mkt 201 -lec3- conbuybeh

8/3/2019 MKT 201 -Lec3- ConBuyBeh

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Consumer Markets and

Consumer Buyer Behaviour

Lecture 3

January 27, 2012


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Class Objectives for Today

Identify the Major Models of ConsumerBehaviour

Outline the Major Characteristics

Affecting Consumer Behaviour Distinguish the Major Consumer Buying

Roles

Explain the Buyer Decision Process


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CONSUMER BUYING BEHAVIOUR

Marketers are forced to understand and be cognizant ofthe buying behavior of the consumer, especially withtodays technologically savvy and well informedconsumers.

Consumer buyer behaviour refers to the buying behaviour of final consumers individuals and householdswho buy goods and services for personal consumption. Allof these final consumers combine to make up the

consumer market.


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Consumer market refers ..

to all the individuals and households who buy or acquire goods and services for

personal consumption.

Consumers may make many buying decisions everyday and hence consumer buyer behaviour and theconsumer market are very dynamic.

Marketers can study actual consumer purchases tofind out what they buy, where and how much.


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Consumers buying

behavior is impacted by:

1. Consumercharacteristics

2. Consumer

Psychology

Consumer purchases areinfluenced strongly by:

cultural,

social,

personal and

Psychology

characteristics


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impacted by:

1. Consumer

Characteristics

I.) Cultural

II). Social

III). Personal

2. Consumer Psychology

I). Motivation

II). Learning

III). Perception

IV). Memory


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1. Consumer Characteristics

Cultural Factors These refer to beliefs,

perceptions, values, wants

and normative patterns ofbehavior that is transmittedto the individual by societyfrom family and otherimportant institutions.

Culture is the most basic

cause of a persons wants and

behaviour. Human behaviour

is largely learned.

Culture is transmitted from

generation to generation via:

i) Familyii) Church

iii) School

iv) Groupsv) Media

vi) Peers


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Consumer Characteristics

Culture

Impact on marketing:

Both culture and subculture

will impact the buyingbehaviour of consumers.

Consumer products/services

choice, use and buyingpatterns are overwhelmingimpacted by the culturalexposure of the consumer.

Companies that are able

to absorb multicultural

activities and strategies

in their overall marketing

programs are at an

advantage in capitalizingon the great potential of

this factor


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Sub Culture

Many brands target specificsubcultures:

Hispanics 50 mill- $950

mill buying po3werexpected to increase -$1.4 tr-2013

African American annualbuying $913 bil increase to$1.2 trill- 2013

Asian Americans mostaffluent 15 mil- $500 bil inspending money expected toincrease to $750 bill in 2013

Mature markets(baby boomers- By 2015 50 75

40% of adult consumers


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Consumer Characteristics

Social

Social factors

Social forces represent:

all the forces that will allowfor the social developmentand maturity of theindividual.

They are closelyintertwined in the culturalbackground of theindividual.

These include:

Reference groups

Social roles

Status

Family


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1. Consumer CharacteristicsSocial

Reference groups

All the groups thathave direct orindirect impact onan individuals

attitudes andbehavior

Groups with direct influenceare membership groups andare two types:

i) Primary

-family, friends, neighbours,

co-workers, etc.

ii) Secondary

- religious, professionalgroups, etc.


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Social

Impact on marketing:Reference groups will influence consumers in three (3)ways:

i) Exposing individuals to new lifestyles, behaviors andexperiences that will impact attitude towards brands,products, etc.

ii) Creating pressure for conformity which may impact

product choice, brand and usage rate.

ii) Exposing individuals to groups that they are hoping tobelong or whose values they reject.


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Social

Social roles andstatus

An individualmembership in a groupwill assign him roles(activities) and each rolecarries a status.

Impact on Marketing:

Consumers will selectproducts that symbolizes and

will communicate their rolesAnd ultimately their status insociety.

Marketers can maximize onthis in branding andpositioning of productsservices to the consumer.


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Social Family

This can be categorizedas the most powerfulinstitution of consumer

buying in any society.

Family structure andorganization are

implications of sociocultural orientations.

The consumer behaviour isdetermined by the familythat they were exposed to(family orientation) and this

behavior is transferred tothe family they create(family procreation)


Changes in family size andstructure will result inchanges in the buyingbehavior of the consumer.


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Personal FactorsThese include:

1. Age, stage, and lifecycle(Sony 7 groups)

2. Occupation andeconomiccircumstances

3. Personality and selfconcept

4. Lifestyles and value.


A. Peoples purchasing patternand choice as it relates toproducts/services will reflectchanges as they move fromage to age and as they movethrough life events situationslike marriage, childbirth,retirement, etc.

B. Economic situations can impactproduct choice and ultimatelydemand. Ones occupation maybe a strong indicator of product

consumption pattern.


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Personal Impact on Marketing:

C. Each person possesses personality characteristics andself concept that will impact his/her buying behavior.Brands are chosen based on how well the product or service fits the personality.

brand personality - is in sync with the consumers

brand personality-

this refers to the mix of human traits that can be attributedto a particular brand.


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PersonalConsumers will more than often select brands that will

have brand personalitythat are consistent with their own:

- Actual self

- Ideal self concept

- Others self concept


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Personal Impact on marketing:

D. Lifestyles and values also help to shape consumers

taste and buying patterns.

Lifestyle relates to an individuals pattern of living inthe world as expressed in activities, interests and

opinions.

Marketers can aim the brand more closely to reflectthe consumers lifestyle or changes within the lifestyle.


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A persons buying choices are furtherinfluenced by four psychological factors:

a. Motivation

b. Perception

c. Learning

d. Beliefs and Attitudes


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2. Consumer PsychologyMotivation

Motivation

A motive is: a need that is sufficiently pressing to direct

the person to seek satisfaction of the need.

An aging baby-boomer who buys a sporty convertible

might explain that he likes to feel the wind thru his thinning

or bald hair or he wants to feel young again

Kotler& Armstrong, (2012) see pg 147

Numerous theories have been tabled to explain this concept

which can generally be applied to consumer behaviour.


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2. Consumer PsychologyMotivation

Maslows Theory of needs

Products/services ultimately fit into the overall plan,goals and lives of the consumer base on their situationin the hierarchy of needs.

Hertzbergs Two-factor Theory

In selling products, marketers should increase satisfiers

and decrease dissatisfiers in order to attract customers.


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2.Consumer PsychologyMotivation

Freuds Theory

Product can meet deeper innate needs of consumer basedon motives.

Products/services also represent different things toconsumer based on the projected needs by the marketer.

Freud-persons do not fully understand their motivation

An aging baby-boomer who buys a sporty convertible mightexplain that he likes to feel the wind thru his thinning or bald hair

or he wants to feel young again


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2.Consumer PsychologyPerception

Perception

Process by which people select, organize and interpret

information to form a meaningful picture of the world

Kotler & Armstrong, (2012)

It is perception and not reality, that consumers respondto which will impact their behavior in the marketplace or

marketspace.


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2.Consumer Psychology

Perception

As it relates to perception, people can form differentperceptions of the same stimulus due to perceptualprocesses :

- Selective attention

- Selective distortion

- Selective retention

- Subliminal (subconscious) perception


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Perception

Research has shown thatpeople are exposed to3000-5000 messagesevery day

One cant respond toevery stimuli, use

Selective Attention-screens out most of theinformation

Some persons areaffected by advertisingbut does not know it

Subliminal (subconscious)perception


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2.Consumer Psychology

Learning and Memory

Learning

Learning relates topermanent change in

behavior arising fromexperience.

Learning is reinforced through

drives (strong internal stimuli,

cues, responses and

reinforcement

.

Memory

Information andexperiences that

individuals encounterthroughout their lives


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Model of Consumer Behaviour

Consumer

Psychology

MotivationPerceptionLearningMemory

OtherStimuli

EconomicTechnologicalPoliticalCultural Consumer

Characteristics

Cultural Social

Personal

MarketingStimuli

Products& services

Price,DistributionCommunications

BuyingDecisionProcess

Problemrecognition

InformationsearchEvaluation ofAlternativesDecisionPost-purchasebehavior

Purchase

Decision

Productchoice

BrandChoiceDealer Choice

PurchaseAmountPurchasetimingPaymentMethod.


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Summary

Consumer buying are affected by large societal factors.

Consumer buyer behaviour is influenced by four key setsof buyer characteristics: cultural, social, personal and

psychological.

Buying behaviour may vary greatly across different typesof products and buying decisions.

Consumers undertake complex buying behaviour whenthey are highly involved in a purchase and perceivedsignificant differences among brands.


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Types of Buying Decisions

Buying behaviour different greatly for different products

Some purchases are simple, habitual therefore very

routine;

Others are Complex involving extensive research egbuying a computer or a motor vehicle


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Complex buying behaviourComplex buying behaviour

Buying Behaviourcharacterised by:

High consumer involvementin a purchase

Significant perceiveddifferences among brands

Usually involved if theproduct is expensive, risky,purchased infrequently &

highly self expressive.

Dissonance reducingDissonance reducingbuying behaviourbuying behaviour

Buying Behaviour

characterised by: High consumer

involvement in a purchase

Few perceived differencesamong brands

Usually involved if theproduct is expensive, risky,purchased infrequently &

highly self expressive.


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Habitual buying behaviourHabitual buying behaviour

Buying Behaviourcharacterised by:

Low consumer involvementin a purchase

Few significantly perceivedbrand differences

Purchases are usually lowcost, frequently purchased,passive

VarietyVariety--seeking buyingseeking buyingbehaviourbehaviour

Buying Behaviour

characterised by: Low consumer

involvement in a purchase

Significant perceived branddifferences

Consumers can easilyswitch brands


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The Buying Decision process

This process begins long before the actualpurchase and continues long after.

Sometimes results in the non-purchase ofgoods and services

Marketers therefore must concentrate on theentire process.


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NeedRecognition

The Buying Decision Process

Information Search

Evaluation of

alternatives

Purchase Decision

Post purchase

behaviour


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The Buyer Decision Process

How can marketers learn about the stages in thebuying process:

Personal purchase experience

Interview persons

Ask consumers to describe the ideal way to buy

product

Most consumers go thru the five (5) stage BuyingProcess


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1. Need recognition a need occurs when acustomer is faced with a problem or a need.

A need may occur from two states:

actual state (when a product fails to perform

satisfactorily hence a need emerges) or

desired state (desire for something new)

(might be triggered by an advt)


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2. Information search and evaluation

(Consumers actively seeking)

Information search in this context relates to: the mental or physical way information is

gathered.

The search can be:

- Internal -

- External social network sites


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Information evaluation:

a. The more urgent the need the less evaluation will take

place

b. The more significant the product the more evaluation

c. The more complex the alternatives the greater theevaluation


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Information is obtained from 4 sources:

Advertisement- sales person

Commercial advts.

Non consumer advt.

eg Hospitality rating Apple AA

Personal family friends

Experiential (using the product-risk taking)


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The intensity of the searchheightens awareness,knowledge of availablebrands & features

3. EVALUATION OFALTERNATIVES

Short listing personal criteria

Can be subjective (impulsive

objective(consumer guides)

Careful calculation &logical thinking:

i. Trying to satisfy a need

ii. Derive benefits from theproduct

iii. Product attributes satisfyneeds

Eg shoes durabilitystyle price


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Purchase

decision maynot always

result in actual

purchase!!!!!

4. Purchase Decision

The buyers decision about

which brand to purchase

This is impacted by:

Attitude of others (friends)

Unanticipated situational

factors reduced income Purchase intention

Perceived risks (self esteem

Evaluation of alternatives


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4. Post purchase

decision

These include:

a. Post purchase action

b. Post purchase

satisfactionc. Post purchase use

and disposal

Consumer takes furtheraction after the purchasebased on satisfaction ordissatisfaction

A gap between expectationand reality results inCognitive dissonance

(state of mind that customers gothru after a purchase)

Level of dissonanceincreases with the value ofthe product.


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Customer satisfaction willresult in lasting relationships

It is also important that

customer satisfaction levelsbe measured periodically

As buyers go thru thebuying process some may

pass more quickly thanothers. It depends on thebuyer themselves, theproducts, and the actualbuyer situation

The marketers job is tounderstand :

the buyers behaviour at

each stage.

The attitudes of others,perceived risk,

situational factors as wellas, the consumers levelof post purchasesatisfaction & actions

Th B D i i P fTh B D i i P f


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The Buyer Decision Process forThe Buyer Decision Process for

New ProductsNew Products

New Product

A good or service or idea

that is perceived by somepotential customer as

new

(Kotler/Armstrong)

The product may havebeen on the marketbefore (how doconsumers learn about

he

Adoption process

The mental process an

individual passes fromfirst hearing about aninnovation to finaladoption.

This is the decision forthe user to become aregular user.


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Stages in the Adoption ProcessStages in the Adoption Process

Awareness theconsumer becomes awareof the innovation but lacksinformation about it.

Interest The consumer isstimulated to seekinformation about theinnovation.

Evaluation Theconsumer decided whetherit would make sense to trythe new product.

Trial The consumertries the product on asmall scale to improve hisor her estimate of itsvalue.

Adoption Theconsumer decides tomake full and regular useof the innovation.This progression suggests

that the new-productmarketer should thinkabout how to facilitateconsumer movementthrough these stages.


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Stages in the Adoption ProcessStages in the Adoption Process

HYUNDAI ASSURANCE

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