Module 5 - Rome Business School...Derren Brown Module 5 - slide 7 Characteristics Affecting Consumer Behavior Factors Influencing Consumer Behavior Module 5 - slide 8 Culture is the

Module 5 - slide 1

Module 5

Consumer Markets and Consumer

Buyer Behavior

Master in Marketing and Communication

Module 5 - slide 2

Consumer Markets and Consumer Buyer Behavior

• Model of Consumer Behavior

• Characteristics Affecting Consumer

Behavior

• Types of Buying Decision Behavior

• The Buyer Decision Process

• The Buyer Decision Process for New

Products

Topic Outline

Module 5 - slide 3

Consumer buyer behavior refers to the buying

behavior of final consumers—individuals and

households who buy goods and services for

personal consumption

Consumer market refers to all of the personal

consumption of final consumers

Model of Consumer Behavior

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Analysing consumer behaviour

• What do consumers buy?

• Where do they buy?

• When do they buy?

• Why do they buy?

• How do they buy?

• Who buys?

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Stimulus-response model of buyer

behaviour

Marketing

and stimuli

Buyer’s

black box

Buyer

responses

Module 5 - slide 6

Model of Consumer Behavior

http://www.youtube.com/watch?v=befugtgikMg

http://www.youtube.com/watch?v=ZgWvn4yldM4&feature=related

http://www.youtube.com/watch?v=j25qV5RO-nU&feature=relatedDerren Brown

Module 5 - slide 7

Characteristics Affecting Consumer Behavior

Factors Influencing Consumer Behavior

Module 5 - slide 8

Culture is the learned values, perceptions,

wants, and behavior from family and other

important institutions


Chapter 5- slide 9

Culture

Country ClustersNEAR

EASTERN

Turkey

Greece

Iran GERMANIC

Austria

Germany

Switzerland

INDEPENDENT

IndiaJapan

IsraelBrazil

NORDIC

FinlandDenmark

SwedenNorway

ANGLO

United Kingdom

Canada

United States

Ireland

South Africa

New Zealand

Australia

LATIN

EUROPEAN

France

Belgium

Italy Spain

Portugal

LATIN

AMERICAN

Argentina

Mexico

Chile

Peru

ColumbiaVenezuela

FAR

EASTERN

MalaysiaSingaporeHong

Kong

Philippines

Indonesia

TaiwanThailand

South Vietnam

ARAB

Oman

Bahrain

Abu-Dhabi

Saudi Arabia

United Arab Emirates

Kuwait

Chapter 5- slide 10

Culture - Geert Hofstede

•Power distance

•Uncertainty avoidance

•Individualism/collectivism

•Masculinity/femininity

Module 5 - slide 11

Characteristics Affecting

Consumer Behavior

Subculture are groups of people within a culture with shared value systems based on common life experiences and situations

• Hispanic

• African American

• Asian

• Mature consumers

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Social classes are society’s relatively

permanent and ordered divisions whose

members share similar values, interests,

and behaviors

• Measured by a combination of occupation,

income, education, wealth, and other

variables


Module 5 - slide 13


http://www.rhodeislandhousing.org/

Social classes

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Membership Groups

• Groups with direct influence and to which a person belongs

AspirationalGroups

• Groups an individual wishes to belong to

Reference Groups

• Groups that form a comparison or reference in forming attitudes or behavior

Groups and Social Networks

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• Word-of-mouth influence and buzz marketing

– Opinion leaders are people within a reference group who exert social influence on others

– Also called influentials or leading adopters

– Marketers identify them to use as brand ambassadors


http://www.tremor.com/

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• Online Social Networks are

online communities where

people socialize or exchange

information and opinions

• Include blogs, social

networking sites (facebook),

virtual worlds (second life)


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• Family is the most important consumer-buying organization in society

– Family of orientation

– Family of procreation

• Wife as main purchasing agent

• Children’s influence on family buying decisions

Social Factors

Module 5 - slide 18

Characteristics Affecting

Consumer Behavior

Children in Europe

• 76 million under 14

• Estimated €18bn in disposable income

• Influence an additional €100bn that their families spend

in food, clothing, entertainment, personal care items.

• Influence family decision about vacations, cars, mobile

phones

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• Social roles and statusare the groups, family, clubs, and organizations that a person belongs to that can define role and social status

Social Factors

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Consumer buying roles

• Initiator: Person who first suggests or

thinks of the idea of buying a particular

product.

• Influencer: A person whose views or

advice will influence the product or

service.

• Decider: Buying decision maker of the

product

• Buyer: Ultimate purchaser

• User: Ultimate user

Module 5 - slide 21


• Age and life-cycle stage

• RBC Royal Band stages

– Youth: younger than 18

– Getting started: 18–35

– Builders: 35–50

– Accumulators: 50–60

– Preservers: over 60

Personal Factors

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Occupation affects the goods and services

bought by consumers

Economic situation includes trends in:

Personal Factors

Personal income

SavingsInterest rates

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Lifestyle is a person’s pattern of living as expressed in his or her psychographics

• Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment

Personal Factors

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• Personality and self-concept

– Personality refers to the unique psychological

characteristics that lead to consistent and

lasting responses to the consumer’s

environment

Personal Factors

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Personal Factors

Dominance Autonomy

Defensiveness Adaptability Aggressiveness

Personal Factors

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Brand Personality Traits

A brand personality is the specific mix of human traits that may

be attributed to a particular brand. One researcher identified

five brand personality traits:

1. Sincerity (down-to-earth, honest, wholesome, and

cheerful)

2. Excitement (daring, spirited, imaginative, and up-to-date)

3. Competence (reliable, intelligent, and successful)

4. Sophistication (upper class and charming)

5. Ruggedness (outdoorsy and tough)

Module 5 - slide 27


• Self-concept (or self-image)

– The complex mental picture that people have

of themselves.

– How do you view yourself?

– “We are what we have” (?)

Personal Factors

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Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes

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A motive is a need that is sufficiently pressing to

direct the person to seek satisfaction

– Biological

– Psychological

Motivation research refers to qualitative research

designed to probe consumers’ hidden,

subconscious motivations

Psychological FactorsMotivation

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Maslow’s Hierarchy of Needs

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Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes

– Selective attention

– Selective distortion

– Selective retention


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Selective attention is the tendency for people to

screen out most of the information to which they

are exposed

Selective distortion is the tendency for people to

interpret information in a way that will support

what they already believe

Selective retention is the tendency to remember

good points made about a brand they favor and

forget good points about competing brands


Module 5 - slide 33


• Learning is the change in an individual’s

behavior arising from experience and

occurs through interplay of:


Drives Stimuli Cues

Responses Reinforcement

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Belief is a descriptive thought that a person

has about something based on:

• Knowledge

• Opinion

• Faith

Psychological FactorsBeliefs and Attitudes

Module 5 - slide 35


Attitudes describe a

person’s relatively

consistent evaluations,

feelings, and

tendencies toward an

object or idea


Module 5 - slide 36

Types of Buying Decision

Behavior

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

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Types of Buying Decision Behavior

Four Types of Buying Behavior

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Buying decision behaviour

• Complex buying behaviour: High involvement in a purchase and perceived significant differences among brands. Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive. (Ex.: car)

• Dissonance-reducing buying behaviour: Situations characterised by high involvement with an expensive, infrequent or risky purchase but few perceived differences among the brands. (Ex.: carpeting)

• Habitual buying behaviour: Characterised by low consumer involvement and few significant perceived brand differences (Ex.: salt)

• Variety seeking buying behaviour: Low consumer involvement but significant perceived brand differences (Ex.: cookies)

Module 5 - slide 39

The buyer decision process

Needrecognition

Informationsearch

Evaluation ofalternatives

Purchase decision

Postpurchasebehaviour

Module 5 - slide 40

The Buyer Decision Process

• Occurs when the buyer recognizes a

problem or need triggered by:

– Internal stimuli

– External stimuli

Need Recognition

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• Personal sources - family and friends

• Commercial sources -advertising, Internet

• Public sources - mass media, consumer organizations

• Experiential sources - handling, examining, using the product

Information Search

Sources of Information

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During this stage consumers:

• Look for certain benefits that can be acquired by

buying a product

• Attach degrees of importance to each attribute

• Develop brand beliefs about each brand

• Use a utility function for each attribute

• Arrive at attitudes toward each brand through an

evaluation procedure

Evaluation of Alternatives

Module 5 - slide 43


Importance Alternative Brands

Attributes Weight A B CSize 0.2 4 6 2Memory 0.5 6 3 7Warranty 0.1 5 5 4Price 0.2 4 6 7

Evaluation of Alternatives – Expectancy value model

Example: notebook computer

A score can be calculated for each brand by multiplying the importance weight for

each attribute by the brand’s score on that attribute. These weighted scores are then

summed to determine the score for that brand. For example:

ScoreBrand A = (0.2 x 4) + (0.5 x 6) + (0.1 x 5) + (0.2 x 4) = 0.8 + 3.0 + 0.5 + 0.8 = 5.1. This consumer will select the brand with the highest score.

Module 5 - slide 44


Importance Alternative Brands

Attributes Weight A B CSize 0.2 4 6 2Memory 0.5 6 3 7Warranty 0.1 5 5 4Price 0.2 4 6 7

Evaluation of Alternatives – Expectancy value model

Example: notebook computer

Calculate the scores for brands B and C. Which brand would this consumer likely

choose?

ScoreBrand B = (0.2 x 6) + (0.5 x 3) + (0.1 x 5) + (0.2 x 6) = 1.2 + 1.5 + 0.5 + 1.2 = 4.4

ScoreBrand C = (0.2 x 2) + (0.5 x 7) + (0.1 x 4) + (0.2 x 7) = 0.4 + 3.5 + 0.4 + 1.4 = 5.7Based on this analysis, the consumer would probably select Brand C because it has the highest score.

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• The act by the consumer to buy the most

preferred brand

• The purchase decision can be affected by:

– Attitudes of others

– Unexpected situational factors

Purchase Decision

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• The satisfaction or dissatisfaction that the consumer feels about the purchase

• Relationship between:– Consumer’s expectations

– Product’s perceived performance

• The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction

• Cognitive dissonance is the discomfort caused by a post-purchase conflict

Post-Purchase Decision

Module 5 - slide 47


Customer satisfaction is a key to building

profitable relationships with consumers - to

keeping and growing consumers and

reaping their customer lifetime value

Post-Purchase Decision

Module 5 - slide 48

The Buyer Decision Process for New Products

Adoption process is the mental process an

individual goes through from first learning

about an innovation to final regular use.

• Stages in the process include:

Awareness Interest Evaluation Trial Adoption

Module 5 - slide 49

Adopter categorisation on the basis of relative time of adoption

of innovations

Source: Reprinted with permission of The Free Press, a Division of Simon & Schuster, Inc., by Everett M. Rogers. Copyright © 1995 by Everett M. Rogers from Diffusion of Innovations, fourth edition. Copyright © 1962, 1971, 1983 by The Free Press

Module 5 - slide 50

The Buyer Decision Process for New Products

Influence of Product Characteristics

on Rate of Adoption

Relative advantage

Compatibility Complexity

Divisibility Communicability

Module 5 - slide 51

Discussing the concepts

• Thinking about the purchase of a hi-fi system, indicate

the extent to which cultural, social, personal, and

psychological factors affect how a buyer evaluates hi-

fi products and chooses a brand.

• Describe and contrast any differences in the buying

behaviour of consumers for the following: a music

download, a notebook computer, a pair of trainers,

and a breakfast cereal.

Module 5 - slide 52


• How do consumers respond to various marketingefforts the company might use? List the buyercharacteristics that affect buyer behavior anddiscuss which one(s) influence you most whenmaking a new-car purchase decision.

• Name and describe the types of consumer buyingbehavior. Which one would you most likely use ifdeciding on a laptop computer purchase and whichfor picking a restaurant for dinner?

• Explain the stages of the consumer buyer decisionprocess and describe how you or your family wentthrough this process to make a recent purchase.

Module 5 - slide 53


1. How might a marketer influence a consumer’sinformation search through each of the fourinformation sources discussed in the chapter?

2. What is a “new” product and how do consumersgo about deciding whether to adopt a newproduct?

3. What product characteristics influence aninnovation’s rate of adoption? Discuss thecharacteristics of mobile navigation systems inrelation to the rate of adoption.

Exercise

• You are the Marketing Team of a company

that produces and sells frozen food.

• In order to develop the best marketing

strategy, you have to identify the cultural,

social, personal and psychological factors

that can influence the purchase of your

products.

Documents

Module 5 - Rome Business School...Derren Brown Module 5 - slide 7 Characteristics Affecting Consumer Behavior Factors Influencing Consumer Behavior Module 5 - slide 8 Culture is the