Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia PowerPoint to accompany Philip Kotler, Stewart Adam, Linden

Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia

PowerPoint to accompany

Philip Kotler, Stewart Adam, Linden Brown & Gary Armstrong

Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia

Chapter 5

Consumer market behaviour

Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia 3

Chapter objectives (1)

1. Name the elements in the stimulus-response model of consumer behaviour.

2. Outline the major characteristics affecting consumer behaviour, and list some of the specific psychological, personal, cultural and social factors that influence consumers.

3. Explain the buyer decision process and discuss need recognition, information search, evaluation of alternatives, the purchase decision and post-purchase behaviour.


Chapter objectives (2)

4. Identify and define the consumer buying roles of initiator, influencer, decider, buyer and user.

5. Illustrate different types of buying decision behaviour, including complex, dissonance-reducing, habitual and variety seeking buying behaviour.

6. Express the basics of the buyer decision process for new products and identify stages in the adoption process, individual differences in the adoption of innovation, and the influence of product characteristics on the rate of diffusion of innovation.


What is a Consumer Market?

The consumer market consists of all the individuals and households who buy or acquire goods and services for personal consumption. Australian consumers vary tremendously in age,

income, education level, and tastes. And they buy an incredible variety of goods and services. How consumers make their choices among these products takes us into a fascinating field comprised of personal, cultural, and social influences.


A Model of Consumer Behaviour Consumers make buying decisions every day.

And they make many different types of purchases.

Most marketers undertake consumer research to try to learn more about: what consumers buy, who buys, how they buy, when they buy, where they buy and, most importantly, why they buy.

The central question is: How do consumers respond to the various

marketing stimuli the marketing organisation might use?


Figure 5.1: A Model of Buyer Behaviour

7


Characteristics Influencing Consumer Behaviour

1. Consumer purchases are strongly influenced by two groups of factors.

2. On one hand there are internal characteristics that determine our behaviour: psychological personal

3. And then there are external influences that represent the environment in which the individual behaviour takes place: cultural and social


Figure 5.2: Factors Influencing Consumer Behaviour

Cultural•Culture•Subculture•Social Class

Social•Household type•Reference groups•Roles & status

Psychological•Motivation•Perception•Learning (memory)•Beliefs & attitudes•Personality & self-concept

Personal•Age & lifecycle stage•Occupation•Education•Economic situation

Buyers’ responses•Product service & category selection•Brand selection•Reseller selection•Purchase timing & repurchase intervals•Purchase amount

Marketing programs•Marketing objectives•Marketing strategy•Marketing mix

Environmental influences•Economic•Technological•Political

Consumer

BUYER DECISION PROCESS

Lifestyle Experiences


Psychological Influences

1. Motivation

2. Perception

3. Learning

4. Beliefs and Attitudes


Psychological Factors: Motivation

When consumers express interest in buying a product there are a number of questions we might ask. Why? What is the person really seeking? What needs is he or she trying to satisfy?

A person has many needs at any given time.


Psychological Factors

Motivation Theories

Sigmund Freud assumes that people are largely unconscious about the real psychological forces shaping their behaviour. He sees the person as growing up and repressing many urges.


Psychological Factors

Motivation Theories

Abraham Maslow sought to explain why

people are driven by particular needs at particular times. Why does one person spend much time and energy on personal safety and another on gaining the esteem of others? Maslow's answer is that human needs are arranged in a hierarchy, from the most pressing to the least pressing


Figure 5.3:Maslow’s Hierarchy of Needs

Self-Esteem

Belongingness

Safety

Physiological

SelfActualisation


Psychological Factors: Perception

A motivated person is ready to act. How the person acts is influenced by his or her perception of the situation. Two people with similar motivation and in the same situation might act quite differently because they perceive the situation differently.

Perceptual Processes Selective Exposure Selective Distortion Selective Retention


Psychological Factors: Learning

When people act, they learn. Learning describes

changes in an individual's behaviour arising from experience.

The significance of learning theory to marketers is that they can build demand for a product by associating it with strong drives, using motivating cues and providing positive reinforcement.


Psychological Factors: Beliefs and Attitudes

Through acting and learning, people acquire their beliefs and attitudes

A belief is a descriptive thought or conviction that a person holds about something, and involves holding an opinion.

Incorrect beliefs about product features or brand image can block sales.


Psychological Factors: Beliefs and Attitudes

An attitude describes a person’s relatively consistent evaluations, feelings and tendencies towards an object or idea

People have attitudes towards political parties, music and food types as well as companies and brands


Tricomponent attitude model

Cognitive-thought driven, rational influences on attitudes

Affective- emotionally driven attitudes

Conative- behavioural


Personal Influences

A buyer's decisions are also influenced by personal characteristics such as:

Age and life-cycle stage Occupation Education Economic situation Personality & Self Concept Consumer lifestyle


Lifestyles and Psychographics

Activities, Interests and Opinions (AIO)

SRI Values and Lifestyles (VALS)

Inner-directed and Outer-directed

Roy Morgan Lifestyles groups (10 groups that describe ‘typical’ Australian lifestyles)


Cultural Factors

Cultural factors exert the broadest and deepest influence on consumer behaviour. Marketers need to understand the role played by: culture, subculture social class

http://www.corona-extra.net/n_gallery/gcoro015.jpg


Example: KFC caters for different cultural requirements


Social influences

A consumer's behaviour is also influenced by social factors, such as the consumer's household type and reference groups, as well as social roles and status.

These social factors can strongly affect consumer responses, companies must take them into account when designing their marketing strategies.


Social influences

Household types: changing lifestyles and buying roles affect marketing decisions

Groups Membership groups Reference groups

Opinion leaders

Roles and Status


PublicLuxuries

PublicNecessities

PrivateLuxuries

PrivateNecessities

Gro

up

In

flu

ence

on

Pro

du

ct C

ho

ice

Strong Weak

Group Influence on Brand Choice

Strong

Weak

Figure 5.4: Extent of group influence on product and brand choice


Family and Lifestyle Influences

Family Influences

Age and Life Cycle Stage Occupation

Economic Situation

Lifestyle Identification

Activities Opinions

Interests


Figure 5.5: Consumer Buying Roles

Decider

Buyer

User

Influencer

Initiator

KeyFamily

DecisionRoles


Example:‘Crèche tested’ Mercedes


Types of Buying Decisions

1. Complex Buying Behaviour

2. Dissonance-Reducing Buying Behaviour

3. Habitual Buying Behaviour

4. Variety-Seeking Buying Behaviour


Figure 5.6: Types of Buying Decisions

ComplexBuying

Behaviour

Dissonance-Reducing Buying

Behaviour

Variety-Seeking

Behaviour

HabitualBuying

Behaviour

HighInvolvement

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

LowInvolvement


Figure 5.7: The Buyer Decision Process

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post-purchase Behaviour


Example: Loveable:Purchases are influenced by those around us


Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption


Figure 5.8: Adoption of Innovations

Per

cen

tag

e o

f A

do

pte

rs

Time of AdoptionEarly Late

Inn

ova

tors

Early Adopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority


Influences on Rate of Adoption

Influences

RelativeAdvantageCommunicability

Divisibility Compatibility

Complexity


Influence of Product Characteristics on Rate of Adoption

The characteristics of the new product affect its rate of adoption. Some products are adopted almost overnight (Internet-50 million users in 4 years), some are fast (mobile telephones), others take longer to gain acceptance (personal computers-50 million users in 16 years).


Influence of Product Characteristics on Rate of Adoption

Relative Advantage: the degree to which an innovation appears superior to existing products

Compatibility: the degree to which the innovation fits the values and experiences of potential consumers

Complexity: the degree to which the innovation is difficult to understand or use

Divisibility: the degree to which the innovation may be tried on a limited basis

Communicability: the degree to which the results of using the innovation can be observed or described to others


Consumer behaviour across international borders

Consumers in different countries may have some things in common but their values, attitudes and behaviours may vary a lot

Marketers often adjust their products and communications to reflect the differences

Differences are often subtle and may result from physical differences in consumers and their environment

Other differences may include gestures, body posture and manners

Documents

Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia PowerPoint to accompany Philip Kotler, Stewart Adam, Linden