Chapter 4 Consumer Buying Behaviour Copyright © 2013 Pearson Canada Inc.

Consumer Behaviour 4-2Copyright © 2013 Pearson Canada Inc. Buying Behavior is the decision processes and acts of people involved in buying and using products. Why do consumers make the purchases that they make? What factors influence consumer purchases? Do the changing factors in society influence purchases?

Handout Exercise Three (3) scenarios are given. Read through each scenario and answer the questions from your own point of view. Group discussion

Consumer buying behavior is determined by: Level of involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others. Let’s look at the process of buying

Consumer Purchase Decision Process Copyright © 2013 Pearson Canada Inc.4-5

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 5 stages, determined by the degree of complexity.. 5 Stages

Recognition of Need Copyright © 2013 Pearson Canada Inc.4-7 Different for every product or service you might buy Some times it is instantaneous Sometimes it is slow and anticipated Understanding when and how it happens helps the marketer get involved in the process The sooner the better…

Copyright © 2013 Pearson Canada Inc. 4-8 Information Search Investigative activities conducted by a consumer once a problem or need has been identified. Routine Purchases require little time and minimal evaluation – eg. More complex purchases require extensive time and significant evaluation Generally, as the risk increases the extent of the search for information increases.

Information Search External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is Chinese food, Indian food, Burger King, Pizza

Evaluation of Alternatives Copyright © 2013 Pearson Canada Inc.4-10 A consumer needs to establish criteria against which various products are compared (features the buyer wants or does not want.) Rank/weight alternatives If not satisfied with your choice then return to the search phase Whatever the criteria, you want to make sure your marketing is getting the right information to the customer when they are in that evaluation process. Think of “Positioning” – how options are compared in the mind of the customer

Potential criteria for a new car gas mileage, comfort, design (look and feel) $$$ price environmentally friendly

Potential Criteria for a House Purchase Location Price Taxes If you are a parent—is there a school close by? Time of commute to work Number of bedrooms, bathrooms, New kitchen? Yard

Purchase Decision Copyright © 2013 Pearson Canada Inc.4-13 Once the best alternative has been selected, a consumer makes the ______________________. (includes product, package, store, method of purchase etc. ) The decision shows it self in different ways depending on what we are buying. Sometimes you tell the salesman “Yes.” Sometimes you take it to the cashier. Sometimes you place the order on line. Sometimes you enter a bid on a ______________. It is important to _______________________________yes so you can encourage that. Think – “Close the sale”

Post-Purchase Evaluation Copyright © 2013 Pearson Canada Inc.4-14 It is quite common for a consumer to ____________their buying decision. Do I feel good, bad or indifferent about the purchase? An individual’s degree of satisfaction or dissatisfaction is the result of ________________________, “an unsettled state of mind after an action has been taken.” Prudent marketers initiate _________________to put the consumer’s mind at ease.

Cognitive Dissonance is the feeling of __________________which comes from holding two conflicting thoughts in the mind at the same time. After purchase, you may wonder----- Have I made the right decision? This can be reduced by ___________, after sales communication etc.

Consumer buying behavior is determined by : Level of involvement in ____________________. _________________________of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about a ________________and brands but virtually ignores others. Personal risk Social risk Economic risk

Why does a firm need to analyze buying behavior? Buyers reactions to a __________________has a great impact on the firms success. The marketing concept stresses that a firm should create a _____________________that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. Marketers can better predict how consumers will respond to _______________________.

Marketing Influences the Decision Process At each stage there are chances for a good marketer to get into the process. If you can ________________you can influence the decision If you can make your information better available or ________________you can dominate the research and evaluation steps If you can _____________________you can get the sale If you ________________________about their decision they are more likely to speak highly of you and return to buy again

FactorsRoutine Decision Limited Decision Complex Decision Time Evaluation Preference Purchase Frequency Risk Experience

The Four type of consumer buying behavior are 1. 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. 2. 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.

Cont’d 3. 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. 4. Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same _________________. 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 ___________________.

Influences on Consumer Behaviour Copyright © 2013 Pearson Canada Inc.4-23 Psychological Personal Social __________ Consumer Marketing Mix _______________ Price Marketing Communications _______________ Company Image Reputation

Needs and Motivation Theory Copyright © 2013 Pearson Canada Inc.4-24 Absence of _____________________ Condition prompting action _____________________ Need Motive

__________ Hierarchy of Needs Copyright © 2013 Pearson Canada Inc.4-25

Personality and Self-Concept Copyright © 2013 Pearson Canada Inc.4-26 Personality refers to a person’s ______________ psychological characteristics that lead to relatively __________________________to the environment in which a person lives. The self has four components. Real Self Self-Image Looking- Glass Self Ideal Self

The Self’s Four Components Copyright © 2013 Pearson Canada Inc Real Self – An objective evaluation of one’s self. You as you really are. 2.______________– How you see yourself. It could be a role you play with yourself. 3.Looking-Glass Self – How you think others see you. Such a view can be different from how they actually see you. 4.______________– How you would like to be. What you aspire to be.

Attitudes Copyright © 2013 Pearson Canada Inc.4-28 “An individual’s feelings, favourable or unfavourable, toward an idea or object.” _______________________ is easier if the product idea fits with the attitudes of the target market. Example: People like to snack, but they now search for _____________________

Perception Copyright © 2013 Pearson Canada Inc.4-29 Perception refers to how ________________and interpret messages. Consumers are selective about the ___________________ Selective Exposure Selective Perception Selective Retention Test yourself: Who makes better cars? American or Japanese manufacturers? What has influenced your _______________?

Personal Influences Copyright © 2013 Pearson Canada Inc.4-30 Lifestyle ________________ Technology Economic Situation The Think Marketing box on p. 83 demonstrates how lifestyle change affects marketing strategy.

Lifestyle Copyright © 2013 Pearson Canada Inc.4-31 “A person’s pattern of living expressed in terms of activities, interests, ____________________.” Independent research companies conduct surveys and place people _________________________ _ Protective Providers Up and Comers Les “Petite Vie” Mavericks Contented Traditionalists Joiner Activists Tie-Dyed Greys Each segment is motivated by a unique set of ______________________ _. Check out p. 81 for detailed descriptions of these segments.

Lifestyle: Applied Copyright © 2013 Pearson Canada Inc.4-32 ________________________determines the activities (work, sports and hobbies), interests (family, friends and social situations) and opinions (social issues, business and politics). When combined with demographic data, certain “lifestyles” emerge. Example: _______________may appeal to the macho-instincts of a protective provider. Someone who works hard, values personal initiative, and is committed to family and friends. Remember the role of a Psychographic – it describes the self view.

Age and Life Cycle Theory Copyright © 2013 Pearson Canada Inc.4-33 _________________is based on the needs of a family as its members progress through various stages. Example: The needs of a young working family with children are different from an older married couple with no children ____________________. Marketers target by age and life cycle and devise strategies suited to _______________________. Remember the concept of a Cohort

Social Influences Copyright © 2013 Pearson Canada Inc.4-34 Social influences embrace reference groups, family, and social _______________________. Reference Groups – A group of people with a common interest that influences the members’ ____________________________ Family – Members of a family think and act as individuals and the decisions they make can influence ________________________ Social Class – People find themselves in groups based on __________________, lifestyles, and social history.

Family Copyright © 2013 Pearson Canada Inc.4-35 The ________________________of adults means marketers can no longer make assumptions about who the primary buyer is. 1.Major decisions are ___________________. 2.______________________are reconfiguring to appeal more to women. 3.Wal-Mart Supercentres are specifically designed for women 30 to 45 with 2 or 3 children, a husband and a career. 4.Children influence $20 billion in _____________________each year in Canada.

Cultural Influences Copyright © 2013 Pearson Canada Inc.4-36 Culture refers to “behaviour learned from external sources such as family, the workplace, and education—that help form the value systems an individual lives by. Gen X, Gen Y, Boomers Ethnic Groups French Quebec The Think Marketing box on p. 87 examines more details about multicultural marketing. Marketing strategies must be tailored to the _____________________________.

Regional Influence Copyright © 2013 Pearson Canada Inc.4-37 _______________________have an influence on attitudes and values. Canada is a diverse country. Atlantic Quebec Ontario Prairies B.C. 1.Identify common and unique characteristics in each region (within regions there are urban and rural considerations). 2.National strategies don’t always work. 3.Implement __________________if profitable (costs versus benefits).

Visual Model Copyright © 2013 Pearson Canada Inc.4-38