Figure 5.5: Consumer Buying Roles
Lecture 8
The term customer refers to the purchaser of a product or service whereas the term consumer refers to the end user of a product or service. A customer is
Different Types of Customers
Customer definition :a person who buys goods or services from a shop or business.a person of a specified kind with whom one has to deal.retain customers
Customer typesLoyal Customers- less in numberscompletely satisfiedwant individual attentionDiscount Customers- when offered with discounts buy only low cost products. Impulsive Customers- urgenot particularly looking for ahigh percentage of selling.
Customer typesNeed Based Customers- product specific showing thempositive interaction. Wandering Customers- least profitable not sure what to buy. not buy any of those or show least interest in buying. develop a sense of interest.
Customer typesfocus loyal customersimpulsive customers. For other types of customers turning out these customers to loyal and impulsive category.satisfy their needsOrientation of Customers
Orientation of Customers
orientation of customer means how the customers preferences are possessed or in what areas of business the customers are conscious. Cost Oriented Customers-least costs productscompromise on efficacy, performance and quality.prone to loss as when they have sudden problemsrepair costly machines by local vendors and blame to company for any problem
Orientation of Customers
blame to the original supplier and he then has to pay for that.ready to buy second hand products and then challenging it to perform as a new one.running for payment from these customers.Value Oriented Customers- stick to efficient and high performing productshigher initial capital cost and then enjoy the cost free benefits in future. relationship with suppliers as they are the satisfied customers.
Orientation of Customers
Technology Oriented opt for best technology newest technological environment. innovative and have zealcreating new referralsidentify the specific customer needs and transact accordingly.
Industrial vs DomesticFactorsIndustrialDomesticTypes of buyingMicro(product info in detail)Macro Role Of packagingSafetyPromotionPrice negotiationMore with sellerNot so muchMethod buyingOrder size large and complexRetail small size Dominating factorBuy by head buy by heartInfluencePublic relationAdvertising Proposed solicitationDetailed written proposalRarely needs proposalIndustrial vs DomesticFactorsIndustrialDomesticImpulse buyingAlmost absent in manufacturerDomestic buyerExample of buyingNumber of customersLimited number of buyerUnlimitedMotive behind buyingNeed of requirement take more time and price highLittle time, lesss risk, low in priceUse of computerUserarelyParticipants in consumer buying decision
The consumer market consists of all the individuals and households who buy or acquire goods and services for personal consumption. Participants in consumer buying decisionAutomatic :Husband dominated/Wife dominated/Syncretic (consult to many)InitiatorInfluencesDeciderBuyerUserFigure 5.5: Consumer Buying RolesDeciderBuyer User InfluencerInitiatorKeyFamilyDecisionRoles16Figure 5.5 Consumer Buying Roles p 166
The marketer needs to know which people are involved in the buying decision and what role each person plays. Figure 5.5 shows that people might play any of several roles in a buying decision: initiator, influencer, decider, buyer and user.A company needs to identify who occupies the various roles because this information affects product design and advertising message decisions.
Consumer BehaviourConsumer Behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.A Model of Consumer Behaviourconsumers buy, who buys, how they buy, when they buy, where they buy and, most importantly, why they buy.The central question is: How do consumers respond to the various marketing stimuli the marketing organisation might use? 18A Model of Consumer Behaviour p 152Consumers make buying decisions every day, and they make many different types of purchases. Most marketers undertake consumer research to try to learn more about what consumers by, who buys, how they buy, when they buy, where they buy and, most importantly why they buy. The central question is this: how do consumers respond to the various marketing stimuli the marketing organisation might use? The marketing organisation that really understands how consumers will respond to different product features, prices and advertising appeals has a great advantage over its competitors. Therefore, companies and academics have heavily researched the relationship between marketing stimuli and consumer response. Characteristics Influencing Consumer BehaviourConsumer purchases are strongly influenced by two groups of factors. internal characteristics that determine our behaviour:psychological Personalexternal influences that represent the environment in which the individual behaviour takes place: cultural and social 19Characteristics Influencing Consumer Behaviour p 153
Consumer purchases are strongly influenced by two groups of factors. First there are internal characteristics that determine our behaviour: psychological and personal. Then there are external influences that represent the environment in which the individual behaviour takes place: cultural and social. For the most part, the marketer cannot control the factors that influence consumer behaviour, but they must be taken into account.
120How Consumer Influences Drive Marketing Decisions
20The model also shows the major sources of consumer influence that marketing managers should understand when they are developing marketing strategy to solve consumer problems.Direct students to study Exhibit 1.5: The consumer behaviour audit. (See pages 13-15.)Figure 5.2: Factors Influencing Consumer BehaviourCulturalCultureSubcultureSocial ClassSocialHousehold typeReference groupsRoles & statusPsychologicalMotivationPerceptionLearning (memory)Beliefs & attitudesPersonality & self-conceptPersonalAge & lifecycle stageOccupationEducationEconomic situationBuyers responsesProduct service & category selectionBrand selectionReseller selectionPurchase timing & repurchase intervalsPurchase amountMarketing programsMarketing objectivesMarketing strategyMarketing mixEnvironmental influencesEconomicTechnologicalPoliticalConsumer
BUYER DECISION PROCESS
LifestyleExperiences21p.154
Psychological InfluencesMotivationPerceptionLearningBeliefs and Attitudes
23Psychological Factors pp 153-158As marketers we are intent on predicting buyer behaviour. Among other discipline, many branches of psychology have led to our present scientific knowledge of consumer behaviour. We look now at how a persons buying choices are influenced by four major psychological factors motivation, perception, learning, and beliefs and attitudes.
Figure 5.3:Maslows Hierarchy of NeedsSelf-EsteemBelongingnessSafetyPhysiologicalSelfActualisation
24Maslows hierarchy of needs is shown in Figure 5.3 p 157
According to Maslow, a person tries to satisfy the most important need first. When that important need is satisfied, it ceases to act as a motivator and the person will try to satisfy the next most important need. For example, a starving person is unlikely to be interested in the latest happenings in the art world (self actualisation), neither in how others see them (social or esteem needs), nor the whether the air they breathe is clean (safety).
Motivation researchers collect in-depth information from small samples of consumers to uncover the deeper motives for their product choices. They use non-directive depth interviews and various projective techniques to throw the ego off guard techniques such as word association, sentence completion, picture interpretation and role-playing. Motivation researchers have reached some interesting and odd conclusions, however, it is still useful for understanding consumer behaviour.
Perception :the ability to see, hear, or become aware of something through the senses.
Perception
Perception
Perception
Learning is the act of acquiring new, or modifying and reinforcing, existing knowledge, behaviors, skills, values, or preferences and may involve synthesizing...Learning is the act of acquiring new, or modifying and reinforcing, existing knowledge, behaviors, skills, values, or preferences and may involve synthesizing...
Psychological Factors: Beliefs and AttitudesThrough acting and learning, people acquire their beliefs and attitudes A belief is a descriptive thought or conviction that a person holds about something, and involves holding an opinion.Incorrect beliefs about product features or brand image can block sales.
34Psychological Factors 4. Beliefs and Attitudes pp 158-160Through acting and learning people acquire their beliefs and attitudes. These in turn influence their buying behaviour. A belief is a descriptive thought or conviction about something, and involves holding an opinion. Incorrect beliefs are held. An attitude describes a persons relatively consistent evaluations, feelings and tendencies towards an object or an idea.One model of attitudes, the tricomponent attitude model, suggests that three major components are involved: cognitive (beliefs and evaluations not influenced by emotion), affective (emotional responses such as liking or dislike) and conative (intention to purchase or the purchase itself) (p160).Because attitudes are usually developed over a long time, it is often a lengthy, expensive and sometimes fruitless task for a marketer to set out to change a persons beliefs or feelings about a product. It is more likely they can alter the behavioural component. This is one reason why cut-price specials or sales are offered for products whose sales levels are not as high as the marketer desires. Psychological Factors: Beliefs and AttitudesAn attitude describes a persons relatively consistent evaluations, feelings and tendencies towards an object or ideaPeople have attitudes towards political parties, music and food types as well as companies and brands
35p. 158-160 Attitudes influence all evaluation. For example, a buyer might believe that a particular company makes the best mobile phones and another company makes the best computers.Personal InfluencesA buyer's decisions are also influenced by personal characteristics such as:
Age and life-cycle stageOccupationEducationEconomic situationPersonality & Self ConceptConsumer lifestyle
36Personal influences pp 161-163A buyers decisions are also influenced by personal characteristics such as:Age and life-cycle stage p161-People change the goods and services they buy over their lifetime. Clothes, furniture and leisure pursuits are also age-related. Buying is also shaped by the stage of the family lifecycle (Table 5.1).Occupation p161--A persons occupation affects the goods and services bought. Blue-collar workers versus white-collar workers. Marketers try to identify the occupational groups that have an above average interest in their products and services.Education p162--A persons education level is one factor that determines social class. Those with higher education levels tend to hold position that influence such things as standard of dress and computer usage. They tend to place a high value on information and education for their children.Economic situation p162--A persons economic situation will affect product choice. People will consider buying an expensive new sports car only if they have enough disposable income, savings or borrowing power. Marketers of income-sensitive goods such as motor vehicles closely watch trends in personal income, savings and interest rates.Personality and self-concept p 162--Each persons distinct personality influences his or her buying behaviour. Personality is perhaps the most complex of all aspects of human makeup. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to our environment. Personality is closely tied to motivation and is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability and aggressiveness. Personality can be useful for analysing consumer behaviour. Many marketers use a concept related to personality a persons self-concept (self-image). The basic premise is that we are what we have. Thus in order to understand consumer behaviour the marketer must first understand the relationship between self-concept and possessions.
Consumer lifestyle pp162-3 People coming from the same subculture, social class or occupation might have quite different lifestyles. Lifestyle is our pattern of living expressed in our psychographics.Language, beliefs, values, norms, behavior and material objects that are passed from one generation to nextCultural factors exert the broadest and deepest influence on consumer behaviour. Marketers need to understand the role played by:culture, subculturesocial class
Cultural Factorshttp://www.corona-extra.net/n_gallery/gcoro015.jpg
38Cultural Factors pp 163-164Culture p163 The set of basic values, perceptions, wants and behaviours leaned by a member of society from family and other important institutions. Culture is a major influence on our wants and general behaviour. Global marketers must be fully aware of the cultures in each market where sales are sought, and adapt their marketing strategy accordingly.Subculture p 163The now dominant cultures developed mainly from an Anglo-Saxon base followed by a European influence. Today there are many subcultures smaller groups of people with shared value systems based on common life experiences and situations. Subcultural background and religion, race and geographical situation, or those of partners and family, influence the interest of buyers in various goods and services. Social class p164Almost every life form and society has some kind of pecking order or social class structure. Social classes are relatively permanent and ordered divisions in a society whose members share similar values, interests and behaviours. Marketers are interested in social class when it is relevant, because people within a given class tend to exhibit similar behaviour, including buying behaviour. Although there is a class system in Australia, the groups are so large as to make them ineffective as market segments.
PK Example
Social influencesA consumer's behaviour is also influenced by social factors, such as the consumer's household type and reference groups, as well as social roles and status.These social factors can strongly affect consumer responses, companies must take them into account when designing their marketing strategies.42Social influences p 164-166A consumers behaviour is also influenced by social factors, such as the consumers household type and reference groups, as well as social roles and status. Because these social factors can strongly affect consumer responses, companies must take them in to account when designing their marketing strategies. Social influencesHousehold types: changing lifestyles and buying roles affect marketing decisionsGroupsMembership groupsReference groupsOpinion leadersRoles and Status43Household types p164The members of a persons household can strongly influence buyer behaviour. We can distinguish between three household types in the buyers life. The buyers parents make up the family of orientation. The family of procreation, the buyers spouse and children, exert a more direct influence on everyday buying behaviour. Changing roles and lifestyles affect marketers efforts e.g. women buying cars, men buying food for the household.Groups p165 A persons behaviour is influenced by many small groups. Those with a direct influence and to which a person belongs are membership groups. Many small groups influence a persons behaviour. Groups that have a direct influence to which a person belongs are called membership groups. Some are primary where there is regular but informal interaction (family friends, co-workers), some are secondary groups, which are more formal and have less regular interaction (religious groups, professional associations and trade unions).
Reference groups are those that serve as a direct or indirect point of comparison. Reference groups influence people by exposing them to alternative lifestyles; influencing attitudes and self-concept (the desire to fit in); and creating pressures to conform which may affect consumers product and brand choice.
Mostly, groups with the strongest ties and influence over buyer behaviour are Kinship groups such as family.
Opinion leaders: People within a reference group who, because of special skills, knowledge, personality or other characteristics, exert influence on others.Marketers try to identify the personal characteristics of opinion leaders for their products, determine what media they use and direct messages at them.Roles and status p166: We belong to many groups family, clubs, and organisations. Our position in each group can be defined in terms of both role and status. With her parents, a woman plays the role of daughter; in her family, she plays the role of the wife; in her company, she plays the role of product manager. A role is the activities people are expected to perform according to those around them. Each role carries a status reflecting the general esteem given to it by society.
PublicLuxuriesPublicNecessitiesPrivateLuxuriesPrivateNecessitiesGroup Influence on Product ChoiceStrongWeakGroup Influence on Brand ChoiceStrongWeakFigure 5.4: Extent of group influence on product and brand choice44Figure 5.4 Extent of group influence on product and brand choiceGroups p 165
Public luxuries might include Golf clubs, Skis, Boat
Private luxuries might include TV games, garbage disposal, icemakers
Public necessities might include watches, cars, clothes
Private necessities might include mattresses, lamps and refrigeratorsFamily and Lifestyle InfluencesFamily InfluencesAge and Life Cycle StageOccupationEconomic SituationLifestyle IdentificationActivitiesOpinionsInterests45Factors affecting family influences leading to lifestyle identification Family and Lifestyle Influences p 158Consumer lifestyle p 158-People coming from the same subculture, social class or occupation might have quite different lifestyles. Lifestyle is our pattern of living as expressed in our psychographics.Lifestyle: A persons pattern of living as expressed in his or her activities, interests and opinions. Psychographics: The technique of measuring lifestyles and developing lifestyle classifications; it involves measuring the major AIO dimensions (activities, interests, opinions).Lifestyle captures something more than just social class or personality. It profiles a persons whole pattern of acting and interacting in the world. In Australia, the Roy Morgan Research Centre operates omnibus research into consumer opinions and trends. When used carefully, the lifestyle concept can help the marketer to understand changing consumer values and how they affect buying behaviour.
