Marketing Note

Consumer Buyer Behavior – Buying behavior of final consumers - Individuals and

households that buy goods and services for personal consumption.

Consumer Market – Individuals and households that buy or acquire goods/services for
personal consumption.

OBJECTIVE 1 – WHAT IS CONSUMER BEHAVIOR?

 Given characteristics affecting consumer behavior, design marketing efforts to reach

consumers.

o Ongoing process that starts before the purchase and continues after
consumption.

 Markets must be aware of issues before, during, and after purchase to build brand
loyalty and lasting customer relationships.
 Consumers’ responses are the test of success.
OBJECTIVE 2 – FACTORS AFFECTING CONSUMER BEHAVIOR

Consumer purchases are influenced strongly by cultural, social, personal, and

psychological characteristics.

Cultural Factors
Exert a broad and deep influence on consumer behavior.

Culture
Set of basic values, perceptions, wants, and behaviors learned by a member of society
from family and other important institutions.

Example - Freedom, individualism, material comfort, etc.

 Varies country to country.

 Cultural Shift – Changes in cultural values may lead to demand for certain products.

Subculture
A group of people with shared value systems based on common life experiences and
situations.

Example - Nationalities, religions, racial groups, geographic regions.

 Make up important market segments and have tailored products.

 Regional Subcultures – Distinctive programs for regions (i.e. provinces) that may have
specific commodities.
 Founding Nations – Founding nations (Aboriginal, English, and French) have larges
influences on values and buying culture.
  Ethnic Consumers – Visible minorities have specific needs that may be filled by niche
or specialized products.
 Mature Consumers – Different age cohorts have a distinct culture – such as
convenience services, pharmaceuticals, furniture, etc.

Social Class
Relatively permanent and ordered divisions in a society whose members share similar
values, interests and behavior’s.

 Determined by a combination of occupation, income, education, wealth, and other

variables.
 People within the social class tend to exhibit similar buying behavior.

Example - Clothing, home furnishings, leisure, automobiles.

Social Factors
Influenced by differing social factors.

Groups and Social Networks

Two or more people who interact to accomplish individual or mutual goals.

 Membership Groups – Direct influence where a person belongs.

 Reference Groups – Direct or indirect points of comparison or reference.
 Often the influence is the group to which they do not belong.

Word-of-Mouth Influence and Buzz Marketing

o Personal words and recommendations tend to be more credible than commercial

sources.

o Opinion Leader –A person within a reference group who, because of special

skills, knowledge, personality, or other characteristics, exerts social influence on
others.

o Buzz Marketing – Enlisting or creating opinion leaders to serve as brand

ambassadors to spread word about company products.
Opinion Social Networks

o Online Social Communities – Blogs, social networking websites, and even

virtual worlds – where people socialize or exchange information and opinions.

o Harness the power of these networks by promoting products and building closer
customer relationships by interacting with customers.

Family
Most important consumer buying organization in society – role of husband, wife, and
children.

 Marketers cater to the needs of opposite genders in changes of industry.

Example - Manland in IKEA caters to retail-phobic husbands and boyfriends.

 Children influence parents through areas such as food, clothing, and entertainment.

Roles & Status

A person belongs to many groups – their position in the group can be defined as a role
or status.

 Role – Consists of the activities people are expected to perform according to the people
around.

Products are typically appropriate to roles and status.

Personal Factors
Age and Life-Cycle Stage
People change goods/services bought over lifetime – tastes are often age related.

 Life-stage changes result from demographics and life-changing events.

Example - Marriage, having children, changes in personal income, moving out,

retirement.

Occupation
Occupation affects the products and services bought.
 o Blue-collar workers buy rugged work clothes and executives buy more business
suits.

Economic Situation
Trends in personal income, savings, and interest rates affect marketing decisions.

o To counter a recession, discount or cheaper goods are featured.

Lifestyle
A person’s pattern of living as expressed in his/her activities, interests, and opinions.

 Measures AIO dimensions (activities, interests, and opinions) to capture patterns of

acting and interacting.
 Helps marketers understand changing consumer values.

Personality and Self-Concept

Personality - Unique psychological characteristics that distinguish a person or group.

 Described in terms of traits such as self-confidence, dominance, sociability, etc.

o Useful for analysis of consumer behavior.

 Brand Personality – Specific mix of human traits attributed to a particular brand.

o Sincerity

o Excitement

o Competence

o Sophistication

o Ruggedness
 Psychological Factors
Motivation
A need that is sufficiently pressing to direct the person to seek satisfaction of the need.

 Can be biological, psychological.

 Freud – People are largely unaware of the real psychological forces shaping their
behavior.
 Motivation Research – Qualitative research designed to prove consumers’ hidden,
subconscious motivations.
 Interpretive Consumer Research – Dig deeper into consumer psyches and develop
better marketing strategies.
 Maslow – Hierarchy of needs involving physiological, safety, social, esteem, and self-
actualization.

Perception
Process by which people select, organize, and interpret info to form a meaningful
picture of the word.

 Selective Attention – Tendency for people to screen out most of the info exposed to.
 Selective Distortion – Tendency to interpret info in a way that supports their beliefs.
 Selective Retention – Tendency to remember good points made about a favored brand
and forget good points made about competing brands.

Subliminal Advertising – Embedded advertising in media to invoke purchases.

Learning
Changes in an individual’s behavior arising from experience.

 Most human behavior is learned, through drives, stimuli, cues, responses, and
reinforcement.
 Drive – Strong internal stimulus that calls for actions – motives when directed towards a
particular stimulus object.
 Cues – Minor stimuli that determine when, where, and how the person responds.
Beliefs and Attitudes

 Belief – A descriptive thought that a person has about something.

o Based on knowledge, opinion, faith, may be emotionally charged.

 Attitudes – Relatively consistent favourable or unfavourable evaluations, feelings, and

tendencies toward an object or idea.

o Put people in a frame of mind of liking/disliking things.

OBJECTIVE 3 – TYPES OF BUYING DECISION BEHAVIOR

Buying Behavior
Buying behavior is based on degree of buyer involvement and the degree of differences
among brands.

Complex Buying Behavior

High consumer involvement in a purchase and significant perceived differences among
brands.

 Product could be expensive, risky, purchased infrequently, and highly expressive – and
there are many options!
 Learning Process: develop beliefs, attitudes, and make a thoughtful purchase.

o Marketers must understand the process and help buyers learn.

Dissonance-Reducing Buyer Behavior

High consumer involvement but few perceived differences among brands.

 The products are expensive, infrequent, or risky – but options are similar from brands.
  post purchase Dissonance (after-sale discomfort) – Disadvantages are noticed on
the purchased item, or consumers hear good things about other brands.

o Marketers should provide evidence and support to help consumers feel good.

Habitual Buying Behavior

Low consumer involvement and few significant brand differences.

 Consumers do not research and weigh options – it is a habit to buy the brand.
 Ad Repetition – Creates brand familiarity rather than brand conviction, the consumer is
familiar with the brand through passive learning.

o Low commitment to brands, so marketers use price and sales promotions to

promote buying.

Variety-Seeking Buying Behavior

Low consumer involvement but significant perceived brand differences.

 Much brand switching out of boredom or interest to try new things (variety).
 Marketing strategy is to dominate shelf space, keeping them stocked, and running
frequent reminder ads.

The Buyer Decision Process

 Consists of 5 stages - Need recognition, Info search, Evaluation of alternatives,

Purchase decision, and Post purchase behavior.

1. Need
Recognition
First stage of the buyer decision process – consumer recognizes a problem or need.

 Triggered by internal stimuli (normal needs) or external stimuli (via ads or word of
mouth)
2. Information Search
Second stage – Consumer is aroused to search for more info; the consumer may have
heightened attention or may go into an active information search.

 Consumers obtain info from many sources -

o Personal Sources (family, friends, neighbors, acquaintances)

o Commercial Sources (advertising, sales-people, dealer websites, packaging,

displays)

o Public Sources (mass media, consumer rating organizations, internet searches)

o Experiential Sources (Test drive of the product)

 Most effective sources are personal – they legitimize and evaluate products for the
buyer.

3. Evaluation of Alternatives
Third stage – Consumer uses info to evaluate alternative brands in the choice set.

 Consumers may use careful calculations and logical thinking or impulse and intuition.
 Buyers consider several attributes with different importance.

4. Purchase Decision
Fourth stage – Consumer decides what brand to buy.

 Factors come in between the purchase intention and decision:

o Attitudes of Others

o Unexpected Situational Factors

5. Post purchase Behavior

Fifth Stage – Consumers take further action after purchase based on their satisfaction
with a purchase.

 Satisfaction is derived from consumer’s expectations and product’s perceived

performance.
 Cognitive Dissonance – Discomfort caused by post purchase conflict.
 o Consumers feel uneasy about acquiring drawbacks of the chosen brand and
losing the benefits of the ones not purchased.

 Customer Satisfaction – A key to build profitable relationships.

o Marketers who go beyond meeting expectations and delight the customer build
stronger satisfaction.

OBJECTIVE 4 – THE BUYER DECISION PROCESS FOR NEW PRODUCTS

New Product – A good, service, or idea that is perceived by potential customers as
new.

Adoption Process – The mental process through an individual pass from first learning
about an innovation to final adoption.

Stages in the Adoption Process

5 Stages of Adoption

o Awareness

o Interest

o Evaluation

o Trial

o Adoption

Individual Differences in Innovativeness

 Each product area features consumers of differing readiness -

o Innovators, Early Adopters, Early Majority, Late Majority, Laggards

Influence of Product Characteristics on Rate of Adoption
Five Important Characteristics in influencing an innovation’s rate of adoption

1. Relative Advantage – How superior it appears compared to existing products.

2. Compatibility – How it fits the values and experiences of potential consumers.
3. Complexity – How difficult it is to understand or use.
4. Divisibility – How tried the innovation is on a limited basis.
5. Communicability – How the results of the innovation’s use can be communicated to
others.