CONSUMER BUYER BEHAVIOR AND CONSUMER
MARKETS
HARLEY DAVIDSON ‘You don’t see people tattooing Yamaha
on their bodies’ Consumer T-shirts saying “ I rather push a
Harley than drive a Honda’ Harley Captures 23 % of all U.S bike sales
and 50% of all heavy weight segment For several years sales have outstripped
supply During last 5 years Harley Sales have
increased by 50% and earnings have jumped by 75%.
HARLEY DAVIDSONHarley Management puts top priority on
understanding customer wants and what makes them tick.
Who their customers are What they think How they feel Why they buy a Harley
FOCUS GROUP RESEARCHSeven Core Customer Types1) Adventure loving traditionalists2) Sensitive pragmatist3) Stylish status seekers4) Laid back campers5) Classy capitalists6) Cool headed loners7) Cocky Misfits
HARLEYS UNIVERSAL APPEAL“Independence Freedom and Power”
Analyst: ‘Its much more than a machine, its part of their own self expression and lifestyle
Analyst: The toughest baddest guy on the block. Never mind that you are a dentist or an accountant. You ( feel ) wicked astride all that power.
Harley Dealer: ‘We sell a dream here’
CLASSIC HARLEY AD
Tagline: When was the last time you felt this strongly about anything.
CONSUMER BUYER BEHAVIOUR The buying behavior of final consumers-
individuals and households who buy goods and services for final personal consumption
ANSWER TO QUESTIONS What consumers buy? Where they buy? How much they buy ? When they buy ? Why they buy ?
CONSUMER BUYER BEHAVIOR
Buying Decisions are made at an unconscious level
So What is the central question for
marketers?
How do consumers respond to the various marketing efforts the company might use.
STIMULUS RESPONSE MODEL OF BUYER BEHAVIOR
Marketing and other
StimuliMarketing OtherProduct EconomicPrice Political Place CulturalPromotion Technological
Buyers Black Box
Buyers Characteristics Buyers Decision
Process
Buyer ResponsesProduct ChoiceBrand ChoiceDealer Choice
Purchase TimingPurchase Amount
CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
Cultural
•Culture•Subculture•Social Class
Social•Reference Groups•Family•Roles and Status
Personal
•Age and Lifecycle Stage•Occupation•Economic Situation•Lifestyle•Personality and SelfConcept
Psychological
•Perception•Motivation•Learning•Beliefs and Attitudes
CULTURAL FACTORS Culture: The set of basic values, perceptions,
wants and behavior learned by a member of society from family and other important institutions.
-Cultural Shifts
Health and Fitness
Informality
Subculture: A group of people with shared value systems based on common life experiences and situations.
-Geographic, Racial groups,Nationalities,Religions
AD TARGETING VARIOUS SUB CULTURES IN USA
SOCIAL CLASSSocial Class: Relatively permanent and
ordered divisions in a society whose members share similar values, interests and behavior
Social class: is not determined by a single factor such as income but is measured as a combination of occupation, income, education, wealth and other variables.
SOCIAL FACTORSSocial Factors are Groups,Family, Social
Roles and StatusGroupsMembership Groups
Opinion Leader
Reference Groups
Buzz Marketing-Tremor and Vocal Point
Social Networking-Chevy Tahoe
FamilyRoles and Status
AMERICAN IDOL AND COKE
BUZZ MARKETING: TREMOR AND VOCAL POINT “ The most powerful form of marketing is a
message from a trusted friend.” Most companies see a dramatic 10-30%
increase in sales after employing the word of mouth network
Examples: Shamrock Farms launched a new chocolate –malt flavored milk
P&G Dawn Direct Foam Detergent Tremor Vocal Point Connectors
IMITATION…
PERSONAL FACTORS
Age Life Cycle Stage
Occupation Lifestyle
Personality Self Concept
Age and Life Cycle StageRBC Royal Bank five stage segments1. Youth-Less than 182. Getting Started-18-353. Builders-35-504. Accumulators-50-605. Preservers-over 60
Occupation
Economic SituationExample: Rolex Timex Khadi Khas/Khadi Lesac/Lesac Casual
LIFESTYLELifestyle A persons pattern of living as expressed
in his or her activities, interests and opinions.
It profiles a persons whole pattern of acting and interacting in the world.
Measure Customers major AIO dimensions Activities:Interests:Opinions:
VALS
Two Major Dimensions
1) Primary Motivations
2) Resources
Ideals
Thinkers
Believers
Achievements
Achievers
Strivers
Self-Expression
Experiencers
Makers
Innovators
Survivors
TWO MAJOR DIMENSIONS OF VALS Primary MotivationsIdeals: Guided by Knowledge and PrinciplesAchievement: Look for product and services
that demonstrate success to their peers Self Expression: Desire social or physical
activity, variety and risk Resources Income, education, health, self -confidence,
energy and other factors- high or lowExample: Iron City Beer
Personality The unique psychological characteristics
that lead to relatively consistent and lasting responses to ones own environment.
Brand Personality The specific mix of human traits that
may be attributed to a particular brand
FIVE BRAND PERSONALITY TRAITS Sincerity: Down to Earth, Wholesome
and Cheerful Excitement: Daring, Spirited,
Imaginative and Up to Date Competence: Reliable, Intelligent and
Successful Sophistication: Upper Class and
Charming Ruggedness: Outdoorsy and Tough
EXAMPLESRuggedness: Levis, NikeExcitement: MTV, Pepsi, Mountain DewCompetence: Banks, Dawn, CNN, IBA,
IoBMSophistication: Rolex, Ameer Adnan, Sana
Safinas Sincerity: Campbell soup.
SELF CONCEPT Self Concept ( Self Image ) Peoples
possessions contribute to and reflect their identities
“We are what we have”Example : Apple
PSYCHOLOGICAL FACTORS Four Major Psychological FactorsMotivationPerceptionLearningBeliefs and Attitudes
MOTIVATIONTwo kinds of needs: 1) Biological
2) Psychological
Motive: a need that is sufficiently pressing to direct the person to seek satisfaction of the need
Two Popular Motivation Theories
1. Sigmund Freud
2. Abraham Maslow:
MOTIVATIONSigmund Freud: suggests that people are
largely unconscious about the real psychological forces shaping their behavior
Motivation Research:
MASLOW’S HIERARCHY OF NEEDS
Self Actualization NeedsSelf-Development and Realization
Esteem NeedsSelf-Esteem, Recognition, Status
Social NeedsSense of Belonging, Love
Safety NeedsSecurity, protection
Physiological NeedsHunger Thirst
PERCEPTION The process by which people select organize,
and interpret information to form meaningful picture of the world
Three perceptual processes1. Selective Attention: The tendency for people to
screen out most of the information to which they are exposed
2. Selective Distortion: the tendency of people to interpret information in a way that will support what they already believe.
3. Selective Retention: likely to remember the good points made about a brand they favor and to forget good points made about competing brands.
Subliminal Advertising
LEARNING, BELIEFS AND ATTITUDESLearning: Changes in an individuals behavior
arising from experienceLearning takes place through the interplay of
drives, stimuli, cues, responses and reinforcement.
A drive is a strong internal stimulus that calls for action
A drive becomes a motive when it is directed towards a particular object
Cues are minor stimuli that determine when, where and how the customers respond.
CUE
BELIEFS AND ATTITUDEBeliefs: A descriptive thought that a
person has about something.Example: LaysAttitude: A persons relatively consistently
evaluations, feelings and tendencies towards an object or idea
Got Milk! Example
CHANGING ATTITUDES TOWARDS MILK
GOT MILK !
FOUR TYPES OF BUYER BEHAVIOR
High Involvement
Low Involvement
Significant Differences Between Brands
Complex Buying Behavior
Variety Seeking Buying Behavior
Few Differences Between Brands
Dissonance Reducing Buying Behavior
Habitual Buying Behavior
TYPES OF BUYING DECISION MAKINGComplex Buying Behavior: in situations
characterized by high consumer involvement in a purchase and significant perceived differences between brands.
Dissonance Reducing Buying Behavior: in situations characterized by high involvement but few perceived differences among brands
Habitual Buying Behavior: in situations characterized by low customer involvement and few significant perceived brand differentness
Variety Seeking Buying Behavior: situations characterized by low consumer involvement but significant perceived brand differences
Complex Buying Behavior
When the product is expensive1. Risky2. Purchased infrequenly3. Highly Self ExpressiveThe Buyer has much to learn about the
product category
Complex Buying Behavior
What does the marketer need to do?
THE BUYER DECISION PROCESS
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decisions
Post Purchase Behavior
THE BUYER DECISION PROCESS Need Recognition- the first stage of the buyer
decision process in which the buyer recognizes a need or problem.
Information Search –the stage of the buyer decision process in which the consumer is aroused to search for more information.
Evaluation of Alternatives- the stage of the buyer decision process in which the user uses information to evaluate alternative brands in the choice set.
Purchase Decisions - the buyers decision about which brand to purchase.
Post Purchase Behavior -the stage of the buyer decision process in which the consumer takes further action after purchase, based on satisfaction or dissatisfaction.
Cognitive Dissonance- Buyer discomfort caused by post-purchase conflict.
NEED RECOGNITIONInternal StimulusExternal Stimulus
INFORMATION SEARCHPersonal SourcesCommercial SourcesPublic SourcesExperiential Sources
EVALUATION OF ALTERNATIVES Evaluation of AlternativesCar ExampleStylingOperating EconomyWarrantyPrice
PURCHASE DECISION Two factors can come between the
purchase intention and purchase decision.
1: Attitude of others2. Unexpected Situational Factors
POST PURCHASE BEHAVIOUR
Why is it important to satisfy customers? Marketers should go beyond merely
meeting the expectation of consumers- they aim to delight them- Example Lexus,Boing
Measure Customer Satisfaction Regularly
Encourage customers to complain
THE BUYER DECISION PROCESS FOR NEW PRODUCTS
STAGES IN THE ADOPTION PROCESSConsumers go through five stages in the
process of adopting a new productAwarenessInterestEvaluationTrialAdoption
INDIVIDUAL DIFFERENCE IN INNOVATIVENESS People differ in their readiness to try
new products .
Adopter Groups
Innovators 2.5%
Early Adopters 13.5%
Early Majority 34%
Late Majority 34%
Laggards 16%
INFLUENCE OF PRODUCT CHARACTERISTICS ON RATE OF ADOPTION
Relative Advantage