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Priciples of Marketing

by Philip Kotler and Gary Armstrong

Chapter 5
Managing Marketing Information to
Gain Customer Insights

PEARSON
Objective Outline

Model of Consumer Behavior


Define the consumer market and construct a simple
1
model of consumer buyer behavior.

Characteristics Affecting Consumer Behavior


Name the four major factors that influence consumer
2
buyer behavior.
Objective Outline

Types of Buying Decision Behavior


3 The Buyer Decision Process
List and define the major types of buying decision
behavior and the stages in the buyer decision process.

The buyer decision Process for New Products


4 Describe the adoption and diffusion process for new
products.
Model of Consumer Behavior

Consumer Buyer Behavior


Consumer buyer behavior refers to the buying
behavior of final consumers ─ individuals and households
that buy goods and services for personal consumption. All of
these final consumers combine to make up the consumer
market.
Model of Consumer Behavior

We can measure the whats, wheres, and whens of consumer buying


behavior. But it’s very difficult to “see” inside the consumer’s head
and figure out the whys of buying behavior (that’s why we call
black box). Marketers spend a lot of time and dollars trying to
figure out what makes customers tick.
Characteristics Affecting Consumer Behavi
or
Cultural Factors

Culture
Factors

Social
Culture Subculture
Class
Culture

Every
 Culture is the
group
Marketers orset
are of basic
society
always hasvalues, perceptions,
a culture,
trying to spot and wants,
cultural
cultural shifts so
and behaviors
influences
as to discover learned
on buying by a member
behavior
new products of society
maymight
that vary from
greatly
be wanted.
family
from andcountry
both other important
to countyinstitutions.
and country to country.
Subculture  Many marketers now embrace cross-cultural
 They tend to be deeply family oriented and make shipping a family
marketing ─ the practice of including ethnic
affair ─ children have a bigand
themes saycross-cultural
in what brands they buy. within
perspectives
 Each  Hispanic
Asian Americans aretend
the second-
 Older, first-generation
culture contains
Although their mainstream consumers
smaller
morefastest-growing
price conscious subcultures,
marketing.
than to be very
other or brand
gro
loyal andsegments,
to favor brands and sellers whosubsegment
show afterinterest in
special
ups of people  Cross-cultural
with shared
blacks are also marketing
value appeals
systems
strongly motivated to consumer
based on
Hispanic
them. by qualitysimilarities Americans.
and selection.across subcultures rather than
common
 Younger life experiences
Hispanics,  Asian
however,
differences.
andshown
consumers
have situations.
shop frequently
increasing price and
 Brands are important.
areand
the amost brand conscious of all the
sensitivity in recent
 years
Many marketers
 In recent years,ethnic willingness
manygroups. are to
finding
companies have switch
that to
insightsstore
brands. developedgleaned
special from ethnic
products, consumers
appeals, and can influence
 Within the Hispanictheir  They there
market, can beexist
fiercely
many brand loyal.
distinct subsegments
broader
marketing programs for them.markets.
based on nationality, age, income, and other factors.

Hispanic African Asian Cross


American American American Cultural
Consumers Consumers Consumers Marketing
Social Class
 Social classes are society’s relatively permanent
and ordered divisions whose members share simil
ar values, interests, and behaviors.
Social Factors

Social
Factors
Groups and Social Networks
 A group is two or more people who interact to accomplis
h individual or mutual goals.
 Reference groups serve as direct or indirect points of com
parison or reference in forming a person’s attitudes or beh
avior.
 Reference groups expose a person to new behaviors and l
ifestyles, influence the person’s attitudes and self-concept
, and create pressures to conform that may affect the pers
on’s product and brand choices.
Groups and Social Networks

 Word-of-Mouth Influence and Buzz Marketing.

Opinion Leader
Word-of-Mouth Influence
 A person withinBuzz Marketing
a reference group who, because of
 The impact of the personal words and
 Involves enlisting
special skills, or even personality,
knowledge, creating opinion leaders
or other
recommendations of trusted friends, associates,
to serve as “brand
characteristics, ambassadors”
exerts who spread
social influence the
on others.
and other consumers on buying behavior.
 word
Some about a company’s
experts products.
call this group the influentials or
 Most word-of-mouth influence happens naturally:
 Many
leadingcompanies
adopters. are now turning everyday
Consumers start chatting about a brand they use or
 customers intotobrand
Marketers try evangelists.
identify opinion leaders for their
feel strongly about one way or the other.
products and direct marketing efforts toward them.
Groups and Social Networks
 Online Social Networks.
• They are online communities where people socialize or e
xchange information and opinions.
• Social networking media range from blogs and message
boards to social networking Web sites and virtual worlds
.
• This new form of consumer-to-consumer and business-t
o-consumer dialog has big implications for marketers.
Family
 The family is the most important consumer buyin
g organization in society, and it has been research
ed extensively.
 Husband-wife involvement varies widely by prod
uct category and by stage in the buying process.
 Buying roles change with evolving consumer life
styles.
Roles and Status
 A role consists of the activities people are expect
ed to perform according to the people around the
m.
 Each role carries a status reflecting the general es
teem given to it by society.
 People usually choose products appropriate to the
ir roles and status.
Personal Factors
Age and Life-Cycle Stage
 Buying is also shaped by the stage of the family life cycle
─ the stages through which families might pass as they m
ature over time.
 Marketers often define their target markets in terms of lif
e-cycle stage and develop appropriate products and mark
eting plans for each stage.
Occupation
 A person’s occupation affects the goods and services bou
ght.
 Marketers try to identify the occupational groups that hav
e an above-average interest in their products and services.
 A company can even specialize in making products neede
d by given occupational group.
Economic Situation
 A person’s economic situation will affect his or her store
and product choices.
 Marketers watch trends in personal income, savings, and i
nterest rates.
 In the more frugal times following the Great Recession,
most companies have taken steps to redesign, reposition,
and reprice their products and services.
Lifestyle
 Lifestyle is a person’s pattern of living as expressed in his
or her activities, interests, and opinions.
 It involves measuring consumers’ major AIO dimensions
─ activities, interests, and opinions.
 It can help marketers understand changing consumer valu
es and how they affect buyer behavior.
Personality and Self-Concept
Sincerity (down-to-earth, honest, wholesome
 Personality refers to the unique
, and psychological characteris
cheerful)
tics that distinguish a person or group.
 Personality is usually described
Excitementin(daring,
terms ofspirited,
traits such as
imaginative,
and up-to-date)
self-confidence, dominance, sociability, autonomy, defens
One researcher
iveness, adaptability, and aggressiveness.
identified five Competence (reliable, intelligent, and
 Brand personality is the specific mix of human traits that
brand personality successful)
may be attributed to a particular brand.
traits:
Sophistication (upper class and charming)

Ruggedness (outdoorsy and tough)


Psychological Factors
Motivation
 A motive (drive) is a need that is sufficiently pressing to
direct the person to seek satisfaction.
 Motivation researchers use a variety of probing technique
s to uncover underlying emotions and attitudes toward br
ands and buying situations.
 But many marketers use such touchy-feely approaches, n
ow sometimes called interpretive consumer research, to d
ig deeper into consumer psyches and develop better mark
eting strategies.
Motivation
Perception
Selective
 All of us Attention
by the flow of information through our five sens
es:
The tendency
sight, for people
hearing, smell,totouch,
screenand taste.
out most of the information to
 Perception is the
which they are process by which
Selective
exposed people select, organiz
Retention
e,Means  Consumers
and interpret information
that marketers mustare tolikely
work formtoaremember
meaningful picture
ofespecially hardgood
the world. points
to attract themade about a brand
consumer’s they favor and forget food points
attention
 People can form different
made perceptions
about competing of the same stimulu
brands.
s because of three perceptual processes: selective
Selective attentio
Distortion
n, selective distortion, and selective retention.
 Describes the tendency of people to
interpret information in a way that
will support what they already
believe.
Learning
 Learning
• Describes changes in an individual’s behavior arising fro
m experience.
• Occurs through the interplay of drives, stimuli, cues, res
ponses, and reinforcement.
 Drive
• A strong internal stimulus that call for action
• A drive becomes a motive when it is directed toward a p
articular stimulus object.
Beliefs and Attitudes

•• AA descriptive
descriptive thought
thought that
that aa person
person has
has about
about
 Attitudes are difficult to change.
something
something
Belief

BeliefA person’s attitudes fit into a pattern; changing one
•• Based
Based on
on real
real knowledge,
knowledge, opinion,
opinion, or
or faith
faith
attitude may require difficult adjustments in many
and may or may not carry an emotional charge
others. and may or may not carry an emotional charge
 A company should usually try to fit its products into
•• Describes aa person’s relatively consistent
existing attitudes rather than attempt consistent
Describes person’s relatively to change
Attitude
Attitude evaluations, feelings, and tendencies toward
attitudes. evaluations, feelings, and tendencies toward
an
an object
object or
or idea
idea
Types of Buying Decision Behavior

Complex Buying Behavior Habitual Buying Behavior


• Consumers are highly involved in • Occurs under conditions of
a purchase and perceive low-consumer involvement
significant differences among and little significant brand
brands. difference

Variety-Seeking Buying Dissonance-Reducing Buying


Behavior Behavior
• Occurs in situations • Occurs when consumers are
characterized by low highly involved with an
consumer involvement but expensive, infrequent, or risky
significant perceived brand purchase but see little difference
differences among brands
The Buyer Decision Process
Need Recognition
 The buying process starts with need recognition ─ the bu
yer recognizes a problem or need.
 The need can be triggered by internal stimuli when one of
the person’s normal needs ─ for example, hunger or thirst
─ rises to a level high enough to become a drive.
 A need can also be triggered by external stimuli.
Information Search
 Information search is the stage of the buyer decision pro
cess in which the consumer is motivated to search for mo
re information.
 Traditionally, consumers have received the most informat
ion about a product from commercial sources that control
led by the marketer.
 The most effective sources tend to be personal.
 Commercial sources normally inform the buyer, but perso
nal sources legitimize or evaluate products for the buyer.
Evaluation of Alternatives
 The alternative evaluation is the stage of the bu
yer decision process in which the consumer uses i
nformation to evaluate alternative brands in the c
hoice set.
 Marketers should study buyers to find out how th
ey actually evaluate brand alternatives.
Purchase Decision
 The purchase decision is the buyer’s decision about whic
h brand to purchase.
 But two factors can come between the purchase intention
and the purchase decision.
 The first factor is the attitudes of others.
 The second factor is unexpected situational factors.
Postpurchase Behavior
 The postpurchase behavior is the stage of the b
uyer decision process in which consumers take fu
rther action after purchase, based on their satisfac
tion or dissatisfaction.
 Almost all major purchases, however, result in co
gnitive dissonance, or discomfort caused by post
purchase conflict.
The Buyer Decision Process for New Pro
ducts
 A new product is a good, service, or idea that is perceive
d by some potential customers as new.
 We define the adoption process as the mental process thr
ough which an individual passes first learning about an in
novation to final adoption.
 Adoption is the decision by an individual to become a reg
ular user of the product.
Stages in the Adoption Process
 Five stages in the process of adopting a new product:
Individual Differences in Innovativeness
Early
adopters
 In each product
Innovatorsarea, there are “consumption pio
Lagging They are guided by
neers” and
They are early adopters.
venturesome adopters respect ─ they are
─ they try new ideas at opinion leaders in their
They are traditional bound ─
some risk. communities and adopt
they are suspicious of changes
new ideas early but
and adopt the innovation only
carefully.
Early when it has become something
mainstreamof a tradition itself.
Late
They are guided by mainstream
respect ─ they are
They adopt an
opinion leaders in their
innovation only after a
communities and adopt
majority of people
new ideas early but
have tried it.
carefully.
Influence of Product Characteristics on
Rate of Adoption
 Five characteristics are especially important in in
fluencing an innovation’s rate of adoption.
• Relative advantage
• Compatibility
• Complexity
• Divisibility
• Communicability
The End