1. Copyright © 2003 Prentice-Hall, Inc. 7-1 Chapter 7 Analyzing Consumer Markets and Buyer Behavior

2. Copyright © 2003 Prentice-Hall, Inc. 7-2  In this chapter, we focus on two questions:  How do the buyers’ characteristics – cultural, social, personal, and psychological – influence buying behavior?  How does the buyer make purchasing decisions? Chapter Objectives

3. Copyright © 2003 Prentice-Hall, Inc. 7-3  The field of consumer behavior studies how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires.  Understanding consumer behavior and “knowing customers” is never simple.  Studying customers behavior provides clues for developing new products, product features, prices, channels, messages, and other marketing mix elements. Influencing Buyer Behavior

4. Copyright © 2003 Prentice-Hall, Inc. 7-4  A Consumer’s buying behavior is influenced by:  Cultural factors  Social factors  Personal factors  Psychological factors Influencing Buyer Behavior

5. Copyright © 2003 Prentice-Hall, Inc. 7-5  Culture, subculture and social class are important in buying behavior.  Culture is the fundamental determinant of a person’s wants and behavior.  Each culture consists of subcultures that provide more specific identification and socialization for their members (nationalities, religions, racial groups, geographic regions)  Social classes are those divisions in the community who share the same values, interests and behavior.  Social classes reflect income, education, occupation and residence.  Social classes differ in dress, speech patterns, recreational preferences and many other characteristics.  Social classes show distinct product and brand preferences in many areas including clothing, home furnishings, leisure activities and autombiles. (1) Cultural Factors:

6. Copyright © 2003 Prentice-Hall, Inc. 7-6  Reference Groups:  Consumer’s buying behavior is influenced by social factors as reference groups, family, and social roles and statuses.  Membership groups are groups having a direct influence on a person (family, friends, neighbors and co-workers) with whom the person interacts continuously and informally.  Secondary groups takes more formal and requires less continuous interaction (religious, professional and trade unions).  Reference groups influence a person’s buying behavior by exposing him to new behavior or lifestyles, brand choice and self concept.  People influenced by groups to which they do not belong (Aspirational groups & dissociative groups).  Opinion leader is the person who offers advice or information about a specific product or service. (2) Social Factors:

7. Copyright © 2003 Prentice-Hall, Inc. 7-7  Family:  Family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group.  There are to kinds of families in buyer’s life: family of orientation (parents and siblings), and family of procreation (spouse and children).  Internet ethics for targeting kids.  Roles and Statuses:  A role consists of the activities a person is expected to perform.  Each role carries a status.  People choose products that communicate their roles and statuses. (2) Social Factors:

8. Copyright © 2003 Prentice-Hall, Inc. 7-8  Age and stage in the life cycle:  People buy different goods and services over a lifetime.  Marketers should pay close attention to changing life circumstances, divorce, widowhood, remarriage and their effect on consumption.  Occupation and economic circumstances:  Consumption and buying behavior influenced by occupation, income, savings, debts, borrowing power.  Lifestyle:  Marketers should search for relationship between their products and lifestyle groups.  Psychographics is the science of using psychology and demographics to better understand consumers. (2) Personal Factors:

9. Copyright © 2003 Prentice-Hall, Inc. 7-9  Personality and self-concept:  Consumers are likely to choose brands whose personalities match their own.  Brand personality is the specific mix of human traits that my be attributed to a particular brand.  Self-concept theory has had a mixed record of success in predicting consumer responses to brand images. (2) Personal Factors:

10. Copyright © 2003 Prentice-Hall, Inc. 7-10  Motivation  Perception  Learning  Beliefs and attitudes Psychological Factors

11. Copyright © 2003 Prentice-Hall, Inc. 7-11  Motivation:  A need becomes a motive when it is aroused to a sufficient level of intensity.  A motive is a need that is sufficiently pressing to drive the person to act.  Three theories of human motivation for consumer analysis and marketing strategy:  Freud’s Theory.  Maslow’s Theory.  Hersberg’s Theory. Psychological Factors

12. Copyright © 2003 Prentice-Hall, Inc. 7-12  Freud’s Theory:  Psychological forces are unconscious and a person can’t understand his own motivations.  Laddering technique: trace a person’s motivations from the instrumental ones to the more terminal ones.  Methods used to uncover deeper motives are: word association, sentence completion, picture interpretation and role playing. Psychological Factors

13. Copyright © 2003 Prentice-Hall, Inc. 7-13  Maslow’s Theory: helps marketers understand how various products fit into the plans, goals, and lives of consumers. Psychological Factors

14. Copyright © 2003 Prentice-Hall, Inc. 7-14  Herzberg’s Theory  Dissatisfiers: factors that cause dissatisfaction.  Satisfiers: factors that cause satisfaction.  The absence of disatisfier is not enough, satisfiers must be actively present to motivate a purchase.  Two implications of the theory:  Sellers should avoid disatisfiers.  Manufacurers should identify the major satisfiers of purchase in the market and then supply them. Psychological Factors

15. Copyright © 2003 Prentice-Hall, Inc. 7-15  Perception  In marketing, the people’s perceptions are more important than the reality.  People differ in their perceptions of the same object because of three perceptional processes: 1.Selective attention  People are more likely to notice stimuli than relate to a current need  People are more likely to notice stimuli than they anticipate  People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli  Selective distortion  Selective retention Psychological Factors

16. Copyright © 2003 Prentice-Hall, Inc. 7-16  Learning  Learning is produced through the interplay of drivers, stimuli, cues, responses, and reinforcement.  A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds (ex. IBM).  Discrimination means that a person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly.  Marketers should build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement. Psychological Factors

17. Copyright © 2003 Prentice-Hall, Inc. 7-17  Beliefs and Attitudes  A belief is a descriptive thought that a person holds about something.  Attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea.  People’s beliefs about a product or brand influence their buying decisions.  Brand beliefs exist in consumer’s memory.  A company should fit its product into existing attitudes rather than to try to change people’s attitudes. Psychological Factors

18. Copyright © 2003 Prentice-Hall, Inc. 7-18 The purchase of a product from a Company A turns out to be a positive experience. You are looking for a loosely related product, which is also offered by Company A. Do you assume that you will again have a positive experience with Company A’s offering, or do you look for the “best of breed,” regardless of which company offers it?

19. Copyright © 2003 Prentice-Hall, Inc. 7-19  Buying Roles  Initiator: suggest the idea of buying.  Influencer: whose views influence the decision.  Decider: who decide whether, what, how, where to buy.  Buyer: who makes the actual purchase.  User: consumes/uses the product/service.  Buying behavior  Consumer decision making varies with the type of buying decision. The Buying Decision Process

20. Copyright © 2003 Prentice-Hall, Inc. 7-20 Table 7.3: Four Types of Buying Behavior High Involvement Low Involvement Significant Differences between Brands Complex buying behavior Variety-seeking buying behavior Few Differences between Brands Dissonance-reducing buying behavior Habitual buying behavior

21. Copyright © 2003 Prentice-Hall, Inc. 7-21  Complex Buying Behavior  Understand consumers’ information gathering ad evaluation behavior.  Assist buyer to learn about the product’s attributes and importance.  Differentiate brand’s features, use print media and motivate sales personnel.  Dissonance-Reducing Buyer Behavior  Marketing communication should supply beliefs and evaluations that help buyer feel good about his/her brand choice.  Habitual Buying Behavior  Use price and sales promotions to stimulate product trial (TV advertising).  Variety-Seeking Buying Behavior  Offering lower prices, deals, coupons, free samples and advertising. What marketers can do? (strategies)

22. Copyright © 2003 Prentice-Hall, Inc. 7-22  How marketers learn about the stages?  Introspective method: think about how they themselves would act.  Retrospective method: interview a small number of recent buyers and ask them to recall the events making their choice.  Prospective method: locate consumers who plan to buy and ask them to think out loud about their buying process.  Prescriptive method: ask consumer about the ideal way to buy.  Understanding by mapping the customer’s  Consumption system  Customer activity cycle  Customer scenario  Metamarket  Metamediaries Stages in the Buying Decision Process

23. Copyright © 2003 Prentice-Hall, Inc. 7-23  Problem recognition  Information search  Personal sources  Commercial sources  Public sources  Experiential sources Stages of the Buying Decision Process Figure 7.4: Five-Stage Model of the Consumer Buying Process

24. Copyright © 2003 Prentice-Hall, Inc. 7-24 Figure 7.5: Successive Sets Involved in Customer Decision Making

25. Copyright © 2003 Prentice-Hall, Inc. 7-25  Evaluation of Alternatives  There is no single process used by one/all consumers in all buying situations.  Brand beliefs  Brand image The Buying Decision Process

26. Copyright © 2003 Prentice-Hall, Inc. 7-26  Purchase Decision Figure 7.6: Steps Between Evaluation of Alternatives and a purchase decision The Buying Decision Process

27. Copyright © 2003 Prentice-Hall, Inc. 7-27  Informediaries  Consumer Reports  Zagats  Unanticipated situational factors  Perceived risk  Brand decision  Vendor decision  Quantity decision  Timing decision  Payment-method decision The Buying Decision Process

28. Copyright © 2003 Prentice-Hall, Inc. 7-28  Postpurchase Behavior  Postpurchase Satisfaction  Disappointed  Satisfied  Delighted  Postpurchase Actions  Postpurchase Use and Disposal The Buying Decision Process

29. Copyright © 2003 Prentice-Hall, Inc. 7-29 Figure 7.7: How Customers Dispose of Products