Dr. Chen, Principle of Marketing Part 3 Part 3 CUSTOMER BEHAVIOR AND E-MARKETING.

Dr. Chen, Principle of Marketing

Part 3CUSTOMER BEHAVIOR AND E-MARKETING.


6: Consumer Buying Behavior

7: Business Markets and Buying Behavior

8: Reaching Global Markets

9: Digital Marketing and Social Networking


Chapter 6Consumer Buying Behavior

Professor Jason C. H. Chen, Ph.D.

School of Business Administration

Gonzaga University

Spokane, WA 99258

[email protected]

Dr. Chen, Principle of Marketing4

To recognize the stages of the consumer buying decision process

To understand the types of consumer decision making and the level of involvement

To explore how situational influences may affect the consumer buying decision process

To understand the psychological influences that may affect the consumer buying decision process

To examine the social influences that may affect the consumer buying decision process

To examine consumer misbehavior

Learning Objectives


Buying behavior It is the decision _________ and _______ of

people involved in buying and using products

Consumer buying behavior: It refers to the buying behavior of ultimate

consumers. Products are purchased for personal or household

use and not for business purposes

Buying Behavior

processes actions


Understanding Buying Behavior

Customers’ overall opinions and attitudes toward a firm’s products have a great impact on the firm’s success

To find out what satisfies buyers, marketers must examine the main influences on what, where, when, and how consumers buy.

By gaining a deeper understanding of the factors that affect buying behavior, marketers are in a better position to predict how consumers will respond to marketing strategies

7-6Copyright © 2014 South-Western, Cengage Learning. ALL RIGHTS RESERVED.


Affected by the following influences: ____________

Surroundings, time, purchase reason, and buyer’s mood and condition

____________ perception, motives, learning, attitudes, personality and

lifestyles

________ Roles, family, reference groups and opinion leaders, culture

and subculture

Not all decision processes lead to a purchase Not all consumer decisions include all five stages

Consumer Buying Decision Process

Situational

Psychological

Social


Figure 6.1 - Consumer Buying Decision Process and Possible Influences on the Process

[1] [2] [3] [4] [5]


1. Problem Recognition Stage

Occurs when a buyer becomes aware of a _________ between a desired state and an actual condition. Speed of consumer problem recognition

can be rapid or slow Some consumers are unaware of their

problems or needs Marketers use sales personnel, advertising,

and packaging to help trigger recognition of such needs or problems


difference


1. Problem Recognition Stage

Occurs when a buyer becomes aware of a _________ between a desired state and an actual condition. Speed of consumer problem recognition

can be rapid or slow Some consumers are unaware of their

problems or needs Marketers use sales personnel, advertising,

and packaging to help trigger recognition of such needs or problems


difference


2. Information Search

• Buyers search their memories for information about products that might solve their problem

_________ search

• Buyers seek information from sources other than their memories

_________ search

Internal

External


Consideration set: Group of _______ within a product category that a buyer views as possible alternatives

Evaluative criteria: To assess the products in a consideration set, the buyer use

evaluation criteria: objective (e.g., size) and subjective (style) product characteristics that are important to a buyer

Marketers influence consumers’ evaluations by framing the alternatives by: Describing the alternatives and their attributes in a certain

manner

3. Evaluation of Alternatives

brands


4. Purchase Stage

The buyer: Chooses the product or brand to be bought

Product __________ may influence the decision

Chooses the seller Negotiates the terms of the transaction Makes the actual purchase or terminates the

process


availability


Cognitive dissonance: ________ in buyer’s mind about whether decision to buy certain product was right Cause

Purchase of _________ , high-involvement product lacking desirable features of competing brands

Lessened by contacting recent customers regarding the purchaseMarketers sometimes attempt to reduce cognitive

dissonance by having salespeople call or e-mail recent customers to make sure they are satisfied with their new purchase.

5. Post-purchase Evaluation

Doubts

expensive


Degree of interest in a product and the importance the individual places on that product

High-involvement products - Visible to others and are expensive

Low-involvement products - Less expensive and have less associated social risk

Level of Involvement


Level of Involvement

• Long-term and ongoing interest in a product or product category

Enduring involvement

• Temporary and dynamic and results from a particular set of circumstances

Situational involvement


Loyalty to a specific brand

Factors Influencing Level of Involvement

Product categories

sports

Interest in a specific advertisement

funny commercial

Medium

TV show

Certain decisions and behaviors

a love of shopping


Table 6.1 - Consumer Decision Making

• Routinized response: when buying frequently purchased, low-cost item that require very little search-and-decision effort.

• Limited: when they purchase products occasionally or from unfamiliar brands in a familiar product category – need more time.

• Extended: occurs with high-involvement, unfamiliar, expensive, or infrequently purchased items – e.g., car, home


Consumer Decision Making Strategies

7-19

ConsumerBuying

Behaviors

RoutinizedResponse

LimitedProblemSolving

ExtendedProblemSolving

ImpulseBuying

Copyright © 2014 South-Western, Cengage Learning. ALL RIGHTS RESERVED.

Impulse buying – An unplanned buying behavior resulting from a powerful urge to buy something immediately

When have you made a purchase solely on impulse?

Were you satisfied or dissatisfied with the purchase?

• Most students probably will indicate they have purchased a product on impulse.

• Typical impulse products include candy, a compact disc, or a pair of jeans.


Consumer Decision Making

• Buying frequently purchased, low-cost items that require very little search-and-decision effort

Routinized response behavior

• Purchasing products occasionally or from unfamiliar brands in a familiar product category

Limited decision making

• Occurs with high-involvement, unfamiliar, expensive, or infrequently-purchased items

Extended decision making

• No conscious planning and stems from a powerful urge to buy something immediately

Impulse buying


Situational Influences on the Buying Decision Process

7-21

SituationalInfluences

PhysicalSurroundings

Social Surroundings

TimeDimension

PurchaseReason

Mood of Consumer



Possible Influences on the Decision Process



Situational Influences

Influences that result from circumstances, time, and location that affect the consumer buying decision process Can influence the decision making process (buyers) at ____

stage Cause the individual to shorten, lengthen, or terminate the

process

Five categories of situational influences: Physical surroundings Social surroundings Time perspective Reason for purchase Buyer’s momentary mood and condition


any


Psychological Influences on the Buying Decision Process

7-24

Psychological Influences

Perception

MotivesLifestyle

Personality and Self-Concept

Learning

Attitudes


Factors that in part determine people’s general behavior, thus influencing their behavior as consumers Operate on buyers internally, but are acted

on by outside forces :


Partly determine people’s general behavior and influence their behavior as consumers

Strongly affected by external social forces Consumer behavior based psychological

influences Perception Motives Learning Attitudes and personality Self-concept and lifestyles

Psychological Influences


The Perception Process

7-26

1

3 2

Selective Exposure

Selective Distortion

SelectiveRetention


[1]

[2][3]


Perception is the process of selecting, organizing, and interpreting information inputs to produce meaning

Information inputs: Sensations received through sight, taste, hearing, smell, and touch

Perception process 1) Selective _________ : Selecting some sensory inputs

and ignore others 2) Perceptual ____________: Organizing and integrating

new information with what is stored in memory 3) Interpretation: Assigning meaning to what has been

organized

Perception

exposure

organization


Selective Exposure

• Changing or twisting of information that is inconsistent with personal feelings or beliefs

• It occurs when a person receives information inconsistent with personal feeling or beliefs.

Selective _________

• Remembering information inputs that support personal feelings and beliefs and forgetting inputs that do not

Selective _________

distortion

retention

The selective nature of perception may also result in two other conditions.


Probability that seller’s information never ________ the target

Buyer receives information but perceives it differently than was intended

Buyers who perceive information inputs to be inconsistent with prior beliefs will forget the information quickly

Problems in Perception

reaches


Internal energizing force that directs a person’s activities toward satisfying needs or achieving goals Buyers are affected by a set of motives rather than by

just one. Physical feelings, states of mind, or emotions

Maslow’s hierarchy of needs: Humans seek to satisfy five levels of needs from most to least basic to survival

Patronage motives: Influence which establishments a customer frequents

Motive


Figure 6.2 - Maslow’s Hierarchy of Needs

Physiological needs

Safety needs

Social needs

Esteem needs

Self-actualization needs

• Basic level• Requirements for survival such

as food, water, clothing etc.

Life insurance

Social acceptance (love and affection)

Respect, recognition

People’s needs to grow and develop


Changes in a person’s thought processes and behavior caused by information and experience

Consequences of behavior influences learning behavior

Customers learn about products through __________ Indirect experience - Salespeople, advertisements, websites,

friends, and relatives However, marketers may encounter problems in attracting

and holding consumers’ attention, providing them with information for making purchase decisions, and convincing them to try the product.

Learning

experience


Enduring evaluation of feelings about and behavioral tendencies toward an object or idea

Develops toward something that is: Tangible or intangible Living or nonliving

Acquired through: Experience Interaction with other people

Attitude


Components of Attitude

• Knowledge and information about the object or idea

Cognitive

• Feelings and emotions toward the object or idea

Affective

• Actions regarding the object or idea

Behavioral


Attitude - Academic Models

• Used to understand and predict consumer’s attitude• Consists of elements that combine to form the overall attitude

• Beliefs about product attributes• Strength and evaluation of beliefs

Attitude Toward the Object Model (Fishbein model)

• Focuses on intentions to act or purchase• Considers consumer perceptions of what other people believe is

the best choice among a set of alternatives

Behavioral Intentions Model (Theory of Reasoned Action)


Attitude scales usually consists of a series of adjectives, phrases, or sentences about an object

Used to indicate the intensity of individual feelings toward the object by reacting to the adjectives, phrases, or sentences E.g., measuring people’s attitudes toward shopping

might ask respondents to indicate the extent to which they agree or disagree with a number of statements, such as “shopping is more fun than watching TV.”

Attitude Scales


Internal traits and behavioral tendencies resulting in consistent patterns of behavior in certain situations

Influences types and brands of products purchased Marketers aim advertising for specific personality

types Self concept (image): Perception or view of oneself

Buyers purchase products that reflect and enhance their self-concepts

Purchase decisions are important to the development and maintenance of a stable self-concept

Personality


A lifestyle is an individual’s pattern of living expressed through: Activities Interests Opinions

Influences: Consumers’ product needs Brand preferences Choice of media How and where individual shop

Lifestyle


Types of Social Influences

Social influences: Forces other people exert on one’s buying behavior

• Actions and activities performed based on expectations of the individual and surrounding persons

Roles

• Directly impact consumer buying decision process

• Consumer socialization: Process through which a person acquires the knowledge and skills to function as a consumer

Family influences

• A group that a person identifies with so strongly that he or she adopts the values, attitudes, and behavior of group members

Reference groups


Types of Social Influences

• Member of an informal group who provides information about a specific topic to other group members seeking information

Opinion leader

• An open group of individuals with similar social rankSocial class

• Accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment and passes on to future generations

Culture

• Group of individuals whose characteristics, values, and behavioral patterns are:• Similar within the group • Different from other group

Subculture


Table 6.2 - Types of Family Decision Making


Table 6.3 - Examples of Opinion Leaders and Topics


Criteria for Grouping People in to Classes

Occupation and education

Income and wealth

Race and ethnicity

Group

Possessions


Table 6.4 - Social Class Behavioral Traits and Purchasing Characteristics for Upper Americans

Class (Percent of Population)

Behavioral Traits Buying Characteristics

Upper-upper (0.5) • Social elite• Of aristocratic, prominent

families• Inherited their position in

society

• Spend money on private clubs, various causes, and the arts

Lower-upper (3.8) • Newer social elite• Successful professionals

earning very high incomes• Earned their position in

society

• Purchase material symbols of their status

• Provide a substantial market for luxury product offerings

Upper-middle (13.8) • Career-oriented, professional degree holders

• Demand educational attainment of their children

• Provide a substantial market for quality product offerings

(28.1%)


Table 6.4 - Social Class Behavioral Traits and Purchasing Characteristics for Middle Americans



Middle class (32.8)

• Work conscientiously and adhere to culturally defined standards

• Average-pay white-collar workers

• Price sensitive• Spend on family-

oriented, physical activities

Working class (32.3)

• Average-pay blue-collar workers

• Hold jobs that entail manual labor and moderate skills

• Some are union members

• Reside in small houses or apartments in depressed areas

• Impulsive as consumers yet display high loyalty to national brands

• Seek best bargains

(65.1%)


Table 6.4 - Social Class Behavioral Traits and Purchasing Characteristics for Lower Americans



Upper-lower (9.5) • Low-income individuals who generally fail to rise above this class

• Reject middle-class morality

• Living standard is just above poverty

• Frequently purchase on credit

Lower-lower (7.3) • Poverty stricken• Some are unemployed• In spite of their problems,

often good-hearted toward others

• May be forced to live in less desirable neighborhoods

• Spend on products needed for survival

• Able to convert discarded goods into usable items

(16.8%)


Behavior that violates generally accepted norms of a particular society Shoplifting Consumer fraud Piracy Abusive consumers

Consumer Misbehavior


Table 6.5 - Motivations for Unethical or Illegal Misbehavior


Video Case 6.1

STARBUCKS REFINES THE CUSTOMER EXPERIENCE


Summary Starbucks is popular in the United States thanks to its focus

on the customer experience. While the company continues to improve its American stores through innovations such as mobile pay, Starbucks is also expanding globally, especially in Asian markets. It is also diversifying; Starbucks recently purchased premium-juice company Evolution Fresh and is adding the company’s nutritious blended drinks to the traditional Starbucks menu. Starbucks plans to open more Evolution Fresh stores as the demand for healthy foods increases. The company is also competing with energy drink companies after releasing its all-natural Starbucks Refreshers. Starbucks is also promoting its focus on social responsibility.


1. In terms of situational influences and level of involvement, what are the benefits of mobile pay?

Starbucks is working to keep customers involved by

creating routinized response behavior. Mobile pay reduces search-and-decision effort, and the ease of payment and accumulation of Starbucks rewards makes it easy for their customers to prefer Starbucks as a brand.

Starbucks is also taking advantage of customers’ momentary conditions to make sure they have an easy and fast way to pay.


2. With Evolution Fresh, which psychological influences on consumer buying decisions does Starbucks seem to be addressing?

Motives, attitudes, personalities, and lifestyles are all

important to Starbucks. With Evolution Fresh, Starbucks is primarily addressing consumers’ attitudes, especially perceptions and interpretations of the company.

By providing products such as smoothies, juices, salads, and wraps, Starbucks is creating the impression that it cares about consumers’ health and is working to fit into their healthy lifestyles.


3. Why would Starbucks want customers to know that it believes in social responsibility?

Starbucks wants to improve consumers’ perceptions and

interpretations of the company and its actions. If consumers believe the company values ethical and socially responsible behavior, they will be more involved with the brand and more willing to purchase the company’s products.

Dr. Chen, Principle of Marketing Part 3 Part 3 CUSTOMER BEHAVIOR AND E-MARKETING.

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