1. Chapter 5- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Five Consumer Markets and Consumer Buyer Behavior

2. Chapter 5- slide 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer Markets and Consumer Buyer Behavior Model of Consumer Behavior Characteristics Affecting Consumer Behavior Types of Buying Decision Behavior The Buyer Decision Process The Buyer Decision Process for New Products Topic Outline

3. Chapter 5- slide 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumers make many buying decisions everyday and buying decision is the focal point of the marketer’s effort. Marketers can study actual consumer purchases to find out what they buy, where and how much, but learning the why’s of the consumer buying behavior is not easy- the answer is locked deep within the consumer’s mind Model of consumer behavior

4. Chapter 5- slide 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption Consumer market refers to all of the personal consumption of final consumers Model of Consumer Behavior

5. Chapter 5- slide 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Model of Consumer Behavior

6. Chapter 5- slide 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Buyer characteristics and the buyer decision process are two parts of _______. 1.buyer’s black box 2.buyer’s white box 3.buyer’s red box 4.buyer’s shopping box

7. Chapter 5- slide 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Buyer characteristics and the buyer decision process are two parts of _______. 1.buyer’s black box 2.buyer’s white box 3.buyer’s red box 4.buyer’s shopping box

8. Chapter 5- slide 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Factors Influencing Consumer Behavior

9. Chapter 5- slide 9 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics. 1.cost 2.social 3.health 4.profit

10. Chapter 5- slide 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics. 1.cost 2.social 3.health 4.profit

11. Chapter 5- slide 11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Culture is the learned values, perceptions, wants, and behavior from family and other important institutions Every group or society has a culture and cultural influences on buying behavior may vary greatly from one country to another Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted Characteristics Affecting Consumer Behavior

12. Chapter 5- slide 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Subculture are groups of people within a culture with shared value systems based on common life experiences and situations Hispanic African American Asian Mature consumers

13. Chapter 5- slide 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Hispanic consumers: one third of the US population Hispanic consumers tend to buy more branded, higher quality products African-American consumers: they are motivated by quality and selection. Brands are important Characteristics Affecting Consumer Behavior

14. Chapter 5- slide 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Asian American: they are the second fastest growing population sub segment after the Hispanics. More than 90% of the Asian American Go online regularly and are most comfortable with internet technology such as online banking Characteristics Affecting Consumer Behavior

15. Chapter 5- slide 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Mature consumers: very attractive market. The entire U.S baby boom generation, the largest and the wealthiest demographic cohort in the country. Mature consumers are not stuck in their ways Characteristics Affecting Consumer Behavior

16. Chapter 5- slide 16 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Four examples of subculture groups include Hispanic, African American, Asian American, and ________. 1.middle-class 2.mature consumers 3.RVers 4.echo boomers

17. Chapter 5- slide 17 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Four examples of subculture groups include Hispanic, African American, Asian American, and ________. 1.middle-class 2.mature consumers 3.RVers 4.echo boomers

18. Chapter 5- slide 18 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Groups of people with shared value systems based on common life experiences are called ________. 1.cohorts 2.generations 3.subcultures 4.affiliate groups

19. Chapter 5- slide 19 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Groups of people with shared value systems based on common life experiences are called ________. 1.cohorts 2.generations 3.subcultures 4.affiliate groups

20. Chapter 5- slide 20 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The fastest-growing and most affluent subculture in the United States is the _____ population. 1.Hispanic 2.African American 3.Asian American 4.mature

21. Chapter 5- slide 21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The fastest-growing and most affluent subculture in the United States is the _____ population. 1.Hispanic 2.African American 3.Asian American 4.mature

22. Chapter 5- slide 22 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors Measured by a combination of occupation, income, education, wealth, and other variables Characteristics Affecting Consumer Behavior

23. Chapter 5- slide 23 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall In some social systems, members of different classes are reared for certain roles and cant change their social positions. In other country, however, the lines between social classes are not fixed and rigid, people can move to a higher social class or drop into a lower one. Characteristics Affecting Consumer Behavior

24. Chapter 5- slide 24 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Marketers are interested in social class because within a given social class tend to exhibit similar buying behavior. Social classes show distinct product and brand preferences in areas such as clothing, home furnishings, and automobiles. Characteristics Affecting Consumer Behavior

25. Chapter 5- slide 25 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior

26. Chapter 5- slide 26 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ________. 1.subculture 2.families 3.social class 4.reference groups

27. Chapter 5- slide 27 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ________. 1.subculture 2.families 3.social class 4.reference groups

28. Chapter 5- slide 28 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Which of the following is not one of the major American social classes? 1.Upper class 2.Working class 3.Lower-upper class 4.Lower-working class

29. Chapter 5- slide 29 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Which of the following is not one of the major American social classes? 1.Upper class 2.Working class 3.Lower-upper class 4.Lower-working class

30. Chapter 5- slide 30 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Membership Groups Groups with direct influence and to which a person belongs Aspirational Groups Groups an individual wishes to belong to Reference Groups Groups that form a comparison or reference in forming attitudes or behavior Groups and Social Networks

31. Chapter 5- slide 31 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Word-of-mouth influence and buzz marketing –Opinion leaders are people within a reference group who exert social influence on others –Also called influentials or leading adopters –Marketers identify them to use as brand ambassadors Groups and Social Networks

32. Chapter 5- slide 32 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ________. 1.opinion leader 2.mature consumer 3.marketer 4.upper class citizen

33. Chapter 5- slide 33 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ________. 1.opinion leader 2.mature consumer 3.marketer 4.upper class citizen

34. Chapter 5- slide 34 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Online Social Networks are online communities where people socialize or exchange information and opinions Include blogs, social networking sites (facebook), virtual worlds (second life) Groups and Social Networks

35. Chapter 5- slide 35 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Family is the most important consumer- buying organization in society Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services The wife traditionally has been the main purchasing agent for the family. Social Factors ( family )

36. Chapter 5- slide 36 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Children may also have a strong influence on family buying decisions Studies found that kids influence family decisions about where they take vacations, what cars or cell phones they buy. As a result, marketers of cars, full service restaurants, cell phones are now placing ads on the children oriented TV networks Social Factors ( family )

37. Chapter 5- slide 37 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status A role consists of the activities that people expected to perform according to the persons around them Social Factors (roles and status)

38. Chapter 5- slide 38 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Each role carries a status reflecting the general esteem given to it by society. People usually choose products appropriate to their roles and status. Consider the roles a working mother plays Social Factors (roles and status)

39. Chapter 5- slide 39 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Age and life-cycle stage People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture and recreation are age related. Buying Is also shaped by the stage of the family life cycle “ the stages through which families might pass as they mature over time” Personal Factors

40. Chapter 5- slide 40 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Traditional family life cycle stages include young singles and married couples with children. The nontraditional stages such as unmarried couples, singles marrying later in life, single parents, extended parents ( those with young adult children returning home ) and others Personal Factors

41. Chapter 5- slide 41 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior RBC Royal Bank stages –Youth: younger than 18 –Getting started: 18–35 who are going through first experiences, first credit card, first car, first child –Builders: 35–50 in their peak earning years, as they build careers and family, they tend to borrow more than they invest Personal Factors

42. Chapter 5- slide 42 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Accumulators: 50–60 Worry about saving for retirement and invested wisely. Preservers: over 60 Want to maximize their retirement income to maintain a desired lifestyle. Personal Factors

43. Chapter 5- slide 43 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Occupation affects the goods and services bought by consumers Blue workers tend to buy more rugged work clothes, whereas executives buy more business suits. A company can specialize in making products needed by a given occupational group. Personal Factors

44. Chapter 5- slide 44 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Economic situation includes trends in: If economic indicators point to a recession, marketers can take steps to redesign, and reprice their products closely. Personal Factors Personal income Savings Interest rates

45. Chapter 5- slide 45 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Lifestyle is a person’s pattern of living as expressed in his or her psychographics Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment Personal Factors

46. Chapter 5- slide 46 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Personality and self-concept –Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment –Personality is described in terms of traits. Personal Factors

47. Chapter 5- slide 47 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Personal Factors Dominance Autonomy DefensivenessAdaptabilityAggressiveness

48. Chapter 5- slide 48 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A brand personality is the specific mix of the human traits that may be attributed to a particular brand. One researcher identified five brand personality traits: 1.Sincerity ( honest, wholesome, and cheerful) 2.Excitement ( imaginative and up-to date) Characteristics Affecting Consumer Behavior

49. Chapter 5- slide 49 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3. Competence ( reliable, intelligent and successful ) 4. Sophistication ( upper class and charming) 5. Ruggedness ( tough and outdoorsy) Characteristics Affecting Consumer Behavior

50. Chapter 5- slide 50 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting. 1.self-esteem 2.self-concept 3.lifestyle 4.personality

51. Chapter 5- slide 51 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting. 1.self-esteem 2.self-concept 3.lifestyle 4.personality

52. Chapter 5- slide 52 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Which of the following is not one of the five brand personality traits? 1.Ruggedness 2.Sophistication 3.Self-concept 4.Sincerity

53. Chapter 5- slide 53 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Which of the following is not one of the five brand personality traits? 1.Ruggedness 2.Sophistication 3.Self-concept 4.Sincerity

54. Chapter 5- slide 54 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Psychological Factors Motivation Perception LearningBeliefs and attitudes

55. Chapter 5- slide 55 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior A person has may needs at any given time. Some are biological, arising from the states of tension such as hunger, thirst or discomfort. Others are psychological arising from the need for recognition, esteem, or belonging. A need becomes a motive when it’s aroused to a sufficient level of intensity Psychological Factors Motivation

56. Chapter 5- slide 56 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations Psychological Factors Motivation

57. Chapter 5- slide 57 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Psychologists have developed theories of human motivation, two of the most popular- the theories of psychologists Frued and Maslow. Frued’s theory suggests that a person’s buying decisions are affected by subconscious motives that even the buyer mayn’t fully understand. Characteristics Affecting Consumer Behavior

58. Chapter 5- slide 58 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Maslow’s Hierarchy of Needs

59. Chapter 5- slide 59 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Maslow’s hierarchy of needs are psychological, safety, ________, esteem, and self- actualization. 1.social 2.economic 3.lifestyle 4.education

60. Chapter 5- slide 60 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Maslow’s hierarchy of needs are psychological, safety, ________, esteem, and self- actualization. 1.social 2.economic 3.lifestyle 4.education

61. Chapter 5- slide 61 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes –Selective attention –Selective distortion –Selective retention Psychological Factors

62. Chapter 5- slide 62 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The process by which people select, organize, and interpret information to form a meaningful picture of the world is ________. 1.sensation 2.learning 3.perception 4.motivation

63. Chapter 5- slide 63 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The process by which people select, organize, and interpret information to form a meaningful picture of the world is ________. 1.sensation 2.learning 3.perception 4.motivation

64. Chapter 5- slide 64 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Selective attention is the tendency for people to screen out most of the information to which they are exposed, marketers must work hard to attract the consumer’s attention Selective distortion is the tendency for people to interpret information in a way that will support what they already believe Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands Psychological Factors

65. Chapter 5- slide 65 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Learning is the change in an individual’s behavior arising from experience and occurs through interplay of: Psychological Factors DrivesStimuliCues Responses Reinforcement

66. Chapter 5- slide 66 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior A drive : a strong internal stimulus that calls for action. A drive becomes a motive when its directed towards a particular stimulus object. Cues are minor stimuli that determine when, where and how the person responds The consumer’s response to his or her interest in buying the product Psychological Factors

67. Chapter 5- slide 67 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Belief is a descriptive thought that a person has about something based on: Knowledge Opinion Faith Psychological Factors Beliefs and Attitudes

68. Chapter 5- slide 68 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Marketers are interested in the beliefs that people formulate about specific products and services, because these beliefs make up product and brand images that affect buying behavior. If some of the beliefs are wrong and prevent purchase, the marketer will want to launch a campaign to correct them. Characteristics Affecting Consumer Behavior

69. Chapter 5- slide 69 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea Psychological Factors

70. Chapter 5- slide 70 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Attitudes put people into a frame of mind of liking or disliking things, or moving toward or away from them Attitudes are difficult to change, a company should usually try to fit its products into existing attitudes rather than an attempt to change the attitudes. Psychological Factors

71. Chapter 5- slide 71 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of Buying Decision Behavior Complex buying behaviorDissonance-reducing buying behaviorHabitual buying behaviorVariety-seeking buying behavior

72. Chapter 5- slide 72 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall When consumers are highly involved in a purchase and perceive significant differences among the brands. Consumers maybe highly involved when the product is expensive, risky and purchased infrequently Marketers need to help buyers learn about product-class attributes& their relative importance. They need to differentiate their brand features, by describing them using print media with long copy Complex buying behavior

73. Chapter 5- slide 73 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Occurs when consumers are highly involved with an expensive, risky purchase but see little differences among brands Consumers might experience post purchase dissonance when they notice certain disadvantages of the purchased brand or hear favorable things about brands not purchased Dissonance-reducing buying behavior

74. Chapter 5- slide 74 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Occurs under conditions of low consumer involvement and little significant brand difference Consumers appear to have low involvement with most low cost, frequently purchased products Ad repetition creates brand familiarity rather than brand conviction “ consumers don’t form strong attitudes toward a brand, they select the brand because its familiar Habitual buying behavior

75. Chapter 5- slide 75 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of Buying Decision Behavior Four Types of Buying Behavior

76. Chapter 5- slide 76 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall In situations characterized by low consumer involvement but significant perceived brand differences. In such cases consumers often do a lot of brand switching Brand switching occurs for the sake of variety rather than because of dissatisfaction. Variety-seeking buying behavior

77. Chapter 5- slide 77 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ________ buying behavior. 1.dissonance-reducing 2.variety-seeking 3.complex 4.habitual

78. Chapter 5- slide 78 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ________ buying behavior. 1.dissonance-reducing 2.variety-seeking 3.complex 4.habitual

79. Chapter 5- slide 79 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ________ buying behavior is characterized by low consumer involvement but significant perceived brand differences. 1.Dissonance-reducing 2.Variety-seeking 3.Complex 4.Habitual

80. Chapter 5- slide 80 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ________ buying behavior is characterized by low consumer involvement but significant perceived brand differences. 1.Dissonance-reducing 2.Variety-seeking 3.Complex 4.Habitual

81. Chapter 5- slide 81 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process Buyer Decision Making Process

82. Chapter 5- slide 82 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The first stage of the buyer decision process, in which the consumer recognizes a problem or need. The need can be triggered by internal stimuli when one of the person’s normal needs rises to a level high enough to become a drive. Need Recognition

83. Chapter 5- slide 83 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process A need can be triggered by external stimuli For example, an advertisement or a discussion with a friend might get you thinking about buying a new car. At this stage the marketer should research consumers to find out what kinds of needs or problem arise. Need Recognition

84. Chapter 5- slide 84 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process An interested consumer may or mayn’t search for more information, if the consumer’s drive is strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not the consumer may store the need in the memory or undertake an information search. Information Search

85. Chapter 5- slide 85 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The stage of the buyer decision process in which the consumer is aroused to search for more information, the consumer may simply heightened attention or may go into an active information search. Information Search

86. Chapter 5- slide 86 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process Personal sources—family, friends and neighbors Commercial sources— advertising, Internet, salespeople Public sources—mass media, consumer organizations, internet searches Experiential sources—handling, examining, using the product Information Search Sources of Information

87. Chapter 5- slide 87 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The consumer receives the most information about a product from commercial sources. Commercial sources inform the buyer, but personal sources evaluate the product for the buyer As more information is obtained, the consumer’s awareness of the brands increase Information Search

88. Chapter 5- slide 88 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The marketer needs to know about alternative evaluation How the consumer processes information to arrive at brand choices. The consumer arrives at attitudes towards different brands through some evaluation procedure. Evaluation of Alternatives

89. Chapter 5- slide 89 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process Sometimes consumers make buying decisions on their own, sometimes they turn to friends, consumer guides or salespeople for buying advice. Marketers should study buyers to find out how they actually evaluate brand alternatives. If they know what evaluation processes go on, marketers can take steps to influence the buyer’s decision Evaluation of Alternatives

90. Chapter 5- slide 90 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The buyer’s decision about which brand to purchase. Two factors can come between the purchase intention and the purchase decision Purchase Decision

91. Chapter 5- slide 91 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The act by the consumer to buy the most preferred brand The purchase decision can be affected by: –Attitudes of others –Unexpected situational factors Purchase Decision

92. Chapter 5- slide 92 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The stage of the buyer decision process in which the consumers take further action after purchase, based on their satisfaction or dissatisfaction Post-Purchase Decision

93. Chapter 5- slide 93 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process The satisfaction or dissatisfaction that the consumer feels about the purchase Relationship between: –Consumer’s expectations –Product’s perceived performance The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction Cognitive dissonance is the discomfort caused by a post-purchase conflict Post-Purchase Decision

94. Chapter 5- slide 94 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process Customer satisfaction is a key to building profitable relationships with consumers— to keeping and growing consumers and reaping their customer lifetime value Satisfied customers talk favorably about the product, pay less attention to competing brands Post-Purchase Decision

95. Chapter 5- slide 95 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use. New product: a good, service, or idea that’s perceived by some potential customers as new Stages in the process include: Awareness Interest Evaluation Trial Adoption

96. Chapter 5- slide 96 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Awareness : the consumer becomes aware of the new product, but lacks information about it Interest: the consumer seeks information about the new product Evaluation: the consumer considers whether trying the new product makes sense Stages in the adoption process

97. Chapter 5- slide 97 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Trial: the consumers tries the new product on a small scale to his or her estimate of its value Adoption : the consumer decides to make full and regular use of the new product. * This model suggests that the new product marketer should think about how to help consumers move through these stages Stages in the adoption process

98. Chapter 5- slide 98 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall There are five adopters groups which are : 1.Innovators(venturesome) : they try new ideas at some risk 2.Early adopters:they are opinion leaders in their communities and adopt new ideas early but carefully 3.Early majority(deliberate): they rarely are leaders, they adopt new ideas before the average person Individual differences in Innovativeness

99. Chapter 5- slide 99 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 4. Late majority( skeptical) : they adopt an innovation only after a majority of people have tried it 5. Laggards(tradition bound) : they are suspicious of changes and adopt the innovation only when it has become sth. Of a tradition itself. Individual differences in Innovativeness

100. Chapter 5- slide 100 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What are the two largest statistical populations in the adoption process? 1.Innovators and early majority 2.Early adopters and early majority 3.Early majority and late majority 4.Innovators and laggards

101. Chapter 5- slide 101 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What are the two largest statistical populations in the adoption process? 1.Innovators and early majority 2.Early adopters and early majority 3.Early majority and late majority 4.Innovators and laggards

102. Chapter 5- slide 102 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products Influence of Product Characteristics on Rate of Adoption Relative advantage CompatibilityComplexity DivisibilityCommunicability

103. Chapter 5- slide 103 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Relative advantage: the degree to which the innovation appears superior to existing products Compatibility: the degree to which the innovation fits the values and experiences of potential consumers Complexity: the degree to which the innovation is difficult to understand or use Influence of Product Characteristics on Rate of Adoption

104. Chapter 5- slide 104 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Divisibility : the degree to which the innovation maybe tried on a limited basis Communicability : the degree to which the results of using the innovation can be observed or described to others Influence of Product Characteristics on Rate of Adoption