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Welcome to MKT 301

The Principles of Marketing


Consumer Behaviour

"There is hardly anything in the world that some man can't make a little
worse and sell a little cheaper, and the people who consider price only
are this man's lawful prey."
(John Ruskin, 1819-1900, English art critic and social commentator,)
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Administration

• Lecturer: Bruce Sheppy


• E-Mail: sheppyb@richmond.ac.uk
• Attendance register

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Agenda
• the dimensions of customer behaviour, who buys, how they
buy and the choice criteria used
• the differences between consumer and organizational buyer
behaviour
• the main influences on consumer behaviour—the buying
situation, personal and external influences
• the main influences on organizational buying behaviour—
the buy class, product type and purchase importance
• the marketing implications of the various dimensions of
consumer behaviour

Consumer Buying Behaviour

• Consumer Buying Behavior refers to the


buying behavior of final consumers -individuals
& households who buy goods and services for
personal consumption.

• The central question for marketers is:


―How do consumers respond to various
marketing efforts the company might use?‖
Understanding Customers
Who is
important?

What are
How do their choice
they buy? criteria?

Customers

Where do When do
they buy? they buy?

Let’s consider the consumer decision process...


• Problem identification Who is involved in the decision
• Information search process?
• Evaluation of alternatives
•Initiator- information gather
• Purchase •Influencer – pester power
• Post purchase evaluation •Decider- he / she with the power
•Buyer who effects the transaction
•User- actual consumer

Has anyone bought toothpaste lately? Is this how you did it?
(Please answer yes!!!!!)
For what types of goods or services are all steps likely to be
followed carefully?
Phillips Juicer

Advertisement
clearly targets
parents
of young children
who are
concerned
about their
nutrition and
health

Consumer Buying Decision Process

Marketers influence this process using the


Marketing Mix.

Need Information Evaluate Purchase Post purchase


recognition search alternatives decision evaluation

Internal or Personal, Rational vs. Satisfaction or


external Commercial, Impulse Dissatisfaction
Public, On own or in
Experiential consultation
Sources

Cognitive
Consideration Set: Technical,
Economic, Social and Personal
Dissonance
Bang &
Olufsen

Advertisement
provides
Highlights
both rational
and
emotional
factors likely
to influence
purchase

Evaluation of alternatives
•Evoked set includes those alternatives that are already in the memory or our retrieval
set, as well as those which are readily available and on display in a retail setting.
Research tells us that in certain product categories we may have 5 or 6 brands in our
evoked set.
•Inept Set: we are aware of products, but have no intention of buying
•Inert Set: products of which we are not aware and therefore, unlikely to
•purchase
Choice Criteria Used When Evaluating
Alternatives
Social-

Status
Social belonging
Technical- Convention
Fashion
Reliability
Durability
Performance
Style/looks Personal-
Comfort Economic-
Delivery Self –image
Convenience Price Morals
Taste Value for money Emotions
Residual value
Life style costs

Attributes used to measure product choice

• Attributes
– Cost attributes Here we need to consider not only the cost of purchase, but
also the costs associated with operating, repairing or with selling on the
product when we want to replace it.
– Performance attributes: These include the quality of the materials used, how
reliable the product is and how generally it performs. This includes such
attributes such as taste, safety or efficiency.
– Social attributes: These include some intangible benefits such as its
reputation, image
– Availability attributes: We need to consider how easy the product is to
purchase, such as a snack bar or soft drink, if there are credit terms for more
involved purchases such as a car, or other factors such as delivery time and
– quality of service.
• Outcomes:
Once the consumer has made the final decision to purchase, he or she will either
be satisfied with the purchase or dissatisfied with the purchase. If the purchase
represented a level of risk to the consumer, then it is still likely that there are
doubts. Consumers will very often question their own purchase, which we refer to
as cognitive dissonance.
Model of Buyer Behavior
Product Marketing and Economic
Other Stimuli
Price Technological
Place Political
Promotion Cultural

Buying Buyer
Decision Buyer’s Black Box Characteristics
Process

Product Choice Purchase


Buyer’s Response Timing
Brand Choice
Purchase
Dealer Choice Amount

Influences on consumer
purchasing behavior
The buying
situation

Personal Social
influences influences

information culture
processing social class
motivation Consumer geodemo-
beliefs and graphics
attitudes reference
personality groups
lifestyle
lifecycle
Behavioural Learning Theories:
Classical conditioning: Operant conditioning:

is the process of individual respond to


using an established the stimulus that offers
the most satisfactory
relationship between a rewards and
stimulus and a subsequently the
response to cause behaviour is repeated.
learning The more rewarding
the response, the
more likelihood of a
repeat purchase

Behavioural Theories and


Marketing
Classical conditioning uses an established
relationship between stimulus and response to cause
learning –

In advertising humour is known to elicit a pleasant


response and is used in the belief that these
pleasant feeling will be a condition of the product.

Operant conditioning is reinforcement through


rewards –
The use of free samples is based on these
principles
Red Bull

Advertisement
uses humour to
appeal to its
target market of
young adults

VIDEO OF ADVERT

Factors Influencing Consumer Behavior

Cultural
Social Personal
Age and Psycho-
Culture Reference life-cycle logical
groups
Occupation Motivation
Economic Perception Buyer
Sub- Family
culture situation Learning
Lifestyle Beliefs and
Roles Personality attitudes
Social and and
class status self-concept
Factors Affecting Consumer Behavior:
Culture

Culture
• Most basic cause of a person's wants and behavior.
• Values, Perceptions, Wants & Behavior

Subculture Social Class


• Groups of people with shared • Society’s relatively permanent
value systems based on & ordered divisions whose
common life experiences. members share similar values,
interests, and behaviors.
• Gay Consumers (Pink Pound)
• Measured by: Occupation,
• African Consumers
Income, Education, Wealth and
• Asian Consumers Other Variables.
• Mature Consumers

Factors Affecting Consumer Behavior:


Social
Groups
•Membership
•Reference (Opinion leaders)

Family
•Husband, wife, kids Social Factors
•Influencer, buyer, user

Roles and Status


Factors Affecting Consumer Behavior:
Personal
Personal Influences

Age and Life Cycle


Occupation
Stage

Economic Situation Personality & Self-Concept

Lifestyle Identification

Activities Opinions

Interests

Consumer Life Cycle: Key consumer


expenditure/investment
Factors Affecting Consumer Behavior:
Psychological

Motivation Biological or
psychological need that
seeks satisfaction

Beliefs and Psychological


Factors Perception
Attitudes

Evaluations, How you


feelings & select,
behavioral tendencies organize &
toward an object Learning interpret
or idea. inputs.
Change in behavior
based on experience

Perceptions, Attitudes in Practice


 Why do some consumers always buy the
same brand of cola when they can not tell
How we see the difference in blind taste tests?
things  Why do some consumers always buy the
affects our branded pain reliever (eg: Neurofen) when
behaviour they know that the store brand (eg: Boots
and how brand) is made of EXACTLY THE SAME
we act ingredients?
 Why do some people dislike a product that
they have never tried?
 Why do we dislike certain football teams
and support others, even if all the players
change over time?
Perception: Is this an old or
young woman?

Perception: What creature do you see?


So is this truth or belief or is it just what you perceive?
Maslow’s Hierarchy of Needs

Self
Actualization
(Self-development)

Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)

Buyer Characteristics can Affect Each Stage


Which factor determined your "recognition" that you needed to choose a college? Which 2-3
factors had the greatest influence on your information search & decision to attend Richmond?
How many schools were in your consideration set? Any cognitive dissonance?

Social &
Psycho- Cultural
Personal logical
Reference
Age and Motivation groups
life-cycle Perception
Occupation Learning Family
Economic Beliefs and Roles &
situation attitudes status
Lifestyle
Social class
Personality
and Culture &
self-concept Subculture

Need Information Evaluate Purchase Postpurchase


recognition search alternatives decision evaluation
Adopter Categorization on the Basis of
Relative Time of Adoption of Innovations
Diffusion of innovations theory was formalized by Everett Rogers in a 1962 book
called Diffusion of Innovations
•Innovators - venturesome, educated, multiple info sources, greater propensity to take
risk
•Early adopters - social leaders, popular, educated
•Early majority - deliberate, many informal social contacts
•Late majority - skeptical, traditional, lower socio-economic status
•Laggards - neighbors and friends are main info sources, fear of debt

13.5% 34% 34%


2.5%
Innovators Early Early Late 16%
adopters majority majority Laggards

Time of adoption of innovations

What is a Business Market?

• Business Buyer Behavior refers to the


buying behavior of all the organizations
that buy goods and services for use in the
production of other products and services
that are sold, rented, or supplied to
others.
• The business market is huge and
involves many more pounds and items
than do consumer markets.
B2B Marketing Defined

B2B marketing is the


management process responsible
for the facilitation of exchange
between producers of goods and
services and their organisational
customers

Product Types in Organisational


Buying:
Plant &
equipment

Components

Products & Materials


Services
A Clothing Manufacturer and its Suppliers

Suppliers of
raw materials
and Suppliers of
Suppliers components manufacturing
of labour equipment

Manufacturer

Suppliers of
Suppliers of
other equipment
services
and supplies

Model of Business Buyer Behavior


Product Marketing and Economic
Other Stimuli
Price Technological
Place Political
Promotion Cultural

The Buying Organization


Organizational Interpersonal
The Buying Center
Influences and Individual
Buying Decision Influences
Process

Product or Service Delivery Terms


Choice Buyer’s Response and Times
Supplier Choice Service Terms
Order Quantities Payment
Business Buying Situations

New Task Buying


Involved Decision Making

Modified Rebuy

Straight Rebuy

Participants in the Business Buying


Process: The Buying Center

Users
Gatekeepers: Control info
flow into org

Buying Center
Buyers: Deciders: final
eg purchasing Decision maker
officer eg owner?

Influencers: eg IT dept
in computers
Major Influences on
Organizational Buyers

Stages of the Business


Buying Process
Problem Recognition

General Need Description

Product Specification

Supplier Search

Proposal Solicitation

Supplier Selection

Order Routine Specification

Performance Review
Developments in Organizational
Purchasing Practice

Just-in-time purchasing
Online purchasing
Centralised purchasing
Relationship Marketing
Reverse marketing
Leasing

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Chapter Summary
There are key differences between consumer and
organizational buying.
There are 5 roles in the buying decision making group:
initiator, influencer, decider, buyer, user.
The level of involvement is a purchase situation will affect
the number of stages a consumer goes through before
making a purchase decision.
In consumer purchasing choice criteria can be categorised
as: technical, social, economic and personal.
The main influence on consumer buying behaviour are: the
buying situation, personal and social influences.
The main influence on organizational buying behaviour are:
the buy class, the product type, and the importance of the
purchase.
There have been key innovations in purchasing practice.
Reading: Chapter Three Jobber
and Fahy