforcement Feedback on action

Psychological Factors Beliefs and Attitudes a descriptive thought about a brand or service may be based on real knowledge, opinion, or faith Attitude describes a person’s evaluations, feelings and tendencies toward an object or idea They are difficult to change

Learning Goals Define the consumer market and construct a simple model of consumer buyer behaviour Name the four major factors that influence buyer behaviour List and understand the types of buying decision behaviour and stages in the buying decision process Describe the adoption and diffusion process for new products

Types of Buying Decision Behaviour Degree of involvement: How much the consumer cares about the purchase decision Higher levels for products that are expensive, risky, purchased infrequently, and highly self-expressive Degree of perceived differences between brands The type of decision will influence the promotional strategy most likely to be effective

The Buyer Decision Process Need Recognition Triggered by internal (person’s normal needs) or external stimuli (advertisements, friends) Must reach an intensity high enough to become a drive Needs are basic, wants are learned behaviour to satisfy them

The Buyer Decision Process Information Search Influenced by level of involvement (interest) in the decision Memory (internal) search External search: personal, commercial, public, experiential sources of information Word-of-mouth sources are most influential (credibility)

The Buyer Decision Process Evaluation of Alternatives Evaluation procedure depends on the consumer and the buying situation Attributes and importance weights are chosen as criteria Alternatives compared against the criteria Marketers can influence this stage; personal selling

The Buyer Decision Process Purchase Decision Two factors intercede between purchase intentions and the actual decision: Attitudes of others Unexpected situational factors

The Buyer Decision Process Postpurchase Behaviour What the consumer thinks and does after purchasing and using the product or service Satisfaction: relationship between consumer expectation and perceived performance Delighted consumers engage in positive word-of-mouth. Unhappy customers tell on average 11 other people. Cognitive dissonance

Learning Goals Define the consumer market and construct a simple model of consumer buyer behaviour Name the four major factors that influence buyer behaviour List and understand the types of buying decision behaviour and stages in the buying decision process Describe the adoption and diffusion process for new products

Buyer Decision Process for New Products Good, service or idea that is perceived by customers as new. The Adoption Process Mental process through which an individual passes from first hearing about an innovation to final adoption. Five Stages in the Adoption Process Awareness, interest, evaluation, trial, and adoption.

Buyer Decision Process for New Products Individual Differences in Innovativeness Consumers can be classified into five adopter categories, each of which behaves differently toward new products.

Buyer Decision Process for New Products Influence of Product Characteristics on Rate of Adoption Relative Advantage Compatibility Complexity Divisibility Communicability

Buyer Decision Process for New Products Consumer Behaviour Across International Borders Values, attitudes and behaviours differ greatly in other countries. Physical differences exist which require changes in the marketing mix. Customs vary from country to country. Marketers must decide the degree to which they will adapt their marketing efforts.

Learning Goals Define the consumer market and construct a simple model of consumer buyer behaviour Name the four major factors that influence buyer behaviour List and understand the types of buying decision behaviour and stages in the buying decision process Describe the adoption and diffusion process for new products