Lecturer: Bahman MoghimiM.Sc. Of “Industrial Marketing & e-Commerce”Doctor of Business Administration
Consumer Markets and Consumer Buyer BehaviorUniversity of Georgia
Learning Goals
1. Define the consumer market and construct a model of consumer buyer behavior
2. Name the four factors that influence buyer behavior
3. List and understand the types of buying decision behavior and stages in the process
4. Describe the adoption and diffusion process for new products
Case StudyHarley Davidson
Building Success
• Understanding the customers’ emotions and motivation
• Determining the factors of loyalty
• Translating this information to effective advertising
Measuring Success
• Currently 22% of all U.S. bike sales
• Demand above supply• Sales doubled in the
past 5 years with earnings tripled
Learning Goals
1. Define the consumer market and construct a model of consumer buyer behavior
2. Name the four factors that influence buyer behavior
3. List and understand the types of buying decision behavior and stages in the process
4. Describe the adoption and diffusion process for new products
Definitions
• Consumer buyer behavior refers to the buying behavior of final consumers –individuals and households who buy goods and services for personal consumption
• All of these final consumers combine to make up the consumer market
Learning Goals
1. Define the consumer market and construct a model of consumer buyer behavior
2. Name the four factors that influence buyer behavior
3. List and understand the types of buying decision behavior and stages in the process
4. Describe the adoption and diffusion process for new products
Model of Consumer BehaviorMarketing andOther Stimuli
Buyer’s Black Box
Buyer’s Response
ProductPricePlace
Promotion
EconomicTechnologicalPoliticalCultural
Characteristics Affecting Consumer Behavior
Buyer’s Decision Process
Product ChoiceBrand ChoiceDealer Choice
Purchase TimingPurchase Amount
Model of Buyer BehaviorFigure 5.1
Factors Influencing Consumer Behavior
Characteristics Affecting Consumer Behavior
Buyer
PsychologicalPersonal
Social
Culture
Characteristics Affecting Consumer Behavior
– Culture• Forms a person’s wants
and behavior
– Subculture• Groups with shared value
systems
– Social Class• Society’s divisions who
share values, interests and behaviors
• Cultural• Social• Personal• Psychological
Key FactorsKey Factors
• Hispanic consumers: one third of the US population
• Hispanic consumers tend to buy more branded, higher quality products
• African-American consumers: they are motivated by quality and selection. Brands are important
Characteristics Affecting Consumer Behavior
Sub-Culture
• Asian American: they are the second fastest growing population sub segment after the Hispanics.
• More than 90% of the Asian American Go online regularly and are most comfortable with internet technology such as online banking
Characteristics Affecting Consumer Behavior
Sub-Culture
• Mature consumers: very attractive market. The entire U.S baby boom generation, the largest and the wealthiest demographic cohort in the country.
• Mature consumers are not stuck in their ways
Characteristics Affecting Consumer Behavior
Sub-Culture
Characteristics Affecting Consumer Behavior
– Groups• Membership• Reference
– Aspiration• Opinion leaders
– Buzz marketing
– Family• Many influencers
– Roles and status
• Cultural• Social• Personal• Psychological
Key FactorsKey Factors
• In some social systems, members of different
classes are reared for certain roles and cant
change their social positions. In other country,
however, the lines between social classes are not
fixed and rigid, people can move to a higher
social class or drop into a lower one.
Characteristics Affecting Consumer Behavior
Social Factor
• Marketers are interested in social class
because within a given social class tend to
exhibit similar buying behavior. Social classes
show distinct product and brand preferences
in areas such as clothing , home furnishings,
and automobiles.
Characteristics Affecting Consumer Behavior
Social Factor
This advertiser
knows teens are strongly influenced by groups
when purchasing
fashion items
Marketing in Action5 - [email protected]
Online Social Networks are online communities where people socialize or exchange information and opinions
Include blogs, social networking sites (Facebook), virtual worlds (second life)
Groups and Social Networks
Family is the most important consumer-buying organization in society
Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services
The wife traditionally has been the main purchasing agent for the family.
Social Factors ( family )
Children may also have a strong influence on family buying decisions
Studies found that kids influence family decisions about where they take vacations , what cars or cell phones they buy. As a result , marketers of cars , full service restaurants , cell phones are now placing ads on the children oriented TV networks
Social Factors ( family )
Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status
A role consists of the activities that people expected to perform according to the persons around them
Social Factors (roles and status)
Each role carries a status reflecting the general esteem given to it by society.
People usually choose products appropriate to their roles and status. Consider the roles a working mother plays
Social Factors (roles and status)
Characteristics Affecting Consumer Behavior
– Age & Lifestyle
•Activities, interests and opinions
•Lifestyle segmentation
– Occupation
– Economic situation
– Personality and self-concept
• Cultural• Social• Personal• Psychological
Key FactorsKey Factors
VALSFigure 5.4
Principle Oriented Status Oriented Action Oriented
Achievers
ActualizersActualizers
Strugglers
Strivers
Fulfilleds
Believers
ExperiencersExperiencers
Makers
Abundant ResourcesAbundant Resources
Minimal ResourcesMinimal [email protected]
Brand Personality Dimensions
• Sincerity• Ruggedness
• Excitement• Competence
• Sophistication
Characteristics Affecting Consumer Behavior
– Motivation
– Perception
– Learning
– Beliefs and attitudes
• Cultural• Social• Personal• Psychological
Key FactorsKey Factors
Psychological FactorsMotivation
• A motive is a need that is sufficiently pressing to direct the person to seek satisfaction
• Motivation research is based on Freud. Looks for hidden and subconscious motivation
• Maslow ordered needs based on how pressing they are to the consumer
This ad demonstrates
a product meeting
physiological and social
needs
Marketing in Action5 - 41
Discussion
What consumer products might fulfill multiple
levels of the Hierarchy of
Needs?
Psychological Factors Perception
• Perception is the process by which people select, organize, and interpret information.
• Perception Includes:– Selective attention
• Consumers screen out information
– Selective distortion• People interpret to support beliefs
– Selective retention• People retain points to support attitudes
Discussion QuestionPerception
1. How many ads were you exposed to today?
2. Which ones do you remember? Why?
Psychological Factors Learning
• Learning describes changes in an individual’s behavior arising from experience
• Learning occurs through– Drives
• Internal stimulus that calls for action– Stimuli
• Objects that move drive to motive– Cues
• Minor stimuli that affect response– Reinforcement
• Feedback on action
Psychological Factors Beliefs and Attitudes
• Belief – a descriptive thought about a brand or
service– may be based on real knowledge, opinion,
or faith
• Attitude – describes a person’s evaluations, feelings
and tendencies toward an object or idea– They are difficult to change
Learning Goals
1. Define the consumer market and construct a model of consumer buyer behavior
2. Name the four factors that influence buyer behavior
3. List and understand the types of buying decision behavior and stages in the process
4. Describe the adoption and diffusion process for new products
Types of Buying Decision BehaviorFigure 5.6
The Buyer Decision ProcessFigure 5.7
The Buyer Decision Process
• Need recognition• Information search• Evaluation of
alternatives• Purchase decision• Postpurchase
behavior
• Needs can be triggered by:– Internal stimuli
• Normal needs become strong enough to drive behavior
– External stimuli• Advertisements• Friends of friends
Process Stages Process Stages
environment
External Stimuli
• TV advertising
• Magazine ad
• Radio slogan
•Stimuli in the environment
Internal Stimuli
• Hunger
• Thirst
• A person’s normal needs
Need RecognitionNeed RecognitionDifference between an actual state and a desired state
The Buyer Decision ProcessStep 1. Need Recognition
The Buyer Decision Process
• Need recognition• Information search• Evaluation of
alternatives• Purchase decision• Postpurchase
behavior
• Consumers exhibit heightened attention or actively search for information
• Sources of information:– Personal– Commercial– Public– Experiential– Word-of-mouth
Process Stages Process Stages
The Buyer Decision ProcessStep 2. Information Search
•Family, friends, neighbors•Most influential source of
information
•Advertising, salespeople•Receives most information
from these sources
•Mass Media•Consumer-rating groups
•Handling the product•Examining the product•Using the product
Personal Sources
Commercial Sources
Public Sources
Experiential Sources
The Buyer Decision Process
• Need recognition• Information search• Evaluation of
alternatives• Purchase decision• Postpurchase
behavior
• Evaluation procedure depends on the consumer and the buying situation.
• Most buyers evaluate multiple attributes, each of which is weighted differently.
• At the end of the evaluation stage, purchase intentions are formed.
Process Stages Process Stages
Product AttributesEvaluation of Quality, Price, & Features
Product AttributesEvaluation of Quality, Price, & Features
Degree of ImportanceWhich attributes matter most to me?
Degree of ImportanceWhich attributes matter most to me?
Brand BeliefsWhat do I believe about each available brand?
Brand BeliefsWhat do I believe about each available brand?
Total Product SatisfactionBased on what I’m looking for, how satisfied
would I be with each product?
Total Product SatisfactionBased on what I’m looking for, how satisfied
would I be with each product?
Evaluation ProceduresChoosing a product (and brand) based on one
or more attributes.
Evaluation ProceduresChoosing a product (and brand) based on one
or more attributes.
The Buyer Decision ProcessStep 3. Evaluation of Alternatives
The Buyer Decision Process
• Need recognition• Information search• Evaluation of
alternatives• Purchase decision• Postpurchase
behavior
• Two factors intercede between purchase intentions and the actual decision:– Attitudes of others– Unexpected situational
factors
Process Stages Process Stages
The Buyer Decision ProcessStep 4. Purchase Decision
Purchase IntentionDesire to buy the most preferred brand
Purchase Decision
Attitudes of others
Unexpected situational
factors
The Buyer Decision Process
• Need recognition• Information search• Evaluation of
alternatives• Purchase decision• Postpurchase
behavior
• Satisfaction is important:– Delighted consumers
engage in positive word-of-mouth.
– Unhappy customers tell on average 11 other people.
• Cognitive dissonance is common
Process Stages Process Stages
Consumer’s Expectations of Product’s Performance
Dissatisfied Customer
Satisfied Customer!
Product’s PerceivedPerformance
Cognitive Dissonance
The Buyer Decision ProcessStep 5. Post-purchase Behavior
Discussion QuestionHow is “Consumer Reports” used in the decision-making process?
Learning Goals
1. Define the consumer market and construct a model of consumer buyer behavior
2. Name the four factors that influence buyer behavior
3. List and understand the types of buying decision behavior and stages in the process
4. Describe the adoption and diffusion process for new products
Buyer Decision Processfor New Products
• Stages in the Adoption Process– Marketers should help consumers move
through these stages.
• New Products– Good, service or idea that is perceived by
customers as new.
Buyer Decision Process for New Products
• Individual Differences in Innovativeness– Consumers can be classified into five
adopter categories, each of which behaves differently toward new products.
• Product Characteristics and Adoption– Five product characteristics influence the
adoption rate.
DivisibilityCan the innovation
be used on a trial basis?
CompatibilityDoes the innovation
fit the values and experience of the
target market?ComplexityIs the innovation
difficult tounderstand or use?
Relative AdvantageIs the innovation
superior to existing products?
Communicability Can results be easily
observed or described to others?
ProductCharacteristics
• Why might the adoption process be slow for a home robot?
Discussion Question
Source: Business WeekMarketing in ActionSource: Business Week
Buyer Decision Processfor New Products
• International Consumer Behavior– Values, attitudes and behaviors differ greatly in
other countries.– Physical differences exist which require changes in
the marketing mix.– Customs vary from country to country.– Marketers must decide the degree to which they
will adapt their marketing efforts.
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