Transcript Chapter 3 Effects of IT on Strategy and Competition

Part 3
CUSTOMER BEHAVIOR
AND E-MARKETING.
Dr. Chen, Principle of Marketing
6: Consumer Buying Behavior
7: Business Markets and
Buying Behavior
8: Reaching Global Markets
9: Digital Marketing and Social
Networking
Dr. Chen, Principle of Marketing
Chapter 6
Consumer Buying Behavior
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected]
Dr. Chen, Principle of Marketing
Learning Objectives
 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
Dr. Chen, Principle of Marketing
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Buying Behavior
 Buying behavior
processes and _______
actions of
is the decision _________
people involved in buying and using products
 It
 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
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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
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-6
Consumer Buying Decision Process
 Affected by the following influences:
Situational
 ____________
Surroundings, time, purchase reason, and buyer’s mood and
condition
Psychological
 ____________
 perception, motives, learning, attitudes, personality and
lifestyles
Social
 ________
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
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Figure 6.1 - Consumer Buying Decision Process and Possible
Influences on the Process
[1]
Dr. Chen, Principle of Marketing
[2]
[3]
[4]
[5]
8
1. Problem Recognition Stage
 Occurs when a buyer becomes aware of
difference between a desired state and
a _________
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
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-9
1. Problem Recognition Stage
 Occurs when a buyer becomes aware of
difference between a desired state and
a _________
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
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-10
2. Information Search
Internal search
_________
• Buyers search their memories for
information about products that might
solve their problem
External search
_________
• Buyers seek information from sources
other than their memories
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3. Evaluation of Alternatives
 Consideration set: Group of _______
brands 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
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4. Purchase Stage
 The buyer:
 Chooses
the product or brand to be bought
availability may influence the
Product __________
decision
 Chooses the seller
 Negotiates the terms of the transaction
 Makes the actual purchase or terminates the
process
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-13
5. Post-purchase Evaluation
Doubts in buyer’s
 Cognitive dissonance: ________
mind about whether decision to buy certain
product was right
 Cause
expensive , high-involvement product
Purchase of _________
lacking desirable features of competing brands
 Lessened
by contacting recent customers regarding
the purchase
Marketers 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.
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Level of Involvement
 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
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Level of Involvement
Enduring involvement
• Long-term and ongoing interest in a product or
product category
Situational involvement
• Temporary and dynamic and results from a
particular set of circumstances
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Factors Influencing Level of Involvement
Product categories
sports
Loyalty to a specific brand
Interest in a specific advertisement
funny commercial
Medium
TV show
Certain decisions and behaviors
a love of shopping
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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
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Consumer Decision Making Strategies
 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?
Routinized
Response
Consumer
Buying
Behaviors
Limited
Problem
Solving
Extended
Problem
Solving
Impulse
Buying
• 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.
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-19
Consumer Decision Making
Routinized response behavior
•Buying frequently purchased, low-cost items that
require very little search-and-decision effort
Limited decision making
•Purchasing products occasionally or from
unfamiliar brands in a familiar product category
Extended decision making
•Occurs with high-involvement, unfamiliar,
expensive, or infrequently-purchased items
Impulse buying
•No conscious planning and stems from a powerful
urge to buy something immediately
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Situational Influences on the
Buying Decision Process
Physical
Surroundings
Mood of
Consumer
Social
Surroundings
Situational
Influences
Purchase
Reason
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
Time
Dimension
7-21
Possible Influences on the Decision
Process
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-22
Situational Influences
 Influences that result from circumstances, time, and
location that affect the consumer buying decision
process
any
 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
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-23
Psychological
Influences on the
Buying Decision
Process
 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 :
Perception
Motives
Lifestyle
Psychological
Influences
Personality
and SelfConcept
Learning
Attitudes
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
7-24
Psychological Influences
 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
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The Perception Process
[1]
1
Selective
Exposure
[3]
3
Selective
Retention
Dr. ©
Chen,
of Marketing
Copyright
2014Principle
South-Western,
Cengage Learning. ALL RIGHTS RESERVED.
[2]
2
Selective
Distortion
7-26
Perception
 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
exposure : Selecting some sensory inputs
 1) Selective _________
and ignore others
organization Organizing and integrating
 2) Perceptual ____________:
new information with what is stored in memory
 3) Interpretation: Assigning meaning to what has been
organized
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Selective Exposure
The selective nature of perception may also result
in two other conditions.
distortion
Selective _________
• 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.
retention
Selective _________
• Remembering information inputs that support personal
feelings and beliefs and forgetting inputs that do not
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Problems in Perception
 Probability that seller’s information never
reaches 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
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Motive
 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
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Figure 6.2 - Maslow’s Hierarchy of Needs
Self-actualization
needs
People’s needs to
grow and develop
Esteem needs
Social needs
Safety needs
Physiological needs
Dr. Chen, Principle of Marketing
Respect,
recognition
Social acceptance
(love and affection)
Life insurance
• Basic level
• Requirements for survival such
as food, water, clothing etc.
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Learning
 Changes in a person’s thought processes and behavior
caused by information and experience
 Consequences of behavior influences learning
behavior
experience
 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.
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Attitude
 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
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with other people
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Components of Attitude
Cognitive
•Knowledge and information about the object or
idea
Affective
•Feelings and emotions toward the object or idea
Behavioral
•Actions regarding the object or idea
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Attitude - Academic Models
Attitude Toward the Object Model (Fishbein
model)
• 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
Behavioral Intentions Model (Theory of
Reasoned Action)
• Focuses on intentions to act or purchase
• Considers consumer perceptions of what other people believe is
the best choice among a set of alternatives
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Attitude Scales
 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.”
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Personality
 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

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Lifestyle
 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
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Types of Social Influences
Social influences: Forces other people exert on one’s buying
behavior
Roles
• Actions and activities performed based on
expectations of the individual and
surrounding persons
Family influences
• Directly impact consumer buying decision
process
• Consumer socialization: Process through which
a person acquires the knowledge and skills to
function as a consumer
Reference groups
• A group that a person identifies with so
strongly that he or she adopts the values,
attitudes, and behavior of group members
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Types of Social Influences
Opinion leader
• Member of an informal group who provides information about
a specific topic to other group members seeking information
Social class
• An open group of individuals with similar social rank
Culture
• Accumulation of values, knowledge, beliefs, customs, objects,
and concepts that a society uses to cope with its environment
and passes on to future generations
Subculture
• Group of individuals whose characteristics, values, and
behavioral patterns are:
• Similar within the group
• Different from other group
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Table 6.2 - Types of Family Decision Making
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Table 6.3 - Examples of Opinion Leaders and Topics
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Criteria for Grouping People in to Classes
Occupation and education
Income and wealth
Race and ethnicity
Group
Possessions
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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,
• Provide a substantial
professional degree
market for quality product
holders
offerings
• Demand educational
attainment of their children
(28.1%)
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Table 6.4 - Social Class Behavioral Traits and
Purchasing Characteristics for Middle Americans
Class (Percent of
Population)
Behavioral Traits
Buying Characteristics
Middle class (32.8) • Work conscientiously
• Price sensitive
and adhere to culturally • Spend on familydefined standards
oriented, physical
• Average-pay whiteactivities
collar workers
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%)
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Table 6.4 - Social Class Behavioral Traits and
Purchasing Characteristics for Lower Americans
Class (Percent of
Population)
Behavioral Traits
Buying Characteristics
Upper-lower (9.5)
• Low-income individuals
who generally fail to rise
above this class
• Reject middle-class
morality
Lower-lower (7.3)
• Poverty stricken
• Spend on products needed
• Some are unemployed
for survival
• In spite of their problems, • Able to convert discarded
often good-hearted
goods into usable items
toward others
• May be forced to live in
less desirable
neighborhoods
(16.8%)
Dr. Chen, Principle of Marketing
• Living standard is just
above poverty
• Frequently purchase on
credit
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Consumer Misbehavior
 Behavior that violates generally accepted norms
of a particular society
 Shoplifting
 Consumer
fraud
 Piracy
 Abusive
Dr. Chen, Principle of Marketing
consumers
47
Table 6.5 - Motivations for Unethical or Illegal
Misbehavior
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Video Case 6.1
 STARBUCKS REFINES THE
CUSTOMER EXPERIENCE
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 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.
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 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.
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 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.
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 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.
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