1. www.mhhe.com/fourps Final Consumers and Their Buying Behavior For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER FIVE

2. 1. 1. Be able to describe how economic needs and income influence the buyer decision process. 2. 2. Understand how psychological variables affect an individual’s buying behavior. 3. 3. Understand how social influences affect an individual’s buying behavior. 4. 4. Be able to explain how characteristics of the purchase situation influence consumer behavior. 5. 5. Be able to explain the process by which consumers make buying decisions When we finish this lecture you should

3. Consumer Behavior for Marketing Strategy Planning (Exhibit 5-1)

4. FinalConsumers Economic needs Psychological variables variables Social influences PurchaseSituation Marketing mixes All other stimuli Consumer decision process Person making a buying decision Person does or does not purchase (response) Business Customers Customers Consumer Behavior for Marketing Strategy Planning (Exhibit 5-1)

5. Economic Needs Affect Many Buying Decisions— But They’re Not the Whole Story They call it a crash test. We call it a product demonstration.

6. Discretionary income determines spending for many items Total Income Total Income Taxes Necessities Discretionary Income Discretionary Income = minus +

7. Appealing to Higher Income Consumers

8. Income Dimensions of the US Market (Exhibit 5-2)

9. A Luxury Item

10. Person Making Decision Economic needs Economy ofEconomy ofpurchase ConvenienceConvenience Efficiency in useEfficiency in use DependabilityDependability Psychological variables variables MotivationMotivation PerceptionPerception LearningLearning AttitudeAttitude Personality/Personality/ lifestyle lifestyle Social influence FamilyFamily Social classSocial class ReferenceReference groups groups CultureCulturePurchasesituation Purchase reasonPurchase reason TimeTime SurroundingsSurroundings Marketing mixes All other stimuli Consumer decision process Person does or does not purchase (response) How We Will View Consumer Behavior (Exhibit 5-3)

11. Wants Needs Psychological Influences within an Individual Drives Consumers seek benefits to match needs and wants! Drives

12. Physiological Needs Several Needs at the Same Time: PSSP Hierarchy of Needs (Exhibit 5-5) Safety Needs Social Needs Personal Needs

13. Ads for Haynes Jeep-Chrysler feature the slogan, “Come to Haynes, where the fun begins.” This is an appeal to the consumer’s: A. A. physiological need. B. B. safety need. C. C. personal need. D. D. social need. E. E. information need. Checking your knowledge

14. If you have a faucet You can have a facial. Personal Needs

15. Selective Exposure Selective Perception Selective Exposure Selective Perception Perception Determines What Consumers See and Feel Selective Retention

16. Pat purchased a Ford Taurus, but traded it for another brand before it was out of warranty because it constantly needed repairs. Now, every time Pat sees an ad that mentions the quality of Ford’s new vehicles all she can think about is the problems she had with her Taurus. This an example of: A. A. need-based thinking. B. B. selective retention. C. C. selective exposure. D. D. selective perception. E. E. psychographics. Checking your knowledge

17. Drive Cues Response Learning Determines What Response Is Likely (Exhibit 5-6) Reinforcement

18. Work with Existing Attitudes Need To Understand Attitudes & Beliefs Belief: An Opinion Attitude: A Point of View Attitude: A Point of View Attitude: A Point of View Attitude: A Point of View Attitudes Relate to Buying Ethical Issues May Arise Meeting Expectations Is Important Key Concepts Key Concepts

19. Interests Activities Interests Personality and Lifestyle Analysis Personality: How People See Things Opinions

20. Social Influences Affect Consumer Behavior

21. The Family Life Cycle (Exhibit 5-8)

22. Empty nesters Reallocation for teenagers Reallocation for teenagers Reallocation for teenagers Reallocation for teenagers Acceptance of new ideas Acceptance of new ideas Key Issues Key Issues Acceptance of new ideas Acceptance of new ideas Family Life Cycle Implications

23. Which group likely spends the most money on durable goods? A. A.Young single. B. B.Young married without children. C. C.Young married with children. D. D.Middle-aged married with children E. E.Older married without children Checking your knowledge

24. Simple Approaches for Measuring Social Class in the U.S. Income Is Not the Main Determinant! Occupation Education Type of Housing Location of Housing

25. Reference Groups Opinion Leaders Culture Other Social Influences

26. Anime, the cartoon-like Japanese art form, has generated significant interest among Generation Y consumers in the U.S. Anime conventions occur frequently and the largest ones draw more than 20,000 attendees. Anime fans, many in costume, come to these conventions to shop, participate in anime workshops, and to simply hang out with people with similar interests. Promotion of these conventions capitalizes mainly on: A. A. learning. B. B. psychological needs. C. C. selective processes. D. D. reference group influences. E. E. culture. Checking your knowledge

27. Buy Differently Increasing Median Income High Growth Rate Buy Differently Increasing Median Income High Growth Rate Ethnic Dimensions of the US Market Avoid Stereotypes

28. Appealing to Minority Consumers

29. Purchase Reason Time Available Purchase Reason Time Available Individuals Are Affected by the Purchase Situation Physical Surroundings

30. Marketing mixes All other stimuli Economic needs PsychologicalVariables Social influences Purchasesituation Consumer decision process Needawareness Problem Solving Information searchInformation search Identify alternativesIdentify alternatives Set criteriaSet criteria Evaluate alternativesEvaluate alternatives Experience After the purchase Postpone decision Feedback based on experience Purchasedecision Routinized response Expanded Model of Consumer Behavior (Exhibit 5-9)

31. Problem Solving Continuum (Exhibit 5-11) Routinized Response Behavior Low involvement Frequently purchased Inexpensive Little risk Little information Limited Problem Solving Extensive Problem Solving High involvement Infrequently purchased Expensive High risk Much information desired Low involvementHigh involvement

32. Try Triaminic – the widest range of symptom-specific children’s cold formulas. So you can choose exactly the medicine your child needs, with no side effects from unnecessary ingredients. Limited or Extensive Problem Solving?

33. Awareness Interest Awareness Interest Evaluation Trial Decision Confirmation Decision Adoption Process Steps Dissonance may set in after the decision!

34. Alice was a bit unsure about her decision after buying a new car. Her uneasiness was diminished after receiving a congratulatory note from the owner of the dealership. The note contained a coupon stating that her first scheduled maintenance on the vehicle would be free. These tactics are part of the dealer’s strategy to reduce: A. A. dissonance. B. B. low involvement purchasing. C. C. routinized response behavior. D. D. social influences. E. E. information search. Checking your knowledge

35. Decision-making steps Adoption process steps Learning steps Drive Cues Response Reinforcement 1.Becoming aware of need 2.Gathering info about choices 3.Setting criteria, evaluation, possible trial 4.Deciding on the solution 5.Evaluating the purchase experience Awareness and interest Interest and evaluation Evaluation, maybe trial Decision Confirmation Decision Making

36. 1. 1. Be able to describe how economic needs and income influence the buyer decision process. 2. 2. Understand how psychological variables affect an individual’s buying behavior. 3. 3. Understand how social influences affect an individual’s buying behavior. 4. 4. Be able to explain how characteristics of the purchase situation influence consumer behavior. 5. 5. Be able to explain the process by which consumers make buying decisions You now

37. Economic buyers Economic needs Discretionary income Needs Wants Drive Physiological needs Safety needs Social needs Personal needs Perception Selective exposure Selective perception Selective retention Learning Cues Response Reinforcement Attitude Belief Expectation Psychographics Lifestyle analysis Empty nesters Key Terms

38. Social class Reference group Opinion leader Culture Extensive problem solving Limited problem solving Routinized response behavior Low-involvement purchases Dissonance Adoption process Key Terms