A FRAMEWORK for MARKETING MANAGEMENT Chapter 5 Analyzing Consumer Markets Kotler Keller Cunningham 1

© Copyright 2008 Pearson Education Canada Chapter Questions How do cultural, social, and personal factors influence consumer behaviour buying? What major psychological processes influence consumer behaviour to marketing stimuli? How do consumers make purchasing decisions? © Copyright 2008 Pearson Education Canada

Profile: Canadian Marketing Excellence BMW CANADA BMW dominates the luxury passenger segment in Canada Although it reported a 8.3% growth in sales from the previous year, its sales still only accounted for 1.4% of the total Canadian market To increase this, BMW reinforces its brand, passion and joy: Customers are able to customize cars to their own needs BMW invested $150 million to transform its Canadian dealerships to reflect its brand aspirations Use of movies, kiosks at sporting events, and BMW Fascination Driver Training © Copyright 2008 Pearson Education Canada 3

What Influences Consumer Behaviour? Cultural factors Social factors Personal factors © Copyright 2008 Pearson Education Canada

Culture Influences Buyer Behaviour Culture is the most fundamental determinant of a person’s wants and behaviours © Copyright 2008 Pearson Education Canada

Figure 5.1 Model of Consumer Behaviour psychology Marketing stimuli Decision process Purchase decision Other stimuli Consumer characteristics © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Social Classes Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers © Copyright 2008 Pearson Education Canada

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 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Social Factors Reference groups Family Roles and statuses © Copyright 2008 Pearson Education Canada

Social Factors DESJARDINS Desjardins, a Quebec-based banking cooperative has used programs aimed at children since 1901 Provides schools with educational material Around 200,000 student account holders bank with Desjardins The bank also educates children with regards to money management © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Reference Groups Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Family Family of orientation Family of procreation © Copyright 2008 Pearson Education Canada

Roles and Statuses What degree of status is associated with various occupational roles? © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Personal Factors Age Self- concept Life cycle stage Occupation Lifestyle Wealth Values Personality © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Lifestyle influences Multitasking Time-starved Money-constrained © Copyright 2008 Pearson Education Canada

Key Psychological Processes Motivation Perception Learning Memory © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Motivation Freud’s Theory Behaviour is guided by subconscious motivations Maslow’s Hierarchy of Needs Behaviour is driven by lowest unmet need Herzberg’s Two-Factor Theory Behaviour is guided by motivating and hygiene factors © Copyright 2008 Pearson Education Canada

© Copyright 2008 Pearson Education Canada Perception Selective attention Selective retention Selective distortion © Copyright 2008 Pearson Education Canada

Figure 5.2 Hypothetical Dole Mental Map © Copyright 2008 Pearson Education Canada

Figure 5.3 Consumer Buying Process Problem recognition Information search Evaluation Purchase decision Postpurchase behavior © Copyright 2008 Pearson Education Canada

Sources of Information Personal Commercial Public Experiential © Copyright 2008 Pearson Education Canada

Figure 5.4 Successive Sets © Copyright 2008 Pearson Education Canada

Basic Concepts Underlying the Consumer Evaluation Process Consumer seeks to satisfy a need Consumer is looking for specific benefits Each product is viewed as a bundle of attributes with varying abilities to deliver benefits that satisfy needs Attributes of interest vary by product © Copyright 2008 Pearson Education Canada

Evaluations Influence Behaviour Beliefs Attitudes © Copyright 2008 Pearson Education Canada

Factors Affecting Purchase Decisions Consumer’s own preferences Attitudes of others Unanticipated situational factors © Copyright 2008 Pearson Education Canada

Postpurchase Behaviour satisfaction Postpurchase actions Postpurchase product uses © Copyright 2008 Pearson Education Canada

Postpurchase Behaviour BELL CANADA Bell Canada is a leader in reducing customer attrition Agents are encouraged to approach “at risk” customers to identify problems ahead of time Bell’s customer service department compares Bell’s offers with the competition in real time and shares this information with its marketing department for action © Copyright 2008 Pearson Education Canada

Figure 5.5 How Customers Use and Dispose of Products © Copyright 2008 Pearson Education Canada

For Discussion How might time-starvation affect consumer needs and wants? What businesses developed in response to time-starved consumers? © Copyright 2008 Pearson Education Canada