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marketing notes !st sem

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marketing notes !st sem

marketing notes !st sem

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  • 1. Topic 3 – Consumer Markets and Consumer Buyer Behavior
  • 2. Consumer Markets and Consumer Buyer Behavior
    • Objectives
    • Define the consumer market and construct a simple model of consumer buyer behavior
    • Name the four major factors that influence consumer buyer behavior
    • List and understand the stages in the buyer decision process
    • Describe the adoption and diffusion process for new products
  • 3. Consumer Markets and Consumer Buyer Behavior
    • Overview – many different factors affect consumer buying behavior- and understanding it is an essential task of the marketing management
    • Consumer behavior refers to the buying behavior of final consumers-
    • Consumer Market –all the individuals and households who buy or acquire goods and services for personal consumptions.
    • Consumers vary tremendously in age, income, education level, and tastes.
  • 4. Model of Consumer Behavior
    • Most consumers make many buying decisions everyday
    • Large companies base their research to discover actual consumer purchases by asking such questions : how do consumers respond to various marketing efforts ? : where they buy, how much and how they buy and when and why they buy
    • Stimulus- response – how consumers respond to different product features , prices and advertising appeals - which in turn has given the company a great advantage over its competitors.
    • Buyers ‘black box’ – certain responses are produced when marketing and other stimuli enter the consumers ‘black box’ and marketers must figure out what is in the buyers black box.
  • 5. Model of Consumer Behavior – cont’d
    • Model of Buyer Behavior
    responses Product choice Brand choice Dealer Choice Purchase timing Purchase amount Marketing & other stimuli Buyers black Box Buyers responses Economic Technological Political Cultural Product Price Place Promotion Buyer characteristics Buying Decision process
  • 6. Model of Consumer Behavior –cont’d
    • Marketing stimuli consists of the four P’s :product , price, place and promotion.
    • Other input include the major forces: economic, technological, political and cultural.
    • All of these inputs enter the buyers black box turned into set of observable buyer responses: product choice, brand choice , dealer choice, purchase timing, and purchase amount
    • The buyer characteristics –influences how she or he perceives and reacts to the stimuli
    • The buyer decision process – affects the buyers behavior
  • 7. Characteristics Affecting Consumer Behavior
    • Factors Influencing Consumer Behavior
    Cultural Culture Subculture Social class Social Reference Groups Family Roles & status Personal Age & Life-cycle Stage Occupation Economic situation Lifestyle Personality & Self-concept Psychological Motivation Perception Learning Beliefs & Attitudes Buyer
  • 8. Characteristics Affecting Consumer Behavior –cont’d
    • 1.0 CULTURAL FACTORS
    • Cultural factors exert the broadest and deepest influence on consumer behavior
    • Culture – is the most basic cause of a person’s wants and behaviors. It’s the set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important institutions.
    • Every group or society has a culture and cultural influences on buying behavior vary greatly from country to country.
    • Failure to adjust or recognize these differences can result in ineffective marketing.
    • International marketers must understand the culture in each international market and adapt their marketing strategies accordingly.
  • 9. Characteristics Affecting Consumer Behavior –cont’d
    • Subculture – Each culture contains smaller sub-cultures, or groups of people with shared value systems based on common life experiences and situations.
    • Subcultures include nationalities, religions, racial groups, and geographic regions.
    • Many subcultures make up important market segments , and marketers often design products and marketing programs tailored to their needs e.g.
    • -Hispanic consumers ( Cuba, Mexican, Puerto Rican ) in
    • US market.
    • - African-American Consumer – US market
    • - Mature Consumers – US market
    • Social Class – almost every country has some form of social class structure. It is societies relatively permanently and ordered divisions in a society whose members share similar values , interests and behaviours.It is not determined by a single factor such as income but is measured as a combination of occupation , income, education, wealth and other variables.
    • - America’s characteristics of seven Social Class _ upper class (less than 1%), lower uppers (about 2%), upper middles (12%0, middle class (32%), working class (38%),Upper lowers (9%), Lower lowers 7%) , lowers are on welfare , and visibly poverty stricken.
  • 10. Characteristics Affecting Consumer Behavior –cont’d
    • 2.0 SOCIAL FACTORS – Consumer behavior is also influenced by social factors such as : consumers small groups , family and social roles and status.
    • GROUPS – Two or more groups who interact to accomplish individual or mutual goals e.g. family , friends, neighbors ,co-workers etc.
    • FAMILY – Family members can strongly influence buyer behavior . The family is the most important consumer buying organization in society, and has been researched extensively: including husband, wife and children on purchase of different product and services.
    • ROLES & STATUS – each role carries a status reflecting the general esteem given to the product by society People often choose the product that show their status in society.
  • 11. Characteristics Affecting Consumer Behavior –cont’d
    • 3.0 PERSONAL FACTORS -A Buyers decision also influenced by personal characteristics such as the buyers age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept.
    • - Age and Life-cycle stage – People change the goods and services they buy over their life-times including tastes in food, clothes, furniture and recreation, these are aged related. Buying is shaped by the age life-cycle.
    • - Occupation – A blue collar workers tend to buy more rugged work clothes, white collar workers buy more business suits. Companies should specialize in making products needed by given occupational groups
    • thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.
    • -
  • 12. Characteristics Affecting Consumer Behavior –cont’d
    • 3.0 PERSONAL FACTORS - cont’d
    • - Economic situation – A persons economic situation will affect product choice. If economic indicators point to a recession, marketers can take steps to redesign. reposition, and reprice their products closely.
    • - Lifestyle – it is a person’s pattern of living.
    • Lifestyle classifications are by no means – universal and vary significantly from country to country. The study of life style can assist the marketers understand changing consumer values and how they affect buying behavior.
    • - Personality and self concept – personality refers to the unique psychological characteristics of a person can be described as: traits , self-confidence, dominance, sociability, defensiveness, aggressiveness etc. e.g. coffee drinkers tend to be high on sociability
    • To attract customers, starbucks and other coffee houses create environment to which hey can relax and socialize.
  • 13. Characteristics Affecting Consumer Behavior –cont’d
    • 4. 0 PSYCHOLOGICAL FACTORS – A person’s buying choices are further influenced by four major psychological factors : motivation, perception, learning, and beliefs and attitudes
    • - Motivation – Motive (Drive) A need that is sufficiently pressing to direct the person to seek satisfaction of the need Maslow’s theory of motivation explain why people are driven by particular needs at particular time. Maslow’s research stated that human needs are arranged in a hierarchy of needs and in order of importance. (Refer to the next slides for Maslow’s hierarchy of needs )
  • 14. Characteristics Affecting Consumer Behavior –cont’d
    • Maslow’s Hierarchy of Needs
  • 15. Characteristics Affecting Consumer Behavior –cont’d
    • PSYCHOLOGICAL FACTORS – cont’d
    • Perception – It is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Two people with the same motivation and in the same situation may act differently because they perceive the situation differently. People are exposed to a great amount of stimuli everyday.
    • Learning – describes changes in a human behavior arising from experience .Theorist say that most human behavior is learned most occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.
    • Beliefs and Attitudes – through doing and learning, people acquire beliefs and attitude and this influence the buying behavior.
  • 16. Types of Buying Decision Behavior
    • Buying behavior differs greatly for a tube of toothpaste, a tennis racket, an expensive camera, and a new car.
    • More of a complex decisions and more buyer deliberations involved.
    • 1.0 COMPLEX BUYING BEHAVIOUR – consumers undertake complex buying behavior when involved in purchase and perceived differences among brands e.g. when product is expensive, risky, purchased infrequently, and highly self- expressive.
    • for e.g. buying a computer : features may carry no meaning to first time buyer.
  • 17. Types of Buying Decision Behavior –Cont’d
    • 2.0 DISSONANCE- REDUCING BUYING BEHAVIOUR - occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands.
    • Buyers may shop around to learn what is available and buy relatively quickly; they respond primarily to a good price or to purchase convenience.
    • After the purchase , might experience post purchase dissonance (after-sale discomfort) when they notice certain disadvantages on the purchased goods.
  • 18. Types of Buying Decision Behavior – Cont’d
    • 3.0 HABITUAL BUYING BEHAVIOUR –
    • It occurs under conditions of low consumer involvement and little significant brand differences. For example of salt.
    • Consumers have little involvement in this product category- they simply go to the store and reach for a brand. If they keep to the same brand, it is out of habit rather than strong brand loyalty.
    • Consumers appear to have low involvement with most low cost, frequently purchased products.
  • 19. Types of Buying Decision Behavior – Cont’d
    • 4.0 VARIETY – SEEKING BUYING BEHAVIOUR – involve significant brand differences where consumers do a lot of brand switching e.g. buying of cookies.
    • Consumer can change brands each time he purchases from the grocery store.
    • Brand switching occurs for the sake of variety rather than because of dissatisfaction.
    • Therefore, market leaders will try to encourage habitual buying behavior by dominating shelf space , keeping the shelf fully stocked, and running frequently reminder advertising.
  • 20. The Buyer Decision Process
    • Buyer Decision process Model- The buyer decision process consists of five stages : need recognition, information search , evaluation of alternatives , purchase decision , postpurchase behavior
    • The figure implies that the consumer pass through all five stages with every purchase but in more routine purchases , consumers often skip or reverse some of these stages to satisfy a need.
    Need recognition Information search Evaluation of alternatives Purchase decisin Postpurchase behavior
  • 21. The Buyer Decision Process – Cont’d
    • 1.0 NEED RECOGNITION – the need can be triggered by an internal stimuli when one of the persons normal needs- hunger, thirst, sleep, feelings rises to a level high enough to become a drive.
    • By gathering these information the marketer can identify the factors that most often trigger interest in the product and can develop marketing programs that involve these factors.
  • 22. The Buyer Decision Process – Cont’d
    • 2.0 INFORMATION SEARCH –if the consumers drive is strong and a satisfying product is near at hand, the consumer is likely to buy it than otherwise the consumer may undertake an information search related to the need.
    • Information can be obtained from these
    • sources :
    • - Personal sources: family, friends,
    • neighbors etc
    • - Commercial sources :advertising, sales people,
    • packaging, displays etc
    • -Public sources: mass media ,word of mouth
    • - Experiential sources: handling,
    • examining, using the product
  • 23. The Buyer Decision Process – Cont’d
    • 3.0 EVALUATION OF ALTERNATIVES – certain basic concepts help explain consumer evaluation process:
    • - P roduct attributes – choice and need for
    • the product
    • - D egrees of importance – according to the
    • consumer needs and wants
    • - B rand beliefs – set of beliefs held for a
    • particular brand
    • - Total product satisfaction – vary with level of different attributes
    • - E valuation procedure – arrive at attitudes towards the different brands. At this stage consumers rank brand and form purchase intentions.
    • Consumers evaluation depends on the individual and the specific buying situation. Marketers should study buyers to find out how they actually evaluate brand alternatives and take steps to influence the buyers decision.
  • 24. The Buyer Decision Process – Cont’d
    • 4.0 PURCHASE DECISION – the stage of the buyer decision process in which the consumer actually buys that product
    • 5.0 POSTPURCHASE BEHAVIOUR – This is after purchasing the product the consumer will be engaged in the postpurchse behavior ; either is satisfied or dissatisfied.
    • The answer lies in the relationship between the consumers expectation and product’s perceived performance .
  • 25. The Buyers Decision Process for New Products
    • 1.0 New product – A good, service or idea that is perceived by some potential customers as new. I may be around for a while but now we look at how buyers approach the purchase of new products at the first time and make decisions on whether to adopt them.
    • Adoption process - the mental process which an individual passes from first learning about the innovation to final adoption.
    • Adoption – the decision by an individual to become a regular user of the product.
    • 2.0 Stages in the Adoption Process
    • - Awareness – consumer becomes aware of the product
    • - I nterest – consumer seeks information about he product
    • - Evaluation – consumers considers whether trying new product
    • make sense.
    • - Trial - tries the product on small scale
    • - Adoption – Consumer decides to make full and regular use of the
    • new product.
  • 26. The Buyers Decision Process for New Products – cont’d
    • 3.0 Individual Differences in Innovativeness
    • People differ greatly in their readiness to try new products.
    • In each product area, there are ‘ consumption pioneers’ and early adopters. Other individuals adopt new products much later. The late majority are skeptical – they adopt an innovation only after a majority of people have tried it.
    • The early adopters tend to be relatively younger, better educated and higher in income – they are more receptive to unfamiliar things , rely more on their own values and judgment and are more willing to take risks.
  • 27. The Buyers Decision Process for New Products – cont’d
    • 3.0 Influence of product characteristics on rate of Adoption
    • Some products catch on almost overnight (Frisbees) whereas other take a long time to gain acceptance (personal computers)
    • The following are used to influence an innovation’s rate of adoption:
    • - relative advantage – the degree in which the product appear superior than the existing products
    • - Compatibility – the degree to which the innovations fits the values and experiences of potential consumers.
    • - Complexity – The degree in which the innovation is difficult to understand or use.
  • 28. The Buyers Decision Process for New Products – cont’d
    • 3.0 Influence of product characteristics on rate of Adoption -cont’d
    • - Divisibility – the degree to which the innovation may be tried on a limited basis : an option to lease or to buy.
    • - Communicability – the degree to which the innovative product can be observed or described to others.
    • The marketer has to research all the above factors when developing the new product and its marketing program
    • Other characteristics that influence the rate of adoption are : initial and ongoing costs, risk and uncertainty, and social approval.
  • 29. Consumer Behavior Across International Borders
    • Values, attitudes and behaviours of consumers vary greatly from country to country.
    • International marketers should understand these differences and adjust their products and marketing programs accordingly.
    • For example in :
    • USA – most eat cereal regularly for breakfast
    • France – croissants and coffee
    • India - heavy fried breakfast and 22% may skip meal
    • altogether
    • All resulted from physical differences in consumers and their environments.
  • 30. Consumer Behavior Across International Borders – cont’d
    • Other differences across international markets are also due from varying customs e.g. :
    • Shaking your head from side to side means – ‘ no ’ in most countries but ‘yes ’ in Bulgaria and Shri Lanka.
    • Touching another person - is a sign of warmth and friendship in South America, Southern Europe, and many Arab countries – in the Orient it is considered an invasion of privacy.
    • To leave something left on your plate when eating is rude in Norway and Malaysia but in Egypt it is rude when not to leave something on your plate
    • In Italy - it is improper for a door –to door salesperson to call on a woman if she is home alone.
  • 31. Consumer Behavior Across International Borders – cont’d
    • Failing to understand such differences in customs and behaviours from one country to another can spell disaster for markets of International products and programs
    • Marketers must decide on the degree to which they will adapt their products and marketing programs to meet the unique cultures and needs of consumers in various markets
  • 32. THE END

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