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Consumer Markets and
Consumer Buyer Behaviour
Lecture 3
January 27, 2012
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Class Objectives for Today
Identify the Major Models of ConsumerBehaviour
Outline the Major Characteristics
Affecting Consumer Behaviour Distinguish the Major Consumer Buying
Roles
Explain the Buyer Decision Process
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CONSUMER BUYING BEHAVIOUR
Marketers are forced to understand and be cognizant ofthe buying behavior of the consumer, especially withtodays technologically savvy and well informedconsumers.
Consumer buyer behaviour refers to the buying behaviour of final consumers individuals and householdswho buy goods and services for personal consumption. Allof these final consumers combine to make up the
consumer market.
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CONSUMER BUYING BEHAVIOUR
Consumer market refers ..
to all the individuals and households who buy or acquire goods and services for
personal consumption.
Consumers may make many buying decisions everyday and hence consumer buyer behaviour and theconsumer market are very dynamic.
Marketers can study actual consumer purchases tofind out what they buy, where and how much.
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CONSUMER BUYING BEHAVIOUR
Consumers buying
behavior is impacted by:
1. Consumercharacteristics
2. Consumer
Psychology
Consumer purchases areinfluenced strongly by:
cultural,
social,
personal and
Psychology
characteristics
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CONSUMER BUYING BEHAVIOUR
impacted by:
1. Consumer
Characteristics
I.) Cultural
II). Social
III). Personal
2. Consumer Psychology
I). Motivation
II). Learning
III). Perception
IV). Memory
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1. Consumer Characteristics
Cultural Factors These refer to beliefs,
perceptions, values, wants
and normative patterns ofbehavior that is transmittedto the individual by societyfrom family and otherimportant institutions.
Culture is the most basic
cause of a persons wants and
behaviour. Human behaviour
is largely learned.
Culture is transmitted from
generation to generation via:
i) Familyii) Church
iii) School
iv) Groupsv) Media
vi) Peers
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Consumer Characteristics
Culture
Impact on marketing:
Both culture and subculture
will impact the buyingbehaviour of consumers.
Consumer products/services
choice, use and buyingpatterns are overwhelmingimpacted by the culturalexposure of the consumer.
Companies that are able
to absorb multicultural
activities and strategies
in their overall marketing
programs are at an
advantage in capitalizingon the great potential of
this factor
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Sub Culture
Many brands target specificsubcultures:
Hispanics 50 mill- $950
mill buying po3werexpected to increase -$1.4 tr-2013
African American annualbuying $913 bil increase to$1.2 trill- 2013
Asian Americans mostaffluent 15 mil- $500 bil inspending money expected toincrease to $750 bill in 2013
Mature markets(baby boomers- By 2015 50 75
40% of adult consumers
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Consumer Characteristics
Social
Social factors
Social forces represent:
all the forces that will allowfor the social developmentand maturity of theindividual.
They are closelyintertwined in the culturalbackground of theindividual.
These include:
Reference groups
Social roles
Status
Family
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1. Consumer CharacteristicsSocial
Reference groups
All the groups thathave direct orindirect impact onan individuals
attitudes andbehavior
Groups with direct influenceare membership groups andare two types:
i) Primary
-family, friends, neighbours,
co-workers, etc.
ii) Secondary
- religious, professionalgroups, etc.
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1. Consumer Characteristics
Social
Impact on marketing:Reference groups will influence consumers in three (3)ways:
i) Exposing individuals to new lifestyles, behaviors andexperiences that will impact attitude towards brands,products, etc.
ii) Creating pressure for conformity which may impact
product choice, brand and usage rate.
ii) Exposing individuals to groups that they are hoping tobelong or whose values they reject.
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1. Consumer Characteristics
Social
Social roles andstatus
An individualmembership in a groupwill assign him roles(activities) and each rolecarries a status.
Impact on Marketing:
Consumers will selectproducts that symbolizes and
will communicate their rolesAnd ultimately their status insociety.
Marketers can maximize onthis in branding andpositioning of productsservices to the consumer.
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1. Consumer Characteristics
Social Family
This can be categorizedas the most powerfulinstitution of consumer
buying in any society.
Family structure andorganization are
implications of sociocultural orientations.
The consumer behaviour isdetermined by the familythat they were exposed to(family orientation) and this
behavior is transferred tothe family they create(family procreation)
Impact on marketing:
Changes in family size andstructure will result inchanges in the buyingbehavior of the consumer.
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1. Consumer Characteristics
Personal FactorsThese include:
1. Age, stage, and lifecycle(Sony 7 groups)
2. Occupation andeconomiccircumstances
3. Personality and selfconcept
4. Lifestyles and value.
Impact on marketing:
A. Peoples purchasing patternand choice as it relates toproducts/services will reflectchanges as they move fromage to age and as they movethrough life events situationslike marriage, childbirth,retirement, etc.
B. Economic situations can impactproduct choice and ultimatelydemand. Ones occupation maybe a strong indicator of product
consumption pattern.
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1. Consumer Characteristics
Personal Impact on Marketing:
C. Each person possesses personality characteristics andself concept that will impact his/her buying behavior.Brands are chosen based on how well the product or service fits the personality.
brand personality - is in sync with the consumers
brand personality-
this refers to the mix of human traits that can be attributedto a particular brand.
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1. Consumer Characteristics
PersonalConsumers will more than often select brands that will
have brand personalitythat are consistent with their own:
- Actual self
- Ideal self concept
- Others self concept
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1. Consumer Characteristics
Personal Impact on marketing:
D. Lifestyles and values also help to shape consumers
taste and buying patterns.
Lifestyle relates to an individuals pattern of living inthe world as expressed in activities, interests and
opinions.
Marketers can aim the brand more closely to reflectthe consumers lifestyle or changes within the lifestyle.
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2. Consumer Psychology
A persons buying choices are furtherinfluenced by four psychological factors:
a. Motivation
b. Perception
c. Learning
d. Beliefs and Attitudes
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2. Consumer PsychologyMotivation
Motivation
A motive is: a need that is sufficiently pressing to direct
the person to seek satisfaction of the need.
An aging baby-boomer who buys a sporty convertible
might explain that he likes to feel the wind thru his thinning
or bald hair or he wants to feel young again
Kotler& Armstrong, (2012) see pg 147
Numerous theories have been tabled to explain this concept
which can generally be applied to consumer behaviour.
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2. Consumer PsychologyMotivation
Maslows Theory of needs
Products/services ultimately fit into the overall plan,goals and lives of the consumer base on their situationin the hierarchy of needs.
Hertzbergs Two-factor Theory
In selling products, marketers should increase satisfiers
and decrease dissatisfiers in order to attract customers.
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2.Consumer PsychologyMotivation
Freuds Theory
Product can meet deeper innate needs of consumer basedon motives.
Products/services also represent different things toconsumer based on the projected needs by the marketer.
Freud-persons do not fully understand their motivation
An aging baby-boomer who buys a sporty convertible mightexplain that he likes to feel the wind thru his thinning or bald hair
or he wants to feel young again
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2.Consumer PsychologyPerception
Perception
Process by which people select, organize and interpret
information to form a meaningful picture of the world
Kotler & Armstrong, (2012)
It is perception and not reality, that consumers respondto which will impact their behavior in the marketplace or
marketspace.
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2.Consumer Psychology
Perception
As it relates to perception, people can form differentperceptions of the same stimulus due to perceptualprocesses :
- Selective attention
- Selective distortion
- Selective retention
- Subliminal (subconscious) perception
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2. Consumer Psychology
Perception
Research has shown thatpeople are exposed to3000-5000 messagesevery day
One cant respond toevery stimuli, use
Selective Attention-screens out most of theinformation
Some persons areaffected by advertisingbut does not know it
Subliminal (subconscious)perception
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2.Consumer Psychology
Learning and Memory
Learning
Learning relates topermanent change in
behavior arising fromexperience.
Learning is reinforced through
drives (strong internal stimuli,
cues, responses and
reinforcement
.
Memory
Information andexperiences that
individuals encounterthroughout their lives
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Model of Consumer Behaviour
Consumer
Psychology
MotivationPerceptionLearningMemory
OtherStimuli
EconomicTechnologicalPoliticalCultural Consumer
Characteristics
Cultural Social
Personal
MarketingStimuli
Products& services
Price,DistributionCommunications
BuyingDecisionProcess
Problemrecognition
InformationsearchEvaluation ofAlternativesDecisionPost-purchasebehavior
Purchase
Decision
Productchoice
BrandChoiceDealer Choice
PurchaseAmountPurchasetimingPaymentMethod.
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Summary
Consumer buying are affected by large societal factors.
Consumer buyer behaviour is influenced by four key setsof buyer characteristics: cultural, social, personal and
psychological.
Buying behaviour may vary greatly across different typesof products and buying decisions.
Consumers undertake complex buying behaviour whenthey are highly involved in a purchase and perceivedsignificant differences among brands.
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Types of Buying Decisions
Buying behaviour different greatly for different products
Some purchases are simple, habitual therefore very
routine;
Others are Complex involving extensive research egbuying a computer or a motor vehicle
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Types of Buying Decisions
Complex buying behaviourComplex buying behaviour
Buying Behaviourcharacterised by:
High consumer involvementin a purchase
Significant perceiveddifferences among brands
Usually involved if theproduct is expensive, risky,purchased infrequently &
highly self expressive.
Dissonance reducingDissonance reducingbuying behaviourbuying behaviour
Buying Behaviour
characterised by: High consumer
involvement in a purchase
Few perceived differencesamong brands
Usually involved if theproduct is expensive, risky,purchased infrequently &
highly self expressive.
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Types of Buying Decisions
Habitual buying behaviourHabitual buying behaviour
Buying Behaviourcharacterised by:
Low consumer involvementin a purchase
Few significantly perceivedbrand differences
Purchases are usually lowcost, frequently purchased,passive
VarietyVariety--seeking buyingseeking buyingbehaviourbehaviour
Buying Behaviour
characterised by: Low consumer
involvement in a purchase
Significant perceived branddifferences
Consumers can easilyswitch brands
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The Buying Decision process
This process begins long before the actualpurchase and continues long after.
Sometimes results in the non-purchase ofgoods and services
Marketers therefore must concentrate on theentire process.
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NeedRecognition
The Buying Decision Process
Information Search
Evaluation of
alternatives
Purchase Decision
Post purchase
behaviour
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The Buyer Decision Process
How can marketers learn about the stages in thebuying process:
Personal purchase experience
Interview persons
Ask consumers to describe the ideal way to buy
product
Most consumers go thru the five (5) stage BuyingProcess
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The Buyer Decision Process
1. Need recognition a need occurs when acustomer is faced with a problem or a need.
A need may occur from two states:
actual state (when a product fails to perform
satisfactorily hence a need emerges) or
desired state (desire for something new)
(might be triggered by an advt)
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The Buyer Decision Process
2. Information search and evaluation
(Consumers actively seeking)
Information search in this context relates to: the mental or physical way information is
gathered.
The search can be:
- Internal -
- External social network sites
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The Buying Decision Process
Information evaluation:
a. The more urgent the need the less evaluation will take
place
b. The more significant the product the more evaluation
c. The more complex the alternatives the greater theevaluation
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The Buying Decision Process
Information is obtained from 4 sources:
Advertisement- sales person
Commercial advts.
Non consumer advt.
eg Hospitality rating Apple AA
Personal family friends
Experiential (using the product-risk taking)
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The Buying Decision Process
The intensity of the searchheightens awareness,knowledge of availablebrands & features
3. EVALUATION OFALTERNATIVES
Short listing personal criteria
Can be subjective (impulsive
objective(consumer guides)
Careful calculation &logical thinking:
i. Trying to satisfy a need
ii. Derive benefits from theproduct
iii. Product attributes satisfyneeds
Eg shoes durabilitystyle price
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The Buying Decision Process
Purchase
decision maynot always
result in actual
purchase!!!!!
4. Purchase Decision
The buyers decision about
which brand to purchase
This is impacted by:
Attitude of others (friends)
Unanticipated situational
factors reduced income Purchase intention
Perceived risks (self esteem
Evaluation of alternatives
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The Buying Decision Process
4. Post purchase
decision
These include:
a. Post purchase action
b. Post purchase
satisfactionc. Post purchase use
and disposal
Consumer takes furtheraction after the purchasebased on satisfaction ordissatisfaction
A gap between expectationand reality results inCognitive dissonance
(state of mind that customers gothru after a purchase)
Level of dissonanceincreases with the value ofthe product.
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The Buying Decision Process
Customer satisfaction willresult in lasting relationships
It is also important that
customer satisfaction levelsbe measured periodically
As buyers go thru thebuying process some may
pass more quickly thanothers. It depends on thebuyer themselves, theproducts, and the actualbuyer situation
The marketers job is tounderstand :
the buyers behaviour at
each stage.
The attitudes of others,perceived risk,
situational factors as wellas, the consumers levelof post purchasesatisfaction & actions
Th B D i i P fTh B D i i P f
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The Buyer Decision Process forThe Buyer Decision Process for
New ProductsNew Products
New Product
A good or service or idea
that is perceived by somepotential customer as
new
(Kotler/Armstrong)
The product may havebeen on the marketbefore (how doconsumers learn about
he
Adoption process
The mental process an
individual passes fromfirst hearing about aninnovation to finaladoption.
This is the decision forthe user to become aregular user.
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Stages in the Adoption ProcessStages in the Adoption Process
Awareness theconsumer becomes awareof the innovation but lacksinformation about it.
Interest The consumer isstimulated to seekinformation about theinnovation.
Evaluation Theconsumer decided whetherit would make sense to trythe new product.
Trial The consumertries the product on asmall scale to improve hisor her estimate of itsvalue.
Adoption Theconsumer decides tomake full and regular useof the innovation.This progression suggests
that the new-productmarketer should thinkabout how to facilitateconsumer movementthrough these stages.
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Stages in the Adoption ProcessStages in the Adoption Process
HYUNDAI ASSURANCE
We got your back for one full year
(customers were protected against lost
jobs and incomes
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Questions for Review