Marketing: Chap. 5

• Consumer Markets and Consumer Buyer Behavior
  
  • Harley has great customer loyalty.
    
  • Harley's marketers put top priority on understanding customers and what makes them tick. Harley customers are buying a lot more than just a quality bike and a smooth sales pitch: "Things are different on a Harley."
    
  • Consumer-buyer behavior
    
    • The buying behavior of final customers (individuals and households that buy goods and services for personal consumption)
      
    • Consumer market -- made up of all of the final consumers (all the individuals and households who buy or acquire goods and services for personal consumption)
      
• Model of Consumer Behavior
  
  • Understanding the "why" of buying behavior is very difficult.
    
  • Model of buyer behavior
    
    • The environment
      
      • Marketing stimuli -- Product, price, place, promotion
        
    • Buyer's Black box
      
      • Buyer's characteristics
        
      • Buyer's decision process
        
    • Buyer responses
      
      • Buying attitudes and preferences
        
      • Purchase behavior; what the buyer buys, when, where, and how much
        
      • Brand and company relationship behavior
        
• Characteristics Affecting Consumer Behavior
  
  • Cultural factors
    
    • Culture -- the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions
      
    • Subculture -- a group of people with shared value systems based on common life experiences and situations (ie: religions, nationalities, racial groups, etc.)
      
      • Hispanic consumers
        
        • Generics don't sell well to this group
          
      • African-American consumers
        
        • Strongly motivated by quality and selection, brands are important
          
      • Asian-American consumers
        
        • Most tech-savvy segment. They shop frequently and are the most brand conscious and are very brand loyal.
          
      • Mature consumers
        
        • They are not "stuck in their ways" but are more willing to shop around and switch brands than younger counterparts.
          
  • Social Factors
    
    • Social class -- relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.
      
      • Major American social classes
        
        • Upper, middle, working, lower.
          
    • Group -- two or more people who interact to accomplish individual or mutual goals
      
    • Word of mouth influence and buzz marketing
      
      • Opinion leader -- person within a reference group who exerts social influence on others because of special skills, knowledge, or personality.
        
      • Buzz marketing -- an opinion leader serves as a brand ambassador to spread the word about products.
        
    • Online social networks -- online social communities, blogs, etc. where people socialize or exchange information or opinions.
      
      • Marketers are working to harness the power of these networks to promote their products.
        
    • Family
      
      • Family can strongly influence buyer behavior
        
    • Roles and Status
      
      • Role is the activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given to it by society
        
  • Personal Factors
    
    • Age and Life-Cycle Stage
      
      • People change what they buy over time.
        
      • RBC identified 5 life-stage segments
        
        • Youth -- customers younger than 18
          
        • Getting Started -- customers age 18-35 -- going through first experiences
          
        • Builders -- age 35-50 -- tend to borrow more than invest
          
        • Accumulators -- age 50-60 -- worry about saving for retirement.
          
        • Preservers -- age 60 and up -- want to maximize retirement income.
          
    • Occupation -- a person's occupation affects the goods and services he buys.
      
    • Economic Situation -- economic situation affects product choice
      
    • Lifestyle -- a person's pattern of living as expressed in his or her activities, interests, and opinions
      
      • This lifestyle concept can help understand changing consumer values and how they affect buying behavior.
        
    • Personality and Self-Concept
      
      • Personality -- the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment
        
      • Brand personality -- the specific mix of human traits that may be attributed to a particular brand
        
        • 5 brand personality traits
          
          • Sincerity
            
          • Excitement
            
          • Competence
            
          • Sophistication
            
          • Ruggedness
            
  • Psychological Factors
    
    • Motivation -- a need that is sufficiently pressing to direct the person to seek satisfaction of the need
      
      • A person has many needs at any given time. A need becomes a motive when it is aroused to a sufficient level of intensity
        
      • Freud thought that a person's buying decisions are affect by subconscious motives that even the buyer may not fully understand
        
      • Abraham Maslow sought to explain why people are driven by particular needs at particular times.
        
        • From most to least pressing here are the human needs according to Maslow
          
          • Physiological needs (hunger, thirst)
            
          • Safety needs (security, protection)
            
          • Social needs (sense of belonging, love)
            
          • Esteem needs (self-esteem, recognition)
            
          • Self-actualization needs (self-development and realization)
            
        • People satisfy the most important first and then move on
          
    • Perception -- the process by which people select, organize, and interpret information to form a meaningful picture of the world
      
      • Selective attention -- the tendency for people to screen out most of the information to which they are exposed
        
    • Learning -- changes in an individual's behavior arising from experience
      
      • Drive -- strong internal stimulus that calls for action
        
    • Beliefs and Attitudes --
      
      • Belief -- descriptive thought that a person holds about something
        
      • Attitude -- a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.
        
      • Attitudes are difficult to change, thus a company should usually try to fit its products into existing attitudes rather than try to change attitudes
        
• Types of Buying Decision Behavior
  
  • Complex Buying Behavior -- consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands
    
  • Dissonance-reducing buying behavior -- consumer buying behavior in situations characterized by high involvement but low perceived differences among brands
    
    • Carpet is an example.. Buyers consider most brands to be the same and may regret it after they buy (called postpurchase dissonance).
      
  • Habitual Buying Behavior -- consumer buying behavior in situations characterized by low-consumer involvement and few significantly perceived brand differences
    
    • Ad repetition creates brand familiarity, rather than brand conviction.
      
  • Variety-seeking buying behavior -- consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences
    
• The Buyer Decision Process
  
  • The actual purchase decision is just part of a much larger buying process -- starting with need recognition through how you feel after making the purchase. Marketers want to be involved in the whole process
    
  • The considerations a consumer faces are as follows:
    
    • Need recognition
      
    • Information search
      
    • Evaluation of alternatives
      
    • Purchase decision
      
    • Postpurchase behavior
      
  • Need Recognition -- the first stage of the buyer decision process, in which the consumer recognizes a problem or need
    
  • Information search -- the stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into an active information search.
    
    • Generally a consumer gets the most information from commercial sources, which are the sources controlled by the marketer
      
  • Evaluation of alternatives -- the stage of the buyer process in which the consumer uses the information to evaluate alternative brands in the choice set.
    
  • Purchase decision -- the buyer's decision about which brand to purchase
    
    • Two factors can come between the purchase intention and the purchase decision:
      
      • Attitudes of others and unexpected situational factors.
        
  • Postpurchase behavior -- the stage of the buyer decision process in which the consumers take further action after purchase, based on their satisfaction or dissatisfaction.
    
    • This depends on the consumer's expectations and the product's perceived performance.
      
  • Cognitive dissonance -- buyer discomfort caused by postpurchase conflict.
    
• The Buyer Decision Process for New Products
  
  • New product -- good or service or idea that is perceived by some potential customers as new.
    
  • Adoption process -- the mental process through which an individual passes from first hearing about an innovation to final adoption.
    
    • Stages in the adoption process
      
      • Awareness -- consumer becomes aware but lacks information
        
      • Interest -- consumer seeks info
        
      • Evaluation -- consumer decides if it makes sense to use it
        
      • Trial -- consumer tries it on a small scale to test it
        
      • Adoption -- consumer decides to make full use of the product
        
  • Individual difference in innovativeness
    
    • Adopter categories are as follows from early to late:
      
      • Innovators -- venturesome
        
      • Early adopters -- guided by respect
        
      • Early majority -- deliberate though rarely leaders - adopt new ideas before the majority
        
      • Late majority -- they adopt an innovation only after a majority of people have tried it
        
      • Laggards -- tradition bound -- suspicious of changes
        
  • Influence of Product characteristics on rate of adoption
    
    • Relative advantage
      
    • Compatibility
      
    • Complexity
      
    • Divisibility
      
    • Communicability