5 Understanding Consumer Markets and Consumer Buying Behavior

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Consumer Markets andConsumer Buyer

Behavior

A Global Perspective

5

Philip KotlerGary ArmstrongSwee Hoon Ang

Siew Meng LeongChin Tiong TanOliver Yau Hon-Ming

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Learning Objectives

After studying this chapter, you should be able to:1. Define the consumer market and construct a simple model

of consumer buyer behavior

2. Name the four major factors that influence consumer buyerbehavior

3. List and understand the major types of buying decisionbehavior and the stages in the buyer decision process

4. Describe the adoption and diffusion process for newproducts


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Chapter Outline

1. Model of Consumer Behavior2. Characteristics Affecting Consumer Behavior3. Types of Buying Decision Behavior

4. The Buyer Decision Process5. The Buyer Decision Process for New Products6. Consumer Behavior Across International Borders


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Consumer buyer behavior refers to the buyingbehavior of final consumers individuals andhouseholds who buy goods and services for

personal consumption. Consumer market refers to all of the personal

consumption of final consumers.

Model of Consumer Behavior


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Marketing stimuli consists ofthe 4 Ps

Product

Price

Place

Promotion

Other stimuli include: Economic forces

Technological forces

Political forces

Cultural forces

Model of Consumer Behavior


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Model ofConsumerBehavior


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Factors influencing Consumer Behavior


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Personal Factors Age and life-cycle stage

Occupation

Economic situation Lifestyle

Personality and self-concept

Psychological Factors Motivation

Perception

Learning Beliefs and attitudes

Characteristics Affecting Consumer Behavior


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Culture is the learned values,perceptions, wants, and

behavior from family andother important institutions.



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Subcultures are groups of people within a culturewith shared value systems based on common lifeexperiences and situations.

Chinese Indians Malays Eurasians



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Social classes are societys relatively permanentand ordered divisions whose members sharesimilar values, interests, and behaviors.

Measured by a combination of occupation, income,education, wealth, and other variables



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Social Factors

Groups

Membership groups have a direct influence and to which aperson belongs.

Aspirational groups are groups to which an individual wishesto belong.

Reference groups are groups that form a comparison orreference in forming attitudes or behavior.



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Social Factors

Groups

Opinion leaders are people within a reference group withspecial skills, knowledge, personality, or other characteristicsthat can exert social influence on others.

Buzz marketing enlists opinion leaders to spread the word.

Social networking is a new form of buzz marketing MySpace.com Facebook.com


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Social Factors

Family is the most important consumer-buyingorganization in society.

Social roles and status are the groups, family, clubs, andorganizations to which a person belongs that can definerole and social status.


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Personal Factors

Personal characteristics

Age and life-cycle stage Occupation

Economic situation

Lifestyle Personality and self-concept


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Personal Factors

Age and life-cycle stage

RBC (Royal Bank of Canada) Royal Bank hasidentified five life-stage segments:

Youth younger than 18 years

Getting started 18-35 years

Builders 35-50 years Accumulators 50-60 years

Preservers over 60 years


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Personal Factors

Lifestyle is a persons pattern of living as expressed in hisor her psychographics.

Measures a consumers AIOs (activities, interests, andopinions) to capture information about a personspattern of acting and interacting in the environment.


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Personal Factors

SRI Consultings Values and Lifestyle (VALS) typology:

Classifies people according to how they spend moneyand time:

Primary motivations

Resources


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Personal Factors

Primary motivations

Ideals Achievement

Self-expression


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Personal Factors

Resources

High resources Innovators exhibit all primary motivations.

Low resources

Survivors do not exhibit strong primarymotivation.


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VALS LifestyleClassifications


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Personal Factors

Personality and Self-Concept

Personality refers to the unique psychologicalcharacteristics that lead to consistent and lastingresponses to the consumers environment.


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Personal Factors


Brand personality refers to the specific mix of human traits thatmay be attributed to a particular brand:

Sincerity

Excitement

Competence Sophistication

Ruggedness

http://www.nestle.com.sg/home.htm


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Personal Factors


Self-concept refers to peoplespossessions that contribute to andreflect their identities.


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Psychological Factors

Motivation

A motive is a need that is sufficiently pressing to direct theperson to seek satisfaction.

Motivation research refers to qualitative research designedto probe consumers hidden, subconscious motivations.


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Abraham Maslows Hierarchy ofNeeds

People are driven by particularneeds at particular times.

Human needs are arranged in a

hierarchy from mostpressing to least pressing.


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Perception is the process by which people select, organize,and interpret information to form a meaningful picture of theworld from three perceptual processes:

Selective attention

Selective distortion

Selective retention


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Selective attention is the tendency for people to screenout most of the information to which they are exposed.

Selective distortion is the tendency for people tointerpret information in a way that will support whatthey already believe.

Selective retention is the tendency to remember goodpoints made about a brand they favor and to forgetgood points about competing brands.


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Learning is the changes in an individuals behavior arisingfrom experience and occurs through interplay of:

Drives

Stimuli

Cues

Responses Reinforcement


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Beliefs and Attitudes

Belief is a descriptive thought that a person has aboutsomething based on: Knowledge

Opinion

Faith


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Beliefs and Attitudes

Attitudes describe a persons relatively consistentevaluations, feelings, and tendencies toward an objector idea.



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Types of Buying Decision Behavior

Complex Buying Behavior

Occurs when consumers are highly motivated in a purchaseand perceive significant differences among brands.

Purchasers are highly motivated when: Product is expensive

Product is risky

Product is purchased infrequently

Product is highly self-expressive


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Dissonance-reducing buying behavior occurs whenconsumers are highly involved with an expensive,infrequent, or risky purchase, but see little differenceamong brands.

Post-purchase dissonance occurs when the consumernotices certain disadvantages of the product purchased orhears favorable things about a product not purchased.


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Habitual buying behavior occurs when consumers havelow involvement and there is little significant branddifference.

Variety-seeking buying behavior occurs whenconsumers have low involvement and there aresignificant brand differences.


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The Buyer Decision Process

Five stages in the buyer decision process1. Need recognition

2. Information search

3. Evaluation of alternatives4. Purchase decision

5. Post-purchase behavior


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Need Recognition

Need recognition occurs when the buyer recognizesa problem or need triggered by:

Internal stimuli

External stimuli


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Information Search

Information search is the amount of information neededin the buying process and depends on:

The strength of the drive,

The amount of information you start with,

The ease of obtaining the information,

The value placed on the additional information, and The satisfaction from searching.


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Information Search

Sources of information: Personal sources family and friends

Commercial sources advertising, Internet

Public sources mass media, consumerorganizations

Experiential sources handling, examining, usingthe product


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Sources and Role of Information


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Evaluation of Alternatives

Evaluation of alternatives is how the consumerprocesses information to arrive at brand choices.


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Purchase Decision

The purchase decision is the act by the consumer tobuy the most preferred brand.

The purchase decision can be affected by: Attitudes of others

Unexpected situational factors


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Post-Purchase Decision

The post-purchase decision is the satisfaction ordissatisfaction the consumer feels about the

purchase. Relationship between:

Consumers expectations

Products perceived performance


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The larger the gap between expectation andperformance, the greater the consumers

dissatisfaction. Cognitive dissonance is the discomfort caused by a

post-purchase conflict


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Customer satisfaction is a key to building profitablerelationships with consumers to keeping and

growing consumers and reaping their customerlifetime value.


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The Buyer Decision Process forNew Products

Stages in the Adoption Process

1. Awareness

2. Interest3. Evaluation

4. Trial

5. Adoption


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Awareness is when the consumer becomes awareof the new product but lacks information.

Interest is when the consumer seeks informationabout the new product.


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Evaluation is when the consumer considers

whether trying the new product makes sense. Trial is when the consumer tries the new product

to improve his or her estimate of value.

Adoption is when the consumer decides to makefull and regular use of the product


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Individual Differences in Innovation


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Influence of Product Characteristics on Rate ofAdoption

Relative advantage is the degree to which aninnovation appears to be superior to existing products.

Compatibility is the degree to which an innovation fitsthe values and experiences of potential consumers.


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Influence of Product Characteristics on Rate ofAdoption

Complexity is the degree to which the innovation isdifficult to understand or use.

Divisibility is the degree to which the innovation maybe tried on a limited basis.


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Consumer Behavior Across InternationalBorders

Differences can include: Values

Attitudes

Behaviors The question for marketers is whether to adapt or

standardize the marketing.

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5 Understanding Consumer Markets and Consumer Buying Behavior