Chapter 5: Consumer Markets and Consumer Buyer Behavior

• Consumer buying behavior: refers to the buying behavior of final consumers – individuals and households who buy goods and services for personal consumption

• All of these final consumers combine to make up the consumer market

Stimulus-Response Model of Consumer Behavior

Stimuli Buyer’s Black Box Buyer Response4P’s Buyer characteristics Product choice

Buyer decision process Brand choiceOther characteristics Dealer choice• Economic Purchase timing• Technological Purchase amount• political• cultural

• The stimulus-response model of buyer behavior shows that marketing (made up of the four P’s—product, price, place, and promotion) and other stimuli (such as the economic, technological, political, and cultural environments) center on the consumer’s “black box” and produce certain responses.

• Marketers must figure out what is “in” the consumer’s “black box.”• The “black box” has two parts.• 1) The buyer’s characteristics influence how he or she perceive and react to stimuli.• 2) The buyer’s decision process itself affects the buyer’s behavior.

Characteristics Affecting Consumer Behavior

A CULTURAL FACTORS:

A-1 Culture: It is the set of basic values, perceptions, wants, and behaviors learned by member of society from family and other important institutions • It Forms a person’s wants and behavior• Marketers are always trying to spot cultural shifts in order to imagine new products that might be wanted (the fitness and health craze of the late 80s and 90s for example).A-2 Subculture: It is a group of people with shared value systems based on common life experiences and situations• Each culture contains smaller subcultures. • Subcultures might be nationality groups, religious groups, racial groups, or geographic area groups. Many of these subcultures make up important market segments and many times products are designed for them. A-3 Social Class: It is the relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.• Social class is not determined by a single factor such as income but is measured as a combination of occupation, income, education, wealth, and other variables.• Social scientists have identified seven social classes:

a). Upper Uppers (less than 1 percent). b). Lower Uppers (about 2 percent).c). Upper Middles (about 12 percent). d). Middle Class (about 32 percent).e). Working Class (about 38 percent). f). Upper Lowers (about 9 percent).g). Lower Lowers (about 7 percent).

• Marketers are interested in social class because people within a given social class tend to exhibit similar behavior, including buying behavior. This is most evident in the selection of clothing, home furnishings, leisure activity, and automobiles.

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B SOCIAL FACTORS:

B-1 Reference Groups:• These include small groups, family, and social roles and status.• There are several specialized group formations within the larger configuration• Reference groups are groups that that have a direct (face-to-face) or indirect influence on the

person’s attitudes or behavior. People are often influenced by reference groups to which they do not belong. a. Membership groups are groups that have a direct influence on a person’s behavior; they are groups to which a person belongs b. Aspirational: An aspirational group is a group to which an individual wishes to belong.c. An opinion leader is a person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. Marketers try to identify opinion leaders and direct products and communications toward them. Opinion leaders are best for Word-of-mouth influence and buzz marketing. Marketers identify them to use as brand ambassadors.

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

• Include blogs, social networking sites (facebook), virtual worlds (second life) B-2 Family: The influence can be very strong because the family is the most important consumer-buying organization in society. Marketers are interested in the roles and influence of the husband, wife, and children in the purchase of different products and services. Buying roles change with evolving lifestyles (such as more females working outside the home). Marketers try to identify the influencer role in a family unit (such as children).B-3 Roles and Status: • A person belongs to many groups and the person’s position within each group can be defined in terms of both role and status. • A role is the activities a person is expected to perform according to the people around him or her.• Status is the general esteem given to a role by society. People often choose products that show their status in society.C SOCIAL FACTORS:C-1 Age and life cycle: People change the goods and services that they buy over their lifetimes. Part of these changes are shaped by the family life cycle (stages throughout which families might pass as they mature over time). The traditional life cycle stages are being modified as people form new lifestyles (such as single parenting)C-2 Occupation: A person’s occupation affects the goods and services bought (software bought by accountants, lawyers, and doctors).C-3 Economic situation: The economic situation of the buyer is very important in purchase consideration. It includes trends in 1) Personal Income, 2) Savings, 3) Interest Rates• If a person fears losing their job, their purchasing habits generally change. • If the person perceives that their economic situation is going to improve, they might consider making

a major purchase C-4 Lifestyle: A lifestyle is a person’s pattern of living as expressed in his or her psychographics (such as activities, interests, and opinions). Lifestyle profiles a person’s whole pattern of acting and interacting in the world. It is more than the person’s social class or personality.• Examples of AIOs include:a). Activities (work, hobbies, shopping, etc.). b). Interests (food, fashion, recreation, etc.). c). Opinions (about themselves, social issues, business, etc.).• The most widely used lifestyle classification is the SRI Values and Lifestyles (VALS) typology. • VALS classifies people according to their consumption tendencies by how they spend their time and

money. • A person could change positions over time. It is felt that a person’s lifestyle does affect their

purchase behavior. • Groups are further subdivided based on self-orientation and resources.• Self-orientation groups include:1]. Principle-oriented consumers who buy based on their views of the world.2]. Status-oriented consumers who base their purchases on the actions and opinions of others.3]. Action-oriented buyers who are driven by their desire for activity, variety, and risk taking.

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• Resources can be either abundant or minimal depending on whether the the buyer has high or low levels of income, education, health, self- confidence, energy, and other factors

Lifestyle segmentation(1) Innovators are successful, sophisticated, take-charge, Highly motivated people with high self-esteem.• They are change leaders and are the most receptive to new ideas and technologies. • Innovators are very active consumers, and their purchases reflect cultivated tastes for upscale, niche products and services.• Image is important to Innovators, as an expression of their taste, independence, and personality. • Innovators are among the established and emerging leaders in business and government, yet they continue to seek challenges. • Their lives are characterized by variety. • Their possessions and recreation reflect a cultivated taste for the finer things in life.(2) Thinkers are motivated by ideals.• They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. • They tend to be well educated and actively seek out information in the decision-making process. • They are well-informed about world and national events and are alert to opportunities to broaden their knowledge.• Thinkers have a moderate respect for the status quo institutions of authority and social decorum, but are open to consider new ideas. • Although their incomes allow them many choices, Thinkers are conservative, practical consumers; • They look for durability, functionality, and value in the products they buy.(3) Believers are motivated by ideals. • They are conservative, conventional people with concrete beliefs based on traditional, established codes: family, religion, community, and the nation. • Many Believers express moral codes that are deeply rooted and literally interpreted. • They follow established routines, organized in large part around home, family, community, and social or religious organizations to which they belong.• As consumers, Believers are predictable; they choose familiar products and established brands. • They are generally loyal customers.(4) Achievers: Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to career and family. • Their social lives reflect this focus and are structured around family, their place of worship, and work.• Achievers live conventional lives, are politically conservative, and respect authority and the status quo. • They value consensus, predictability, and stability over risk, intimacy, and self-discovery.• Image is important to Achievers;• they favor established, prestige products and services that demonstrate success to their peers.• Because of their busy lives, they are often interested in a variety of time-saving devices.(5) Strivers are trendy and fun loving. • Because they are motivated by achievement, Strivers are concerned about the opinions and approval of others.• Money defines success for Strivers, who don't have enough of it to meet their desires. • They favor stylish products that emulate the purchases of people with greater material wealth. • Many see themselves as having a job rather than a career, and a lack of skills and focus often prevents them from moving ahead.• Strivers are active consumers because shopping is both a social activity and an opportunity to demonstrate to peers their ability to buy.• As consumers, they are as impulsive as their financial circumstance will allow.(6) Experiencers are motivated by self-expression.• As young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool. • They seek variety and excitement, savoring the new, the offbeat, and the risky. • Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities.• Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing.

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• Their purchases reflect the emphasis they place on looking good and having "cool" stuff.(7) Makers are motivated by self-expression Like Experiencers.• They express themselves and experience the world by working on it-building a house, raising children, fixing a car, • Makers are practical people who have constructive skills and value self-sufficiency. • They live within a traditional context of family, practical work, and physical recreation and have little interest in what lies outside that context.Makers are suspicious of new ideas and large institutions such as big business. • They are respectful of government authority, but resentful of government intrusion on individual rights. • They are unimpressed by material possessions other than those with a practical or functional purpose.• Because they prefer value to luxury, they buy basic products.(8) Survivors live narrowly focused lives. • With few resources with which to cope, they often believe that the world is changing too quickly.• They are comfortable with the familiar and are primarily concerned with safety and security. • Because they must focus on meeting needs rather than fulfilling desires, Survivors do not show a strong primary motivation.• Survivors are cautious consumers. • They represent a very modest market for most products and services. • They are loyal to favorite brands, especially if they can purchase them at a discount.

C-5 Personality and self-concept:• Each person’s personality and self-concept will influence their buying behavior.• Personality is a person’s unique psychological characteristics that lead to relatively consistent and

lasting responses to his or her own environment.• Personality is usually described in terms of traits (such as self-confidence, dominance, sociability,

etc.). Personality can be useful for analyzing consumer behavior for certain brand or product choices.

• The self-concept describes the self-image. The basic idea is that people’s possessions contribute to and reflect their identities.

A brand personality is the specific mix of human traits that may be attributed to a particular brand.Five brand personalities might be:1) Sincerity (Down to earth, honest, wholesome and cheerful)2) Excitement (Daring, spiritual, imaginative and up-to-date)3) Competence (Reliable, intelligent and successful)4) Sophistication (Upper Class & Charming)5) Ruggedness (Outdoorsy and tough)

D PSYCHOLOGICAL FACTORS: A buyer’s choices are influenced by four major psychological factors (motivation, perception, learning, and beliefs and attitudes):D-1 Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. person has many needs at any given time and they can be biological or psychological. Several theories of motivation include:

1. Freud’s theory of motivation assumed that people are largely unconscious about the real psychological forces shaping their behavior. A person does not fully understand his or her motivation according to Freud. These ideas spawned the field of motivation research

2. Maslow believed that needs were arranged in a hierarchy (beginning with physiological needs and then continuing with safety, social, esteem, and self-actualization needs). Under this idea, a person would try to satisfy the most important needs first. The needs include:

D-2 Perception

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

• The marketer must remember that two people with the same motivation and in the same situation may act differently because they perceive the situation differently.

• These differences in perception can be accounted for by three perceptual processes:1. Selective attention is the tendency of people to screen out most of the information to

which they are exposed

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2. Selective distortion is the tendency of people to interpret information in a way that will support what they already believe.

3. Selective retention is the tendency of people to retain only part of the information to which they are exposed, usually information that supports their attitudes and beliefs

D-3 LearningLearning describes changes in an individual’s behavior arising from experience Learning occurs through the interplay of:

a) A drive (a strong internal stimulus that calls for action).b) Stimuli (Objects that move drive to motive) A drive becoming a motive when it is directed toward a particular stimulus object.c) Cues are minor stimuli that determine when, where, and how the person responds. Cues can influence a buyer’s response to an impulsed) Reinforcement (Feedback on action) If the experience is rewarding, then the response is reinforced

D-4 Beliefs and AttitudesA person’s beliefs and attitudes are acquired through acting and learning. A belief is a descriptive thought that a person holds about something.

Belief : a descriptive thought that a person holds about something (a brand or service)a). A belief may be based on real knowledge, opinion, or faith.b). Beliefs may or may not carry an emotional charge.c). Because beliefs make up product and brand images, they are important to marketers. People tend to act on their beliefs.

Attitude describes a person’s consistently favorable or unfavorable evaluations, feelings and tendencies toward an object or ideaa). Attitudes put people into a frame of mind of liking or disliking things, moving toward or away from them.b). Attitudes are difficult to change.c). A person’s attitudes fit into a pattern and changing one attitude may require changing others

Types of Buying Decision Behaviora. Buying behavior differs greatly depending on what is being bought.b. More complex decisions usually involve more buying participants and more buyer deliberation

1. Complex Buying Behavior: Highly involved, significant brand differences Example – computer• It occurs when consumers are highly involved in a purchase and perceive significant differences

among brands.• Consumers may be highly involved when the product is expensive, risky, purchased infrequently,

and highly self-expressive.

2. Dissonance-reducing: Highly involved, little brand differences Example – carpeting• After these purchases, it is common to experience post purchase dissonance (after-sale discomfort)

when they notice certain disadvantages of the purchase or hear favorable things about brands not purchased.

• Counter dissonance occurs with after-sale communications to support claims and make consumers feel better about purchases

3. Habitual: Low involvement, little brand differences Example – salt• In these cases, consumer behavior does not pass through the usual belief-attitude- behavior

sequence. • Ad repetition creates brand familiarity rather than brand conviction.

4. Variety-seeking: Low involvement, significant perceived brand differences Example – cookies

The Buyer Decision Process• There are five stages within the process: need recognition, information search, evaluation of

alternatives, purchase decision, and post purchase behavior. • The model seems to imply that consumers pass through all five stages with every purchase. • In more routine purchases, however, a person might skip or reverse some of the stages.• Marketers need to focus on the entire buying process rather than on just the purchase decision

a. Need recognition i s the first stage of the buyer decision process in which the consumer recognizes a problem or need.1). 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.2). A need can also be triggered by external stimuli (such as an advertisement).

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3). At this stage, the marketer needs to determine the factors and situations that usually trigger consumer need recognition.b. Information search is the stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search. Information can be obtained from several sources:1). Personal sources such as family and friends.2). Commercial sources such as advertising and salespeople.3). Public sources such as the mass media and consumer-rating organizations.4). Experiential sources such as handling, examining, or using the product.c. Evaluation of alternatives is the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands choices. Several basic concepts help to explain the consumer-evaluation process:1). The consumer arrives at attitudes toward different brands through some evaluation procedure.2). In some cases consumers use careful calculations and logical thinking.3). In other instances, consumers buy on impulse and rely on intuition.4). Sometimes, consumers make buying decisions by themselves. At other times, the consumer uses friends, buying or consumer guides, or salespeople for advice.5). Marketers should study buyers to find out how they actually evaluate brand alternatives.d. Purchase decision is the stage of the buyer decision process in which the consumer actually buys the product. Generally, the consumer’s purchase decision will be to buy the most preferred brand; however, two factor’s can come between purchase intention and the purchase decision. They are:1) The attitude of others. How much another person’s attitudes will affect individual choices depends both on the strength of the other person’s attitudes toward the buying decision and on an individual’s motivation to comply with that person’s wishes. 2) Purchase intention is also influenced by unexpected situational factors. If unexpected situational factors arise as the consumer is about to act, the purchase intention may be affected e. Postpurchase behavior is the stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction. Determinates are:1. The relationship between the consumer’s expectations and the product’s perceived performance. The larger the gap between expectations and performance, the greater the consumer’s dissatisfaction. 2) Some sellers might even understate performance levels to boost consumer satisfaction with the product

• Cognitive dissonance is buyer discomfort caused by post purchase conflict and it is very common.

• It is very important to satisfy customers because a company’s sales come from two basic groups: new customers and retained customers.1) Because it is more expensive to attract new customers than to retain current ones, it is important to keep current customers happy. 2) A satisfied customer also tells others about their experience

Buyer Decision Process for New ProductsNew Products: Good, service or idea that is perceived by customers as new.Stages in the Adoption Process: Marketers should help consumers move through these stages.

AwarenessEvaluationInterestTrial

Individual Differences in InnovativenessConsumers can be classified into five adopter categories, each of which behaves differently toward new products.Five product characteristics influence the adoption rate.Innovators Early Adopters Early Majority Late Majority Laggards

Product Characeristics & AdoptionFive product characteristics influence the adoption rate.

Relative Advantage Compatibility ComplexityDivisibility Communicability

International Consumer Behavior– Values, attitudes and behaviors differ greatly in other countries.– Physical differences exist which require changes in the marketing mix.

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– Customs vary from country to country.– Marketers must decide the degree to which they will adapt their marketing efforts.

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