1. Chapter 5- slide 1 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 Behaviors 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 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

4. Chapter 5- slide 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumers make many buying decisions every day, and the buying decision is the focal point of the marketer’s effort. –Most large companies research consumer buying decisions in great detail to answer questions about what consumers buy –Marketers can study actual consumer purchases to find out. But learning about the whys of consumer buying behavior is not so easy— Model of Consumer Behavior

5. Chapter 5- slide 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The central question for marketers is as follows: How do consumers respond to various marketing efforts the company might use The starting point is the stimulus-response model of buyer behavior Marketing and other stimuli enter the consumer’s “black box” and produce certain responses Model of Consumer Behavior

6. Chapter 5- slide 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Marketers want to understand how the stimuli are changed into responses inside the consumer’s black box. First, the buyer’s characteristics influence how he or she perceives and reacts to the stimuli. Second, the buyer’s decision process itself affects his or her behavior. Model of Consumer Behavior

7. Chapter 5- slide 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Model of Consumer Behavior All these inputs enter the buyer’s black box, where they are turned into a set of buyer responses: what he or she buys, when, where, and how often.

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 Culture is the most basic cause of person’s want and behavior. Growing up child learns basic values, perceptions, wants, and behavior from family and other important institutions. Characteristics Affecting Consumer Behavior

10. Chapter 5- slide 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Subcultures are groups of people within a culture with shared value systems based on common life experiences and situations Bengalis Gujaratis Punjabis

11. Chapter 5- slide 11 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

12. Chapter 5- slide 12 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

13. Chapter 5- slide 13 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 –Marketers identify them to use as brand ambassadors Groups and Social Networks

14. Chapter 5- slide 14 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

15. Chapter 5- slide 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Family is the most important consumer- buying organization in society The groups, family, clubs, and organizations that a person belongs to define his/her social role and status Social Factors

16. Chapter 5- slide 16 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Occupation affects the goods and services bought by consumers Economic situation includes trends in: Personal Factors Personal income Savings Interest rates

17. Chapter 5- slide 17 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( is the study of personality, values, attitudes, interests, and lifestyles) Personal Factors

18. Chapter 5- slide 18 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 usually described in terms of traits as self confidence, dominance, sociability, aggressiveness, adaptability. Personal Factors

19. Chapter 5- slide 19 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Psychological Factors MotivationPerceptionLearningBeliefs and attitudes

20. Chapter 5- slide 20 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 Psychological Factors Motivation

21. Chapter 5- slide 21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Characteristics Affecting Consumer Behavior Maslow’s Hierarchy of Needs People are driven by particular needs at particular times Human needs are arranged in a hierarchy from most pressing to least pressing

22. Chapter 5- slide 22 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 Psychological Factors

23. Chapter 5- slide 23 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 Psychological Factors

24. Chapter 5- slide 24 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

25. Chapter 5- slide 25 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

26. Chapter 5- slide 26 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

27. Chapter 5- slide 27 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of Buying Decision Behavior 5-34 Complex Buying Behavior When consumers are highly motivated in a purchase and perceive significant differences among brands Purchasers are highly motivated when: Product is expensive Product is risky Product is purchased infrequently Product is highly self-expressive

28. Chapter 5- slide 28 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of Buying Decision Behavior 5-35 Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands

29. Chapter 5- slide 29 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of Buying Decision Behavior 5-36 Habitual buying behavior occurs when consumers have low involvement and there is little significant brand difference Variety-seeking buying behavior occurs when consumers have low involvement and there are significant brand differences

30. Chapter 5- slide 30 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process Need Recognition Need recognition occurs when the buyer recognizes a problem or need triggered by: Internal stimuli External stimuli 5-38

31. Chapter 5- slide 31 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process 5-39 Information Search Information search is the amount of information needed in the buying process and depends on the strength of the drive, the amount of information you start with, the ease of obtaining the information, the value placed on the additional information, and the satisfaction from searching

32. Chapter 5- slide 32 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process 5-40 Information Search Sources of information: Personal sources—family and friends Commercial sources—advertising, Internet Public sources—mass media, consumer organizations Experiential sources—handling, examining, using the product

33. Chapter 5- slide 33 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process 5-41 Evaluation of Alternatives Evaluation of alternatives is how the consumer processes information to arrive at brand choices

34. Chapter 5- slide 34 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process 5-42 Purchase Decision The purchase decision is the act by the consumer to buy the most preferred brand The purchase decision can be affected by: Attitudes of others Unexpected situational factors

35. Chapter 5- slide 35 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process 5-43 Post-Purchase Decision The post-purchase decision is the satisfaction or dissatisfaction the consumer feels about the purchase Relationship between: Consumer’s expectations Product’s perceived performance

36. Chapter 5- slide 36 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process 5-44 Post-Purchase Decision 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

37. Chapter 5- slide 37 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 5-45 Post-Purchase Decision

38. Chapter 5- slide 38 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-46 New product is a good, service, or idea that is perceived by some potential customers as new Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use

39. Chapter 5- slide 39 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-47 Stages in the Adoption Process 1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

40. Chapter 5- slide 40 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-48 Stages in the Adoption Process Awareness is when the consumer becomes aware of the new product but lacks information Interest is when the consumer seeks information about the new product

41. Chapter 5- slide 41 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-49 Stages in the Adoption Process Evaluation is when the consumer considers whether trying the new product makes sense Trial is when the consumer tries the new product to improve his or her estimate of value

42. Chapter 5- slide 42 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-50 Stages in the Adoption Process Adoption is when the consumer decides to make full and regular use of the product

43. Chapter 5- slide 43 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-51 Individual Differences in Innovation Early adopters are opinion leaders and adopt new ideas early but cautiously Early majority are deliberate and adopt new ideas before the average person Late majority are skeptical and adopt new ideas only after the majority of people have tried it Laggards are suspicious of changes and adopt new ideas only when they become tradition

44. Chapter 5- slide 44 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-52 Influence of Product Characteristics on Rate of Adoption Relative advantage is the degree to which an innovation appears to be superior to existing products Compatibility is the degree to which an innovation fits the values and experiences of potential consumers

45. Chapter 5- slide 45 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The Buyer Decision Process for New Products 5-53 Influence of Product Characteristics on Rate of Adoption Complexity is the degree to which the innovation is difficult to understand or use Divisibility is the degree to which the innovation may be tried on a limited basis

46. Chapter 5- slide 46 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall