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MKTG MGMT Kotler & Keller Ch.

h. 6, 7, 8, 11, 12 Chapter 6: Analyzing Consumer Markets Chapter Questions: o How do consumer characteristics influence buying behavior? o What major psychological processes influence consumer responses to the marketing programs o How do consumers make purchasing decisions? o How do marketers analyze consumer decision making? What influences Consumer Behavior? (p. 150) o Cultural Factors: Culture: the fundamental determinant of a persons wants and behavior. Through family and other key institutions, a child growing up in the US is exposed to values such as achievement and success, activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism, and youthfulness. Subcultures: each culture consists of subcultures that provide more specific identification and socialization for their members. Includes nationalities, religions, racial groups, and geographic regions. o Social Factors: Reference groups: all the groups that have a direct (face-to-face) or indirect influence on their attitudes or behavior Membership groups: groups that have a direct influence Primary groups: where the person interacts fairly continuously and informally 1. Family, friends, neighbors and coworkers Secondary Groups: tend to be more formal and require less continuous interaction 1. Religious, professional and trade-union groups Aspirational Groups: those groups a person hopes to join Dissociative Groups: those whose values or behavior an individual rejects Opinion Leader: the person who offers informal advice or information about a specific product or product category 1. Such as which of several brands is best, or how a particular product may be used Family: the most important consumer buying organization in society, and family members constitute the most influential primary reference group Family of orientation: consists of parents and siblings

1. From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, selfworth and love. o Personal Factors: age, life cycle stage, occupation, wealth, personality, values, lifestyle, self-concept Age and stage in the life cycle: our taste in food, clothes, furniture, and recreation is often related to age Occupation and economic circumstances: occupation also influences consumption patterns. Marketers try to identify the occupational groups that have aboveaverage interest in their products and services and can tailor products for certain occupational groups Personality and self-concept: each person has personality characteristics that influence his or her buying behavior: Personality: a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including buying behavior) Brand Personality: the specific mix of human traits that we can attribute to a particular brand. Stanfords list of traits: 1. Sincerity: down-to-earth, honest, wholesome and cheerful 2. Excitement: daring, spirited, imaginative, and up-to-date 3. Competence: reliable, intelligent and successful 4. Sophistication: upper-class and charming 5. Ruggedness: outdoorsy and tough Lifestyle and values: people from the same subculture, social class and occupation may lead quite different lifestyles: Lifestyle: a persons pattern of living in the world as expressed in activities interests and opinions Multi-tasking: doing two or more things (consumers who experience time famine are prone to this) Core Values: the believe systems that underlie attitudes and behaviors (consumer decisions are influenced by this. Figure 6.1: Model of Consumer Behavior:

Key Psychological Processes: (p. 160) o The starting point for understanding consumer behavior is the stimulus response model (above) o The processes include: Motivation, Learning, Perception & Memory o Motivation: we all have many needs at any given time Biogenic: needs that arise from physiological states of tension such as hunger, thirst of discomfort Psychogenic: needs that arise from psychological states of tension such as the need for recognition, esteem, or belonging. o Motive: when a need is aroused to a sufficient level of intensity to drive us to act Motivation Theories: o Freuds Theory: behavior is guided by subconscious motivations Sigmund Freud assumed the psychological forces shaping peoples behavior are largely unconscious, and that a person cannot fully understand his or her own motivations Laddering: a technique that allows marketers to trace a persons motivations from stated instrumental ones to the more terminal ones (allowing the marketer to decide at what level to develop the message and appeal) Projective techniques: techniques researchers use to uncover deeper motives triggered by a product Examples include: word association, sentence completion, picture interpretation, and role playing, o Maslows Theory: Abraham Maslow sought to explain why people are driven by particular needs at particular times. o Hierarchy of Needs: Maslow theorized that human needs are arranged in a hierarchy from most to least pressing i.e. behavior is driven by lowest, unmet need: Ranked needs: Physiological, Safety, Social, Esteem & Self-actualization

Herzbergs Theory: Frederick Herzberg developed a two-factor theory that distinguishes: 1. Dissatisfiers: factors that cause dissatisfaction 2. Satisfiers: factors that cause satisfaction o Herzbergs Two Factor Theory: behavior is guided by motivating and hygiene factors The absence of dissatisfiers is not enough to motivate a purchase; satisfiers must be present Perception: (p. 161) o Perception: the process by which we select, organize, and interpret information inputs to create a meaningful picture of the world (more important than reality) and can consist of three perceptual processes: o Selective Attention: the act of screening most stimuli out (but we are influenced by unexpected stimuli), which means that marketers work hard to attract consumers notice. People are more likely to notice stimuli: that relate to a current need they anticipate whose deviations are large in relationship to the normal size of the stimuli o Selective Distortion: the tendency to interpret information in a way that fits our preconceptions o Selective Retention: Most of us dont remember much of the information to which were exposed, but we do retain information that supports our attitudes and beliefs o Subliminal Perception: The selective perception mechanisms require consumers active engagement and thought The argument that says marketers embed covert, subliminal messages in ads or packaging. (No evidence for this, though) Consumer Buying Process: The Five-Stage Model (p. 166) o Problem Recognition: buyer recognizes a problem or need triggered by internal (hunger, thirst, sex) or external stimuli An internal stimulus, one of the persons normal needs, rises to a threshold level and becomes a drive o Information Search: consumers often search for limited amounts of information. There are two levels of engagement in the search: Heightened attention: the milder search state where a person simply becomes more receptive to information about a product

Active information search: the next level where searching includes looking for reading material, phoning friends, going online, and visiting stores to learn about the product. Information Sources: Major information sources to which consumers will turn fall into four groups: Personal: Family, friends, neighbors, acquaintances Commercial: Advertising, Web sites, sales persons, dealers, packaging, displays Experimental: Handling examining, using the product Search Dynamics: by gathering information, the consumer learns about competing brands and their features. total set: total set of brands available awareness set: the subset of brands that the individual consumer will come to know consideration set: the brands that meet initial buying criteria

Market Partitioning: the process of identifying the hierarchy of attributes that guide consumer decision making (e.g. brand-dominant hierarchy, nation dominated hierarchy) In order to understand different competitive forces and how these various sets get formed. Evaluation of Alternatives: understanding the consumer evaluation process: 1. The consumer is trying to satisfy a need 2. The consumer is looking for certain benefits from the product solution 3. The consumer sees each product as a bundle of attributes with varying abilities to deliver the benefits Beliefs & Attitudes: belief: a descriptive thought that a person holds about something

attitudes: a persons enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea Expectancy-value Model: a model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs the positives and negatives according to importance A compensatory model, in that perceived good things about a product can help to overcome perceived bad things Example of consumer choosing a laptop:

Strategies to stimulate greater interest in brand: Real positioning: redesigning the product Psychological repositioning: altering the beliefs about the brand Competitive depositioning: alter beliefs about competitors brands Alter the importance of the weights: the marketer could try to persuade buyers to attach more importance to the attributes which the brand excels Call attention to neglected attributes: The marketer could draw buyers attention to neglected attributes Shift the buyers ideals: the marketer could try to persuade buyers to change their ideal levels for one or more attributes Purchase Decision: in this phase, the consumer may make up to five subdecisions: brand, dealer, quantity, timing, and payment method Stage between Evaluation of Alternatives and a Purchase decision: Noncompensatory Models of Consumer Choice: when consumers do not sit simultaneously consider all positive and negative attribute considerations in making a decision Heuristics: a rule of thumb or mental shortcuts in the decision process. There are three choice heuristics here: 1. Conjunctive heuristic: the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes

2. Lexicographic heuristic: a consumer choosing the best brand on the basis of its perceived most important attribute 3. Elimination-by-aspects heuristic: situation in which the consumer compares brands on an attribute selected probabilistically, and brands are eliminated if they do not meet minimum acceptable cutoff levels Intervening Factors: Even if consumers form brand evaluations, two general factors can intervene between the purchase intention and the purchase decision (See Figure): Attitudes of others: the influence of another persons attitude depends on: 1. The intensity of the other persons negative attitude toward our preferred alternative 2. Our motivation to comply with the other persons wishes Unanticipated situational factors: loss of job, or another purchases take priority. Heavily influenced by one or more types of perceived risk (the degree of perceived risk varies with the amount of money at stake, the amount of attribute uncertainty, and the level of consumer self-confidence): 1. Functional risk: the product does Stages between evaluation of not perform to expectations alternatives and Purchase 2. Physical Risk: The product poses a threat to the physical well-being or health of the user or others 3. Financial Risk: The product is not worth the price paid 4. Social Risk: The product results in embarrassment in front of others 5. Psychological Risk: The product affects the mental well-being of the user 6. Time Risk: The failure of the product results in an opportunity cost Post purchase Behavior: After the purchase, the consumer might experience dissonance from noticing certain disquieting features or hearing favorable things about other brands and will be alert to information that supports his or her decision. Marketers must monitor:

Postpurchase satisfaction: a function of the closeness between expectations and the products perceived performance Dissappointment: occurs if the product performance falls short of expectations Satisfaction: occurs if the product meets expectations Delighted: occurs when the product exceeds expectations Postpurchase actions: Satisfied consumers are more likely to purchase the product again and will also tend to say good things about the brand to others. Dissatisfied customers may abandon or return the product Public actions: complaining to the company, going to a lawyer, or complaining to other groups (such as business, private, or government agencies) Private Actions: include deciding to stop buying the product (exit option) or warning friends (voice option) Postpurchase Uses & Disposal: Consumers may fail to replace some products soon enough because they overestimate product life The marketer needs to know how consumers dispose of products because it may damage the environment There may be product opportunities in disposed products

How Customers Use or Dispose of Products

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