Consumer markets Chapter 7

Consumer buying behaviour Defined as the buying behaviour of the final consumers, individuals and households who buy goods and services for personal consumption.

Consumer market Consumer market is defined as all the individuals and households who buy or acquire goods and services for personal consumption. The world consumer market consists of approx 6.3 billion people the billion people in North America, Western Europe and Japan make up 70% of the world’s spending power.

Influencers of consumer behaviour Cultural factors Social factors Personal and psychological characteristics

Cultural factors Culture Subculture Social class Basic cause of person’s wants and behaviour Human behaviour is predominantly learned behaviour from family and other important institutions Subculture Group sharing similar value systems based upon life experiences and situations Social class Relatively permanent and ordered divisions in a society whose members share similar values interests and behaviours. Class systems differ in size and constituents Lower social classes are more culture-bound Young people of all classes are less so

Social factors Membership groups Primary groups family, friends, neighbours Secondary groups religious groups and professional associations Reference groups direct or indirect influence on the person’s behaviour or attitudes Aspirational groups reference group to which we want to belong

Consumer buying roles Initiator Influencer Decider Buyer User Person who first suggests or thinks of the idea of buying a particular product. Influencer A person whose views or advice will influence the product or service. Decider Buying decision maker of the product Buyer Ultimate purchaser User Ultimate user

Personal factors Age and life cycle phase Psychological life cycles Changing interests Occupation Economic circumstances Savings and buying power Lifestyle Pattern of living expressed in activities Psychographics is the technique of measuring lifestyles Personality and self-concept

RISC Research Agency of Paris developed the 6 ‘Eurotypes’ The ‘traditionalist’ 18% Influenced by culture and socio-economic history, specific to their country The ‘homebody’ 14% Strong attachment to roots and childhood environment The ‘rationalist’ 23% Ability to cope with complex environments, entrepreneurial Personal fulfilment based on self-expression rather than financial reward The ‘pleasurist’ 17% Emphasises sensual and emotional experiences The ‘striver’ 15% Holds beliefs, attitudes and values that underlie change The ‘trend setter’ 13% Favours non-hierarchical structure and spontaneity

Psychological factors Motivation Perception Learning Beliefs and attitudes

Buying decision behaviour Dissonance-reducing buying behaviour Situations characterised by high involvement with an expensive, infrequent or risky purchase but few perceived differences among the brands. Habitual buying behaviour Characterised by low consumer involvement and few significant perceived brand differences Variety seeking buying behaviour Low consumer involvement but significant perceived brand differences

Figure 7.5 Four types of buying behaviour Source: Adapted from Henry Assael, Consumer Behaviour and Marketing Action, 6th edition, p. 67 (Boston, MA: Kent Publishing Company, 1987) © Wadsworth Inc. 1987. Reprinted by permission of Kent Publishing Company, a division of Wadsworth Inc.

Buyer decision process Need recognition Information search Evaluation of alternatives Purchase decision Post-purchase behaviour

Typical consumer evaluation process Figure 7.7 Steps between evaluation of alternatives and a purchase decision

Stages in the adoption process for new products Awareness Interest Evaluation Trial Adoption

Individual differences in innovativeness Figure 7.8 Adopter categorisation on the basis of relative time of adoption of innovations Source: Reprinted with permission of The Free Press, a Division of Simon & Schuster, Inc., by Everett M. Rogers. Copyright © 1995 by Everett M. Rogers from Diffusion of Innovations, fourth edition. Copyright © 1962, 1971, 1983 by The Free Press

Influence of product characteristics on rate of adoption Relative advantage Innovation superior to existing products Compatibility Fit of values and experiences of potential consumers Complexity Ease or difficulty in using the technology or innovation Divisibility Innovation trialled on a limited basis Communicability Results of the innovation can be observed or described to others.