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Chapter 5: Final Consumers and their Buying Behavior

Chapter 5: Final Consumers and their Buying Behavior. 1. Know how income affects consumer behavior and spending patterns. 2 . Understand the economic-buyer model of buyer behavior. 3. Understand how psychological variables affect an individual’s buying behavior.

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Chapter 5: Final Consumers and their Buying Behavior

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  1. Chapter 5: Final Consumers and their Buying Behavior

  2. 1. Know how income affects consumer behavior and spending patterns. 2. Understand the economic-buyer model of buyer behavior. 3.Understand how psychological variables affect an individual’s buying behavior. 4.Understand how social influences affect an individual’s and household’s buying behavior. 5.See why the purchase situation has an effect on consumer behavior. 6.Know how consumers use problem-solving processes. 7.Have some feel for how a consumer handles all the behavioral variables and incoming stimuli. 8. Understand the important newterms. Chapter 5 Objectives When you finish this chapter, you should 5-1

  3. $44K $34K Median income $26K 1960 1980 1996 Median Family Income, 1960-1996 Long term income trends are important to marketing managers because strategy planning must take into account realistic growth potential. A narrow focus on a high growth period that extends a temporary rate too far into the future can ruin chances for long term success 5-2

  4. 50 46.8% 40 30 Percent of Total Income 23.1% 20 15.8% 10 10.0% 4.2% $0 19,680 34,315 51,086 75,316 Lowest 20% Income Group Middle 20% Income Group Top 20% Income Group Percent of Total Income Going to Different Income Groups in 1996 Income Distribution Exhibit 5-1 5-3

  5. Consumer Spending Patterns Discretionary Income Key Terms and Issues Expenditure Data Family Life Cycle 5-4

  6. Marketing Mixes All Other Stimuli Psychological Variables Social Influence Purchase Situation Motivation Perception Learning Attitude Personality/Lifestyle Family Social Class Reference Groups Culture Purchase Reason Time Surroundings Person Making Decision Problem-Solving Process Person Does or Does Not Purchase (Response) A Model of Buyer Behavior Exhibit 5-2 5-5

  7. Personal Needs Social Needs Safety Needs Physiological Needs The PSSP Hierarchy of Needs Exhibit 5-4 5-6

  8. Drive Cues Response Reinforcement The Learning Process Exhibit 5-5 5-7

  9. Activities ??????? ??????? ??????? ??????? ??????? Interests Opinions Lifestyle Dimensions 5-8

  10. Family Life Cycle Middle-aged divorced w/out children Young divorced w/out children Middle-aged married w/out children Young single* Young married x-child.* Young married with children* Middle-aged married with children* Middle-aged married w/out dep. children* Older married* Older un- married* Young divorced with children Middle-aged divorced with children Middle-aged divorced w/out dep. children Usual flow Recycled flow *Traditional family flow Exhibit 5-7 5-9

  11. Upper-class 1.5% Upper-middle class 12.5% Lower-middle class 32% Upper-lower (“working”) class 38% 15% Lower-lower class Social Class Dimensions Exhibit 5-8 5-10

  12. Buying Behavior Median Income Growth Growth Rate Accurate Target Ethnic Dimensions of the US Market 5-11

  13. Purchase Reason ??????? ??????? ??????? ??????? ??????? Time Surroundings Purchase Situation Influences 5-12

  14. Marketing mixes All other stimuli Psychological Variables Social Influences Purchase Situation Person making decision Need-want Awareness Routinized Response Information Search Feedback of information as attitudes Set Criteria Decide on Solution Purchase Product Postpone Decision Postpurchase Evaluation Response The Consumer Problem Solving Process Exhibit 5-9 5-13

  15. High involvement Infrequently purchased Expensive High risk Much information desired Low involvement Frequently purchased Inexpensive Little risk Little information needed Routinized Response Behavior Limited Problem Solving Extensive Problem Solving Low Involvement High Involvement Involvement Continuum Levels of Problem Solving Exhibit 5-11 5-14

  16. Awareness Interest Evaluation Trial Decision Confirmation The Adoption Process 5-15

  17. Problem-solving steps Adoption process steps Learning steps 1. Becoming aware of or interested in the problem 2. Gathering information about possible solutions 3. Evaluating alterative solutions 4. Deciding on the appropriate solution 5. Evaluating the decision Awareness and interest Interest and evaluation Evaluation, maybe trial Decision Confirmation Drive Cues Reinforcement Response Relating the Processes 5-16

  18. Key Terms Discretionary income Economic Buyers Economic Needs Needs Wants Drive Physiological Needs Safety Needs Social Needs Personal Needs Perception Selective Exposure Selective Perception Selective Retention Learning Cues Response Reinforcement Attitude Belief Expectation Psychographics Lifestyle Analysis Empty Nesters Social Class Reference Group Opinion Leader Culture Extensive Problem Solving Limited Problem Solving Routinized Response Behavior Low-involvement Purchases Adoption Process Dissonance 5-17

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