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Chapter 5 Consumer Markets and Consumer Buyer Behavior

Learning Goals Define the consumer market and construct a model of consumer buyer behavior Name the four factors that influence buyer behavior List and understand the types of buying decision behavior and stages in the process Describe the adoption and diffusion process for new products

Case Study Harley Davidson Building Success Understanding the customers’ emotions and motivation Determining the factors of loyalty Translating this information to effective advertising Measuring Success Currently 22% of all U.S. bike sales Demand above supply Sales doubled in the past 5 years with earnings tripled 5 -

Definitions Consumer buyer behavior refers to the buying behavior of final consumers – individuals and households who buy goods and services for personal consumption All of these final consumers combine to make up the consumer market

Model of Buyer Behavior Figure 5.1 5 -

Characteristics Affecting Consumer Behavior Culture Forms a person’s wants and behavior Subculture Groups with shared value systems Social Class Society’s divisions who share values, interests and behaviors Cultural Social Personal Psychological Key Factors

Characteristics Affecting Consumer Behavior Groups Membership Reference Aspirational Opinion leaders Buzz marketing Family Many influencers Roles and status Cultural Social Personal Psychological Key Factors

This advertiser knows teens are strongly influenced by groups when purchasing fashion items Marketing in Action 5 -

Characteristics Affecting Consumer Behavior Age and life cycle Occupation Economic situation Lifestyle Activities, interests and opinions Lifestyle segmentation Personality and self-concept Cultural Social Personal Psychological Key Factors

Brand Personality Dimensions Sincerity Ruggedness Excitement Competence Sophistication

Characteristics Affecting Consumer Behavior Motivation Perception Learning Beliefs and attitudes Cultural Social Personal Psychological Key Factors

Psychological Factors Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Motivation research is based on Freud. Looks for hidden and subconscious motivation Maslow ordered needs based on how pressing they are to the consumer

Maslow’s Hierarchy of Needs Figure 5.5 5 -

This ad demonstrates a product meeting physiological and social needs Marketing in Action 5 -

Discussion What consumer products might fulfill multiple levels of the Hierarchy of Needs? 5 -

Psychological Factors Perception Perception is the process by which people select, organize, and interpret information. Perception Includes: Selective attention Consumers screen out information Selective distortion People interpret to support beliefs Selective retention People retain points to support attitudes

Discussion Question Perception How many ads were you exposed to today? Which ones do you remember? Why? 5 -

Psychological Factors Learning Learning describes changes in an individual’s behavior arising from experience Learning occurs through Drives Internal stimulus that calls for action Stimuli Objects that move drive to motive Cues Minor stimuli that affect response Reinforcement Feedback on action

Psychological Factors Beliefs and Attitudes Belief a descriptive thought about a brand or service may be based on real knowledge, opinion, or faith Attitude describes a person’s evaluations, feelings and tendencies toward an object or idea They are difficult to change

Types of Buying Decision Behavior Figure 5.6 5 -

The Buyer Decision Process Figure 5.7 5 -

The Buyer Decision Process Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior Needs can be triggered by: Internal stimuli Normal needs become strong enough to drive behavior External stimuli Advertisements Friends of friends Process Stages

The Buyer Decision Process Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior Consumers exhibit heightened attention or actively search for information Sources of information: Personal Commercial Public Experiential Word-of-mouth Process Stages

The Buyer Decision Process Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior 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. Process Stages

The Buyer Decision Process Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior Two factors intercede between purchase intentions and the actual decision: Attitudes of others Unexpected situational factors Process Stages Video Snippet Wild Planet realizes that kids and parents make the decision for toys

The Buyer Decision Process Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior Satisfaction is important: Delighted consumers engage in positive word-of-mouth. Unhappy customers tell on average 11 other people. Cognitive dissonance is common Process Stages

Discussion Question How is a site like Consumer Reports used in the decision- making process? 5 - Marketing in Action Click on screenshot for website

Buyer Decision Process for New Products New Products Good, service or idea that is perceived by customers as new. Stages in the Adoption Process Marketers should help consumers move through these stages.

Stages in the Adoption Process Awareness Evaluation Interest Trial Adoption

Buyer Decision Process for New Products Individual Differences in Innovativeness Consumers can be classified into five adopter categories, each of which behaves differently toward new products. Product Characteristics and Adoption Five product characteristics influence the adoption rate.

Adoption Process Figure 5.8 5 -

Product Characteristics Relative Advantage Compatibility Complexity Divisibility Communicability

Why might the adoption process be slow for a home robot? Discussion Question Source: Business Week Marketing in Action Source: Business Week 5 -

Buyer Decision Process for New Products 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.

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