Chapter 7 Analyzing Consumer Markets and Buyer Behavior

1. Chapter 7Analyzing Consumer Markets and Buyer Behavior

2. Chapter Objectives • In this chapter, we focus on two questions: • How do the buyers’ characteristics – cultural, social, personal, and psychological – influence buying behavior? • How does the buyer make purchasing decisions?

3. Influencing Buyer Behavior • The field of consumer behavior studies how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires. • Understanding consumer behavior and “knowing customers” is never simple. • Studying customers behavior provides clues for developing new products, product features, prices, channels, messages, and other marketing mix elements.

4. Influencing Buyer Behavior • A Consumer’s buying behavior is influenced by: • Cultural factors • Social factors • Personal factors • Psychological factors

5. (1) Cultural Factors: • Culture, subculture and social class are important in buying behavior. • Culture is the fundamental determinant of a person’s wants and behavior. • Each culture consists of subcultures that provide more specific identification and socialization for their members (nationalities, religions, racial groups, geographic regions) • Social classes are those divisions in the community who share the same values, interests and behavior. • Social classes reflect income, education, occupation and residence. • Social classes differ in dress, speech patterns, recreational preferences and many other characteristics. • Social classes show distinct product and brand preferences in many areas including clothing, home furnishings, leisure activities and autombiles.

6. (2) Social Factors: • Reference Groups: • Consumer’s buying behavior is influenced by social factors as reference groups, family, and social roles and statuses. • Membership groups are groups having a direct influence on a person (family, friends, neighbors and co-workers) with whom the person interacts continuously and informally. • Secondary groups takes more formal and requires less continuous interaction (religious, professional and trade unions). • Reference groups influence a person’s buying behavior by exposing him to new behavior or lifestyles, brand choice and self concept. • People influenced by groups to which they do not belong (Aspirational groups & dissociative groups). • Opinion leader is the person who offers advice or information about a specific product or service.

7. (2) Social Factors: • Family: • Family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group. • There are to kinds of families in buyer’s life: family of orientation (parents and siblings), and family of procreation (spouse and children). • Internet ethics for targeting kids. • Roles and Statuses: • A role consists of the activities a person is expected to perform. • Each role carries a status. • People choose products that communicate their roles and statuses.

8. (2) Personal Factors: • Age and stage in the life cycle: • People buy different goods and services over a lifetime. • Marketers should pay close attention to changing life circumstances, divorce, widowhood, remarriage and their effect on consumption. • Occupation and economic circumstances: • Consumption and buying behavior influenced by occupation, income, savings, debts, borrowing power. • Lifestyle: • Marketers should search for relationship between their products and lifestyle groups. • Psychographics is the science of using psychology and demographics to better understand consumers.

9. (2) Personal Factors: • Personality and self-concept: • Consumers are likely to choose brands whose personalities match their own. • Brand personality is the specific mix of human traits that my be attributed to a particular brand. • Self-concept theory has had a mixed record of success in predicting consumer responses to brand images.

10. Psychological Factors • Motivation • Perception • Learning • Beliefs and attitudes

11. Psychological Factors • Motivation: • A need becomes a motive when it is aroused to a sufficient level of intensity. • A motive is a need that is sufficiently pressing to drive the person to act. • Three theories of human motivation for consumer analysis and marketing strategy: • Freud’s Theory. • Maslow’s Theory. • Hersberg’s Theory.

12. Psychological Factors • Freud’s Theory: • Psychological forces are unconscious and a person can’t understand his own motivations. • Laddering technique: trace a person’s motivations from the instrumental ones to the more terminal ones. • Methods used to uncover deeper motives are: word association, sentence completion, picture interpretation and role playing.

13. Psychological Factors • Maslow’s Theory: helps marketers understand how various products fit into the plans, goals, and lives of consumers.

14. Psychological Factors • Herzberg’s Theory • Dissatisfiers: factors that cause dissatisfaction. • Satisfiers: factors that cause satisfaction. • The absence of disatisfier is not enough, satisfiers must be actively present to motivate a purchase. • Two implications of the theory: • Sellers should avoid disatisfiers. • Manufacurers should identify the major satisfiers of purchase in the market and then supply them.

15. Psychological Factors • Perception • In marketing, the people’s perceptions are more important than the reality. • People differ in their perceptions of the same object because of three perceptional processes: • Selective attention • People are more likely to notice stimuli than relate to a current need • People are more likely to notice stimuli than they anticipate • People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli • Selective distortion • Selective retention

16. Psychological Factors • Learning • Learning is produced through the interplay of drivers, stimuli, cues, responses, and reinforcement. • A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds (ex. IBM). • Discrimination means that a person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly. • Marketers should build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement.

17. Psychological Factors • Beliefs and Attitudes • A belief is a descriptive thought that a person holds about something. • Attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. • People’s beliefs about a product or brand influence their buying decisions. • Brand beliefs exist in consumer’s memory. • A company should fit its product into existing attitudes rather than to try to change people’s attitudes.

18. Discussion Question The purchase of a product from a Company A turns out to be a positive experience. You are looking for a loosely related product, which is also offered by Company A. Do you assume that you will again have a positive experience with Company A’s offering, or do you look for the “best of breed,” regardless of which company offers it?

19. The Buying Decision Process • Buying Roles • Initiator: suggest the idea of buying. • Influencer: whose views influence the decision. • Decider: who decide whether, what, how, where to buy. • Buyer: who makes the actual purchase. • User: consumes/uses the product/service. • Buying behavior • Consumer decision making varies with the type of buying decision.

20. Table 7.3: Four Types of Buying Behavior

21. What marketers can do? (strategies) • Complex Buying Behavior • Understand consumers’ information gathering ad evaluation behavior. • Assist buyer to learn about the product’s attributes and importance. • Differentiate brand’s features, use print media and motivate sales personnel. • Dissonance-Reducing Buyer Behavior • Marketing communication should supply beliefs and evaluations that help buyer feel good about his/her brand choice. • Habitual Buying Behavior • Use price and sales promotions to stimulate product trial (TV advertising). • Variety-Seeking Buying Behavior • Offering lower prices, deals, coupons, free samples and advertising.

22. Stages in the Buying Decision Process • How marketers learn about the stages? • Introspective method: think about how they themselves would act. • Retrospective method:interview a small number of recent buyers and ask them to recall the events making their choice. • Prospective method: locate consumers who plan to buy and ask them to think out loud about their buying process. • Prescriptive method:ask consumer about the ideal way to buy. • Understanding by mapping the customer’s • Consumption system • Customer activity cycle • Customer scenario • Metamarket • Metamediaries

23. Stages of the Buying Decision Process • Problem recognition • Information search • Personal sources • Commercial sources • Public sources • Experiential sources Figure 7.4: Five-Stage Model of the Consumer Buying Process

24. Figure 7.5: Successive Sets Involved in Customer Decision Making

25. The Buying Decision Process • Evaluation of Alternatives • There is no single process used by one/all consumers in all buying situations. • Brand beliefs • Brand image

26. The Buying Decision Process • Purchase Decision Figure 7.6: Steps Between Evaluation of Alternatives and a purchase decision

27. The Buying Decision Process • Informediaries • Consumer Reports • Zagats • Unanticipated situational factors • Perceived risk • Brand decision • Vendor decision • Quantity decision • Timing decision • Payment-method decision

28. The Buying Decision Process • Postpurchase Behavior • Postpurchase Satisfaction • Disappointed • Satisfied • Delighted • Postpurchase Actions • Postpurchase Use and Disposal

29. Figure 7.7: How Customers Dispose of Products