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Consumer behavior

I. CONSUMER PURCHASE DECISION PROCESS

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Behind the visible act of making a purchase lies a decision process that must be investigated. The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. :

Five Stages of Consumer Behavior

3. 4. 5. 6. 7.

problem recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior.

A. Problem Recognition: Perceiving a Need

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Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision. Can be as simple as noticing an empty milk carton or it can be activated by marketing efforts.

B. Information Search: Seeking Value The information search stage clarifies the options open to the consumer and may involve

Internal search

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Scanning ones memory to recall previous experiences with products or brands. Often sufficient for frequently purchased products. When past experience or knowledge is insufficient The risk of making a wrong purchase decision is high The cost of gathering information is low. The primary sources of external information are:

two steps of information search External search

15. Personal sources, such as friends and family. 16. Public sources, including various product-rating organizations such as Consumer Reports. 17. Marketer-dominated sources, such as advertising, company websites, and salespeople

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C. Alternative Evaluation: Assessing Value The information search clarifies the problem for the consumer by (1) Suggesting criteria to use for the purchase. (2) Yielding brand names that might meet the criteria. (3) Developing consumer value perception.

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A consumer's evaluative criteria represent both the objective attributes of a brand (such as locate speed on a portable CD player) the subjective factors (such as prestige). These criteria establish a consumer's evoked set the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware D. Purchase Decision: Buying Value

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From whom to buy

which depends on such considerations Terms of sale Past experience buying from the seller Return policy. which can be influenced by store atmosphere time pressure a sale pleasantness of the shopping experience.

Three possibilities When to buy

Do not buy E. Postpurchase Behavior: Value in Consumption or Use

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After buying a product, the consumer compares it with expectations and is either satisfied or dissatisfied. Satisfaction or dissatisfaction affects consumer value perceptions consumer communications repeat-purchase behavior. Many firms work to produce positive postpurchase communications among consumers and contribute to relationship building between sellers and buy Cognitive Dissonance. The feelings of postpurchase psychological tension or anxiety a consumer often experiences Firms often use ads or follow-up calls from salespeople in this postpurchase stage to try to convince buyers that they made the right decision.

F. Involvement and Problem-Solving Variations

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Consumers may skip or minimize one or more steps in the purchase decision process depending on the level of involvement the personal, social, and economic significance of the purchase Three characteristics of high-involvement purchase 1. is expensive, 2. can have serious personal consequences, or 3. could reflect on ones social image.

Three general problem-solving variations exist in the consumer purchase decision process:

Routine Problem Solving

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Virtually a habit involves little effort seeking external information and evaluating alternatives. Typically used for low-priced, frequently purchased products. Involves the use of moderate information-seeking efforts. Often used when the buyer has little time or effort to spend. Each stage of the consumer purchase decision process is used Considerable time and effort on external information search and in identifying evaluating alternatives. Used in high-involvement purchase situations.

Limited Problem Solving

Extended Problem Solving

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Involvement and Marketing Strategy

Low and high consumer involvement has important implications for marketing strategy, which differs for products that leaders from their challengers.

G. Situational Influences

The purchase task The reason for engaging in the decision. Social surroundings Including others present when a purchase decision is made. Five situational Physical surroundings Such as decor, music, and crowding in retail stores. influences Temporal effects Such as time of day or the amount of time available. Antecedent states Which include the consumers mood or amount of cash on hand

The actions a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions. The behavioral sciences help answer questions such as : Why people choose one product or brand over another, How they make these choices, and How companies use this knowledge to provide value to consumers

II. PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR

Concepts such as motivation and personality; perception; learning; values, beliefs and attitudes; and lifestyle are useful for interpreting buying marketing efforts. A. Motivation and Personality 1. Motivation

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is the energizing force that causes behavior that satisfies a need. Needs are hierarchical Once basic physiological needs are met, people seek to satisfy learned needs.

Physiological needs

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basic to survival. self-preservation physical well-being. love friendship. achievement status prestige self-respect. personal fulfillment.

Safety needs

From lowest to highest, the hierarchy is: Social needs

Self-actualization needs 2. Personality

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A person's consistent behavior or responses to recurring situations. Research suggests that key traits affect brand and product-type preferences.

Cross-cultural analysis also suggests that residents of different countries have a national character, or a distinct set of personality ch people of a country or society.

Personality characteristics are often revealed in a persons self-concept, which is the way people see themselves and the way they be

B. Perception

The process by which an individual uses information to create a meaningful picture of the world by selecting, organizing interpreting Perception is important because people selectively perceive what they want and it affects how people see risks in a purchase. 1. Selective Perception

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Selective perception

Filtering exposure, comprehension, and retention in the human brains attempt to organize and interpret information.

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Selective exposure

Consumers can pay attention to messages that are consistent with their own attitudes and b Consumers can ignore messages that are inconsistent.

Selective comprehension Selective retention

Involves interpreting (distorting?) information so that it is consistent with a person's attitude Consumers do not remember all the information they see, read, or hear. Consumers see or hear messages without being aware of them. This is a hotly debated issue with more popular appeal than scientific support. Research suggests that such messages have limited effects on behavior

Subliminal perception

2. Perceived Risk

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Anxieties felt Consumes cannot anticipate the outcomes of a purchase Believe that there may be negative consequences. Marketers try to reduce a consumer's perceived risk and encourage purchases by strategies such as providing Free trial of a product Securing endorsements from influential people Providing warranties and guarantees.

C. Learning

Those behaviors that result from Repeated experience Thinking. 1. Behavioral Learning

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The process of developing automatic responses to a situation built up through repeated exposure to it.

Four variables central to how consumers learn from repeated experience are: drive A need that moves an individual to action cue A stimulus or symbol perceived by consumers response The action taken by a consumer to satisfy the drive. reinforcement The reward.

Stimulus generalization

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Marketers use two concepts from behavioral learning theory: Occurs when a response elicited by one stimulus (cue) is generalized to another. Using the same brand name for different products is an application of this concep Refers to a person's ability to perceive differences in stimuli. The advertising for Bud Light beer is an example of this concept.

Stimulus discrimination

2. Cognitive learning

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Involves making connections between two or more ideas or simply observing the outcomes of others behaviors and adjusting one's accordingly. 3. Brand loyalty

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Is a favorable attitude and consistent purchase of a single brand over time. Brand loyalty differs across countries

D. Values, Beliefs, and Attitudes 1. Attitude Formation

Attitude

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A learned predisposition to respond to an object or class of objects in a consistently favorable or unfavor Shaped by our values and beliefs, which are learned.

Values

personally or socially preferable modes of conduct or states of existence that are enduring.

Beliefs

consumer's subjective perception of how well a product or brand performs on different attributes.

2. Attitude Change Approaches to try to change consumer attitudes

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Changing beliefs about the extent to which a brand has certain attributes. Changing the perceived importance of attributes. Adding new attributes to the product.

E. Lifestyle Lifestyle is a mode of living that is identified by activities How a person spends time and resources interests What a person considers important in the environment opinions what a person thinks of self and the world

Psychographics The analysis of consumer lifestyle helps to segment and target consumers for new and existing products.

Values and Lifestyles (VALS) Program

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Developed by SRI International Identified eight interconnected categories of adult lifestyles based on a persons self-orientation and resources.

Self-orientation

Resourc

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Three patterns of attitudes and activities that help people reinforce their social self-image. The three patterns are oriented toward principles, status, action.

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income educatio self-conf health eagernes intelligen energy le

III. SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR

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Sociocultural influences evolve from a formal and informal relationships with other people. Influences Include Personal influence Reference groups The family Social class Culture Subculture.

A. Personal Influence Aspects of personal influence important to marketing Opinion leaders

individuals who exert direct or indirect social influence o

Word of mouth

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People influencing each other during face-to-face conve Power of word of mouth has been magnified by the Inter

B. Reference Groups Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards. Reference groups have an purchase of luxury products but not of necessities. : Membership group Three groups have clear marketing Aspiration group implications Dissociative group

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one to which a person actually belongs

one with which a person wishes to be identified.

one from which a person wants to maintain a distance because of differe

C. Family Influence

Family influences on consumer behavior result from three sources: consumer socialization passage through the family life cycle decision making within the family.

Consumer Socialization

Consumer socialization is the process by which people acquire the skills, knowledge, and attitudes necessary to function as cons

Family Life Cycle

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The distinct phases that a family progresses through from formation to retirement Each phase bringing with it identifiable purchasing behaviors.

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young si Young m Young m The olde older unm

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Family Decision Making

Five roles of indivi purchase process Two decision-making styles exist: spouse-dominant (either wife or husband is responsible) o informati joint decision making (most decisions are made by both husband and wife). o influence Increasingly, preteens and teenagers are assuming these roles for the family, given the prevalence of o decision working parents and single-parent households. o purchase o user

D. Social Class

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The relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior are grouped. Determinants of social class include occupation, source of income (not level of income) education. Social class is a basis for identifying and reaching particularly good prospects for products and services. Upper classes are targeted by companies for items such as financial investments, expensive cars, and evening wear. Middle classes represent a target market for home improvement centers and automobile parts stores. Lower classes are targeted for products such as sports and scandal magazines.

E. Culture and Subculture Culture refers to the set of values, ideas and attitudes that are accepted by a homogeneous group of people and transmitted to the next generation.

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Subcultures - groups within the larger, or national, culture with unique values, ideas, and attitudes. three largest racial/ethnic subcultures in the U.S Hispanics, African-Americans Asians . Each of these groups exhibits sophisticated social and cultural behaviors that affect their buying patterns. 1. African-American Buying Patterns

African-Americans have the largest spending power of the three subcultures

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While price conscious, they are motivated by product quality and choice. Respond to products and advertising that appeal to their African-American pride and heritage as well as address their ethnic features and nee 2. Hispanic Buying Patterns

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Hispanics represent the largest subculture About 50% are immigrants The majority are under the age of 25. Marketing to Hispanics has proven to be a challenge because The diversity of this subculture The language barrier. Sensitivity to the unique needs of Hispanics by firms has paid huge dividends. 3. Asian Buying Patterns

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The Asian is the fastest growing subculture. About 70% of Asians are immigrants Most are under the age of 30. Asians represent a diverse subculture, including Chinese, Japanese, Filipinos, Koreans, AsianIndians, people from Southeast Asia, and Pacific Islanders. Two groups of Asian-Americans have been identified: Assimilated Asians are conversant in English highly educated exhibit buying patterns very much like "typical" American consumers. Nonassimilated Asians recent immigrants who cling to their native languages and customs.