Consumer Behavior Buying behavior of final consumers 05

Definitions Consumer buyer behavior refers to the buying behavior 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

Model of Buyer Behavior

Factors Influencing Consumer Behavior

Characteristics Affecting Consumer Behavior Culture Forms a person’s wants and behavior Subculture Groups with shared value systems Social Class Society’s divisions who share values, interests and behaviors Key Factors Cultural Social Personal Psychological

Characteristics Affecting Consumer Behavior Groups Membership Reference Aspirational Opinion Leaders Buzz marketing Family Many influencers Roles and Status Key Factors Cultural Social Personal Psychological

Characteristics Affecting Consumer Behavior Age and life cycle Occupation Economic situation Lifestyle Activities, interests and opinions Lifestyle segmentation Personality and self-concept Key Factors Cultural Social Personal Psychological

Characteristics Affecting Consumer Behavior Motivation Needs provide motives Motivation research Maslow’s hierarchy of needs Perception Selective attention, selective distortion, selective retention Learning Drives, stimuli, cues, responses and reinforcement Beliefs and attitudes Key Factors Cultural Social Personal Psychological

Attitudes A predisposition to respond in a consistently favorable or unfavorable way An individual’s affective reaction to or overall evaluation of an object, person, action, or concept

Involvement Involvement Profile: Personal interest in a product category Importance of negative consequences Probability of making a mistake Pleasure value of the product category Sign value of the product category How closely the product is related to the self

Types of Buying Decision Behavior Involvement High Low COMPLEX VARIETY SEEKING High brand differences Consumers undertake complex buying behavior when they are highly involved in a purchase and perceive significant differences among brands. This is typical for expensive or self-expressive goods. Dissonance-reducing buying behavior occurs when consumers are highly involved but see little difference among brands. Dissonance refers to post-purchase regret. Habitual buying behavior occurs under low involvement with few significant brand difference. Consumers buy out of habit without much effort. Variety-seeking buying behavior occurs in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching. HABITUAL Low brand differences DISSONANCE REDUCING

The Buyer Decision Process

The Buyer Decision Process Process Stages Needs can be triggered by: Internal stimuli Normal needs become strong enough to drive behavior External stimuli Advertisements Friends of friends Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

The Buyer Decision Process Process Stages Consumers exhibit heightened attention or actively search for information. Sources of information: Personal Commercial Public Experiential Word-of-mouth Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

The Buyer Decision Process Process Stages Evaluation procedure depends on the consumer and the buying situation. Most buyers evaluate multiple attributes, each of which is weighted differently. At the end of the evaluation stage, purchase intentions are formed. Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

The Buyer Decision Process Process Stages Two factors intercede between purchase intentions and the actual decision: Attitudes of others Unexpected situational factors Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

The Buyer Decision Process Process Stages Satisfaction is important: Delighted consumers engage in positive word-of-mouth. Unhappy customers tell on average 11 other people. It costs more to attract a new customer than it does to retain an existing customer. Cognitive dissonance is common Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

Buyer Decision Process for New Products Good, service or idea that is perceived by customers as new. Stages in the Adoption Process Marketers should help consumers move through these stages.

Adoption New Product Buying Adoption Trial Evaluation Awareness Interest Evaluation Trial Adoption is the mental process through which a consumer passes from first learning about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product. Consumers vary in the speed of adopting a new product. The innovators and early adopters are first, followed by the early and late majority, and finally, the laggards. Adoption Adoption

Adopter Categories Based on Relative Time of 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. Product Characteristics and Adoption Five product characteristics influence the adoption rate.

Making an innovation successful Relative Advantage Compatibility Divisibility Communicability Five characteristics are important in influencing an innovation’s rate of adoption. Relative advantage: the degree to which the innovation is superior to existing products Compatibility: the degree to which the innovation fits the values and experiences of potential consumers Complexity: the degree to which the innovation is difficult to understand or use Divisibility: the degree to which the innovation may be tried on a limited basis Communicability: Observability of the innovation Complexity