Chapter 5 Consumer Buying Behavior

Chapter 5Consumer Buying Behavior

Objectives • Understand consumers’ level of involvement with product & describe consumer problem-solving processes • Recognize stages of consumer buying decision process • Explore situational influences of consumer buying process • Understand psychological influences of consumer buying process • Examine social influences of consumer buying process

Types Of Markets Marekt:a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase. • Consumer Markets: Purchasers and household members who intend to consume or benefit from the purchased products and do not buy products to make products. • Business Markets: markets in which buyers buy products for business purposes

Buying Behavior A firm’s ability to develop and sustain satisfying customer relationships requires an understanding of: Buying Behavior:is the decision processes and acts of people involved in buying and using products. Consumer Buying Behavior:refers to the decision processes and purchasing activities of people who purchase products for personal or household use and not for business purposes.

Problem Solving Process • In order to acquire and maintain products that satisfy their current and future needs, customers engage in problem solving. • There are different types of problem solving process depending on: • Nature of product involved. • The amount of effort, both mental and physical, that buyers expend in solving problems. • The customer’s level of involvement. problem solving process on page 123. Figure 5.1

Level Of Involvement • Is an individual’s intensity of interest in a product and the importance of the product for that person. It can be classified as: • Low • High • Enduring • Situational

Levels Of Involvement a) High-involvement: products tend to be those that are visible to others (e.g., clothing, furniture, or automobiles) and expensive, as well as issues of high importance, such as health care. b) Low-involvement: products tend to be less expensive and have less associated social risk, such as many grocery items. c) Enduring involvement: is a person’s ongoing and long term interest in a product or product category. (Ex. Interest in technology. Most of them have enduring involvement with only a few items or activities.) d) Situational involvement: is a person’s temporary and dynamic interest in a product, which usually results from a particular set of circumstances (i.e. the need to buy a new car, after being involved in an accident, … etc).

Level of involvement (Cont’d) • Consumer involvement may be attached to product categories (Such as sports), loyalty to a specific brand, interest in a specific advertisement, or to a certain decisions and behaviors (Ex. A love of shopping. • A consumer may find a particular advertisement entertaining, yet have little involvement with the brand advertised because of loyalty to another brand.

Level Of Involvement and type of Problem Solving Level of Involvement, as well as other factors, affects a person’s selection of one of three types of consumer problem solving: • Routinized response behavior • Limited problem solving • Extended problem solving.

1. Routinized Response Behavior - Is the consumer problem-solving process used when buying frequently purchased, low-cost items needing very little search-and-decision effort. A consumer may prefer a particular brand but it is familiar with several brands in the product class and views more than one as acceptable. - Low involvement products are bought through this kind of process.

2. Limited Problem Solving Is the consumer problem-solving process employed when buying occasionally or when the consumer needs to obtain information about an unfamiliar brand in a familiar product category. Needs a moderate amount of time for information gathering and deliberation.

3. Extended Problem Solving The most complex type and it is a consumer problem-solving process employed when purchasing unfamiliar, expensive, or infrequently bought products. (Ex. Car, home, or college education). Related to high involvement products that need much time seeking information and deciding on the purchase, as well as using many criteria to evaluate alternative brands or choices.

Consumer Problem Solving

Consumer problem solving • It is unnecessary to solve the problem of a particular product every time with the same type of process: • Customer who engaged in extended problem solving the first time to buy a certain product, finds that limited problem solving is appropriate when buys it again • If a routinely purchased, formerly satisfying brand no longer satisfies us, we may use limited or extended problem solving to switch to a new brand

Impulse Buying Buying a product does not always involve some type of problem solving. It can be unplanned (on impulse). Impulse Buying: is an unplanned buying behavior resulting from a powerful urge to buy something immediately (i.e. urgent buying, “Plaster” “paste wounds”)

Consumer Buying Decision Process • A five-stage purchase decision process that includes problem recognition, information search, evaluation of alternatives, purchase, and Postpurchase evaluation. • But some points must be mentioned: • The actual act of purchase is only one stage that comes later in the process • Not all decision processes, once initiated, lead to an ultimate purchase (the individual may terminate the process at any stage). • Not all consumer buying decisions include all five stages. • People engaged in extended problem solving usually go through all stages, other types may omit some stages.

Consumer Buying Decision Process/Possible Influences on the Process

1. Problem Recognition Is the difference between desired state and actual condition (Becoming aware of a need for a particular product). Note: Marketers may use sales personnel, advertising, and packaging to trigger recognition of needs or problems. Recognition speed can also be slow or fast, because sometimes a person has a problem or need but is unaware of it.

2. Information Search • After the consumer becomes aware of the problem or need, he or she searches for information about products that will help resolve the problem or satisfy the need. (The gathered information’s impact depends on how customer interprets it). • There are types of information search: • Internal Search • External Search

Types Of Information Search • Internal Search: An information search in which buyers search their memories for information about their products that might solve their problem • External Search: An information search in which buyers seek information from sources other than memory (friends, relatives, public sources, marketing sources [such as advertising, package labeling, in-store displays)

External Search • The internet almost is the most preferred information source especially for prices. • Personal contacts, “friends, relatives, and associate” are influential sources of information because of past experience or trial and the trust and respect of that contact. • Consumers frequently view information from public sources as highly credible because of its highly factual and unbiased nature. • Repetition is a technique well known to advertisers, increases consumers’ learning of information. • Information can be presented verbally, numerically, or visually.

3. Evaluation Of Alternatives • A successful information search yields a consideration (evoked) setof products or a group of brands that the buyer views as possible alternatives. • In this stage, the consumer establishes a set of evaluative criteriaagainst which to compare the characteristics of the products in the evoked set. • The consumer rates and eventually ranks the brands in the consideration set by using the criteria and their relative importance. • Marketers can influence consumers’ evaluation by Framing the alternatives—that is, by the manner in which they describe the alternatives and their attributes. Framing probably influences the decision processes of inexperienced buyers more those of experienced ones.

4. Purchase • The consumer selects the product or brand to be purchased. Selection is based on the outcome of evaluation stage and other dimensions: • Product availability, seller choice, and terms of sale, price, delivery, warranties, maintenance agreements, installation, and credit agreement may influence the final product selection. • At this stage, the actual purchase is made (unless the process has been terminated earlier)

5. Post-purchase Evaluation • At this stage, the buyer begins to evaluate the product after the purchase, based on many of the criteria used in the evaluation of alternatives stage. The outcome of this stage is either satisfaction or dissatisfaction, which influences whether the consumer complains, communicates with other possible buyers, and repurchase the brand or product. • If the buyer is not happy with the product, a Cognitive dissonanceis experienced. • Cognitive dissonance is a buyer’s doubts shortly after a purchase about whether it was the right decision. • It is most likely to arise when a person has recently bought an expensive, high involvement product that lacks some of the desirable features of competing brands. A buyer experiencing cognitive dissonance may attempt to return the product or seek positive information about it to justify choosing it. • Marketers sometimes attempt to reduce cognitive dissonance by having salespeople telephone recent purchasers to make sure they are satisfied with their new purchase.

There are three main types of influences that affect the Buying Decision Process: Situational influences Psychological influences Social influences Influences on the Buying Decision Process

Situational Influences Situational influences: are factors resulting from circumstances, time, and location that affect the consumer buying decision process. Note: These factors can influence a consumer’s actions at any stage of the buying process (i.e. shorten, lengthen, or even terminate the buying process)

Physical Surroundings: factors in the physical environment in which the decision process occurs (i.e. location, store atmosphere, aromas, sounds, lighting, weather). Social Surroundings:social characteristics and interactions of others who are present during a purchase decision, or when the product is used or consumed, as well as social conditions in the shopping environment. Time Perspective: The time dimension influences the buying decision process in several ways. For example, time available to become knowledgeable about a product, to search for it, and to buy/use it, time of purchase, time available to make the decision [i.e. a consumer may make a quick buying decision or delay the decision under time pressure]. Situational Factors: they can be divided into five categories

Reason for purchase: The reason for purchase raises the questions of what exactly the product purchase should accomplish and for whom (for example, people who are buying a gift may buy a different product from one they would buy for themselves. Buyer’s mood/ condition:The buyer’s momentary mood or momentary conditions (e.g., fatigue, illness, happy, being overexcited, short of cash) may have a bearing on the consumer buying decision process. Note: Any of these moods or conditions can affect a person’s ability and desire to search for information, receive information, evaluate alternatives, and can significantly influence a consumer’s postpurchase evaluation. Situational Factors: five categories (continued)

Psychological Influences • Psychological factors that, in part, determine people’s general behavior, thus influencing their behavior as consumers. • They can be classified into six factors: • Perception • Motives • Learning • Attitudes • Personality and Self-Concept • Lifestyle

Different people perceive the same thing at the same time in different ways. Perception is the process of 1)selecting, 2)organizing, and 3)interpreting information inputs to produce meaning (It is three steps) Information inputs are sensations received through our sense organs, including sight, taste, hearing, smell, and touch. (for example: when we hear an advertisement, see a friend, smell or touch a product, we receive information inputs). 1. Perception

1. Perception: 1) selecting Selectivity: although we receive numerous pieces of information at once, only a few reach our awareness. Characteristics of selectivity: (1) Selective exposure, an individual selects which inputs will reach awareness. (2) Selective distortion is changing or twisting currently received information; it occurs when a person receives information inconsistent with personal feelings or beliefs. (3) Selective retention, a person remembers information inputs that support his/her feelings and beliefs and forgets inputs that do not.

1. Perception: 2) organizing Organizing is mentally organizing and integrating new information with what is already stored in memory in order to produce meaning. People use several methods to organize. One method, called closure, occurs when a person mentally fills in missing elements in a pattern or statement

1. Perception: 3) interpreting Interpretation is the assignment of meaning to what has been organized. A person bases interpretation on what he or she expects or what is familiar. A manufacturer who changes a product or its package faces a major problem. • In general, although marketers cannot control buyers’ perceptions, they often try to influence them through information.

1. Perception • Many problems may arise from marketers’ attempts to influence customer’s perceptions: • A consumer’s perceptual process may operate such that a seller’s information never reaches that person. • A buyer may receive a seller’s information but perceive it differently than was intended. • A buyer who perceive information inputs to be inconsistent with prior beliefs is likely to forget the information quickly.

2. Motives • Motive is an internal energizing force that directs a person’s behavior toward satisfying needs or achieving goals. • A buyer’s actions at any time are affected not by just one motive but by a set of motives, with varying degrees of strengths. • Motives affect the direction and intensity of behavior.

2. Motives (continued) • One of the important theories to explain motivation is Maslow’s hierarchy of needs. (by Psychologist Abraham Maslow) • The theory classifies human needs into five levels, from the most to the least important needs. • Once needs at one level are met, humans try to fulfill needs at the next level.

Maslow’s Hierarchy Of Needs

physiological needs: the most basic level, which represents requirements for survival such as food, water, sex, clothing, and shelter, which people try to satisfy first. safety needs, the next level up, which includes security and freedom from physical and emotional pain and suffering. (Ex. Life insurance, automobile air bags, etc..) social needs, the third level, which includes the human requirements for love and affection and a sense of belonging. (Cosmetics, beauty, jewelry to bring love) esteem needs, the fourth level, in which people require respect and recognition from others as well as self-esteem, a sense of one’s own worth. (Flying first class, Lexus) self-actualization, the highest level of needs, which refers to people’s need to grow and develop and to become all they are capable of becoming. Maslow’s hierarchy of needs

Patronage Motives • Motives that influence where a person purchases product on a regular basis. • Under patronage motives, a buyer may shop at specific store because of price, service, location, product variety, or friendliness of salespeople. • Marketers try to determine why regular customers patronize a particular store and to emphasize these characteristics in the store’s marketing mix.

3. Learning Learningrefers to changes in an individual’s thought processes and behavior caused by information and experience. • The learning process is strongly influenced by the consequences of an individual’s behavior. For example, behaviors with satisfying results tend to be repeated, and vice versa. • Marketers help customers learn about their products (for example, by helping them gain experience with them, perhaps through free samples, in-store demonstrations, … etc.) • Consumers learn about products indirectly through information from salespeople, friends, relatives, website, and advertisements.

4. Attitude Attitudeis an individual’s enduring evaluation of feelings about and behavioral tendencies toward an object or idea. The following points are important: • Attitudes are learned through experience and interaction with others • Attitudes remain generally stable, but they can be changed over a long time. • Attitudes consist of three major components: • cognitive (knowledge and information about an object or idea) • affective (feelings and emotions toward an object or idea), and • behavioral (actions regarding an object or idea). Changes in one of these components may or may not alter others. • Consumers’ attitudes toward a firm and its products strongly influence it success or failure

4. Attitude (continued) • Marketers use several approaches to measure consumer attitudes: a) Direct questioning of consumers b) Projective techniques c) Attitude scales, which are means of measuring consumers’ attitudes by gauging the intensity of individuals’ reactions to adjectives, phrases, or sentences about an object. • Marketers may try to change negative attitudes toward an aspect of a marketing mix to make them more favorable. But this is generally a long, expensive, and difficult task and may require promotional efforts.

Personalityis a set of internal traits and distinct behavioral tendencies that result in consistent patterns of behavior in certain situation. The uniqueness of one’s personality arises from both hereditary background and personal experiences. When advertisements focus on certain types of personalities, the advertiser uses personality characteristics that are valued positively. (Page 133) Self-concept (or self-image),is a perception or view of oneself. Buyers buy products that reflect or enhance their self-concept. A person’s self-concept may influence brand selection 5. Personality and Self-Concept

6. Lifestyle • Lifestyleis an individual’s pattern of living expressed through activities, interests, and opinions (i.e. the way people spend time, interact with others, and their general outlook on life and living). People partially determine their own lifestyle, but the pattern is also affected by demographic factors such as age, education, income and social class. • - Lifestyles have a strong impact on many aspects of the consumer buying decision process, from problem recognition to post-purchase evaluation. • A consumer’s lifestyle influences product needs, brand preferences, type of media used, and how and where they shop.

Social Influences Social influencesare the forces that other people exert on one’s buying behavior. They include the followings: • Roles • Family • Reference groups • Opinion leaders • Social classes • Cultures and Subcultures

1. Role • Roleis actions and activities that an individual in a particular position is supposed to perform based on his /her expectations as well as those of others. • Because people occupy numerous positions, they have many roles. A man may perform the roles of son, husband, father, employee or employer, and student. • Each individual has many roles and each role affects both general behavior and buying behavior

2. Family An individual’s roles, within the family, to some extent, influence that person’s behavior as a buyer. Buying decision made by a family are a combination of group and individuals decision making. Consumer socialization is the process through which a person acquires the knowledge and skills to function as a consumer.

Family buying-decision roles Within a household, an individual may perform one or more buying-decision roles: • The gatekeeper is the household member who collects and controls information—price and quality comparisons, locations of sellers, and assessment of which brand best suits the family’s needs. • The influencer is a family member who expresses his or her opinions and tries to influence buying decisions. • The decider is a member who makes the buying choice. • The buyer is a member who actually makes the purchase. • The user is any household member who consumes or uses the product.

Types Of Family Decision-making

3. Reference Group Reference groupis any group that positively or negatively affects a person’s values, attitudes, or behaviors (i.e. family, friends, colleagues, religious groups, and sport groups, professional groups). Another definition: A group that a person identifies with so strongly that he or she adopts the values, attitudes, and behavior of group members. Such as families, work related groups, civic clubs, professional organizations, or religious groups.

Chapter 5 Consumer Buying Behavior