5.Consumer Markets and Buying Behaviour

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Consumer Markets andConsumer Markets andConsumer BuyerConsumer Buyer

BehaviorBehavior


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Harley HogsHarley Hogsaccount for 1/5 ofaccount for 1/5 ofU.S. cycle salesU.S. cycle sales

Sales haveSales have

exceeded supplyexceeded supplyfor yearsfor years

19861986--2000: Four2000: Fourstock splits,stock splits,

increase of 7,100%increase of 7,100%

Fiercely loyalFiercely loyalclientele revolvesclientele revolvesaround 7 corearound 7 core

customer typescustomer types

Harley owners useHarley owners usetheir bikes totheir bikes to

express theirexpress their

lifestyle andlifestyle and

attitudesattitudes

HarleyHarley--DavidsonDavidson

Case Study


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Definitions

Consumer Buying BehaviorConsumer Buying Behavior

Buying behavior of individuals andBuying behavior of individuals andhouseholds that buy products forhouseholds that buy products forpersonal consumption.personal consumption.

Consumer MarketConsumer MarketAll individuals/households who buyAll individuals/households who buy

products for personal consumption.products for personal consumption.


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Stimulus Response ModelStimulus Response ModelMarketing and other stimuli enter theMarketing and other stimuli enter the

buyers black box and producebuyers black box and producecertain choice/purchase responses.certain choice/purchase responses.

Marketers must figure out what isMarketers must figure out what isinside of the buyers black box andinside of the buyers black box andhow stimuli are changed tohow stimuli are changed to

responses.responses.

Modelof

Consumer Behavior


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Characteristics Affecting

Consumer Behavior

CulturalCultural

SocialSocial

PersonalPersonal

PsychologicalPsychological

CultureCulture

SubcultureSubculture HispanicHispanic

consumersconsumers

African AmericansAfrican AmericansAsian AmericansAsian Americans

Mature consumersMature consumers

Social ClassSocial Class

Key FactorsKey Factors


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HispanicsHispanics 35 million consumers purchase $42535 million consumers purchase $425

billion worth of goods and services.billion worth of goods and services.

Expected to grow 64% in 20 years.Expected to grow 64% in 20 years.

Spanish media makes group easy toSpanish media makes group easy toreach.reach.

Brand loyal group.Brand loyal group.


Consumer Behavior


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Asian AmericansAsian Americans 10 million consumers purchase $22910 million consumers purchase $229

billion worth of goods and services.billion worth of goods and services.

Fastest growing, most affluent subculture.Fastest growing, most affluent subculture.

Many nationalities comprise this group.Many nationalities comprise this group.

Consumer packaged goods companiesConsumer packaged goods companiesnow target this group more heavily.now target this group more heavily.


Consumer Behavior


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Mature ConsumersMature Consumers 75 million consumers aged 50+ will grow75 million consumers aged 50+ will grow

to 115 million within 25 years.to 115 million within 25 years.

Mature consumers control 50% of allMature consumers control 50% of alldiscretionary income.discretionary income.

Attractive market for travel, restaurant,Attractive market for travel, restaurant,and cosmetics products, among others.and cosmetics products, among others.


Consumer Behavior


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Consumer Behavior

CulturalCultural

SocialSocial

PersonalPersonal


GroupsGroups

MembershipMembership ReferenceReference

Aspirational groupsAspirational groups

Opinion leadersOpinion leaders B

uzz marketingB

uzz marketing FamilyFamily

Children can influenceChildren can influence

Roles and StatusRoles and Status



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Consumer Behavior

CulturalCultural

SocialSocial

PersonalPersonal


Age and life cycleAge and life cycle

OccupationOccupation Economic situationEconomic situation

LifestyleLifestyle Activities, interests, andActivities, interests, and

opinionsopinions Lifestyle segmentationLifestyle segmentation

Personality and selfPersonality and self--conceptconcept Brand personalityBrand personality



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Brand Personality DimensionsBrand Personality Dimensions


Consumer Behavior

SinceritySincerity

RuggednessRuggedness

ExcitementExcitement

CompetenceCompetence

SophisticationSophistication


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Consumer Behavior

CulturalCultural

SocialSocial

PersonalPersonal


MotivationMotivation N

eeds provide motives forN

eeds provide motives forconsumer behaviorconsumer behavior

Motivation researchMotivation research

Maslows hierarchy of needsMaslows hierarchy of needs

PerceptionPerception Selective attention, selectiveSelective attention, selective

distortion, selective retentiondistortion, selective retention LearningLearning

Drives, stimuli, cues,Drives, stimuli, cues,responses and reinforcementresponses and reinforcement

Beliefs and attitudesBeliefs and attitudes



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Maslows Hierarchy of NeedsMaslows Hierarchy of Needs


Consumer Behavior

SelfSelf--actualizationactualization

Esteem NeedsEsteem Needs

Social NeedsSocial Needs

Safety NeedsSafety Needs

Physiological NeedsPhysiological Needs


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Typesof Buying-

Decision Behavior

DifferenceDifference

between brandsbetween brands

SignificantSignificantDifferencesDifferences

ComplexComplex

buyingbuying

behaviorbehavior

LowLow

FewFewDifferencesDifferences

DissonanceDissonance--

reducingreducing

buyingbuying

behaviorbehavior

Habitual buyingHabitual buying

behaviorbehavior

VarietyVariety--seekingseeking

buying behaviorbuying behavior

High

High

Involvement LevelInvolvement Level


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Five Stages:Five Stages: Need recognitionNeed recognition

Information searchInformation search

Evaluation of alternativesEvaluation of alternatives Purchase decisionPurchase decision

Postpurchase behaviorPostpurchase behavior

The Buyer Decision

Process


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The Buyer Decision

Process

Need recognitionNeed recognition


Evaluation of alternativesEvaluation of alternatives

Purchase decisionPurchase decision


Needs can beNeeds can be

triggered by:triggered by: Internal stimuliInternal stimuli

Normal needs becomeNormal needs become

strong enough to drivestrong enough to drive

behaviorbehavior External stimuliExternal stimuli

AdvertisementsAdvertisements

Friends of friendsFriends of friends

ProcessProcess

StagesStages


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The Buyer Decision

Process






Consumers exhibitConsumers exhibit

heightened attention orheightened attention oractively search foractively search forinformation.information.

Sources of information:Sources of information:

PersonalPersonal CommercialCommercial

PublicPublic

ExperientialExperiential

WordWord--ofof--mouthmouth

ProcessProcess

StagesStages


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The Buyer Decision

Process






Evaluation procedureEvaluation procedure

depends on the consumerdepends on the consumerand the buying situation.and the buying situation.

Most buyers evaluateMost buyers evaluatemultiple attributes, each ofmultiple attributes, each ofwhich is weightedwhich is weighted

differently.differently.

At the end of the evaluationAt the end of the evaluationstage, purchase intentionsstage, purchase intentionsare formed.are formed.

ProcessProcess

StagesStages


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The Buyer Decision

Process






Two factors intercedeTwo factors intercede

between purchasebetween purchaseintentions and theintentions and theactual decision:actual decision:

Attitudes of othersAttitudes of others

UnexpectedUnexpectedsituational factorssituational factors

ProcessProcess

StagesStages


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The Buyer Decision

Process






Satisfaction is important:Satisfaction is important:

Delighted consumersDelighted consumersengage in positive wordengage in positive word--ofof--mouth.mouth.

Unhappy customers tell onUnhappy customers tell onaverage 11 other people.average 11 other people.

It costs more to attract aIt costs more to attract a

new customer than it doesnew customer than it doesto retain an existingto retain an existingcustomer.customer.

Cognitive dissonance isCognitive dissonance iscommoncommon

ProcessProcess

StagesStages


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Buyer Decision Process

for New Products

New ProductsNew Products Good, service or idea that isGood, service or idea that is

perceived by customers as new.perceived by customers as new.

Stages in the Adoption ProcessStages in the Adoption ProcessMarketers should help consumersMarketers should help consumers

move through these stages.move through these stages.


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Stages in the Adoption ProcessStages in the Adoption Process


for New Products

AwarenessAwareness

EvaluationEvaluation

InterestInterest

TrialTrial

AdoptionAdoption


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for New Products

Individual Differences in InnovativenessIndividual Differences in Innovativeness Consumers can be classified into fiveConsumers can be classified into five

adopter categories, each of whichadopter categories, each of whichbehaves differently toward new products.behaves differently toward new products.

Product Characteristics and AdoptionProduct Characteristics and Adoption Five product characteristics influence theFive product characteristics influence the

adoption rate.adoption rate.


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Adopter CategoriesAdopter Categories


for New Products

InnovatorsInnovators

Early MajorityEarly Majority

Early AdoptersEarly Adopters

Late MajorityLate Majority

LaggardsLaggards


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Product CharacteristicsProduct Characteristics


for New Products

Relative AdvantageRelative Advantage

CompatibilityCompatibility

ComplexityComplexity

DivisibilityDivisibility CommunicabilityCommunicability


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for New Products

International Consumer BehaviorInternational Consumer Behavior Values, attitudes and behaviors differValues, attitudes and behaviors differgreatly in other countries.greatly in other countries.

Physical differences exist which requirePhysical differences exist which require

changes in the marketing mix.changes in the marketing mix. Customs vary from country to country.Customs vary from country to country.

Marketers must decide the degree to whichMarketers must decide the degree to whichthey will adapt their marketing efforts.they will adapt their marketing efforts.

Documents

5.Consumer Markets and Buying Behaviour