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Chapter 5

Model of Consumer Behavior Characteristics Affecting Consumer Behavior Types of Buying Decision Behavior The Buyer Decision Process The Buyer Decision Process for New Products

Consumer Buying Behavior


Buying behavior of individuals and

households that buy products for personal consumption.

Consumer Market
All individuals/households who buy products

for personal consumption.

Environment
Marketing Other stimuli stimuli
Product Price Place Promotion Economic Technological Political Cultural

Buyers black box Buyers decision Buyers characteristics process


Cultural Social Personal Psychological Problem recognition Information search Evaluation Decision Postpurchase behavior

Buyer response
Buyer attitude and preferences What the buyer buys, when,where and how much Brand and company relationship behavior

Stimulus Response Model


Marketing and other stimuli enter the buyers

black box and produce certain choice/purchase responses.

Marketers must figure out what is inside of the

buyers black box and how stimuli are changed to responses.

Culture is the learned values, perceptions, wants, and behavior from family and other important institutions Cultural shifts

Subculture are groups of people within a culture with shared value systems based on common life experiences and situations Subcultures can be based on geographic areas e.g. Bangali,Gujrati,Punjabi,Sindhi and religious based e.g. Hindu,Muslim,Christians,Jain,Budhist and rituals based e.g. Basant,Bhangra,Sufi Saints

Social classes are societys 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

Group: Two or more people who interact to accomplish individual and mutual goals

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

Word-of-mouth influence and buzz marketing


Opinion leaders are people within a reference group

who because of skills, knowledge and personality characteristics exert social influence on others Also called influential or leading adopters Marketers identify them to use as brand ambassadors who spread words about their products

Online Social Networks are online communities where people socialize or exchange information and opinions Include blogs, social networking sites (facebook), virtual worlds (second life)

Family is the most important consumer-buying organization in society. Marketers focus on roles and influence of husband, wife and children on purchases of different products
Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status. Person position can be defined in terms of both roles and status in each group. A role consists of activities people are expected to perform according to person around them

single and married couples are traditional family stages,Unmarried couples,single marrying later in life,childless couples,same sex couples,extended parents,single parents are non traditional family cycles

RBC Royal Bank identified 5 life stages segments


Youth: younger than 18 Getting started: 1835 (1st car, credit card,loan,marriage) Builders: 3550 (who are in peak earning years) Accumulators: 5060 (worry about saving for retirement and invest wisely) Preservers: over 60 (want to maximize retirement income)

Occupation affects the goods and services bought by consumers


Blue collar workers need work rugged clothes Executives need more business suits Pakistani companies in Sialkot supply surgical instruments to Surgeons

Economic situation includes trends in:


Personal income Interest rates

Savings

If there is recession, marketers tend to reprice, reposition and redesign their products.

Lifestyle is a persons pattern of living as expressed in his or her psychographics

Measures a consumers AIOs (activities, interests, opinions) to capture information about a persons pattern of acting and interacting in the environment

Personality refers to the unique


psychological characteristics that lead to consistent and lasting responses to the consumers environment Personality is described in terms of traits such as selfconfidence,dominance,sociability, autonomy,defensiveness, adaptability,aggressiveness

Self concept/self image concept


premise that peoples possessions contribute to and reflect their identities that is WE ARE WHAT WE HAVE.

Consumer tend to choose brands with personalities that match their own

Brand Personality-specific mix of human traits attributed to a particular brand. There are 5 dimensions of brand personality: Sincerity(down to earth,honest,wholesome,cheerful) Dove Excitement(daring,imaginative,up to date) Apple Competence(Reliable,intelligent,successful) CNN Sophistication(upper class and charming) Ruggedness(Outdorsy and tough)

Motivation
Perception Learning Beliefs and attitudes

A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Motivation research refers to qualitative research designed to probe consumers hidden, subconscious motivations

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes
Selective attention Selective distortion Selective retention

Selective attention is the tendency for people to screen out most of the information to which they are exposed Selective distortion is the tendency for people to interpret information in a way that will support what they already believe Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands

Learning is the change in an individuals behavior arising from experience and occurs through interplay of:
Drives: A strong stimulus that calls for action Stimuli: Object that moves drive to motive Cues: minor stimuli that determines when,where and how person responds Reinforcement: Feedback on action

Belief is a descriptive thought that a person has about something based on: Knowledge Opinion Faith Attitudes describe a persons relatively consistent evaluations, feelings, and tendencies toward an object or idea

Complex
Dissonance-reducing Habitual
Highly involved, significant brand differences Example computer

Highly involved, little brand differences Example carpeting


Low involvement, little brand differences Example salt Low involvement, significant perceived brand differences Example cookies

Variety-seeking

1st stage of buyer decision process in which the buyer recognizes a problem or need triggered by:
Internal stimuli

Normal needs become strong enough to drive behavior External stimuli Advertisements Friends of friends

2nd stage in which buyer is aroused to search for more information, buyer simply may heightened attention or may go into active information search Personal sourcesfamily and friends Commercial sourcesadvertising, Internet Public sourcesmass media, consumer organizations Experiential sourceshandling, examining, using the product Word of mouth

Stage of buyer decision process in which consumer uses information to evaluate alternative brands in choices set
Evaluation procedure depends on the consumer and the buying situation. Most buyers evaluate multiple attributes, each of which is weighted differently. At the end of the evaluation stage, purchase intentions are formed.

Buyer decision about which brand to purchase

The purchase decision can be affected by:


Attitudes of others e.g. someone important to you

thinks that you should buy a less expensive car, you may not buy an expensive car
Unexpected situational factors e.g. price of product

increases or friend may report disappointment about car you are going to purchase

Stage at which consumer takes further action after purchase based on satisfaction or dissatisfaction that the consumer feels about the purchase Relationship between:
Consumers expectations Products perceived performance

The larger the gap between expectation and performance, the greater the consumers dissatisfaction Cognitive dissonance is the discomfort caused by a post-purchase conflict

Customer satisfaction is a key to building profitable relationships with consumersto keeping and growing consumers and reaping their customer lifetime value
Delighted consumers engage in positive word-

of-mouth. Unhappy customers tell on average 11 other people. It costs more to attract a new customer than it does to retain an existing customer.

A good, service or idea that is perceived by some potential customer new is called new product
Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use. Marketer should help consumer to move through five stages of adoption process

Awareness: Consumers are aware of


product but lacks information about it

new

Interest: Consumer seeks information about


new product

Evaluation:consumer considers whether


trying new product makes sense

Trial: Consumer tries new product at small scale


to improve his or her estimates of its value

Adoption: consumer decides to make regular


and full use of new product

Consumers can be classified into five adopter categories, each of which behaves differently toward new products.
Innovators: are venturesome, they try new ideas at some

risk Early adopters: are guided by respect, they are opinion leaders in their communities and adopt new ideas early but carefully Early majority: are deliberate, although they rarely are leaders, they adopt new ideas early before average Late majority: are skeptical, they adopt innovation when majority of people have tried it Laggards: are traditional bound, they are suspicious of changes and adopt innovation when it becomes tradition

Relative advantage: degree to which innovation appears superior to existing product Compatibility: degree to which innovation fits values and experience of potential customers Complexity: degree to which innovation is difficult to understand and use Divisibility: degree to which innovation may be tried on limited basis Communicability: degree to which results of using innovation can be observed or described to others

International Consumer Behavior


Values, attitudes and behaviors differ greatly

in other countries. Physical differences exist which require changes in the marketing mix. Customs vary from country to country. Marketers must decide the degree to which they will adapt their marketing efforts.