Consumer Markets and Consumer Buyer Behavior

Chapter 5: Consumer Markets and Consumer Buyer Behavior

Grace Andrews, Maddie Brown, Jenna Chamblee, Walker Finklea, Kristin Freeman, and Colby Ireland

FTM 282March 27, 2014

Objective 1: Model of Consumer Behavior● Consumer buyer behavior is the buying behavior of final consumers.● All the individuals and households that buy or acquire goods and services for

personal consumption make up the consumer market.● The stimulus-response model is the simplest way to model consumer buying

behavior● Marketers must figure out how to make inputs from the environment turn

into the responses they want to see in consumer buying behavior by trying to understand the processes that go on in the buyer’s “black box”

FTAR Example

H&M Global Programs for Change “With the aim to achieve long lasting improvements on a global scale within the focus areas of education, clean water and strengthening women. The H&M Conscious Foundation supports three global non-profit organizations that are well equipped to drive such a change.”

The economic and cultural stimuli in H&M’s Program for Change allows them to enter the buyer's “black box” by affecting the buyer’s decision making process. People are more likely to buy H&M’s product instead of a competitor's if they are aware that H&M will donate proceeds to a charity that relates to the buyers personal attitudes and preferences.

Objective 2: Characteristics Affecting Consumer Behavior

● Buyer characteristics: cultural, social, personal, and psychological● Culture: a person’s wants and behavior; anything from age to

ethnicity. Subcultures (nationalities, religions, racial groups, and geographic regions) also make up important market segments and marketers often design products tailored to their needs.

● Social: reference groups (family, friends, social networks, professional organizations)

● Personal: the buyer’s age, life-cycle stage, occupation, economic circumstances, personality, how they interact in the world

● Psychological: motivation, perception, learning, beliefs and attitudes

Objective 2: Characteristics Affecting Consumer Behavior

Objective 2: Characteristics Affecting Consumer Behavior

FTAR Example: TOMS

TOMS is guided by one simple mission statement:

“With every product you purchase, TOMS will help a person in need. One for One.®”

TOMS stands for a movement that not only benefits the consumers, but also the world. The one for one movement allows customers to buy a pair of shoes and know that TOMS gives a pair to someone in need. The idea has now expanded to purchases of TOMS’ eyewear to helping save and restore sight to those in need. TOMS mission statement and goals allows them to reach their buyer characteristics such as cultural, social, personal, and psychological. Culturally, TOMS appeals to consumers for benefitting those in need of different cultures including nationalities, religions, racial groups, and geographic regions. TOMS responds socially by appealing to and connecting people all over the world. Socially, TOMS’ products are available for anyone of any age, style, occupation, or economic situation. TOMS also appeals to consumers by helping others in need. Psychologically, this comforts customers knowing that their proceeds are benefitting people that need help.

Objective 3: Types of Buying Decision Behavior andThe Buyer Decision Process

Types of Buying Decision Behavior● Complex buying behavior: high consumer involvement in a

purchase and significant perceived differences among brands

● Dissonance-reducing buying behavior:high involvement but few perceived differences among brands

● Habitual buying behavior: low consumer involvement and few significant perceived brand differences

● Variety-seeking buying behavior: low consumer involvement but significant perceived brand differences

The Buyer Decision Process

FTAR Example:

Urban Outfitters App:“We did it! And now we have UO Mobile,

an iPhone app that lets you find the nearest store,

learn about events and special online promotions first,

and even read our blog! Download it now!”

The Urban Outfitters illustrated product involvement by making an online website for virtual shoppers and also the UO App that allows consumers to browse their products on the go while also finding the nearest store and beneficial promotions. This availability of their product reaches other consumer bases and ultimately sets them apart from competitor brands.

Objective 4: The Buyer Decision Process for New Products

Consumers go through five stages when adopting a new product:● Awareness● Interest● Evaluation● Trial● Adoption

There are different levels of willingness of consumers to try new products:

● Innovators● Early adopters● Early mainstream● Late mainstream● Lagging adopters

Each requires different marketing approaches.

Main Product Characteristics that Influence Rate of Adoption:

● Relative Advantage● Compatibility● Complexity● Divisibility● Communicability

FTAR Example: Old Navy

Old Navy creating awareness for their new line of pants using commercials

https://www.youtube.com/watch?v=ySjlNbgDMWE

Intro Case: GoPro

GoPro is a fast-growing company that makes small, wearable HD cameras at an affordable price. However, GoPro understands that customer behavior is driven by much more than just a high-quality product with innovative features.

Much of GoPro’s success is from their loyal customers because GoPro is able to develop a deep understanding of their customer’s behavior. The brand is centered around what the cameras actually let the customers do. The consumer market is young males who want to create an emotional connection between the storyteller (themselves) and their audience.

https://www.youtube.com/watch?v=ev5JqIJvbiE

Intro Case: GoPro

The brand's slogan: GoPro- Be a HERO sums up the company’s deeper motivations to not just capture a moment, but also create, broadcast and develop recognition for the consumer.

According to Nick Woodman, the founder of GoPro, “Success begins with understanding the customer’s needs and motivations.”

GoPro accomplishes this in their understanding of how to wrap technology around humans needs so that it matters to people.

Article 1: GoPro Sees Opportunity in Its Amateur Daredevils

● This article discusses how GoPro is on the way to becoming a more media focused company

● Recently GoPro has become more well-known on YouTube and other Internet sites because of the adrenaline-soaked videos

● If GoPro can build up their media business it could help fortify their business in a market where smartphones and tablets have devastated dedicated cameras

● GoPro is now reaching different markets such as Microsoft with Xbox game consoles and they recently began working in television and film

● GoPro has sponsored athletes such as Kelly Slater and Shaun White who shoot themselves in action

Case Study: Harnessing the Power of Online Social Influence

In today’s world people are constantly sharing their brand experiences with friends and family over the internet. Because of this marketers focusing on getting people to interact with their brands online in positive ways.Examples of these interactions: ● Online brand ambassadors● Using existing online influentials and social networks● Developing conversation-provoking events and videos

Ford Fiesta Movement CampaignFord gave away Fiestas to 100 20-something Millennials for six months. During these six months the “Fiesta Ambassadors” shared their experiences via blogs, tweets, Facebook updates, and Youtube posts. The campaign generated 58% pre-launch awareness with 4.3 million YouTube views, 50,000 sales leads, and 35,000 test drives.

Article 2: Consumer Activity in social media: Managerial approaches to consumers’ social media behavior

● Consumers today are constantly sharing knowledge about products and it is assumed it is done via social media

● Recent studies suggest that consumers are not necessarily as active online as many have believed

● By offering a more detailed description of the differences in consumers’ use of social media we were able to see more research on consumer related activities that were related to user-created content

● Consumers' online behavior is developing at a fast rate, consumers are taking part in a variety of activities ranging from consuming content, participating in discussions, and sharing knowledge with other consumers contributing to other consumers' activities

● This research found 15 activities grouped together under three themes that helped organize suggested managerial strategies related to different levels of consumer activity

● Overall this study helped give tools to uncover managerial challenges and for planning responses to consumer activities

Case Study: Pet Owner Lifestyles-and Marketing to Them

● 62 percent of all households in the U.S. own at least one pet.

● Pet owners in the U.S. spend more than $50 billion a year on pets, which is more than the gross domestic product of all but 72 countries in the world.

● Pet owning is a specific lifestyle segment and marketers find success in being able to successfully target this large, growing group.

● “For many devoted pet parents,having a pet affects just about every decision they make”

Case Study: Pet Owner Lifestyles - and Marketing to Them

● The “Dream Dog” program at The Benjamin Hotel in New York City○ Provides dog beds in a variety of styles, plush doggie bathrobes, canine

room service, DVDs for dogs, spa treatments, etc.○ “We understand that you pet is a special addition to your family.”

● Pet Airways○ Serves nine U.S. cities using twenty aircraft○ Climate controlled cabins with cages only○ Pet owners can track their pets using the company website

Companies such as these saw an opportunity to specifically target the pet owner lifestyle and problems that can arise while having a pet during travel. Understanding these needs in the travel industry has led to success for them both.

Article 3: PET.

● Nestle Purina Petcare has been strengthening their bonds between pet owners and the stores they shop in through marketing strategies

● They created a website called “Tales for the Pet Lover’s Heart” because they felt it was important for shoppers to buy pet food from companies that actually care about their pets

● Nestle Purina has continuously presented out of the box strategies that have better helped them connect with their pet consumers and market better to them

Company Case: Porsche: Guarding the Old While Bringing in the New

● Porsche is a company that has always been niche, and that makes cars for a distinctive group of financially successful buyers

● Must Porsche buyers consider the car like a piece of clothing, something that they wear and are seen in, which means that they care about their appearance

● Because of the car’s high expense, it is obvious that they thoroughly enjoy driving the car, or they would resort to driving a car of average value

● However, Porsche encountered a problem...Were there enough buyers to keep the company afloat? ○ In order to grow, the amount of buyers must increase at least a little in time ○ This led to Porsche thinking outside the box and extending their brand○ They introduced a new car, the 914. This:

■ was cheaper than the 911■ increased sales

● However, this did not fix everything, but Porsche did not give up without a fight...○ They revamped their cars to have a more “race-like” engine and body○ They began to appeal to their original group of buyers once again○ By 2002, they introduced the SUV

Interview Highlights

● Reece Gonzalez- sales associate● Best Buy markets typically online, but also prints advertisements and eals

on the receipt so customers always have access to our information.● Best Buy’s target market can really apply to any age or demographic

group as they have many products that can appeal anywhere from children in entertainment to a businessman working on a presentation for work.

● Best Buy makes sure they can reach the appropriate target market by having demonstrations set up of the variety of products in the store available to try out and see how the product or service performs.

● The holidays is obviously a big shopping time of year, but the products range throughout the year so there is no particular trend they follow.

Interview Highlights Cont’d

● Best Buy influences customers to buy and remain loyal by implementing exceptional customer service and making sure that they meet all of the customers’ wants and needs. “They need to be recognized as more than a customer and know that we value their concerns and demands.” - Gonzalez

● Usually any company that markets electronics has to come out with something new or at least enhance the current product. Best Buy’s job is to market these new products that come out.

● The most important characteristic of a good marketing campaign according to Best Buy is being able for the customer to get hands on, try out, and view the product so that they can trust in their decision to purchase a product.

● “It is important to educate consumers on what we have to offer and why we are the best. If e do not have what the customer wants, if we cant get it we will. Even ship it to them.” - Gonzalez

● Unlike other stores in this particular competitive market, Best Buy is able to carry both appliances and electronics, not one or the other.

Works CitedArmstrong, Gary. "Consumer Markets and Consumer Buyer Behavior." Principles of Marketing. By Philip Kotler. 15th ed. Upper Saddle River: Pearson Education, 2014. 134-65. Print.

http://www.toms.com/

Gallagher, J. (2010). Pet. Supermarket News, 58(41), Retrieved from http://eds.a.ebscohost.com.prox.lib.ncsu.edu/ehost/detail?sid=4ca28ddf-c3c3-481b-8eb0-93ba0078f368@sessionmgr4004&vid=2&hid=4202&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl

Heinonen, K. (2011), Consumer activity in social media: Managerial approaches to consumers' social media behavior. Journal of Consumer Behaviour, 10: 356–364. doi: 10.1002/cb.376

(2013, April 22). Sharing is selling - ford fiesta - gamification. Retrieved from iGamify website: http://www.igamify.com/_blog/Blog/post/sharing-is-selling---ford-fiesta---gamification/

(2014, March 7). Wardrobe interview. Retrieved from Youtube website: https://www.youtube.com/watch?v=ySjlNbgDMWE

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http://www.responsiblebusiness.eu/display/rebwp4/3.+Consumer+Behaviour

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uo_mobile_iphone_app

Wingfield, N. (2014, Jan 30). Gopro sees opportunity in its amateur daredevils. The NewYork Times, Retrieved from http://www.nytimes.com/2014/01/31/technology/gopro-works-on-its-brand.html?_r=2

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