Transcript Consumer Reports

Chapter 4
Understanding Buyer
Behavior
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Behavior of the individual consumer in the
marketplace
Multiple factors that influence consumer
behavior
Various principles of psychology, sociology,
and social psychology – valuable in explaining
consumer behavior
Relationship of consumer behavior and
marketing management decisions like target
market selection, marketing mix design
Difference between organizational market
behavior and consumer market behavior
How organizations make purchase decisions
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• Understand the buyer both as
an individual and as a member
of society
• Buyer’s needs must be met by
the product offered by the
marketer
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• Market exchange allows buyers and
sellers to assess relative trade-offs that
satisfy their respective needs and wants
• Buyers and sellers have policies and
objectives guiding their analysis of tradeoffs
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• Unlike organizations, buyers often
don’t understand what prompts them
to behave in a particular manner
• Exchange process thus becomes
unpredictable and difficult for
marketers to understand
• An understanding of the exchange
process is critical in determining the
offer that will attract buyers
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Target market selection and market
offering design is influenced by
 How do potential buyers go about
making purchase decisions?
 What factors influence their
decision process and in what way?
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• Consumers –
individuals
and groups
• Organizations
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Consumer behavior:
 Purchase for personal, family, or group
use
 Combination of efforts and results related
to the consumer’s need to solve problems
 Triggered by identification of some unmet
need – physical/psychological
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• Need: a basic deficiency
given a particular
essential item e.g., food,
air, transportation
• Want: placing a certain
personal criterion as to
how that need must be
fulfilled e.g., when hungry
having a specific food
item in mind
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 Need
Identification
 Information search and
processing
 Identification and evaluation of
alternatives
 Products/service/outlet selection
 Purchase decision
 Post-purchase behavior
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• Complex: consumers go
through all six stages in
case of first-time
purchase, buying highpriced, long-lasting
infrequently purchased
articles
• Simple: habitual manner of
repurchasing same brand,
past reinforcement in
learning experiences
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 The magnitude of the discrepancy
between what we have and what we
need
 The importance of the problem
 Adequate definition of the problem
 Marketers sometimes need to
activate problem recognition, shape
its definition
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Information:
 Source can be external or internal
 Can come from family, friends, personal observation,
Consumer Reports, salespeople, mass media
 Helps evaluate alternative products, services, outlets
 Involves mental, physical activities, time, energy, money,
foregoing more desirable activities
 Can identify new needs
 Save money, improve quality of selection, reduce risks
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• Exposure:
• Attention
• Perception
• Retention
• Retrieval and
application
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To a source of
stimulation e.g.,
watching T.V., going
to supermarket,
receiving direct mail
advertisements at
home
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Focus mental
resources on the
stimuli e.g.,
relevant
informational
cues
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Classifying the
incoming signals
into meaningful
categories,
forming patterns,
assigning names
or images to
them
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Storage of
information for
later reference
e.g., heavy
repetition, putting
message to
music
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Recovery of
information
from memory
and putting it
in right
context
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 Elaborate/Central: active manipulation of
information; close attention to a message,
develop thoughts in support of or counter to
the information
 Non-elaborate/Peripheral: passive
manipulation of information e.g., airline
passengers reception of preflight safety
procedures
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Critical factors:
• Time and money costs
• Amount of information the
consumer already has
• Amount of perceived risk
if a wrong selection is
made
• Predisposition towards
particular choices
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• Outlet selection influence
product evaluation or
product selection
influence outlet
evaluation e.g., if a
desired brand is out-ofstock at a convenient
outlet, the consumer may
wait until the product
comes in, accept a
substitute, or go to
another outlet
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Critical questions
Solution
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• How much effort is the consumer
willing to spend in shopping of the
product?
• What factors influence when the
consumer will actually purchase?
• Are there any conditions that would
prohibit or delay purchase?
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• Provide basic
product, price,
location information
through labels
• Advertising,
personal selling and
public relations
• Product sampling,
coupons, rebates
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• Probing research that elicit real-life stories
from customers about how they behave,
what they truly feel, what their unspoken
impulses are
• Intuit software writers revolutionized the
way Americans handle their money
through consultation with storytelling
customers
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Cognitive Dissonance: people strive for consistency
among their cognitions – knowledge, attitudes,
beliefs, values
Inconsistencies result in dissonance
Consumers may buy a brand being already aware of
dissonance
Consumers may feel dissonance from disturbing
information received after purchase
Solution: advertisements should stress positive
attributes, confirm product’s popularity,
personalized reinforcement
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 Situation: buying task, market
offerings, demographic influences
 External: culture, social class,
reference groups, family
 Internal: learning and
socialization, motivation, lifestyle
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Simple or complex depends on
• Whether the decision is novel or routine
• The extent of the consumer’s involvement with the
decision
High-involvement decisions:
• Important to the buyer
• Close ties to consumer’s ego and self-image
• Risk – financial (high price), social (peer group
pressure), psychological (anxiety in case of wrong
decision)
Low-involvement: straightforward, low risk, repetitive, habit,
brand loyalty
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• Extent of product or brand choices
available e.g., in the field of DVD some
prominent brand names are Sony,
Samsung, Panasonic
• Wider choice helps tailor purchase to
specific needs but can also confuse and
frustrate leading to less than optimal
choice
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Age
Sex
Income
Education
Occupation
Marital Status
Mobility
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Large group of people with a similar heritage
Beliefs: a proposition that reflects a person’s
particular knowledge and assessment of
something
Values: general statements that guide behavior
and influence beliefs, helps in choosing from
alternatives
Customs: overt modes of behavior that
constitute culturally approved ways of behaving
in specific situations e.g., buying presents for
mother on Mother’s Day is an American custom
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Occupation
Wealth
Income
Education
Power
Prestige
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• Upper-upper: wealthy people
• Lower-upper: locally prominent
families
• Upper-middle: professionals,
business owners
• Lower-middle: mid-level white
collar workers like teachers
• Upper-lower: blue-collar
workers
• Lower-lower: unskilled workers
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 Helps
shape a person’s attitudes and
behaviors
 Formal or informal
 Have individuals who are opinion
leaders for the group
 Determines how roles are performed
 Creates conformity with group norms
 Group communication through
opinion leaders like teachers, auto
mechanics
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Types of Reference Groups
Membership
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Dissociation
Aspiration
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• Impacts attitude and
behavior
• Specific decisions makers
for the purchase in
question
• Family lifecycle
determined by age,
marital status, parenthood
e.g., bachelors, newly
married, parents, empty
nesters, solitary survivors
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Learning:
• Changes on behavior
resulting from previous
experiences
• Ongoing process that is
dynamic, adaptive and
subject to change
• Practice
Non-experiential learning:
conceptualization of a
potential experience
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• Socialization:
• Process by which persons
acquire the knowledge, skills and
dispositions that make them more
or less able members of society
• Behavior is acquired and
modified over the person’s
lifecycle
• Socialization agents: person,
organization, information source
• Modeling, reinforcement and
social interaction
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Patronage motives:
► Consumers reasons for shopping at a particular outlet
► Price-conscious, convenience-oriented, service-oriented
Motive:
► Inner drive to take action to satisfy a need
► Positive, negative, high-level, low-level goals
Motive sources:
► Internal, environmental, psychological (Maslow’s “need
hierarchy”)
Personality:
► All traits that make an individual unique
► Introvert, Extrovert
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• Attitudes, interests, opinions
of potential customer
• Application – shopping
orientation, cognitive,
affective, behavioral
attitude
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Multiple individuals involved in making buying
decisions; rules for making decisions
Motivation: rational and quantitative but also
emotional
Decisions involve a range of complex technical
dimensions
Decisions span considerable time creating a lag
between initial contact with customer and
purchasing decision; monitoring and adjusting
to change is critical
Each organization has unique personality and
way of functioning
Straight re-buy, modified re-buy, new task
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Problem Recognition
General Need Description
Product Specification (technical)
Supplier search (appropriate vendor)
Proposal solicitation (from suppliers)
Supplier Selection (delivery capability, consistent
quality, fair price)
• Order-routine specification (quantity, warranty)
• Performance Review
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Neo Consumer Mind-set
 Shrinking
Day
 Connectedness Craze
 Body vs. Soul Conundrum
 Triumph of Individualism
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