CHAPTER 6 REVISED NOTES

Major Factors influencing Buying Behaviour

Cultural Factors

Culture: values, perceptions, preferences and behaviours.

Subculture: nationalities, religions, racial grps & geographic regions.

Social Class: homogeneous & enduring divisions, hierarchically ordered, members share common
values.

Indicated by occupation, income, education, etc.

Social Factors

Reference Groups: all groups that have a direct (membership groups) or indirect influence on
attitudes or behavior. These groups expose us to new behaviors & lifestyles influence attitudes &
self-concept create pressures for conformity that influence brand choice

Family: Most important & influential primary reference group.

Family of orientation – parents & siblings

Family of procreation – spouse & children

Roles and Statuses

A person participates in many groups – family, clubs, and organizations. The person’s position in
each group can be defined in terms of role and status. A role consists of the activities that a person is
expected to perform. Each role carries a status. People choose products that communicate their role
and status in society. Thus, CEOs drive Mercedes, etc. Marketers are aware of the status symbol
potential of products and brands.

PERSONAL FACTORS

A buyer’s decisions are also influenced by personal characteristics. These include the buyer’s age and
stage in the life cycle, occupation, economic circumstances, lifestyle and personality and self-
concept.

Age and stage in the life cycle

People buy different goods and services over a lifetime.

Consumption is shaped by the family life cycle. Marketers often choose life cycle groups as their
target market. Yet target households are not always family based: there are also single households,
gay households and co-habitor households.

Some recent work has identified psychological life cycle stages. Adults experience certain passages
or transformations as they go through life. Marketers pay close attention to changing life
circumstances – divorce, widowhood, remarriage – and their effect on consumption behavior.

Occupation & economic circumstances

Occupation also influences a consumption pattern. A company can even specialize its products for
certain occupational groups.

Product choice is greatly affected by economic circumstances: spendable income (level, stability,
time pattern), savings and assets (including the % that is liquid), debts, borrowing power, and
attitude towards spending Vs saving. Marketers of income-sensitive goods pay constant attention to
trends in personal income, savings and interest rates. If economic indicators point to a recession,
marketers can take steps to redesign, reposition, and re price their products so they continue to
offer value to target customers. Stages in the Family Life Cycle

1.Bachelor stage: young, single not living at home Few financial burdens

Fashion opinion leaders Recreation oriented.

Buy:basic home equipment, furniture, cars, vacations

2.Newly married Couple: Young no children

Highest purchase rate & highest average purchase of durables Cars, appliances, furniture,
vacations

3.Full nest I: youngest child under 6

Home purchasing at peak.

Liquid assets low

Interested in new products, advertised products

Buy: washers, dryers, TV, baby food, vitamins, dolls,

4.Full Nest II: youngest child 6 or over

Financial position better

Less influenced by advertisements

Buy larger sized packages, multiple unit deals

Buy: cleaning material, bicycles, piano

5. Full Nest III: older married couple with dependent children

Financial position still better

Less influenced by advertising

High average purchase of durables

Auto, boats, dental services, magazines

6. Empty Nest I: older married couple, no children living with them, head of house in labor force

Home ownership at peak

Interested in travel, recreation, self-education

Not interested in new products

 Buy: vacations, luxuries, home improvements

7. Empty Nest II: older married couple, no children living with them, head of house retired

Drastic cut in income

Keep home

Buy: medical appliances, medical care products

8. Solitary survivor: in labor force

Income still good but likely to sell home

Solitary survivor: retired

Same medical and product needs as other retired group

Drastic cut in income

Special need for attention, affection, security

Psychological Factors:

4 major psychological factors that influence a person’s buying choices:

Motivation: A person has many needs at a given time –

Biogenic Needs – Arising from psychological states of tension such as hunger, thirst, discomfort.

Psychogenic needs – Arising from psychological states of tension such as need for recognition,
esteem or belonging.

Motive: A need becomes a motive when it is aroused to a sufficient level of intensity causing a
person to act.

Theories related to Motivation:

Freud’s Theory:

Psychological forces shaping a person’s behavior are largely unconscious.

“Laddering” can be used to trace a person’s motivations from the stated instrumental ones to the
more terminal ones.

This helps the marketer decide at what level the message/appeal is to be developed.

Motivation researchers collect consumer interviews for insights using techniques like word
association, sentence completion, picture implementation & role playing.

Motivational positioning: The whisky example – Whisky can attract someone who seeks social
relaxation, status or fun. Hence whisky brands have specialized in these three kinds of appeals.

Maslow’s theory:
Maslow’s theory helps marketers understand how various products fit into the plans goals and lives
of consumers.

 Self-Actualization Needs (Self Development and realization)

 Esteem Needs (self-esteem, recognition, status)
 Social Needs (Sense of belonging, love)
 Safety Needs (security, protection)
 Physiological Needs (food, water, shelter)

Herzberg’s Theory: Two-factor theory

Dissatisfiers – Factors that cause dissatisfaction.

Satisfiers – Factors that cause satisfaction.

The Seller should do his best to avoid dissatisfiers.

The manufacturers should identify the major satisfiers or motivators of purchase in the market and
then supply them.

Perception: How a motivated person acts is influenced by his or her perception

Perception is the process by which an individual selects organizes and interprets information inputs
to create a meaningful picture of the world. Perception is individual.

Selective Attention:

 People are more likely to notice stimuli that relate to current need
 People are more likely to notice stimuli that they anticipate
 People are more likely to notice stimuli whose deviations are large in relation to the normal
size of the stimuli

Selective Distortion: It is the tendency to twist information into personal; meanings and interpret
information in a way that will fit a person’s preconceptions. Marketers cannot do much about this.

Selective Retention: People tend to forget much that they learn but tend to retain information that
supports their attitudes and beliefs. (Marketers use drama and repetitions in sending messages to
their target market)

Learning: When people act, they learn.

Learning involves changes in an individual’s behavior arising from experience.

Learning is produced through interplay of:

Drives – A strong internal stimulus impelling action

Stimuli

Cues – Minor stimuli that determine when, where and how a person responds

Responses

Reinforcement
Beliefs and Attitudes: A belief is a descriptive thought that a person holds about something.

Beliefs may be based on knowledge, opinion or faith. They may or may not carry emotional charge.

An attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and

action tendencies towards some object or idea

Buying roles:

Initiator – Influencer – Decider – Buyer – User

Buying behavior:

Complex buying behavior – three-step process – develops belief about the product, attitude about
the product and then makes a thoughtful choice.

Dissonance reducing buying behavior – consumer is highly involved in a purchase but sees little
difference in brands. Marketing communication should supply beliefs and evaluations that help the
consumer feel good about his/her brand choice.

Habitual buying behavior – bought under conditions of low involvement and absence of significant
brand differences.

Variety seeking buying behavior – characterized by low involvement but significant brand
differences.

High Involvement Low Involvement

Significant differences Complex buying behavior Variety seeking buying
between brands behavior
Few differences between Dissonance reducing buying Habitual buying behavior
brands behavior

Stages of the Buying Decision Process

Ways to find out the buying decision process by marketers:

 Introspective Method: they would think how they would behave

 Retrospective Method: Ask people to recall their buying decision process
 Prospective process: Ask prospective customers to think aloud
 Prescriptive process: Ask customers the ideal way to buy the product Five stage Process of
Consumer Buying Decision

Problem Recognition

The buying process starts when the customer feels the need for the product

Information Search:

An inclined customer would look for more information. At the first level it is called heightened
attention. He simply becomes more receptive for information
At the next level is the active information search looking for more information from friend, reading
material, etc.

Sources of information for the customer:

 Personal Sources: family, friends

 Commercial sources: Ads, sales people
 Public sources: Mass media
 Experimental sources: Handling, examining

Successive sets involved in consumer Buying decision process:

Total Set Awareness Consideration Choice Set: Decision:

All the Set Set: Strong
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possible The brands Some initial Contenders
choices that the brands that
consumer is meet basic
aware of requirements

Evaluation of IDEAS

The consumer is trying to satisfy his needs, get some benefits and finally look at the product as a
bundle of benefits.

EXPECTANCY-VALUE MODEL - The expectancy-value model of attitude formation posits that

consumers evaluate products and services by combining their brand beliefs—the positives and
negatives—according to importance. The consumer would give weightages to the various attributes
of the product and find out the total points to the product.

Some methods which can help change the consumers perception of the product

Real repositioning: redesign the product

Psychological repositioning: Alter the belief of the brand

Competitive repositioning: Alter belief about the competitor’s brand

Purchase Decision

NONCOMPENSATORY MODELS OF CONSUMER CHOICE: consumers often take “mental shortcuts”

called heuristics or rules of thumb in the decision process.
  Using the conjunctive heuristic, the consumer sets a minimum acceptable cutoff level for
each attribute and chooses the first alternative that meets the minimum standard for all
attributes
 With the lexicographic heuristic, the consumer chooses the best brand on the basis of its
perceived most important attribute
 Using the elimination-by-aspects heuristic, the consumer compares brands on an attribute
selected probabilistically—where the probability of choosing an attribute is positively related
to its importance—and eliminates brands that do not meet minimum acceptable cutoffs

INTERVENING FACTORS

The first factor is the attitudes of others. The influence of another person’s attitude depends on two
things: (1) the intensity of the other person’s negative attitude toward our preferred alternative and
(2) our motivation to comply with the other person’s wishes

The second factor is unanticipated situational factors that may erupt to change the purchase
intention. A consumer’s decision to modify, postpone, or avoid a purchase decision is heavily
influenced by one or more types of perceived risk:

 Functional risk—The product does not perform to expectations.

 Physical risk—The product poses a threat to the physical well-being or health of the user or
others.
 Financial risk—The product is not worth the price paid.
 Social risk—The product results in embarrassment in front of others.
 Psychological risk—The product affects the mental well-being of the user.
 Time risk—The failure of the product results in an opportunity cost of finding another
satisfactory product.

Post-purchase behaviour:

Post-purchase Satisfaction: the customer may either be satisfied, delighted or dissatisfied after the
purchase. these feelings make a lot of difference to the customers perception and behaviour
towards the company.

Post-purchase actions: the customer may take different actions depending upon his satisfaction
level. The dissatisfied customer may stop buying (exit opition) or the customer may be tell his friends
not to buy the product (voice option)

Post-purchase use and disposal: Marketers need to monitor what the consumer does with the
product after purchase and how it is disposed off to maintain environmental friendliness of the
product.

Behavioral Aspects

consumers don’t always process information or make decisions in a deliberate, rational manner. .
Behavioral decision theorists have identified many situations in which consumers make seemingly
irrational choices

Decision Heuristics

The availability heuristic—Consumers base their predictions on the quickness and ease with which a
particular example of an outcome comes to mind. If an example comes to mind too easily,
consumers might overestimate the likelihood of its happening
The representativeness heuristic—Consumers base their predictions on how representative or
similar the outcome is to other examples. One reason package appearances may be so similar for
different brands in the same product category is that marketers want their products to be seen as
representative of the category as a whole

The anchoring and adjustment heuristic—Consumers arrive at an initial judgment and then adjust it
based on additional information. For services marketers, a strong first impression is critical to
establish a favorable anchor so subsequent experiences will be interpreted in a more favorable light

Framing

Decision framing is the manner in which choices are presented to and seen by a decision maker. A
$200 cell phone may not seem that expensive in the context of a set of $400 phones but may seem
very expensive if those phones cost $50. Framing effects are pervasive and can be powerful

MENTAL ACCOUNTING Researchers have found that consumers use mental accounting when they
handle their money.78 Mental accounting refers to the way consumers code, categorize, and
evaluate financial outcomes of choices.

 Consumers tend to segregate gains.

 Consumers tend to integrate losses
 Consumers tend to integrate smaller losses with larger gains.
 Consumers tend to segregate small gains from large losses