Business English Upper Intermediate U2W09 John Silberstein

Agenda Homework Consumer and Buyer Behavior

Marketing Use the internet to find a career opportunity on-line and write a cover letter expressing interest in the position. The opportunity should be posted in English and you should cut and paste the opportunity to your submission. Homework

Marketing What is meant by consumer and buyer behavior? Buying Behavior is the decision processes and acts of people involved in buying and using products. The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Consumer and Buyer Behavior

Marketing Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer and Buyer Behavior

Marketing Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest. Consumer and Buyer Behavior

Marketing Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy. Consumer and Buyer Behavior

Marketing Four main applications of consumer behavior: marketing strategy, public policy, social marketing and make us better consumers. Consumer and Buyer Behavior

Marketing Four main applications of consumer behavior: marketing strategy: Designing better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices. Consumer and Buyer Behavior

Marketing Four main applications of consumer behavior: public policy In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers’ attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers. Consumer and Buyer Behavior

Marketing Four main applications of consumer behavior: social marketing Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. Consumer and Buyer Behavior

Marketing Four main applications of consumer behavior: make us better consumers. As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. Consumer and Buyer Behavior

Marketing: Consumer and Buyer Behavior Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next. Stages of the Consumer Buying Process

Marketing: Consumer and Buyer Behavior The 6 stages are: Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Purchase Post Purchase Evaluation Stages of the Consumer Buying Process

Marketing: Consumer and Buyer Behavior The 6 stages are: Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Purchase Post Purchase Evaluation Stages of the Consumer Buying Process

Marketing: Consumer and Buyer Behavior Routine Response/Programmed Behavior-- buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand. The four type of consumer buying behavior are:

Marketing: Consumer and Buyer Behavior Extensive Decision Making/Complex high involvement--unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. Impulse buying -- no conscious planning. The four type of consumer buying behavior are:

Marketing: Consumer and Buyer Behavior The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. The four type of consumer buying behavior are:

Marketing: Consumer and Buyer Behavior A consumer, making a purchase decision will be affected by the following three factors: Personal Psychological Social The marketer must be aware of these factors in order to develop an appropriate Marketing Mix for its target market. Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Personal Unique to a particular person. Demographic Factors. Sex, Race, Age etc. Who in the family is responsible for the decision making. Young people purchase things for different reasons than older people. Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors 1.Motives 2.Perception 3.Ability and knowledge 4.Attitudes 5.Personality 6.Lifestyles Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors: Motives A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix. MASLOW hierarchy of needs can help identify what may motivate a purchase decision for a specific product. Physiological Safety Love and Belonging Esteem Self Actualization Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors: Motives Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. We chose what info we pay attention to, organize it and interpret it. Selective Exposure- select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies current needs, intensity of input changes. Selective Distortion-Changing/twisting current received information, inconsistent with beliefs. Advertisers that use comparative advertisements (pitching one product against another), have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A current example...MCI and AT&T...do you ever get confused? Selective Retention-Remember inputs that support beliefs, forgets those that don't. Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be expected to be aware of all these inputs, and certainly will not retain many. Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors: Ability and Knowledge Learning changes a person's behavior. This is caused by information and experience. Therefore to change consumers' behavior about your product, you need to give them new information, such as free samples or information about the product. When making buying decisions, buyers must process information. Knowledge is the familiarity with the product and expertise. Inexperienced buyers often use prices as an indicator of quality more than those who have knowledge of a product. Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality. Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior. Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors: Attitudes Knowledge and positive and negative feelings about an object or activity-whether tangible or intangible, living or non- living drive perceptions. An individual learns attitudes through experience and interaction with other people. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy. Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors: Personality The internal traits and behaviors that make a person unique. Uniqueness arrives from a person's heredity and their personal experiences. Examples include: Work ethic, Compulsiveness, Self confidence, Friendliness, Adaptability, Ambitiousness, Dogmatism, Authoritarianism, Introversion, Extroversion, Aggressiveness, Competitiveness. Traits effect the way people behave. Marketers try to match the product image to the perceived image of the product by their customers. Categories that Effect the Consumer Buying Decision Process

Marketing: Consumer and Buyer Behavior Psychological factors: Lifestyles Lifestyles are the consistent patterns people follow in their lives. EXAMPLES: Healthy foods for a healthy lifestyle. Categories that Effect the Consumer Buying Decision Process