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Chapter Five. Consumer Markets and Consumer Buyer Behavior. Consumer Markets and Consumer Buyer Behavior. Model of Consumer Behavior Characteristics Affecting Consumer Behavior Types of Buying Decision Behavior The Buyer Decision Process The Buyer Decision Process for New Products.

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chapter five

Chapter Five

Consumer Markets and Consumer Buyer Behavior

consumer markets and consumer buyer behavior
Consumer Markets and Consumer Buyer Behavior

Model of Consumer Behavior

Characteristics Affecting Consumer Behavior

Types of Buying Decision Behavior

The Buyer Decision Process

The Buyer Decision Process for New Products

Topic Outline

model of consumer behavior
Model of consumer behavior
  • Consumers make many buying decisions everyday and buying decision is the focal point of the marketer’s effort.
  • Marketers can study actual consumer purchases to find out what they buy, where and how much, but learning the why’s of the consumer buying behavior is not easy- the answer is locked deep within the consumer’s mind
model of consumer behavior1
Model of Consumer Behavior

Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption

Consumer market refers to all of the personal consumption of final consumers

slide6
Buyer characteristics and the buyer decision process are two parts of _______.

buyer’s black box

buyer’s white box

buyer’s red box

buyer’s shopping box

slide7
Buyer characteristics and the buyer decision process are two parts of _______.

buyer’s black box

buyer’s white box

buyer’s red box

buyer’s shopping box

characteristics affecting consumer behavior
Characteristics Affecting Consumer Behavior

Factors Influencing Consumer Behavior

slide9
Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics.

cost

social

health

profit

slide10
Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics.

cost

social

health

profit

characteristics affecting consumer behavior1
Characteristics Affecting Consumer Behavior
  • Culture is the learned values, perceptions, wants, and behavior from family and other important institutions
  • Every group or society has a culture and cultural influences on buying behavior may vary greatly from one country to another
  • Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted
characteristics affecting consumer behavior2
Characteristics Affecting Consumer Behavior

Subculture are groups of people within a culture with shared value systems based on common life experiences

and situations

  • Hispanic
  • African American
  • Asian
  • Mature consumers
characteristics affecting consumer behavior3
Characteristics Affecting Consumer Behavior
  • Hispanic consumers: one third of the US population
  • Hispanic consumers tend to buy more branded, higher quality products
  • African-American consumers: they are motivated by quality and selection. Brands are important
characteristics affecting consumer behavior4
Characteristics Affecting Consumer Behavior
  • Asian American: they are the second fastest growing population sub segment after the Hispanics.
  • More than 90% of the Asian American Go online regularly and are most comfortable with internet technology such as online banking
characteristics affecting consumer behavior5
Characteristics Affecting Consumer Behavior
  • Mature consumers: very attractive market. The entire U.S baby boom generation, the largest and the wealthiest demographic cohort in the country.
  • Mature consumers are not stuck in their ways
slide16
Four examples of subculture groups include Hispanic, African American, Asian American, and ________.

middle-class

mature consumers

RVers

echo boomers

slide17
Four examples of subculture groups include Hispanic, African American, Asian American, and ________.

middle-class

mature consumers

RVers

echo boomers

slide18
Groups of people with shared value systems based on common life experiences are called ________.

cohorts

generations

subcultures

affiliate groups

slide19
Groups of people with shared value systems based on common life experiences are called ________.

cohorts

generations

subcultures

affiliate groups

slide20
The fastest-growing and most affluent subculture in the United States is the _____ population.

Hispanic

African American

Asian American

mature

slide21
The fastest-growing and most affluent subculture in the United States is the _____ population.

Hispanic

African American

Asian American

mature

characteristics affecting consumer behavior6
Characteristics Affecting Consumer Behavior

Social classes are society’s 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
characteristics affecting consumer behavior7
Characteristics Affecting Consumer Behavior
  • In some social systems, members of different classes are reared for certain roles and cant change their social positions. In other country, however, the lines between social classes are not fixed and rigid, people can move to a higher social class or drop into a lower one.
characteristics affecting consumer behavior8
Characteristics Affecting Consumer Behavior
  • Marketers are interested in social class because within a given social class tend to exhibit similar buying behavior. Social classes show distinct product and brand preferences in areas such as clothing , home furnishings, and automobiles.
slide26
Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ________.

subculture

families

social class

reference groups

slide27
Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ________.

subculture

families

social class

reference groups

slide28
Which of the following is not one of the major American social classes?

Upper class

Working class

Lower-upper class

Lower-working class

slide29
Which of the following is not one of the major American social classes?

Upper class

Working class

Lower-upper class

Lower-working class

characteristics affecting consumer behavior11
Characteristics Affecting Consumer Behavior

Word-of-mouth influence and buzz marketing

  • Opinion leaders are people within a reference group who exert social influence on others
  • Also called influentials or leading adopters
  • Marketers identify them to use as brand ambassadors

Groups and Social Networks

slide32
A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ________.

opinion leader

mature consumer

marketer

upper class citizen

slide33
A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ________.

opinion leader

mature consumer

marketer

upper class citizen

characteristics affecting consumer behavior12
Characteristics Affecting Consumer Behavior

Online Social Networks are online communities where people socialize or exchange information and opinions

Include blogs, social networking sites (facebook), virtual worlds (second life)

Groups and Social Networks

characteristics affecting consumer behavior13
Characteristics Affecting Consumer Behavior

Family is the most important consumer-buying organization in society

Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services

The wife traditionally has been the main purchasing agent for the family.

Social Factors ( family )

characteristics affecting consumer behavior14
Characteristics Affecting Consumer Behavior

Children may also have a strong influence on family buying decisions

Studies found that kids influence family decisions about where they take vacations , what cars or cell phones they buy. As a result , marketers of cars , full service restaurants , cell phones are now placing ads on the children oriented TV networks

Social Factors ( family )

characteristics affecting consumer behavior15
Characteristics Affecting Consumer Behavior

Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status

A role consists of the activities that people expected to perform according to the persons around them

Social Factors (roles and status)

characteristics affecting consumer behavior16
Characteristics Affecting Consumer Behavior

Each role carries a status reflecting the general esteem given to it by society.

People usually choose products appropriate to their roles and status. Consider the roles a working mother plays

Social Factors (roles and status)

characteristics affecting consumer behavior17
Characteristics Affecting Consumer Behavior

Age and life-cycle stage

People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture and recreation are age related. Buying Is also shaped by the stage of the family life cycle “ the stages through which families might pass as they mature over time”

Personal Factors

characteristics affecting consumer behavior18
Characteristics Affecting Consumer Behavior

Traditional family life cycle stages include young singles and married couples with children.

The nontraditional stages such as unmarried couples, singles marrying later in life, single parents , extended parents ( those with young adult children returning home ) and others

Personal Factors

characteristics affecting consumer behavior19
Characteristics Affecting Consumer Behavior

RBC Royal Bank stages

  • Youth: younger than 18
  • Getting started: 18–35 who are going through first experiences, first credit card, first car , first child
  • Builders: 35–50 in their peak earning years, as they build careers and family, they tend to borrow more than they invest

Personal Factors

characteristics affecting consumer behavior20
Characteristics Affecting Consumer Behavior
  • Accumulators: 50–60

Worry about saving for retirement and invested wisely.

  • Preservers: over 60

Want to maximize their retirement income to maintain a desired lifestyle.

Personal Factors

characteristics affecting consumer behavior21
Characteristics Affecting Consumer Behavior

Occupation affects the goods and services bought by consumers

Blue workers tend to buy more rugged work clothes, whereas executives buy more business suits.

A company can specialize in making products needed by a given occupational group.

Personal Factors

characteristics affecting consumer behavior22
Characteristics Affecting Consumer Behavior

Economic situation includes trends in:

If economic indicators point to a recession, marketers can take steps to redesign , and reprice their products closely.

Personal Factors

characteristics affecting consumer behavior23
Characteristics Affecting Consumer Behavior

Lifestyle is a person’s pattern of living as expressed in his or her psychographics

Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment

Personal Factors

characteristics affecting consumer behavior24
Characteristics Affecting Consumer Behavior

Personality and self-concept

  • Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment
  • Personality is described in terms of traits .

Personal Factors

characteristics affecting consumer behavior26
Characteristics Affecting Consumer Behavior
  • A brand personality is the specific mix of the human traits that may be attributed to a particular brand. One researcher identified five brand personality traits:
  • Sincerity ( honest, wholesome, and cheerful)
  • Excitement ( imaginative and up-to date)
characteristics affecting consumer behavior27
Characteristics Affecting Consumer Behavior

3. Competence ( reliable , intelligent and successful )

4. Sophistication ( upper class and charming)

5. Ruggedness ( tough and outdoorsy)

slide50
A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting.

self-esteem

self-concept

lifestyle

personality

slide51
A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting.

self-esteem

self-concept

lifestyle

personality

slide52
Which of the following is not one of the five brand personality traits?

Ruggedness

Sophistication

Self-concept

Sincerity

slide53
Which of the following is not one of the five brand personality traits?

Ruggedness

Sophistication

Self-concept

Sincerity

characteristics affecting consumer behavior29
Characteristics Affecting Consumer Behavior

A person has may needs at any given time. Some are biological, arising from the states of tension such as hunger, thirst or discomfort. Others are psychological arising from the need for recognition , esteem , or belonging .

A need becomes a motive when it’s aroused to a sufficient level of intensity

Psychological Factors

Motivation

characteristics affecting consumer behavior30
Characteristics Affecting Consumer Behavior

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

Psychological Factors

Motivation

characteristics affecting consumer behavior31
Characteristics Affecting Consumer Behavior
  • Psychologists have developed theories of human motivation, two of the most popular- the theories of psychologists Frued and Maslow.
  • Frued’s theory suggests that a person’s buying decisions are affected by subconscious motives that even the buyer mayn’t fully understand.
slide59
Maslow’s hierarchy of needs are psychological, safety, ________, esteem, and self-actualization.

social

economic

lifestyle

education

slide60
Maslow’s hierarchy of needs are psychological, safety, ________, esteem, and self-actualization.

social

economic

lifestyle

education

characteristics affecting consumer behavior33
Characteristics Affecting Consumer Behavior

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

Psychological Factors

slide62
The process by which people select, organize, and interpret information to form a meaningful picture of the world is ________.

sensation

learning

perception

motivation

slide63
The process by which people select, organize, and interpret information to form a meaningful picture of the world is ________.

sensation

learning

perception

motivation

characteristics affecting consumer behavior34
Characteristics Affecting Consumer Behavior

Selective attention is the tendency for people to screen out most of the information to which they are exposed, marketers must work hard to attract the consumer’s attention

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

Psychological Factors

characteristics affecting consumer behavior35
Characteristics Affecting Consumer Behavior

Learning is the change in an individual’s behavior arising from experience and occurs through interplay of:

Psychological Factors

characteristics affecting consumer behavior36
Characteristics Affecting Consumer Behavior

A drive : a strong internal stimulus that calls for action.

A drive becomes a motive when its directed towards a particular stimulus object.

Cues are minor stimuli that determine when, where and how the person responds

The consumer’s response to his or her interest in buying the product

Psychological Factors

characteristics affecting consumer behavior37
Characteristics Affecting Consumer Behavior

Belief is a descriptive thought that a person has about something based on:

Knowledge

Opinion

Faith

Psychological Factors

Beliefs and Attitudes

characteristics affecting consumer behavior38
Characteristics Affecting Consumer Behavior
  • Marketers are interested in the beliefs that people formulate about specific products and services, because these beliefs make up product and brand images that affect buying behavior.
  • If some of the beliefs are wrong and prevent purchase , the marketer will want to launch a campaign to correct them.
characteristics affecting consumer behavior39
Characteristics Affecting Consumer Behavior

Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea

Psychological Factors

characteristics affecting consumer behavior40
Characteristics Affecting Consumer Behavior

Attitudes put people into a frame of mind of liking or disliking things, or moving toward or away from them

Attitudes are difficult to change, a company should usually try to fit its products into existing attitudes rather than an attempt to change the attitudes.

Psychological Factors

complex buying behavior
Complex buying behavior
  • When consumers are highly involved in a purchase and perceive significant differences among the brands. Consumers maybe highly involved when the product is expensive, risky and purchased infrequently
  • Marketers need to help buyers learn about product-class attributes& their relative importance. They need to differentiate their brand features, by describing them using print media with long copy
dissonance reducing buying behavior
Dissonance-reducing buying behavior
  • Occurs when consumers are highly involved with an expensive , risky purchase but see little differences among brands
  • Consumers might experience post purchase dissonance when they notice certain disadvantages of the purchased brand or hear favorable things about brands not purchased
habitual buying behavior
Habitual buying behavior
  • Occurs under conditions of low consumer involvement and little significant brand difference
  • Consumers appear to have low involvement with most low cost, frequently purchased products
  • Ad repetition creates brand familiarity rather than brand conviction “ consumers don’t form strong attitudes toward a brand, they select the brand because its familiar
types of buying decision behavior1
Types of Buying Decision Behavior

Four Types of Buying Behavior

variety seeking buying behavior
Variety-seeking buying behavior
  • In situations characterized by low consumer involvement but significant perceived brand differences. In such cases consumers often do a lot of brand switching
  • Brand switching occurs for the sake of variety rather than because of dissatisfaction .
slide77
A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ________ buying behavior.

dissonance-reducing

variety-seeking

complex

habitual

slide78
A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ________ buying behavior.

dissonance-reducing

variety-seeking

complex

habitual

slide79
________ buying behavior is characterized by low consumer involvement but significant perceived brand differences.

Dissonance-reducing

Variety-seeking

Complex

Habitual

slide80
________ buying behavior is characterized by low consumer involvement but significant perceived brand differences.

Dissonance-reducing

Variety-seeking

Complex

Habitual

the buyer decision process
The Buyer Decision Process

Buyer Decision Making Process

the buyer decision process1
The Buyer Decision Process

The first stage of the buyer decision process, in which the consumer recognizes a problem or need.

The need can be triggered by internal stimuli when one of the person’s normal needs rises to a level high enough to become a drive.

Need Recognition

the buyer decision process2
The Buyer Decision Process

A need can be triggered by external stimuli

For example , an advertisement or a discussion with a friend might get you thinking about buying a new car. At this stage the marketer should research consumers to find out what kinds of needs or problem arise.

Need Recognition

the buyer decision process3
The Buyer Decision Process

An interested consumer may or mayn’t search for more information, if the consumer’s drive is strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not the consumer may store the need in the memory or undertake an information search.

Information Search

the buyer decision process4
The Buyer Decision Process

The stage of the buyer decision process in which the consumer is aroused to search for more information, the consumer may simply heightened attention or may go into an active information search.

Information Search

the buyer decision process5
The Buyer Decision Process

Personal sources—family, friends and neighbors

Commercial sources—advertising, Internet, salespeople

Public sources—mass media, consumer organizations, internet searches

Experiential sources—handling, examining, using the product

Information Search

Sources of Information

the buyer decision process6
The Buyer Decision Process

The consumer receives the most information about a product from commercial sources.

Commercial sources inform the buyer , but personal sources evaluate the product for the buyer

As more information is obtained, the consumer’s awareness of the brands increase

Information Search

the buyer decision process7
The Buyer Decision Process

The marketer needs to know about alternative evaluation

How the consumer processes information to arrive at brand choices.

The consumer arrives at attitudes towards different brands through some evaluation procedure.

Evaluation of Alternatives

the buyer decision process8
The Buyer Decision Process

Sometimes consumers make buying decisions on their own, sometimes they turn to friends, consumer guides or salespeople for buying advice.

Marketers should study buyers to find out how they actually evaluate brand alternatives. If they know what evaluation processes go on, marketers can take steps to influence the buyer’s decision

Evaluation of Alternatives

the buyer decision process9
The Buyer Decision Process

The buyer’s decision about which brand to purchase.

Two factors can come between the purchase intention and the purchase decision

Purchase Decision

the buyer decision process10
The Buyer Decision Process

The act by the consumer to buy the most preferred brand

The purchase decision can be affected by:

  • Attitudes of others
  • Unexpected situational factors

Purchase Decision

the buyer decision process11
The Buyer Decision Process

The stage of the buyer decision process in which the consumers take further action after purchase, based on their satisfaction or dissatisfaction

Post-Purchase Decision

the buyer decision process12
The Buyer Decision Process

The satisfaction or dissatisfaction that the consumer feels about the purchase

Relationship between:

  • Consumer’s expectations
  • Product’s perceived performance

The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction

Cognitive dissonance is the discomfort caused by a post-purchase conflict

Post-Purchase Decision

the buyer decision process13
The Buyer Decision Process

Customer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime value

Satisfied customers talk favorably about the product, pay less attention to competing brands

Post-Purchase Decision

the buyer decision process for new products
The Buyer Decision Process for New Products

Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.

New product: a good, service , or idea that’s perceived by some potential customers as new

Stages in the process include:

stages in the adoption process
Stages in the adoption process
  • Awareness : the consumer becomes aware of the new product, but lacks information about it
  • Interest: the consumer seeks information about the new product
  • Evaluation: the consumer considers whether trying the new product makes sense
stages in the adoption process1
Stages in the adoption process
  • Trial: the consumers tries the new product on a small scale to his or her estimate of its value
  • Adoption : the consumer decides to make full and regular use of the new product.

* This model suggests that the new product marketer should think about how to help consumers move through these stages

individual differences in innovativeness
Individual differences in Innovativeness
  • There are five adopters groups which are :
  • Innovators(venturesome) : they try new ideas at some risk
  • Early adopters:they are opinion leaders in their communities and adopt new ideas early but carefully
  • Early majority(deliberate): they rarely are leaders, they adopt new ideas before the average person
individual differences in innovativeness1
Individual differences in Innovativeness

4. Late majority( skeptical) : they adopt an innovation only after a majority of people have tried it

5. Laggards(tradition bound) : they are suspicious of changes and adopt the innovation only when it has become sth. Of a tradition itself.

slide100
What are the two largest statistical populations in the adoption process?

Innovators and early majority

Early adopters and early majority

Early majority and late majority

Innovators and laggards

slide101
What are the two largest statistical populations in the adoption process?

Innovators and early majority

Early adopters and early majority

Early majority and late majority

Innovators and laggards

the buyer decision process for new products1
The Buyer Decision Process for New Products

Influence of Product Characteristics

on Rate of Adoption

influence of product characteristics on rate of adoption
Influence of Product Characteristics on Rate of Adoption
  • Relative advantage: the degree to which the innovation appears superior to existing products
  • Compatibility: the degree to which the innovation fits the values and experiences of potential consumers
  • Complexity: the degree to which the innovation is difficult to understand or use
influence of product characteristics on rate of adoption1
Influence of Product Characteristics on Rate of Adoption
  • Divisibility : the degree to which the innovation maybe tried on a limited basis
  • Communicability : the degree to which the results of using the innovation can be observed or described to others