Buyer Behavior in Health Care Marketing How are decisions made and what influences impact the process?

Who and What Are Consumers? People and/or organizations that buy products People and/or organizations that use products

Perception The process by which an individual receives, selects, organizes and interprets information to create a meaningful picture of the world. Individualized process where information is filtered and screened for interpretation

Decision Making Model

Problem Recognition Consumer perceives a difference between a desired or ideal state and the actual state –Motivated to close the gap –Ex: you do not have insurance coverage and feel that this is NOT an ideal state

Information Search Internal –Initial information search may utilize internal memory stores initially. Ex: product experience, previous WOM External –Based on information and involvement may choose to seek additional information from external sources such as the Internet, phone book, friends, etc.

Alternative Evaluation If the decision is not classified as habitual, the consumer may feel the need to evaluate competing alternatives in the marketplace Elaboration Likelihood helps us determine level of processing to occur Fishbein Model is extremely helpful in evaluating choices and forming attitudes

Elaboration Likelihood Model model that allows marketers to predict routes to persuasion route to persuasion based on two moderating variables: –motivation (involvement) –ability to comprehend central and peripheral routes are the ends of an elaboration continuum

ELM Elaboration –amount of issue relevant thinking done by the consumer Involvement –personal motivation to “think” –reflects risk and how close the issue ties to the ego

ELM Most decision utilize the peripheral route to persuasion Low involvement or simply lack of ability to process detailed information

Peripheral Route Affective Route - Zajonc reflects lower levels of involvement or lack of ability to process outcome is attitude toward the ad attitudes less resistant or persistent than those formed centrally relies on cues such as sex, celebrities, music color, visuals to persuade

Peripheral Route Most effective forms of advertising will be: –tv –radio –celebrity endorsers –mood oriented print ads –sex

Attitudes learned predisposition to think in a certain way about a person, product, service or idea based on: –personal factors-social class –cultural factors-race –educational factors –familial roots –religious factors

Central Route high levels of involvement higher levels of ability to process may reflect a natural desire to be cognitive cognitive route to persuasion outcome is an attitude toward the brand attitudes formed centrally are more resistant and persistent

Central Route reflected by the Fishbein Model of Attitude Formation best forms of advertising –print –cognitive –product information provided

Fishbein Model Attitude Changes Change a belief –Very difficult to change an initial negative impression Change the Importance of the Evaluative Criteria Add a new BiEi Combination –BEST! Improves your position and hurts everyone else!

Purchase Decision Consumer determines how to resolve differences between actual and desire state (through product purchase, etc. ) and then must also make a patronage decision Patronage decision is “where” to acquire the product or service

Post Purchase Evaluation Consumer must determine level of satisfaction with the decision, the product/service, and provider. Determination of expectations and if they were met primary Cognitive Dissonance –Mental anxiety when unsure about alternative chosen –Providers can assuage concerns and reaffirm decision

Psychological Influences Maslow –Motivation Attitudes Lifestyle –VALS Learning

Maslow’s Hierarchy of Needs Motivation - internal force that stimulates the person to act in a certain manner. Needs- the basis of motivated behavior

Maslow’s Hierarchy Self-Actualization - Fulfillment Ego Needs - success, achievement Social Needs - affection, friendship Safety and Security Needs - protection, order, stabilization Physiological Needs - food, water, shelter, sex

Major Influences on Consumers External Influences –Culture –Social Class –Reference Groups –Family Personal Influences –Age –Sex –Family Status –Occupation Psychological Influences –Attitudes –Perception –Needs

Culture Complex of tangible items such as art, literature, clothing, music and intangibles such as law, values, customs that define a group of people and their way of life.

Social Class Position that you and you family occupy within society Determined by: –income –occupation –wealth –family prestige –value of home

Reference Groups Collection of people that you use as a guide for behavior in specific situations. 3 Functions –provide information –means of comparison –furnish guidance

Family 2 or more people living in a house related by blood, marriage, or adoption Provides economic, financial and emotional support Determines Lifestyle

Industrial Buying Behavior Organizational Behavior background critical –Decisions tend to be made in a group –More rational in orientation –Reflects derived demand concerns (demand for HMO impacted by consumer needs) –Larger quantities purchased –Many individuals affected by decisions

Marketing Strategies Undifferentiated Marketing –Mass Marketing Differentiated Marketing Focused (Concentrated Marketing)

Marketing Segmentation Identifying groups of people with shared characteristics within the broad markets for consumer or business products aggregating these groups into larger segments according to their mutual interest in the product’s utility

Segmentation Variables Demographics* –age, income, sex, family size Geodemographics –regions, climate, density Psychographics Behaviorgraphic –benefits sought, usage rates, purchase occasion *increasingly hard to measure but more predictive

Behaviorgraphics and Psychographics Behaviorgraphics –Targeting based on the way people behave –Best data to have, but not always available Psychographics –Targeting based on lifestyle and attitudes Values, motivations, and lifestyles as they relate to buying behavior

Cohort Segmentation Cohort is a group of people bound together in history by a set of events –Wars –Technological changes –The Depression –Generation Xers Match Expectations with cohorts to best serve!

Demographics/Geodemos Monitoring demo shifts can assist with –identifying segments –forecasting of sales –assisting with media planning Minimizing wasted coverage Geographic Dispersion –Population relocating to South and West from Northeast and Midwest –70% growth to come in these regions

Criteria For Usable Segments Sufficient Size –Large enough to profit? Measurability –Identify the group with characteristics such as demos Accessibility Responsiveness Durability

Segmenting Business Markets Demographics –Size of company –Industry type –Customer location Operating variables –Technology –Product use Purchasing Approaches –Procedures and criteria