16371 Customer Behave

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Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458

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Consumer markets and consumer behavior



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Questions to be addressed

How do consumer characteristics influence buying behavior?

What are the processes and the parameters which influence consumer responses towards marketing programs?

How do consumers make purchasing decisions?

How are marketers effected by consumer decision making



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Aim of marketing is to meet and satisfy customer¶s need.Aim of marketing is to meet and satisfy customer¶s need.

Consumer Buying Behavior Consumer Buying Behavior refers to the buying behavior of final consumers -individuals &households who buy goods and services for personal consumption.

³ The process and activities people engage in when searching for, selecting, purchasing, using,evaluating and disposing off products and services so as to satisfy their needs and desires.

It is the study of how individuals select, buy and use goods and services and focuses on the³how´ and ³why´ of the total experience consumers have with the product.

What factors and variables influence the buying decision?

Provides clues to marketers for introducing products or services, setting prices, devisingchannels, crafting messages and developing other marketing activities.

The holistic marketing orientation focuses on value. Fully connect with customers,understanding their daily lives and the changes that occur during their lifetime so that right products are marketed to the right customer in the right way.

Eg- Wal mart¶s design of Latin American stores

Consumer Buying Behavior




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Tata Steel used

steeljunction® to

encourage

consumers to go

steel shopping and

to develop deeper

understanding of

individual andhousehold

customers.




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Marketing andOther Stimuli

Buyer¶s Black Box

Buyer¶s Response

CharacteristicsAffectingConsumer Behavior

Buyer¶sDecisionProcess

Stimulus-response model




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A Model of Consumer Behavior

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens




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Model of Consumer Behavior




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Buyer¶s Black Box

Known as ³ Black box´ because marketer cannot know precisely for

every customer exactly what process goes on in his mind

But is important because the process ultimately leads to the

³purchasing´ or ³no purchasing´ decision.

What is going on in the minds of customers before, during and after the purchase?

Marketing and environmental stimuli enter the buyer¶s consciousness.

As a marketer one needs to understand what happens in the buyer¶s

consciousness which leads to the purchase decision.

Buyer¶s characteristics influence how they perceive the stimuli. Buyer¶s characteristics includes cultural, social, personal and

psychological factors



Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 13

Five premises of consumer behavior

Consumer behavior is purposeful and goal oriented.

Consumer has free choice

Consumer behavior is a process

Consumer behavior can be influenced

There is a need for consumer education.




Factors Influencing

Consumer Behavior

Social

Referencegroups

Family

Rolesand

status

Personal

Age andlife-cycle

Personalityand

self-concept

Lifestyle

Psycho-logical

MotivationPerceptionLearning

Beliefs andattitudes

Buyer

Culture

Sub-culture

Socialclass

Cultural




Culture Culture is the fundamental determinant of a person¶s wants and behaviors and

has a great impact on the values, perceptions, preferences and behaviorsthrough the key institutions.

Culture includes knowledge, belief, art, morals, custom, gestures and any other system received as a member of the society and transferred from onegeneration to other.

These factors are outside the control of the customers and marketers but must

be taken into account by the them. Marketers need to customize products according to the culture and tradition.

As a part of their efforts to convince customers to purchase their productsmarketers use cultural representations especially in promotional appeals. Eg-³Coca Cola Open happiness´ campaign

Eg- Color meanings for choosing color pallette

Numbers

Eating habits










Factors Affecting Consumer Behavior:

Sub Culture

Subculture

Include religion, races andgeographic regions

Group of people with shared valuesystems based on common lifeexperiences.

American Indians

African Americans

Asian Americans

Each culture consists of smaller sub cultures that provide more specific

identification and socialization for its members.













Factors Affecting Consumer Behavior: Social

classes

All societies exhibit social stratification. Mostly takes the form of caste system

where members of different castes are reared for certain roles. They reflect

income, occupation, dress and speech patterns.

Social Class Societys relatively permanent

& ordered divisions whosemembers share similar values,interests, and behaviors.

Measured by: OccupationIncome, Education, Wealth andOther Variables.

People within a social classtend to exhibit similar buyingbehavior.




Characteristics of Social classes

People within the same social class behave alike and different from the people of the other social class.

Indicated by a cluster of variables- occupation, income, wealth and

education.

Social classes show distinct product and brand preferences in clothing,

leisure activities and lifestyle

Marketers are interested in social classes because people within a given

social class tend to exhibit similar buying behavior.




Social stratification of US society

Upper uppers- These are the less than 1% social elite. Mostly live on inherited

wealth. Are a huge market for costliest jewellery, antiques, homes, vacations andluxury cars.

Lower uppers- About 2% of the population. Includes people who have earnedhuge income or wealth through exceptional ability in their profession or business.Build a symbol of status for themselves and their children.

Upper middles- Include mainly professional people like small business men andcorporate managers who are concerned with their career, believe in their

education and possess professional and administrative skills. They provide goodmarket for good homes, clothes, furnitures and appliance.

Middle class- Average pay white collar workers. Buy popular products and try tokeep up with the trends. Spend on worthwhile things and steer children towardscollege education.

Working class- Includes the average pay blue collar workers. Depends heavilyon f riends and relatives for economic and emotional support

Upper lowers- Includes workers who are just above poverty line. Unskilledworkers and daily wage earners.

Lower lowers- Below the poverty line. Depend totally on public aid and charity



Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc.

Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458

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Reference GroupsMembership

Family (most important)Husband, wife, kids

Roles and Status

Social Factors

Factors Affecting Consumer Behavior: Social





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Social Factors: groups

Group can be defined as two or more people who interact to accomplish individual or mutual goals

A person¶s reference group consists of all those groups that have a direct or indirectinfluence on the attitude, lifestyle and behavior of individuals.

Groups that have a direct influence on the attitude and behavior of an individuals are themembership groups. Consists of primary and secondary groups. Eg- Friends,neighbours,co-workers and religious, spiritual groups, trade union groups

People are also influenced by groups to which they aspire to join. These are the

aspirational groups. Dissociative groups are the one¶s whose belief system and values are rejected

Opinion leaders also act as important groups influencing individuals.

Marketers try to identify target customer¶s reference groups

The factor that effects the influence exerted by a reference group are the information andexperience that the group carries(as perceived by the consumers) its credibility andattractiveness.

Reference groups create pressures for confirmity that directly effects the consumer¶s

brand and product choice.





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Family

The most important primary reference group which effects a buyer¶s behavior

Consists of parents- family of orientation and later on the family of procreation- spouseand children.

From parents a person acquires an orientation toward religion, politics, and economicsand a sense of personal ambition, self-worth, values, morals and love. In countries likeIndia family of orientation plays a significant role in buying pattern.

With changing lifestyles women and children have come to influence the purchasedecisions to great extent.

Teenagers exert a great influence in purchasing decisions particularly in technology based products.

More and more children are being targeted as they also influence the buying decision toa great extent.





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R oles and status

The position and the responsibility that a person holds in the groups that he is a

part of defines his role and status

Each role carries a status.

Needs, wants and demands of an individual are highly influenced by his/her

status

People choose products that communicate their role and status in society

Marketers offer products according to the status symbol communicated by the

product.

Also people choose products that reflect and communicate their role and status

in the society.

Marketers are aware about the status symbol potential of products and brands.





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Personal


Personal

Personal Influences

Age and Family Life CycleStage

Personality and self concept

Lifestyle Identification

Activities Opinions

Interests





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Age and stage in life cycle

People buy a variety of different goods over their lifetime.

Tastes and preferences in foods, clothes, vehicles, vacations is to a great extentrelated directly to age.

Consumption is influenced by stages in life cycle which is divided into 8stages.

Bachelor stage, Newly married couple, Full nest I, Full nest II, Empty nest

I, Empty nest II, Solitary survivor. In bachelor stage one is fashion and recreation oriented, fewer responsibilities,

purchase basic home equipment, newly married have the highest purchaserate- good market for consumer durables, appliances, vehicles and furniture

Full nest I and II- financial position is better, bigger size packages, childrenrelated purchases

Empty nest I- Older married couples, children not living with them, more

savings, travel and recreation, luxuries and home improvements. Solitary survivor- Income is still good, but likely to sell home or rent out.

Marketers mould their products according to the life cycle stage of customers.





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Brand Personality

Is a comprehensive concept which includes all the tangible andintangible traits of a brand like beliefs, values, features and interests.

Brand personality describes a brand in terms of human characteristics.

A brand with a personality becomes a compelling value proposition for the customers hence marketers are constantly trying to give their brands a personality by conveying it through promotional appeals

Manufacturers use brand ambassadors to create the perception andimage.

It is the attribution of human personality traits to a brand and is done asa method to achieve differenciation.

Brand personality helps marketers to position their products in mindsof customers.





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Personality and self concept

Personality refers to a set of distinguishing physical and psychological set of traits that lead to a consistent and an enduring response to environmentalstimuli.

Every person has certain personality traits which reflect on his/her buying behavior.

People try to relate their own personalities with the products that they use

Brands also have personalities and consumers choose those brands and

products which they feel relates to their personality. Research in brand personality identified the following 5 traits:

Sincerity- (Down to earth, Honest)

Excitement- ( Daring, Spirited and adventure)

Competence- (Reliable, intelligent, successful)

Sophistication- (Elite and charming)

R uggedness- (Outdoor and rough)





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Lifestyle

Lifestyle is a person¶s pattern of living in the world and is determined

by his activities, opinions and interests. Though people may belong to the same sub culture they may lead

absolutely different lifestyles.

Lifestyle portrays the person interacting with his environment

As marketers the job is to relate their products with different lifestyles.

Marketers who target consumers on the basis of their lifestyles believethat by appealing to the people¶s inner selves it is possible to influencetheir outer selves- their purchase behavior.





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Lifestyle Influences

Multi-tasking

Time-starved

Money-constrained





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Psychological

PsychologicalFactors

AffectingBuyersChoices

Motivation

Perception

Learning

Beliefs and Attitudes





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Psychological - Motive

A motive is a need that has a sufficient level of intensity. Creating a

tension state that drives the person to act.

Satisfying the need reduces the felt tension.

Motivation begins with the presence of a stimulus that spurs the

recognition of a need The theories are by Sigmund Freud, Abraham Maslow and

Frederick Herzberg

Psychological forces shaping people¶s behavior are largely

unconscious.

Methods like Laddering, In depth interviews and Projectivetechniques have been used by motivation researchers to trace a

person¶s terminal motives which are largely implicit.

Accordingly marketers can decide at which level to develop the

message and appeal and position the product.





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Physiological Needs(hunger, thirst)

Safety Needs

(security, protection)

Social Needs(sense of belonging, love)

Esteem Needs

(self-esteem)

Self Actualization

Maslow¶s Hierarchy of Needs





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Motivation

Maslow sought to explain why consumers are driven bydifferent needs at different times.

Maslow said that human needs are arranged in a hierarchy

from the most pressing to the least pressing. People will try to satisfy their most important needs first.

Marketers need to understand how their products andservices fit psychologically into the lives, goals andaspirations of their potential customers.

If the marketer knows which need is to be appealed to, itwill be much easier to market its products.





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Herzberg¶s two factor theory

According to the two factor theory the factors which cause satisfaction

are different from the factors which cause dissatisfaction.

The opposite of dissatisfaction is not satisfaction.

Implications of the two factor theory are two:

Marketers should do their best to avoid dissatisfiers. Though absenceof dissatisfiers may not sell a product but their presence will surely

unsell the product. Eg- Any product that comes without a warranty

would be a dissatisfier.

Marketers should identify the major satisfiers and incorporate them in

their products.





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Psychological - Perception

The process by which an individual selects,organizes, and interprets information inputs to

create a meaningful picture of the world.





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Perception in marketing

Perceptions are often more important in marketing than the absolute

reality since it is the perception of the customer which effects their behavior and purchase decisions

Its important for marketers to to make sure that the product is same interms of quality, features and benefits that the consumers perceive it to be.

Perception directly influences the psychology of customers as to how

they think, feel, reason and select among different alternatives. Also conditions and situations play a very important role.

Eg- Timing of the stimulus.

Brand personality and positioning is also related to perceptions of consumers.

Selective attention, selective distortion and selective retention





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Psychological - Learning

Changes in an individual¶s behavior arising from experience.

Change is relatively permanent

Arises out of certain past experiences and events





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³Learning´ in Marketing

Repititive purchases of a product by customers is directly related totheir learning experiences and generalisations

Most human behavior is learned hence consumer behavior is alsolearnt.

A drive is a strong stimulus impelling action and marketers have to provide those positive stimulus by associating their brands with them

Marketers can create demand for their products by associating themwith strong drives, using motivating cues and providing positivereinforcements.

New marketers can enter the market by using similar drives as used bytheir already existing competitors.





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Psychological - Attitude

An attitude describes a person¶s favorable or unfavorable

evaluations, feelings, and tendencies toward an object or

idea.Attitude gives customers a frame

of mind of liking or disliking an

object





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Attitude

Consumer attitude is acomposite of their belief,feelings and behavioralintentions towards anobject

A customer may hold a positive or negative belief towards a product. Eg-Coffee available atBarista is black

Belief gives rise to a

feeling. Eg- Drinking black coffee spoils taste.

Feelings result in behavioral intentions.




Phili K tl J h B J M k U S ddl Ri NJ 07458

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Buyer Decision Process

Post purchaseBehavior

PurchaseDecision

InformationSearch

NeedRecognition

Evaluationof Alternatives

Documents

16371 Customer Behave