Chapter 6: Analyzing Consumer Markets Dr. Rushdy Abd Elatief Wady

1. Chapter 6: Analyzing Consumer Markets Dr. RushdyAbdElatiefWady

2. Chapter Questions • How do consumer characteristics influence buying behavior? • What major psychological processes influence consumer responses to the marketing program? • How do consumers make purchasing decisions? • In what ways do consumers stray from a deliberate rational decision process?

3. Consumer Behavior

4. Kotler on Marketing The most important thing is to forecast where customers are moving, and be in front of them.

5. Key Psychological Processes Model of Consumer Behavior • Also known “stimulus-response model” • Considered the starting point for understanding consumer behavior.

6. Marketers must: • Havea thorough understanding of how consumers think, feel, and act. • Offer clear value to each and every target consumer.

7. Adopting a holistic marketing orientation: • Requires fully understanding customers gaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes • Right products are always marketed to the right customers in the right way.

8. Consumer Behavior • Studyof how individuals, groups, and organizations select, buy, use, and disposeof goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must fully understand both the theory and the reality of consumer behavior.

9. What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors

10. Culture Factors: What is Culture? • Way of life of a group of people, the behaviors, beliefs, values, and symbols that they accept, generally without thinking about them, and that are passed along by communication and imitation from one generation to the next. Culture, subculture, and social class are particularly important influencers on consumer buying behavior

11. Culture Factors: What is Culture? • Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions. Cultural values differ by countries and markets

12. Culture Factors: What is Culture? • Marketers must closely attend to cultural values in every country to understand how to best market their existing products and find opportunities for new products

13. Culture Factors:Subcultures • Each culture consists of smaller Subcultures. • Provide more specific identification and socialization for their members. • Subcultures include: • Nationalities • Religions • Racial groups • Geographic regions

14. Culture Factors:Subcultures • When subcultures grow large and affluent enough, companies often design specialized marketing programs to serve them.

15. Fast Facts About American Culture • The average American: • chews 300 sticks of gum a year • goes to the movies 9times a year • takes 4 trips per year • attends a sporting event 7times each year

16. Culture Factors:Social Classes: • Virtually all human societies exhibit Social stratification (الطبقات الاجتماعية) most often in the form of Social Classes. • Social Classes relatively homogeneous and enduring divisions in a society, • Hierarchically ordered and with members who share similar values, interests, and behavior.

17. Culture Factors:Social Classes: Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers

18. What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors

19. Social Factors:- • The facts and experiences that influence individuals' personality, attitudes and lifestyle.

20. Social Factors Reference groups Family Roles & Status

21. Social Factors: Reference Groups • People whose attitudes, behavior, beliefs, opinions, preferences, and values are used by an individual as the basis for his judgment. Groups that have a direct (face-to-face) or indirect influence on their attitudes or behavior

22. Social Factors: Reference Groups • Person does not have to be (or even aspire to be) a member of a reference group to be negatively or positively influenced by its characteristics.

23. Social Factors: Reference Groups • Membership groups • Groups having a direct influence. • Primary groups • Person interacts fairly continuously and informally ( family, friends, neighbors, and coworkers) • Secondary groups • Tend to be more formal and require less continuous interaction (religious, professional, and trade-union groups)

24. Social Factors: Reference Groups • People are also influenced by groups to which they do not belong. • Aspirational groups • Are those a person hopes to join • Dissociative groups • Whose values or behavior an individual rejects

25. Social Factors: Reference Groups • Reference groups influence members in at least three ways: • They expose an individual to new behaviors and lifestyles. • They influence attitudes and self-concept. • They create pressures for conformity that may affect product and brand choices.

26. Social Factors: Reference Groups • Opinion leaders: • Person who offers informal advice or information about a specific product or product category, such as which of several brands is best or how a particular product may be used. Opinion leaders are often highly confident, socially active, and frequent users of the category.

27. Social Factors: Reference Groups • Opinion leaders: • Marketers must determine how to reach and influence the group’s opinion leaders. • Marketers try to reach them by: • Identifying their demographic and psychographic characteristics • Identifying the media they read. • Directing messages to them.

28. Social Factors: Reference Groups • Clique : • Communication researchers see society as consisting of Clique • Small groups whose members interact frequently”. • Clique members are similar, and their closeness facilitates effective communication but also insulates the clique from new ideas.

29. Social Factors: Reference Groups • There are three types of people help to spread an idea like an epidemic : • Mavens : people knowledgeable about big and small things. • Connectors: people who know and communicate with a great number of other people. • Salesmen: who possess natural persuasive power.

30. Social Factors: Family • The family is the most important consumer buying organization in society. • Family members constitute the most influential primary reference group.

31. Social Factors: Family There are two families in the buyer’s life: • Family of Orientation • Consist of one’s parents and elders • Provides orientation towards • Social: Religion, Politics, Economics • Emotional: Self Worth, Ambition, Love and Care • Family of Procreation • Consist of one’s spouse and children • Most important buying unit in a market

32. Social Factors:Family - Affecting Buying Decisions • The wife has usually acted as the family’s main purchasing agent (food, sundries, and staple clothing items) • Now traditional purchasing roles are changing • Marketers would be wise to see both men and women as possible targets.

33. Social Factors:Family - Affecting Buying Decisions • For expensive products and services (cars, vacations, or housing) the vast majority of husbands and wives engage in joint decision making Men and women may respond differently to marketing messages. • Women value connections and relationships with family and friends and place a higher priority on people than on companies • Men, relate more to competition and place a high priority on action.

34. Social Factors:Roles & Status • We can define a person’s position in each group in terms of role and status. • A role consists of the activities a person is expected to perform. • Each role in turn connotes a status. Marketers must be aware of the status-symbol potential of products and brands. • People choose products that reflect and communicate their roleand their actual or desired status in society.

35. What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors

36. Personal Factors Age and stage in the life cycle Occupation and economic circumstances, Personality and self-concept, Lifestyle and values.

37. Personal Factors: Age and stage in the life cycle • Our taste in food, clothes, furniture, and recreation is often related to our age. • Consumptionis also shaped by the family life cycle and the number, age, and gender of people in the household at any point in time.

38. Personal Factors: Age and stage in the life cycle • Other factors: • The average household size. • psychological life-cycle stages • Adults experience Marketers should also consider critical life events or transitions as giving rise to new needs. (marriage, childbirth, illness, relocation, divorce, first job, career change, retirement, death of a spouse)

39. Personal Factors: Occupation and economic circumstances • Occupationalso influences consumption patterns. • Marketers try to identify the occupational groups that have above average interest in their products and services and even tailor products for certain occupational groups. (e.g. Computer software companies, design different products for brand managers, engineers, lawyers, and physicians)

40. Personal Factors: Occupation and economic circumstances • Both product and brand choice are greatly affected by economic circumstances: • Spendable income (level, stability, and time pattern), • Savings and assets (including the percentage that is liquid) • Debts • Borrowing power • Attitudes toward spending and saving.

41. Personal Factors: Personality • A set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including buying behavior). • Each person has personality characteristics that influence his or her buying behavior. • We often describe personality in terms of such traits: • self-confidence , autonomy , deference , sociability , defensiveness, and adaptability . Personality can be a useful variable in analyzing consumer brand choices.

42. Personal Factors: Personality • People from the same subculture, social class, and occupation may lead quite different lifestyles. • A lifestyle: • Is a person’s pattern of living in the world as expressed in activities, interests, and opinions. • It portrays the “whole person” interacting with his or her environment. Marketers search for relationships between their products and lifestyle groups.  

43. Personal Factors: Brand Personality • Defined as • The specific mix of human traits that we can attribute to a particular brand. Brands also have personalities Consumers are likely to choose brands whose personalities match their own.

44. Personal Factors: Brand Personality • Research on brand personalities identified the following traits: • Sincerity (down-to-earth, honest, wholesome, cheerful) • Excitement (daring, spirited, imaginative, and up-to-date) • Competence (reliable, intelligent, and successful) • Sophistication(upper-class and charming) • Ruggedness (outdoorsy and tough)

45. Key Psychological Processes Model of Consumer Behavior • Also known “stimulus-response model” • Considered the starting point for understanding consumer behavior.

46. Key Psychological Processes • Marketing and environmental stimuli enter the consumer’s consciousness . • Set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions. • The marketer’s task is to understand what happens in the consumer’s consciousness between the arrival of the outside marketing stimuli and the ultimate purchase decisions. • Four key psychological processes fundamentally influence consumer responses: • Motivation, • Perception, • Learning, • Memory

47. Key Psychological Processes Motivation Freud’s Theory Maslow’s Hierarchy of Needs Herzberg’s Two-Factor Theory

48. Key Psychological Processes Motivation Freud’s Theory: “Behavior is guided by subconscious motivations” • Sigmund Freud Assumed the psychological forces shaping people’s behavior are largely unconscious, and that a person cannot fully understand his or her own motivations. • Someone who examines specific brands will react not only to their stated capabilities, but also to other, less conscious cues such as shape, size, weight, material, color, and brand name.

49. Key Psychological Processes Motivation Herzberg’s Two-Factor Theory: “Behavior is guided by motivating and hygiene factors” • Frederick Herzberg developed a two-factor theory that distinguishes dissatisfiers(factors that cause dissatisfaction) from satisfiers(factors that cause satisfaction). • The absence of dissatisfiers is not enough to motivate a purchase; satisfiers must be present.

50. Key Psychological Processes Motivation Maslow’s Hierarchy of Needs: “Behavior is driven by lowest, unmet need” • Abraham Maslow sought to explain why people are driven by particular needs at particular times? • His answer is that human needs are arranged in a hierarchyfrom most to least pressing physiological needs, safety needs, social needs, esteem needs, and self-actualization.