Trier 3Consumer (and business)buyer and market behaviour
Previewing concepts (1) Define the consumer market andconstruct a simple model of consumerbuyer behaviour Demonstrate how culture, subculture andsocial class influence consumer buyingbehaviour Describe how consumers’ personalcharacteristics and primary psychologicalfactors affect their buying decisions
Previewing concepts (2) List and understand the majortypes of buying decision behaviourand the stages in the buyer decisionprocess Discuss how consumer decision makingvaries with the type of buying decision
Previewing concepts (3) Define the business market and explainhow business markets differ fromconsumer markets List and define the steps in the businessbuying decision process
The brand - Harley-Davidson Most products and personalities comeand go but others, like the HarleyDavidson, achieve long-lasting cultstatus. Why do you think this occurs?Harley-Davidson makes motorcycles.What do Harley-Davidson owners buy?How do you think the buying process forbuying a Harley-Davidson differs frombuying other 20,000 products?
Harley-Davidson Harley has instilled a high degree of brandloyalty in its target market. The company researches its customer base tounderstand buyer behaviour. The research revealed seven core customertypes: 1) adventure-loving traditionalists, 2)sensitive pragmatists, 3) stylish status-seekers,4) laid-back campers, 5) classy capitalists, 6)cool-headed loners, and 7) cocky misfits.
Harley-Davidson– The Harley-Davidson example shows thatmany factors affect consumer buyingbehaviour.– Consumer buyer behaviour refers to thebuying behaviour of final consumers—individuals and households who buy goodsand services for personal consumption.
Analysing consumer behaviour:Kipling's six Q’s What doconsumers buy? Where do theybuy? When do they buy? Why do theybuy? How do they buy? Who buys?
Key Question! How do consumers respond to variousmarketing efforts? The starting point for answering thisquestion is the stimulus-response modelof buyer behaviour shown in Figure 5.1.
Figure 5.1 Stimulus-responseModel of buyer behaviourMarketingand stimuliBuyer’sblack boxBuyerresponses
Key Q - What is in the buyer’s ‘black box’? Marketing and other stimuli enter the consumer’s‘black box’ and produce certain responses.Marketing stimuli consist of the 4 Ps: product,price, place, and promotion.Other stimuli include major forces and events inthe buyer’s environment.The buyer’s characteristics influence how he orshe perceives and reacts to the stimuli.The buyer’s decision process itself affects thebuyer’s behaviour.
What is neuromarketing?Researchers are using technology to‘look inside the brain’Neuromarketing is the use of neurotechnology to improve marketingdecision making.
Factors InfluencingConsumer ltureFamilySocialclassRolesandstatusPersonalAge rceptionLearningBeliefs andattitudesBuyer
What is culture?Culture is the set of basic values,perceptions, wants and behaviourslearned by a member of society fromfamily and other important institutions.
Cultural factors Culture is the most basic cause of a person’swants and behaviour. Culture is the set of basicvalues, perceptions, wants and behaviourslearned by a member of society from family andother important institutions. Each culture contains smaller subcultures, orgroups of people with shared value systemsbased on common life experiences andsituations. Subcultures include nationalities,religions, racial groups, and geographic regions.
Influences on Culture
Subcultures NationalitiesReligionRacial groupsGeographic regionsHSBC is the first tooffer Islamic financial products.
Cultural factors (con’t) Social classes are society’s relatively permanentand ordered divisions whose members sharesimilar values, interests, and behaviours. Social class is not determined by a single factor,such as income, but is measured as a combinationof occupation, income, education, wealth, andother variables.
Social factorsSocial factors can also affect consumer behaviour. Reference groups Family Roles and status
Think-Pair-Share Consider an item you bought which istypical of what your peers (a key referencegroup) buy, such as a compact disc, amountain bike or a brand of trainer. Were you conscious that your friendsowned something similar when you madethe purchase? Did this make you want theitem more or less? Why or why not?
What is an opinion leader? Opinion leaders are people within areference group who, because of specialskills, knowledge, personality, or othercharacteristics, exert influence on others. Manufacturers of products and brandssubjected to strong group influence mustfigure out how to reach opinion
Figure 5.3 Extent of group influenceon product and brand choice
Blogs and social networking sites Social networking, social interactioncarried out over Internet media,illustrates the importance of socialinfluence on consumer behaviour. MySpace.com; Facebook.com
VW’s Helga reliedon social networking for branding
Family members can strongly influence– The buyer’s parents make up the family of orientation.– The family of procreation (the buyer’s spouse andchildren) has a more direct influence on everydaybuying behaviour.» Husband-wife involvement varies widely by productcategory and by stage in the buying process» Children may also have a strong influence on familybuying decisions in the form of “pester power.”
Think-Pair-Share Now, think of brands that you currently usewhich your parents also use. Examplesmay include soap, tea, or butter/milk. Did you think through these purchases ascarefully as those influenced by your peersor were these purchases simply the resultof following old habits?
Figure 3.4 Family Life Cycle
Consumers’ buying roles InitiatorInfluencerDeciderBuyerUser
Decision-making unit (DMU)» The initiator is the person who first suggests orthinks of the idea of buying a particular product orservice.» The influencer is the person whose view or adviceinfluences buying decision.» The decider is the person who ultimately makes thebuying decision or any part of it.» The buyer is the person who makes the actualpurchase.
Role and Status– A person’s position within each group can bedetermined in terms of role and status.– A role consists of the activities that people are expectedto perform according to the persons around them.– Status is the general esteem given to a role by society.
Personal factors Buyer’s ageLifecycle stageOccupationEconomic situationLifestylePersonalitySelf-concept
Personal Factors Affecting Consumer Behaviour:Personal InfluencesAge and Life CycleStageOccupationEconomic SituationPersonality & Self-ConceptLifestyle IdentificationActivitiesOpinionsInterests
Family life-cycle stagesYoungMiddle-aged SingleMarried without childrenMarried with childrenDivorced with childrenOlder Older married Older unmarriedSingleMarried without childrenMarried with childrenMarried withoutdependent children Divorced without children Divorced with children Divorced withoutdependent children
Think-Pair-ShareHow should a marketer of bedroomfurniture consider life-cycle stage inhis/her strategy?Can you think of a furniture retailer thatplaces emphasis on a particular life-cyclestage?
Individual exercise Go to the VALS Web site athttp://www.sric-bi.com/VALS/presurvey.shtml. Take the VALS survey. Read andconsider the profiles that result from yoursurvey. What things do you agree with?Disagree with?What four products have high indexes foryour type? Do you buy these products?Do you think that an instrument such asthis has any value to marketers?
Think-Pair-ShareIn designing adverts for a soft drink, whichwould you find more helpful: informationabout demographics or lifestyles? Giveexamples.
What is personality?Personality is a person’sdistinguishing psychologicalcharacteristics that lead to relativelyconsistent and lasting responses to hisor her own environment.
PersonalityPersonality can play arole in consumerbehaviour, particularlywith high involvementproducts (e.g., choiceof holiday)Source: Hayes & Jarvis (Travel) Ltd http://www.hayesandjarvis.co.uk
Brands have personalities etence
Personality and Self-Concept Related to personality is a person’s selfconcept. The basic self-concept premiseis that people’s possessions contribute toand reflect their identities. “We are what we have”- Visit somebody’s home/apartment?
Factors Affecting Consumer Behaviour:PsychologicalMotivationBeliefs andAttitudesPsychologicalFactorsLearningPerception
What is suggested byFreud’s theory of motivation?Freud suggested that aperson’s buying decisions areaffected by subconsciousmotives that even the buyermay not understand.
Figure 5.4Maslow’s hierarchy of needs
Exercise Study Maslow’s hierarchy of needs Cut out print ads that appear to be focusedon appealing to the different needs of thishierarchy. Find one ad for each level ofneeds.
PerceptionPerception is the process by whichpeople select, organise and interpretinformation to form a meaningfulpicture of the world
What is the difference betweenattitudes and beliefs?A belief is a descriptive thought aperson has about something.An attitude describes a person’sfavourable or unfavourable evaluations,feelings, and tendencies towards anobject or idea.
Skoda Responded toNegative Attitudes
PEER GROUP EFFECTS How do you getyoung people tochange their attitudesabout Clarks shoesfrom “Shoes theirparents would wear”to “Cool andmodern”?
Consumer decision processConsumer choice results from acomplex interplay of cultural, social,personal, and psychological factors.
Figure 5.5 Four types ofbuying behaviour
Buying decision behaviour Habitual buying behaviour– Characterised by low consumer involvementand few significant perceived branddifferences Variety seeking buying behaviour– Low consumer involvement but significantperceived brand differences
Endorsements from celebritiesincrease sales
What is dissonance-reducingbuying behaviour?Dissonance-reducing buyingbehaviour is consumer behaviour insituations characterised by highinvolvement but few perceiveddifferences among brands.
Dissonance-reducing buying behaviour Dissonance-reducing buying behaviour occurswhen consumers are highly involved with anexpensive, infrequent, or risky purchase, but seelittle difference among brands. After the purchase, consumers might experiencepostpurchase dissonance (after-sale discomfort)when they notice certain disadvantages of thepurchased brand or hear favorable things aboutbrands not purchased.
UNDERSTANDING BUYINGPROCESSES IS CRUCIAL Months of marketing planning can bedismissed in the few moments that a buyermakes a purchase decision
Figure 5.6The buyer decision processNeedrecognitionInformationsearchEvaluation r
The Buyer Decision ProcessStep 1. Need RecognitionNeed RecognitionBuyer Recognizes a Problem or NeedInternal StimuliExternal Stimuli Hunger TV advertising Thirst Magazine advert A person’s normal needs Radio slogan Stimuli in the environment
The Buyer Decision ProcessStep 2. Information SearchPersonal SourcesCommercial SourcesPublic SourcesExperiential Sources Family, friends, neighbours Most effective source ofinformation Advertising, salespeople Receives most information fromthese sources Mass Media Consumer-rating groups Handling the product Examining the product Using the product
Information Search What kind ofpurchase will addressproblem? How can the productbe obtained? What information isneeded?Source: C&G http://www.cheltglos.co.uk
What do consumers do duringthe alternative evaluation stage of thebuying process? Look for certain benefits that can beacquired 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 anevaluation procedure
Interactive Decision Aids
Stages in adopting a new product AwarenessInterestEvaluationTrialAdoption
The Buyer Decision ProcessStep 5. Postpurchase BehaviourConsumer’s Expectations ofProduct’s PerformanceProduct’s Perceived PerformanceSatisfied Customer!Dissatisfied CustomerCognitive Dissonance
Post-Purchase Evaluation Affects likelihood ofrepeat purchase May evoke cognitivedissonance
Post-purchase evaluationHas the purchase lived up to its expectations?Marketers can help reduce cognitive dissonance by: Ensuring that customers’ needs and wants have beencarefully researched. Tailoring the marketing mix to suit the audience. Painting a realistic picture of the product/service in alladvertising literature. Making sure consumers’ expectations are rooted inreality - for example letting the consumer test theproduct/service before purchase. Good after sales care.
POST-PURCHASE EVALUATION Did our purchase live up toexpectations? If not, we could:– Return the product– Tell others– Rationalise our thoughts to overcome"cognitive dissonance"
Impact of Dissatisfied Customers“Dissatisfied customers can tell up to elevenother people about their bad experiences, whichis two to three times more people than asatisfied customer will talk to.”Smith, 1993
Review of theDecision-Making ProcessI’m hungryProblem recognitionWhat’s available?Information searchCakes or chocolate?Information evaluationSnickers!DecisionI should’ve had cake.Post-purchase evaluation
Consumer (and business) buyer and market behaviour Trier 3 . Previewing concepts (1) Define the consumer market and construct a simple model of consumer buyer behaviour Demonstrate how culture, subculture and social class influence consumer buying . – Consumer
Consumer Buyer Behavior refers to the buying behavior of final consumers-individuals and households that buy goods and services for personal consumption. What is Consumer Buyer Behavior? Model of Consumer Buyer Behavior. Cultural Social Personal Psychological Forces that Influence Buyer
GUIDE TO CREATING A DETAILED BUYER PERSONA. 02 . B2C BUYER PERSONA PERSONA FOR POTENTIAL 4 SUV BUYER SAMPLE BUYER PERSONAS. 06 B2B BUYER PERSONAS Title: Chief Information Officer (CIO), Chief . expert with business and strategy ski
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