Cosla ch 6 analyzing consumer markets v78 mary claire soliman v2
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This document discusses factors that influence consumer buying behavior. It analyzes 1) consumer characteristics like cultural, social, and personal factors, 2) psychological processes such as motivation, perception, learning and memory, 3) the purchase decision process which follows problem recognition, information search, evaluating alternatives, and the purchase decision, and 4) irrational factors such as heuristics including availability, representativeness, and anchoring biases. The overall objective is to understand how these various elements shape how individuals, groups and organizations select, buy, use and dispose of products and services.
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Cosla ch 6 analyzing consumer markets v78 mary claire soliman v2
- 1. ANALYZING CONSUMER MARKETS (Understanding the buyer’s psyche) Mary Claire V. Soliman, MD, FPCP, FPSMO Ateneo Graduate School of Business
- 2. Consumer Behavior study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants
- 3. 1. Consumer characteristics 2. Psychological processes 3. Purchase decision processes 4. Irrational Factors Objectives: Consumer buying behavior is influenced by:
- 4. 1. Consumer characteristics 2. Psychological processes 3. Purchase decision processes 4. Irrational Factors Objectives: Consumer buying behavior is influenced by:
- 5. 1. 3 Consumer characteristics: Outline 1: Consumer behavior is influenced by… Cultural Social Personal
- 6. 1.A Cultural Factors influence buying behavior Culture Sub-Culture Social Class 1. Consumer Characteristics
- 7. 1.B Social Factors influence buying behavior Family Reference Group Role and Status * Initiator * Influencer * Decision maker * Buyer 1. Consumer Characteristics
- 8. 1.C Personal Factors influence buying behavior Age Stage in the LifeCycle Occupation Economic Circumstances 1. Consumer Characteristics
- 9. LifestylePersonality Self Concept 1.C Personal Factors influence buying behavior 1. Consumer Characteristics
- 10. 1. Consumer characteristics 2. Psychological processes 3. Purchase decision processes 4. Irrational Factors Objectives: Consumer buying behavior is influenced by:
- 11. Outline 2: 2. Consumer behavior is influenced by… (4) Main psychological processes 1. Motivation 2. Perception 3. Learning 4. Memory
- 12. 2.1 MOTIVATION Freud’s Theory Maslow’s Hierarchy of Needs Herzberg’s Two-Factor Theory 2. PSYCHOLOGICAL PROCESSES
- 13. Maslow’s Theory (self-development and realization) (self esteem, recognition, status) (sense of belonging, love) (security, protection) (food, water, shelter) 2. PSYCHOLOGICAL PROCESSES
- 14. The concept of Maslow’s pyramid for Cardiovascular Health and its impact on ”change cycle” Mohaddeseh Behjati ARYA Atherosclerosis. 2014 Jan; 10 (1): 65-69 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4063512/ Self monitoring of cardiovascular health Cardiovascular enhancement Risk factor modification/ Lifestyle modification Initial evaluation of cardiovascular health factors Healthy diet , rest and recovery
- 15. 2.4 MEMORY Individual selects, organizes + interprets info into meaningful picture Changes in behaviour due to experience All the information + experiences will end up in the memory 2.2 PERCEPTION 2.3 LEARNING 2. PSYCHOLOGICAL PROCESSES Simple Unexpected Concrete Credibility Emotion Stories
- 16. 1. Consumer characteristics 2. Psychological processes 3. Purchase decision processes 4. Irrational Factors Objectives: Consumer buying behavior is influenced by:
- 17. 3. How do consumers make purchase decisions?
- 18. The Five Stage Model Problem Recognition Information Search Evaluating Alternatives Purchase Decision Post Purchase 3. How do consumers make purchase decisions? Buying process follows a sequence of events:
- 19. 3. PURCHASE DECISION PROCESS
- 20. 3.1 Problem Recognition 3. PURCHASE DECISION PROCESS
- 21. 3. PURCHASE DECISION PROCESS 3.1 Problem Recognition Internal stimuli External stimuli
- 23. 3. PURCHASE DECISION PROCESSES 3.2 Information search Consumer exhibit heightened attention or actively search for information Source of information Word of mouth
- 25. Evaluating Alternatives Purchase Decision VS
- 26. 3. PURCHASE DECISION PROCESS 3.3 Evaluation of alternatives Evaluation of procedure depends on the consumer and the buying situation Most buyers evaluate multiple attributes, each of which is weighted differently At the end of the evaluation stage, purchase intentions are formed.
- 28. 3. PURCHASE DECISION PROCESSES 3.4 Purchase decision 2 Factors: Attitude of others Unexpected situational factors
- 30. 3. PURCHASE DECISION PROCESS Dissatisfied Satisfied Delighted 3.4 Post-purchase
- 31. Figure 6.5 Successive Sets in Decision Making Shine OS+ Health Engine CHITS SeriousMD Medcurial EMR Health Engine CHITS SeriousMD Medcurial EMR Health Engine SeriousMD Medcurial EMR Health Engine Medcurial EMR ? Total Set DecisionAwareness Set Consideration Set Choice Set
- 32. 1. Consumer characteristics 2. Psychological processes 3. Purchase decision processes 4. Irrational Factors Objectives: Consumer buying behavior is influenced by:
- 34. Outline 4: 4. Irrational Factors Heuristics
- 35. Outline 4: 4. Irrational Factors Heuristics 1. Availability Heuristic 2. Representativeness Heuristic 3. Anchoring and Adjusting Heuristic
- 36. 4.1 Availability Heuristic 4. Irrational Factors
- 37. 4. Irrational Factors 4.2 Representativeness Heuristic
- 38. 4. Irrational Factors 4.3 Anchoring and Adjustment Heuristic
- 39. 1. Consumer characteristics 2. Psychological processes 3. Purchase decision processes 4. Irrational factors Questions and Objectives: Consumer buying behavior is influenced by:
- 40. ANALYZING CONSUMER MARKETS (Understanding the buyer’s psyche) Mary Claire V. Soliman, MD, FPCP, FPSMO Ateneo Graduate School of Business
Editor's Notes
- CONSUMER BEHAVIOR Study of how individuals, groups and organizations select, buy. use and dispose of goods, services ideas or experiences to satisfy their needs and wants
- How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? In what ways do consumers stray from a deliberative, rational decision process?
- How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? In what ways do consumers stray from a deliberative, rational decision process?
- Consumer behavior is influenced by 3 factors: Cultural , Social and Personal. Analyzing these factors can provide clues to reach and serve customers more effectively.
- Culture: CULTURE is the fundamental determinant of a person’s wants and behavior. The culture refers to the beliefs, customs, rituals and practice that a particular group of people follows. As a child grows, he inculcates the buying and decision-making patterns through his family and the key institutions. The culture varies from region to region and even from country to country. For example, traditional chinese medicine includes various forms of herbal medicine, acupuncture and exercise in the form of tai-chi or qigong. On the other hand, the traditional belief of Filipinos on the “albularyo” should not be overlooked. Therefore, the marketer should carefully study all the different cultures and frame the marketing strategies accordingly. Subculture: The culture can be further divided into subculture wherein the people are classified more specifically on the basis of their shared customs and beliefs, including religions, geographic regions, and nationalities. A physician taking care of a Jehovah’s Witness patient should be mindful of ordering blood transfusion, as it is a practice prohibited in this religion. This subculture is a good target for the erythropoietin market, an injection that stimulates production of red blood cells. Social Class: The social class to which an individual belongs to also influences the buying decision. Generally, the people belonging to the same class are said to be sharing similar interests, values and behavior. Our society is classified into three social classes: upper class, middle class, and the lower class. An individual belonging to the upper class buy products or services that advocate his status while the lower class people buy those products which satisfy their basic needs. In the healthcare industry, those in the upper class may opt to purchase branded medicines while those in the lower class may prefer the generic counterparts.
- Family: The family members play a crucial role in designing one’s preferences and behavior. It offers an environment wherein the individual evolves, develops personality and acquires values. A child develops his buying behavior and preferences by watching his parents and tend to buy the same products or services even when he grows old. It is believed that an individual passes through two families: Family of Orientation and Family of Procreation. The Family of Orientation is the family wherein an individual is born into, and the parents have a strong influence on his behavior. While in the family of procreation, it is the family created by an individual with his spouse and children and as such, the preferences tend to change with the influence of the spouse. Ex: An individual’s healthy eating habits may be an influence of vegetarian parents. In the same way, adherence of children in seeking preventive medicine practices rubs off from their parents who do the same. Roles and Status: An individual’s position and role in the society also influences his buying behavior. A person holding a supreme position in the organization is expected to purchase those items that advocate his status. The marketers should try to understand the individual’s position and role in the endorsement of products. Ex: The boss of a company may opt to pursue a comprehensive executive check up or wellness package, whereas, an employee may just do the minimum to pass an annual medical check up for clearance to work Reference Group: A reference group is a group with which an individual likes to get associated with, i.e. he wants to be called a member of that group. It is observed, that all the members of the reference group share common buying behavior and have a strong influence over each other. The marketers should try to identify the roles within the reference group that influences the behavior of others. Such as Initiator (who initiates the buying decision), Influencer (whose opinion influences the buying decision), Decision-Maker (who has the authority to take the purchase decision) and Buyer (who ultimately buys the product). For example: A person who needs a cataract surgery may seek the opinion of his high school “barkada” or college friends when choosing an Eye center to go to. Thus, these social factors play a crucial role in building the buying behavior of an individual, and the marketers should understand these properly when designing their marketing campaigns.
- AGE- Newborn babies and young children will be brought to the pediatrician for vaccinations whereas the needs of the elderly will be focused on maintanance medications for chronic illnesses or physical rehabilitation. STAGE IN THE LIFE CYCLE – Newly weds as they go through the stages of first pregnancy and first baby will probably have more visits to a hospital, thus investing time in preparing Maternal and Child care packages are important. Occupation and Economic circumstances – In the beginning of each year, employees of fast food companies are required to have annual check ups. Targetting these companies by offering affordable packages in mobile clinics can serve these population.
- Lifestyle – is a person’s pattern of living in the world as expressed in activities, interests and opinions - shaped partly by whether consumers are money constrained or time constrained. Ex: A time-constrained boss of a company may be willing to pay for a higher priced wellness executive package designed to be completed in 2 days in place of cheaper diagnostic exams that will require waiting in line for a schedule over a week. PERSONALITY – Each person has a set of human psychological traits (as self confidence, dominance, autonomy, sociability, defensiveness and adaptability) that lead to relatively consistent buying behavior. Brand personality – is the specific mix of human traits that can be attributed to a particular brand Sincerity Excitement Competence Sophistication Ruggedness SELF-CONCEPT – consumers often choose and use brands with a brand personality consistent with their: 1. Actual self-concept – how we view ourselves 2. Ideal self-concept – how we would like to view ourselves 3. Other’s self-concept – how we think others see us
- How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? In what ways do consumers stray from a deliberative, rational decision process?
- MOTIVATION We all have many needs at any given time. They may be: *Biogenic – arise from physiologic states of tension (hunger, thirst or discomfort) *Psychogenic - arise from psychologic states of tension (need for recognition, esteem or belonging) A NEED becomes a MOTIVE when it is aroused to a sufficient level of intensity to drive us to act 3 of the best known theories of human motivation are those of Sigmund Freud, Frederick Herzberg and Abraham Maslow. Based on Sigmund Freud’s belief, people are most often unaware of their real needs and that the psychological forces shaping people’s behavior are largely unconscious. Frederick Herzberg developed a two-factor theory that distinguishes dissatisfiers (factors that cause dissatisfaction) from satisfiers (factors that cause satisfaction).The absence of dissatisfiers is not enough to motivate a purchase, satisfiers must be present.
- This slide illustrates Maslow’s Need Hierarchy. The theory suggests that people will try to satisfy their most important need first and then try to satisfy the next most important. For example, a starving man (need 1) will not take an interest in the latest happenings in the art world (need 5), nor in how he is viewed by others (need 3 or 4), nor even in whether he is breathing clean air (need 2), but when he has enough food and water, the next most important need will become salient.
- The concept of Maslow’s pyramid for Cardiovascular Health and its impact on ”change cycle” Mohaddeseh Behjati ARYA Atherosclerosis. 2014 Jan; 10 (1): 65-69 In a healthy person, with or without risk factors, availability of a healthy diet and sufficient rest and recovery are the first level. Then, the evaluation of the cardiovascular health state is necessary. If risk factors such as smoking, unhealthy diet, over weight and obesity, stressful life style, physical inactivity, strong family history, metabolic problems, lipid disorders, and other risk factors are found, the next level is the modification of risk factors and therapeutic life style changes. This will progress to cardiovascular enhancement through appropriate cardiovascular exercise.
- In marketing, perceptions are more important than reality, because perceptions affect consumers’ actual behavior. Perception is the process by which we select, organize and interpret information inputs to create a meaningful icture of the world. Learning induces changes in behavior arising from experience. Learning theory teaches marketers that they can build demand for a product by associating it with strong drives, using motivation cues and providing positive re inforcement. Memory – Cognitive psychologists distinguish between Short term memory and Long term memory. All the informationand experiences we encounter as we got hrough life can go to our long term memory. Marketers can ensure their ideas are remembered and have impact by following the acronym SUCCES
- How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? In what ways do consumers stray from a deliberative, rational decision process?
- A hospital recognizes the difficulty in accessing and processing health information records and patient information
- Handwritten vs Automated Medical record keeping
- Satisfaction is key: Delighted consumers engage inpositive word of mouth Unhappy customers tell on average 11 other people It costs more to attract a new customer than it does to retain an existing customer
- Satisfaction is key: Delighted consumers engage inpositive word of mouth Unhappy customers tell on average 11 other people It costs more to attract a new customer than it does to retain an existing customer
- Figure 6.5 illustrates how consumers move through from developing an initial set of brands to consider to making a final decision. By gathering information, the consumer learns about competing brands and their features. The first box in Figure 6.5 shows the total set of brands available. The individual consumer will come to know a subset of these, the awareness set. Only some, the consideration set, will meet initial buying criteria. As the consumer gathers more information, just a few, the choice set, will remain strong contenders. The consumer makes a final choice from these.
- How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? In what ways do consumers stray from a deliberative, rational decision process?
- One way in which we make decisions is via a process called Heuristics.
- Heuristics – are mental short cuts or rules of thumb. We use past experiences to make quick decisions. How we approach solving a problem or making a decision quickly and efficiently. Advantage: Speed Downside: Inaccurate decisions
- 1. Availabilty Heuristic – when individuals make decisions based on easy-to-remember or easily accessible information
- 4.2 Representativeness Heuristic - Our brains automatically rely on our past experiences and mental representations. For example, a consumer may infer a relatively high product quality from a store (generic) brand if its packaging is designed to resemble a national brand
- 4.3 The Anchoring and adjustment heuristic is a psychological heuristic that people use to make quantitative estimates. A seller may try to influence a buyer's decision to purchase a good by placing another similar good next to it, which has a higher price. The hope is that the buyer, using the anchoring and adjustment heuristic, considers the cheaper good a bargain.