Marketing principles k&a chapter 5 moghimi

B.Moghimi@yahoo.co.uk

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

Consumer Markets and Consumer Buyer BehaviorUniversity of Georgia

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

Case StudyHarley Davidson

Building Success

• Understanding the customers’ emotions and motivation

• Determining the factors of loyalty

• Translating this information to effective advertising

Measuring Success

• Currently 22% of all U.S. bike sales

• Demand above supply• Sales doubled in the

past 5 years with earnings tripled

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

Learning Goals

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

Model of Consumer BehaviorMarketing andOther Stimuli

Buyer’s Black Box

Buyer’s Response

ProductPricePlace

Promotion

EconomicTechnologicalPoliticalCultural

Characteristics Affecting Consumer Behavior

Buyer’s Decision Process

Product ChoiceBrand ChoiceDealer Choice

Purchase TimingPurchase Amount

Model of Buyer BehaviorFigure 5.1

Factors Influencing Consumer Behavior

PsychologicalPersonal

Social

Culture

– Culture• Forms a person’s wants

and behavior

– Subculture• Groups with shared value

systems

– Social Class• Society’s divisions who

share values, interests and behaviors

• Cultural• Social• Personal• Psychological

Key FactorsKey Factors

• 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

Sub-Culture

– Groups• Membership• Reference

– Aspiration• Opinion leaders

– Buzz marketing

– Family• Many influencers

– Roles and status

• 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

Marketing in Action5 - 24B.Moghimi@yahoo.co.uk

Online Social Networks are online communities where people socialize or exchange information and opinions

Include blogs, social networking sites (Facebook), virtual worlds (second life)

Groups and Social Networks

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 ( family )

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

Social Factors (roles and status)

– Age & Lifestyle

•Activities, interests and opinions

•Lifestyle segmentation

– Occupation

– Economic situation

– Personality and self-concept

VALSFigure 5.4

Principle Oriented Status Oriented Action Oriented

Achievers

ActualizersActualizers

Strugglers

Strivers

Fulfilleds

Believers

ExperiencersExperiencers

Makers

Abundant ResourcesAbundant Resources

Minimal ResourcesMinimal ResourcesB.Moghimi@yahoo.co.uk

Brand Personality Dimensions

• Sincerity• Ruggedness

• Excitement• Competence

• Sophistication

– Motivation

– Perception

– Learning

– Beliefs and attitudes

Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes

Psychological FactorsMotivation

• 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 NeedsFigure 5.5

5 - 40

This ad demonstrates

a product meeting

physiological and social

Marketing in Action5 - 41

Discussion

What consumer products might fulfill multiple

levels of the Hierarchy of

Needs?

Psychological Factors 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 QuestionPerception

1. How many ads were you exposed to today?

2. Which ones do you remember? Why?

Psychological Factors 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

Psychological Factors 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

Learning Goals

Types of Buying Decision BehaviorFigure 5.6

The Buyer Decision ProcessFigure 5.7

The Buyer Decision Process

• Need recognition• Information search• Evaluation of

alternatives• Purchase decision• Postpurchase

behavior

• Needs can be triggered by:– Internal stimuli

• Normal needs become strong enough to drive behavior

– External stimuli• Advertisements• Friends of friends

Process Stages Process Stages

environment

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

Internal Stimuli

• Hunger

• Thirst

• A person’s normal needs

Need RecognitionNeed RecognitionDifference between an actual state and a desired state

The Buyer Decision ProcessStep 1. Need Recognition

behavior

• Consumers exhibit heightened attention or actively search for information

• Sources of information:– Personal– Commercial– Public– Experiential– Word-of-mouth

The Buyer Decision ProcessStep 2. Information Search

•Family, friends, neighbors•Most influential source of

information

•Advertising, salespeople•Receives most information

from these sources

•Mass Media•Consumer-rating groups

•Handling the product•Examining the product•Using the product

Personal Sources

Commercial Sources

Public Sources

Experiential Sources

behavior

• Evaluation 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.

Product AttributesEvaluation of Quality, Price, & Features

Degree of ImportanceWhich attributes matter most to me?

Brand BeliefsWhat do I believe about each available brand?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

The Buyer Decision ProcessStep 3. Evaluation of Alternatives

behavior

• Two factors intercede between purchase intentions and the actual decision:– Attitudes of others– Unexpected situational

factors

The Buyer Decision ProcessStep 4. Purchase Decision

Purchase IntentionDesire to buy the most preferred brand

Purchase Decision

Attitudes of others

Unexpected situational

factors

behavior

• Satisfaction is important:– Delighted consumers

engage in positive word-of-mouth.

– Unhappy customers tell on average 11 other people.

• Cognitive dissonance is common

Consumer’s Expectations of Product’s Performance

Dissatisfied Customer

Satisfied Customer!

Product’s PerceivedPerformance

Cognitive Dissonance

The Buyer Decision ProcessStep 5. Post-purchase Behavior

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

Learning Goals

Buyer Decision Processfor 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

AdoptionB.Moghimi@yahoo.co.uk

Buyer Decision Process 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 ProcessIndividual Differences in Innovativeness

Figure 5.8

DivisibilityCan the innovation

be used on a trial basis?

CompatibilityDoes the innovation

fit the values and experience of the

target market?ComplexityIs the innovation

difficult tounderstand or use?

Relative AdvantageIs the innovation

superior to existing products?

Communicability Can results be easily

observed or described to others?

ProductCharacteristics

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

Discussion Question

Source: Business WeekMarketing in ActionSource: Business Week

Buyer Decision Processfor 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.

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