Marketing principles k&a chapter 5 moghimi

Lecturer: Bahman Moghimi
M.Sc. Of “Industrial Marketing & e-Commerce”
Doctor of Business Administration

Consumer Markets and Consumer Buyer Behavior
University of Georgia

B.Moghimi@yahoo.c
B.Moghimi@yahoo.co.uk o.uk

Learning Goals

1. Define the consumer market and
construct a model of consumer buyer
behavior
2. Name the four factors that influence
buyer behavior
3. List and understand the types of
buying decision behavior and stages
in the process
4. Describe the adoption and diffusion
process for new products
B.Moghimi@yahoo.co.uk

Case Study
Harley Davidson
Building Success Measuring Success

• Understanding the • Currently 22% of all
customers’ emotions U.S. bike sales
and motivation • Demand above supply
• Determining the • Sales doubled in the
factors of loyalty past 5 years with
• Translating this earnings tripled
information to
effective advertising
5-5

Learning Goals

behavior
buyer behavior
in the process


Definitions
• Consumer buyer 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


Learning Goals
behavior
buyer behavior
in the process


Model of Consumer Behavior
Product Marketing and Economic
Other Stimuli
Price Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s Black Box Affecting
Process Consumer
Behavior

Product Choice
Purchase
Brand Choice Buyer’s Response Timing
Dealer Choice Purchase
Amount

Model of Buyer Behavior
Figure 5.1

5 - 10

Factors Influencing Consumer Behavior


Characteristics Affecting Consumer Behavior

Culture
Social
Personal
Psychological

Buyer


Characteristics Affecting
Consumer Behavior
– Culture
Key Factors • Forms a person’s wants
and behavior

• Cultural – Subculture
• Groups with shared value
• Social systems
• Personal
– Social Class
• Psychological • Society’s divisions who
share values, interests and
behaviors


Sub-Culture

• Hispanic consumers: one third of the US
population
• Hispanic consumers tend to buy more
branded, higher quality products
• African-American consumers: they are
motivated by quality and selection. Brands
are important


Sub-Culture

• Asian American: they are the second
fastest growing population sub segment
after the Hispanics.
• More than 90% of the Asian American
Go online regularly and are most
comfortable with internet technology
such as online banking


Sub-Culture

• Mature consumers: very attractive market.
The entire U.S baby boom generation, the
largest and the wealthiest demographic
cohort in the country.

• Mature consumers are not stuck in their
ways


Consumer Behavior

– Groups
• Membership
Key Factors • Reference
– Aspiration
• Cultural • Opinion leaders
– Buzz marketing
• Social
• Personal – Family
• Psychological • Many influencers

– Roles and status


Social Factor

• In some social systems, members of different
classes are reared for certain roles and cant
change their social positions. In other country,
however, the lines between social classes are not
fixed and rigid, people can move to a higher
social class or drop into a lower one.


Social Factor

• Marketers are interested in social class
because within a given social class tend to
exhibit similar buying behavior. Social classes
show distinct product and brand preferences
in areas such as clothing , home furnishings,
and automobiles.


Social Factor


This
advertiser
knows teens
are strongly
influenced
by groups
when
purchasing
fashion
items B.Moghimi@yahoo.co.uk 5 - 24
Marketing in Action

Groups and Social Networks

 Online Social Networks are
online communities where
people socialize or exchange
information and opinions
 Include blogs, social
networking sites (Facebook),
virtual worlds (second life)


Social Factors ( family )

 Family is the most important consumer-buying
organization in society

 Marketers are interested in the roles and influence of
the husband, wife and children on the purchase of
different products and services

 The wife traditionally has been the main purchasing
agent for the family.


Social Factors ( family )

 Children may also have a strong influence on family
buying decisions

 Studies found that kids influence family decisions
about where they take vacations , what cars or cell
phones they buy. As a result , marketers of cars , full
service restaurants , cell phones are now placing ads on
the children oriented TV networks


Social Factors (roles and status)

 Social roles and status
are the groups, family,
clubs, and organizations
that a person belongs to
that can define role and
social status

 A role consists of the
activities that people
expected to perform
according to the persons
around them


Social Factors (roles and status)

 Each role carries a status reflecting the general esteem
given to it by society.

 People usually choose products appropriate to their
roles and status. Consider the roles a working mother
plays


Consumer Behavior
– Age & Lifestyle
Key Factors •Activities, interests and
opinions
• Cultural •Lifestyle segmentation

• Social – Occupation
– Economic situation
• Personal
– Personality and self-concept
• Psychological


VALS
Figure 5.4

5 - 31

Abundant Resources
Actualizers

Principle Oriented Status Oriented Action Oriented

Fulfilleds Achievers Experiencers

Believers Strivers Makers

Strugglers
Minimal Resources

Brand Personality
Dimensions

• Sincerity • Excitement
• Ruggedness • Competence

• Sophistication


Consumer Behavior

Key Factors – Motivation

– Perception
• Cultural
• Social – Learning

• Personal – Beliefs and attitudes
• Psychological


Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes


Motivation
• A motive is a need that is sufficiently pressing to
direct the person to seek satisfaction

• Motivation research is based on Freud. Looks
for hidden and subconscious motivation

• Maslow ordered needs based on how pressing
they are to the consumer


Maslow’s Hierarchy of Needs
Figure 5.5

5 - 40

This ad
demonstrates
a product
meeting
physiological
and social
needs

5 - 41
Marketing in Action

Discussion

What consumer
products might
fulfill multiple
levels of the
Hierarchy of
Needs?

B.Moghimi@yahoo.co.uk 5 - 42

Perception
• Perception is the process by which people
select, organize, and interpret information.
• Perception Includes:
– Selective attention
• Consumers screen out information
– Selective distortion
• People interpret to support beliefs
– Selective retention
• People retain points to support attitudes


Discussion Question
Perception
1. How many ads
were you exposed
to today?

2. Which ones do you
remember? Why?

B.Moghimi@yahoo.co.uk 5 - 44

Learning
• Learning describes changes in an individual’s
behavior arising from experience
• Learning occurs through
– Drives
• Internal stimulus that calls for action
– Stimuli
• Objects that move drive to motive
– Cues
• Minor stimuli that affect response
– Reinforcement
• Feedback on action


Beliefs and Attitudes
• Belief
– a descriptive thought about a brand or
service
– may be based on real knowledge, opinion,
or faith

• Attitude
– describes a person’s evaluations, feelings
and tendencies toward an object or idea
– They are difficult to change

Types of Buying Decision Behavior
Figure 5.6

5 - 48

The Buyer Decision Process
Figure 5.7

5 - 49

The Buyer Decision
Process

Process Stages • Needs can be triggered by:
– Internal stimuli
• Need recognition • Normal needs become
• Information search strong enough to drive
• Evaluation of behavior
alternatives – External stimuli
• Purchase decision • Advertisements
• Postpurchase • Friends of friends
behavior


Step 1. Need Recognition

Need Recognition
Difference between an actual state and a desired state

Internal Stimuli External Stimuli

• Hunger • TV advertising

• Thirst • Magazine ad
• A person’s normal • Radio slogan
needs
•Stimuli in the
environment

The Buyer Decision
Process

Process Stages • Consumers exhibit
heightened attention or
• Need recognition actively search for
information
• Information search
• Sources of information:
• Evaluation of
alternatives – Personal
• Purchase decision – Commercial
• Postpurchase – Public
behavior – Experiential
– Word-of-mouth

Step 2. Information Search

Personal Sources •Family, friends, neighbors
•Most influential source of
information

Commercial Sources •Advertising, salespeople
•Receives most information
from these sources

Public Sources •Mass Media
•Consumer-rating groups

•Handling the product
Experiential Sources •Examining the product
•Using the product


The Buyer Decision
Process

Process Stages • Evaluation procedure
depends on the consumer and
• Need recognition the buying situation.
• Information search • Most buyers evaluate multiple
• Evaluation of attributes, each of which is
alternatives weighted differently.
• Purchase decision • At the end of the evaluation
stage, purchase intentions are
• Postpurchase
formed.
behavior


Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?

Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?

Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.


The Buyer Decision
Process

Process Stages • Two factors intercede
between purchase
• Need recognition intentions and the actual
• Information search decision:
• Evaluation of – Attitudes of others
alternatives – Unexpected situational
• Purchase decision factors
• Postpurchase
behavior


Step 4. Purchase Decision

Purchase Intention
Desire to buy the most preferred brand

Unexpected
Attitudes
situational
of others
factors

Purchase Decision


The Buyer Decision
Process

Process Stages • Satisfaction is important:
– Delighted consumers
• Need recognition engage in positive word-
• Information search of-mouth.
• Evaluation of – Unhappy customers tell
on average 11 other
alternatives people.
• Purchase decision • Cognitive dissonance is
• Postpurchase common
behavior


Step 5. Post-purchase Behavior
Consumer’s Expectations of
Product’s Performance

Product’s Perceived
Performance

Satisfied Dissatisfied
Customer! Customer

Cognitive Dissonance

Discussion Question
How is “Consumer Reports” used in the decision-making process?

Buyer Decision Process
for New Products
• Stages in the Adoption Process
– Marketers should help consumers move
through these stages.

• New Products
– Good, service or idea that is perceived by
customers as new.


Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

for New Products
• Individual Differences in Innovativeness
– Consumers can be classified into five
adopter categories, each of which behaves
differently toward new products.

• Product Characteristics and Adoption
– Five product characteristics influence the
adoption rate.


Adoption Process
Individual Differences in Innovativeness
Figure 5.8

5 - 65

Communicability Relative Advantage
Can results be easily Is the innovation
observed or described superior to existing
to others? products?

Product
Divisibility Characteristics Compatibility
Can the innovation Does the innovation
be used on a fit the values and
trial basis? experience of the
target market?
Complexity
Is the innovation
difficult to
understand or use?


Discussion Question

• Why might the
adoption process
be slow for a home
robot?

5 - 68
Marketing in Action Source: Business Week
B.Moghimi@yahoo.co.uk Source: Business Week

for New Products

• International Consumer Behavior
– Values, attitudes and behaviors differ greatly in
other countries.
– Physical differences exist which require changes in
the marketing mix.
– Customs vary from country to country.
– Marketers must decide the degree to which they
will adapt their marketing efforts.


Marketing principles k&a chapter 5 moghimi

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