Consumer behaviour

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Behaviour in consumer and business markets

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  • Situational influences - Japanese have coined a term for marketing to situations to - TOP marketing. (Time, Occasion and Place) -Japanese families own multiple cameras, each for a different situation - 35mm SLR is reserved for weddings and travel - aim and shoot camera for parties and weather proof and under water version for beach and camping.
  • PERCEPTION - our perception of reality drives our behaviour. MOTIVES or motivation plays an important role in the consumer decision process - particularly at problem recognition stage. A need exists and the person is motivated to search for alternatives. LEARNING - changes in a person's behaviour caused by information and experience. ATTITUDE - knowledge and positive or negative feeling.
  • ROUTINE RESPONSE BEHAVIOUR is practiced when buying frequently purchased, low cost items. These need very little search and decision effort. Automatic purchase. LIMITED DECISION-MAKING - when you buy products occasionally or when you need to obtain more information about an unfamiliar brand in a familiar product category. The marketer must design a communication program that will increase the buyer's brand comprehension and confidence. EXTENSIVE DECISION-MAKING - involved when purchasing unfamiliar, expensive or infrequently bought products. eg: cars. IMPULSE BUYING - involves no conscious planning - but rather a powerful, persistent urge to buy something immediately.
  • Consumer behaviour

    1. 1. Buyer Behaviour • LECTURE 3• Consumer market behaviour – chapter 5• Business market behaviour – chapter 6 BHO1171 - 3 - School of HTM - VU 1
    2. 2. CONSUMER BEHAVIOUR A DEFINITIONThe study of the processes involved when individuals and groups select, purchase, use or dispose of: products, services, ideas, or experiencesto satisfy needs and desires.Michael Solomon (1996) BHO1171 - 3 - School of HTM - VU 2
    3. 3. What to coverThe following topics must be covered:• Why marketers need to study buyer behaviour• Model of consumer behaviour• Factors influencing consumer behaviour• Roles in the buying process• Levels of involvement• The buying decision process• Differentiate between consumer and B2B markets• Compare models of consumer and business buyer behaviour BHO1171 - 3 - School of HTM - VU 3
    4. 4. WHY MARKETERS SHOULD ANALYSE BUYER BEHAVIOUR• Buyers reactions to a firms marketing strategy have a impact on the firm’s success.• The marketing concept stresses that a firm should create a marketing mix that satisfies customers.• To find out what satisfies customers, marketers must examine the main influences on WHAT, WHERE, WHEN and HOW consumers buy.• By gaining a better understanding of the factors that affect buying behaviour, marketers can better predict how consumers will respond to marketing strategies. BHO1171 - 3 - School of HTM - VU 4
    5. 5. Why should a company identify these roles?• Because they have implications for - designing the product determining messages allocating promotional budgets.• If the husband decides on the cars make, then the motor vehicle company will direct most of the advertising to reach the husband.• The company might design some car features to please the wife and place some advertisement in the media reaching wives.• Knowing the main participants and the roles they play helps the marketer to fine-tune the marketing program. BHO1171 - 3 - School of HTM - VU 5
    6. 6. A Model of Buyer Behaviour BHO1171 - 3 - School of HTM - VU 6
    7. 7. Factors Influencing ConsumerPsychological Behaviour •Household type Personal •Age & lifecycle stage Social •Occupation •Reference groups•Motivation •Education •Roles & status•Perception •Economic situation•Learning (memory)•Beliefs & attitudes•Personality & self-concept Consumer Buyers’ responses •Product service & BUYER DECISION category selection PROCESS •Brand selectionMarketing programs Experiences •Reseller selection•Marketing objectives •Purchase timing & Lifestyle repurchase intervals•Marketing strategy•Marketing mix •Purchase amount Cultural Environmental influences •Economic •Culture •Technological •Subculture •Political •Social Class BHO1171 - 3 - School of HTM - VU 7
    8. 8. FACTORS INFLUENCING BUYING DECISIONPROCESS(1) Personal Factors(2) Psychological Factors(3) Social Factors(4) Cultural Factors(5) Environmental Influences(6) Marketing Programs BHO1171 - 3 - School of HTM - VU 8
    9. 9. PERSONAL FACTORS THAT INFLUENCEBUYER RESPONSES• Numerous personal factors• Age and lifecycle stages• Occupation• Level of education• Economic situation (income level)• Level of involvement BHO1171 - 3 - School of HTM - VU 9
    10. 10. PSYCHOLOGICAL FACTORS THAT INFLUENCE BUYER RESPONSES• PERCEPTION - our perception of reality drives our behaviour.• MOTIVES or motivation plays an important role in the consumer decision process - particularly at problem recognition stage. A need exists and the person is motivated to search for alternatives.• LEARNING - changes in a persons behaviour caused by information and experience.• BELIEFS & ATTITUDE - knowledge and positive or negative feeling.• PERSONALITY & SELF-CONCEPT- a person’s distinguishing psychological characteristics that leads to relatively consistent and lasting responses to his or her environment BHO1171 - 3 - School of HTM - VU 10
    11. 11. SOCIAL FACTORS THAT INFLUENCE BUYER RESPONSES• Household Type can strongly influence buyer behaviour eg parents in families• The wife, husband and children’s roles in buying decisions is very important for marketers• Reference Groups - groups people generally identify with. Most people have reference groups - such as family, friends, religious or professional organisations.• An individuals roles influences both general behaviour and buying behaviour.• To develop a marketing mix that precisely meets the needs of the target market, marketers must know: - who does the actual buying - what other roles influence the position. BHO1171 - 3 - School of HTM - VU 11
    12. 12. CULTURAL FACTORS THAT INFLUENCE BUYER RESPONSES• Culture is the basic determinant of much of our decision- making and buying behaviour. Each of us belongs to several cultural groups.• We are also members of smaller groups and sub-cultures - which reflect geographic, religious or ethnic differences. A group of people with shared value systems based on common life experiences and situations• Social Class has a bearing on many aspects of a persons life - it also affects buying decisions. Members of a social class tend to share similar vakues, interests and behaviours BHO1171 - 3 - School of HTM - VU 12
    13. 13. Consumer Buying Roles User Initiator Key Family DecisionBuyer Roles Influencer Decider BHO1171 - 3 - School of HTM - VU 13
    14. 14. The Buyer Decision Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behaviour BHO1171 - 3 - School of HTM - VU 14
    15. 15. Types of Buying Decisions High Low Involvement InvolvementSignificant Complex Variety-differences Buying Seeking between brands Behaviour Behaviour Few Dissonance- Habitualdifferences between Reducing Buying Buying brands Behaviour Behaviour BHO1171 - 3 - School of HTM - VU 15
    16. 16. TYPES OF BUYING DECISION BEHAVIOUR Involvement LevelsInsert Fig 5.6 pp164• Complex Buying Behaviour – significant differences between brands - buyer is highly involved when purchase is expensive, risky and highly self expressive (like buying a present for someone special)• Dissonance-reducing buyer behaviour – similar to above but there is very little difference s among brands. Emphasis in on reducing dissatisfaction after purchase – or making the wrong choice.• Habitual buying behaviour – routine purchase. Low involvement. Brands very similar. Low cost, frequently purchased item• Varity-seeking buying behaviour – low involvement but significant brand differences BHO1171 - 3 - School of HTM - VU 16
    17. 17. THE CONSUMER BUYING DECISION PROCESS• The actual act of purchasing is only one stage in the process.• The process begins several stages before the actual purchase.• Not all decision processes will lead to a purchase.• All consumer decisions do not always include all five stages.• Usually limited d-m and routine response behaviour may omit some stages. BHO1171 - 3 - School of HTM - VU 17
    18. 18. EXAMPLE: Beliefs about a product or service• Beliefs are often based on opinion or faith, especially for products such as life insurance.• Actual experience with a product may be the most powerful way to shape beliefs about it.• These beliefs make up the product or service’s brand image• These beliefs will have a strong effect on a person’s: – repurchase habits and – the type of comments they make to others about it. BHO1171 - 3 - School of HTM - VU 18
    19. 19. EXAMPLE: ROLES IN BUYING PROCESS ChildrenS Breakfast Cereal:• the child would be the initiator and influencer,• the parent who does the grocery shopping would be the decider and buyer,• and the child would be the user.Leggs pantyhose:• It is likely that four roles are played by the same woman: she initiates, decides, buys, and uses the product, perhaps with some influence from a friend.• BHO1171 - 3 - School of HTM - VU 19
    20. 20. EXAMPLE: ROLES IN BUYING PROCESSPurina Dog Chow:• The owner is the initiator, decider, and buyer.• The dog is the influencer (it wont eat an unpalatable product, so the owner changes brands) and the user.A VCR is an expensive and complicated purchase.• In a family situation, children may be initiators,• A friend who is an electronics buff and a salesperson might be influencers,• One or both parents would be the deciders and buyers, and• All members of the family would be users. BHO1171 - 3 - School of HTM - VU 20
    21. 21. IMPORTANCE OF POSTPURCHASE BEHAVIOUR• Satisfied customers are likely to buy the product again and recommend it to their friends.• Dissatisfied customers may stop buying the product, steer their friends away from it, or even sue the manufacturer.• Post purchase behaviour is also relevant because it may suggest new marketing opportunities. For example, resealable cereal and hot-dog packages were designed to overcome postpurchase problems with product freshness. BHO1171 - 3 - School of HTM - VU 21
    22. 22. POSTPURCHASE BEHAVIOUR AND MARKETING OPPORTUNITIES• Unusual postpurchase behaviour, such as using a product in an unexpected way, can also alert companies to new opportunities.• This is common with food products, EGsuggesting oatmeal as a cookie ingredient,cream of mushroom soup as a sauce, ordry onion soup as a dip mix.• It can work in other areas as well, such as Avons promotion of Skin-So-Soft bath oil as a mosquito repellent-a use discovered by consumers. BHO1171 - 3 - School of HTM - VU 22
    23. 23. Question?• The consumer buying decision involves 5 stages• What stages do consumers go through in adopting a new product? BHO1171 - 3 - School of HTM - VU 23
    24. 24. DefinitionsNew product: a good, service or idea that is perceived by some potential customers as newAdoption process: the mental process through which an individual passes from first learning about an innovation to final adoption BHO1171 - 3 - School of HTM - VU 24
    25. 25. Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption BHO1171 - 3 - School of HTM - VU 25
    26. 26. Markets• There are two types of markets• (1) Consumers or end-user markets – which we have just considered (Chapter 5)• (2) Business-to-business markets – (also called organisational markets) where buying conditions and buying processes differ. This is covered below (Chapter 6) BHO1171 - 3 - School of HTM - VU 26
    27. 27. A Model of Business Buying Behaviour ( fig 6.2) BHO1171 - 3 - School of HTM - VU 27
    28. 28. Model of Consumer Behaviour Marketing and Other Stimuli Buyer’s Black Box ? ? Buyer’s Response BHO1171 - 3 - School of HTM - VU 28
    29. 29. Stages in the Business Buying Process Problem RecognitionGeneral Need Description Product Specification Proposal Solicitation Supplier Search Supplier Selection Order Routine Specification Performance Review BHO1171 - 3 - School of HTM - VU 29
    30. 30. Major Types of Business Buying Situations Straight Modified Rebuy Types of Rebuy Business Buying Situations New Task Buying BHO1171 - 3 - School of HTM - VU 30
    31. 31. Three Types of Buying Situations (figure 6.3) BHO1171 - 3 - School of HTM - VU 31
    32. 32. Characteristics of Business Markets Market Structure and Demand Characteristics Other of Nature of Characteristics Business Buying Markets Unit Types of Decisions and Decision Process BHO1171 - 3 - School of HTM - VU 32
    33. 33. A Model of Business Buying Behaviour The Environment The Buying Organisation The Buying Centre Buying Decision Process Buyer’s Response BHO1171 - 3 - School of HTM - VU 33
    34. 34. Participants in the Business Buying Process Users Gatekeepers Buying Centre Deciders Influencers Buyers BHO1171 - 3 - School of HTM - VU 34
    35. 35. Major influences on Business Buying Environmental Organisational Interpersonal Individual Buyers BHO1171 - 3 - School of HTM - VU 35
    36. 36. Major influences on Business Buying (figure 6.4) BHO1171 - 3 - School of HTM - VU 36
    37. 37. Institutional and Government Markets Institutional Markets Low Budgets Captive Patrons Government MarketsCentralized Buying Public Review Outside Publics Submit Bids Non-economic Criteria BHO1171 - 3 - School of HTM - VU 37

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