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Copyright © 2002
All rights reserved.
CHAPTER 2CHAPTER 2
Determinants of Customer Behavior:
Personal Factors
and Market Environment
Determinants of Customer Behavior:
Personal Factors
and Market Environment
CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVECUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE
PART 1:PART 1:
CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVECUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE
PART 1:PART 1:
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
2 Copyright © 2002
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FrameworkFramework
Payer
UserBuyer
Personal Context• Culture• Groups and Institutions• Personal Worth• Social Class
Personal Context• Culture• Groups and Institutions• Personal Worth• Social Class
Personal Traits• Genetics• Biogenics• Personality
Personal Traits• Genetics• Biogenics• Personality
Market Context• Economy• Government Policy• Technology
Market Context• Economy• Government Policy• Technology
Market Traits• Climate• Topography• Ecology
Market Traits• Climate• Topography• Ecology
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Two Broad ClassesTwo Broad Classes
Personal traits Those biological and physiological features a person is
born with and those that develop as a person grows but whose origin derives from biological heredity.
Individual traits Group traits
Personal context The characteristics of the socio-econocultural
environment in which we have lived and are living, which has intimately influenced our resources, tastes, and preferences
4
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Personal FactorsPersonal Factors
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Personal TraitsPersonal Traits
Genetics
Biogenics
Race
Gender
Age
Personality
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
6 Copyright © 2002
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Genetics: The Cards We Are Dealt at BirthGenetics: The Cards We Are Dealt at Birth
DNA (deoxyribonucleic acid) Chemicals in cell nuclei that form the
molecular basis of heredity in organisms Genes (segments of DNA) provide the code
that determines our characteristics
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
7 Copyright © 2002
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ResearchResearch
Research is in progress on genetics and DNA, seeking to discover secrets of the human condition and behaviorAdvances in neurology are uncovering various chemicals that regulate human emotions and behavior These discoveries support the idea of biological
determinism – the belief that human behavior is determined by biological factors such as genetics and DNA
Other non-biological factors such as culture, perception, learning, and individual motivation, determine much of adult behavior as well
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Genetics Affect Customer Needs and BehaviorGenetics Affect Customer Needs and Behavior
Four Factors Physiological differences Diseases and mental disorder Circadian rhythm Emotions and behavior
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CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Direct Effects of GeneticsDirect Effects of Genetics
Physical features and physiological characteristics Height, weight, skin color and tone, color of
eyes, color and texture of hair, and bodily reactions to variations in temperature and other environmental changes (i.e., allergies)
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Daily Cycle of ActivityDaily Cycle of Activity
Circadian Rhythm – biological “clock” governs rhythms like sleep-wake cycles
People’s rhythms affect,, when shoppers like to shop, among other things
Research is also examining whether consumers might process advertisements differently at different times of the day according to their circadian rhythm
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Human BehaviorHuman Behavior
Nature (biological factors) Behavior is determined by a person’s upbringing, by
family life, by parental values, by peer group influences, by school, and by church groups
Nurture (the familial and social environment) Behavior is determined by a person’s genetic makeup:
our emotions, our sexual preference, tribalism, love of status, notions of beauty, our sociability, creativity, and morality itself
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Birth Order MattersBirth Order Matters
Birth order is the sequence among all siblings born of the same mother Older children are control freaks, aspiring,
ambitious and driven Younger siblings, in contrast, take themselves
much less seriously, are more sociable and less judgmental, more risk taking and more open to new things and change
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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BiogenicsBiogenics
Three biogenic characteristics that influence customer behavior: Race Gender Age
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CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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RaceRace
In the United States, the Bureau of the Census specifies the following four race categories: 1. Caucasian
2. African American
3. American Indian and Alaskan Eskimos
4. Asian and Pacific Islanders
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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GenderGender
Gender is a biogenic group trait that divides customers into two groups males and females
This group trait remains constant through a person’s life, and it influences customer values and preferences
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
16 Copyright © 2002
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AgeAge
Age is perhaps the most pervasive influence on customer behavior
Both needs and wants vary immensely by age
Age helps determine the lifetime revenue from a customer Lifetime revenue is the estimated revenue a firm may
expect to receive from a customer over the customer’s lifetime
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Chronological Age-based GroupingChronological Age-based Grouping
The GI Generation (born from 1901 to 1924)
Silent Generation (born between 1925)
Baby Boomers (born between 1946 to 19640
Generation X (Post 1964)
Generation Y (born between 1977 and 1995)
Children
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
18 Copyright © 2002
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Distribution of Online Buyers By AgeDistribution of Online Buyers By Age
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Customer PersonalityCustomer Personality
Personality refers to a person’s consistent ways of responding to the environment in which he or she lives
Customer personality is a function of two factors: Genetic makeup Environmental conditioning
Personality = Genetics x Environment
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Behaviorism TheoryBehaviorism Theory
A person develops a pattern of behavioral responses because of the rewards and punishments offered by his or her environment
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Freudian TheoryFreudian Theory
Human personality is driven by both conscious and unconscious motivesThree divisions of the human psyche: id
the basic source of inner energy directed at avoiding pain and obtaining pleasure and represents the unconscious drives and urges
ego between the unconscious and impulsive desires of the id and the
societal ideals internalized by the superego superego
the moral side of the psyche, reflecting societal ideals
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Unconscious Tactics of the EgoUnconscious Tactics of the Ego
Aggression
Rationalization
Projection
Repression
Withdrawal
Regression
Copyright © 1999 by Thomas Southwestern. All rights reserved.
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Trait TheoryTrait Theory
A person is viewed as a composite of several personality traits
A personality trait is a consistent, characteristic way of behaving
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Personality of the Business CustomerPersonality of the Business Customer
Two personality traits of the “social styles” classification Assertiveness Responsiveness
Classification of Personality Into Social StylesClassification of Personality Into Social Styles
Analytical• Slow reaction• Maximum effort to organize• Minimum concern for
relationships• Historical time frame• Cautious action• Tends to reject involvement
Driving• Swift reaction• Maximum effort to control• Minimum concern for caution
in relationships• Present time frame• Direct action• Tends to reject inaction
Amiable• Unhurried reaction• Maximum effort to relate• Minimum concern for effecting
change• Present time frame• Supportive action• Tends to reject conflict
Expressive• Rapid reaction• Maximum effort to involve• Minimum concern for routine• Future time frame• Impulsive action• Tends to reject isolation
RESPONSIVENESS
AS
SE
RT
IVE
NE
SS
LOW HIGH
HIGH
LOW
RESPONSIVENESS
AS
SE
RT
IVE
NE
SS
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Personal ContextPersonal Context
Culture
Institutions and groups
Personal worth
Social class
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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CultureCulture
Enculturation Acculturation
Elements of Culture
Characteristics of CultureDimensions of
Cross-cultural Values
Values
Norms
Rituals
Myths
Culture is learned
Culture regulates society
Culture makes living more efficient
Culture is adaptive
Culture is environmental
Multiple cultures are nested hierarchically
Individual vs. collectivism
Large vs. small power distance
Strong vs. weak uncertainty avoidance
Masculinity vs.femininity
Abstract vs. associative thinking
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Institutions and GroupsInstitutions and Groups
Institutions More permanent groups with pervasive and
universal presence in society
Groups Two or more persons sharing a common
purpose
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CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Types of GroupsTypes of Groups
PRIMARY SECONDARY
• Family• Work organization• Church groups• Fraternities/sororities
• Professional associations• Credit unions• Political campaign volunteers• YMCA
• Personal role model• A significant other• The person one “secretly
admires”
• Celebrities• Fortune 500 companies• Other artists (for an artist)
ME
MB
ER
SH
IPS
YM
BO
LIC
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Classification of Groups for Household CustomersClassification of Groups for Household Customers
TYPE OF INSTITUTIONS/GROUPS
INFORMAL FORMAL
CHOICE
Volunteer groups
Community
Friendship groups
Cultural heroes
School
Workplace
Fraternities/sororities
TYPE OF MEMBERSHIP
ASCRIBED OR ASSIGNED
Family
Relatives
Tribes
Religion
Prison
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Private-Public, Luxury-Necessity, Product-Brand InfluencesPrivate-Public, Luxury-Necessity, Product-Brand Influences
PUBLIC
PRODUCTBRAND
WEAK REFERENCEGROUP INFLUENCE (-)
STRONG REFERENCEGROUP INFLUENCE (+)
STRONG REFERENCE GROUP INFLUENCE (+)
Public Necessities
Influence: weak product and brand
Examples: Wristwatch, automobile, man’s suit
Public Luxuries
Influence: Strong product and weak brand
Examples: TV game, trash compactor, icemaker
WEAK REFERENCEGROUP INFLUENCE (-)
Private Necessities
Influence: Weak product and brand
Examples: Mattress, floor lamp, refrigerator
Private Luxuries
Influence: Strong product and weak brand
Examples: TV game, trash compactor, icemaker
PRIVATE
NE
CE
SS
ITY
LU
XU
RY
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Personal WorthPersonal Worth
Three components of personal worth Income Wealth Borrowing power
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Social Class CharacteristicsSocial Class Characteristics
Rank ordering
Relative permanence
Intergenerational class mobility
Internal homogeneity
Distinct from income
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Market EnvironmentMarket Environment
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CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Two Broad ClassesTwo Broad Classes
Market traits The physical characteristics of the surroundings in
which consumers select, use, and pay for products and services in both household and business markets
Market context The man-made market forces (as opposed to the
nature-made forces) of the market as a physical place that affects customer needs and wants
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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Market TraitsMarket Traits
Climate
Topography
Ecology
Copyright © 1999 by Thomas Southwestern. All rights reserved.
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ClimateClimate
Climate is the first major component of the geophysical market environment, which consists of temperature, wind, humidity, and rainfall in the area Homeostasis Influences consumer behaviors
Food consumption Use of clothing Housing patterns Geographical distribution of population
Climate also affects business customers’ needs and purchases
Copyright © 1999 by Thomas Southwestern. All rights reserved.
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TopographyTopography
Topography is another major component of the geophysical environment which is the terrain, altitude, and soil conditions of the market where customers buy and use the product or service Consumption varies across different regions of the
world Geographical variation
Different patterns of consumption in different regions Regional marketing
Adapting marketing programs according to segmentation based on geographic differences among customers
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 2CHAPTER 2PART 1Customer Behavior: A Managerial Perspective
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EcologyEcology
Ecology refers to the natural resources and the delicate balance and interdependence among vegetation, animals and humans
Ecology affects customer behavior by making certain market options less convenient or less attractive, and by customers exercising their environmental values, which then bear upon their market choices Green consumer Environmentally conscious consumer
Copyright © 1999 by Thomas Southwestern. All rights reserved.
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Market ContextMarket Context
Economy
Government policy
Technology
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EconomyEconomy
The economic climate affects customer behavior by: Encouraging or constraining customer
purchases at the individual household levels as well as for business customers
Influencing customer sentiment Driving business cycles
Copyright © 1999 by Thomas Southwestern. All rights reserved.
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Government PolicyGovernment Policy
Government policy comprises: Monetary policy Fiscal policy Public policy Facilitative infrastructure
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TechnologyTechnology
Technological breakthroughs can significantly change market behaviors and customer expectationsAvenues of impact Increased access to information Product innovation: new options More flexibility and control Customized products and services