MKTG 504 - CONSUMER BEHAVIOR

WHO, WHEN, HOW, WHERE.........

Dr. Dennis PittaUniversity of Baltimore

CONSUMER BEHAVIOR

The subject of human behavior that is concerned with the decisions and acts of individuals in purchasing and using products.

BUYING BEHAVIOR

The decision processes and actions of individuals involved in buying and using products.

The First Buyer Behavior Model: Simple Response

StimulusStimulusStimulusStimulus OrganismOrganismOrganismOrganism ResponseResponseResponseResponse

ECONOMIC (HU) MAN MODEL

Income is spent on goods providing

UTILITY

MARGINAL UTILITY CONCEPT

PROBLEMS WITH THE MODEL:MAN NOT ALWAYS RATIONAL

NO PERFECT INFORMATON

USES FOR THE ECONOMICHUMAN MODEL

USEFUL FOR EXPENSIVE GOODSPROVIDES ANALYSIS OFECONOMIC

VARIABLES FOR WHCIH DATA EXISTS.

(E.G., ELASTICITY - at what price will utility decrease?)

Downward sloping demand curve

LEARNING THEORY MODEL - PAVLOVIAN

DRIVE

CUE

RESPONSE

REINFORCEMENT

USES FOR LEARNING THEORY MODEL

MANY: BRAND LOYALTYBRAND NAMES

PROBLEMS WITH THE LEARNING THEORY MODEL

NEGLECTS:

PERCEPTIONSINTERPERSONAL INFLUENCESSUBCONCIOUS

MOTIVATION MODEL: FREUDIAN

(SYMBOLIC PRODUCT)Uses PROJECTIVE TECHNIQUESMOTIVATIONAL RESEARCHPROBLEMS WITH THE MODEL:COSTLYINTERPRETATION???

A projective test - the Thematic Apperception Test

Typical directions….

Study the picture on the right until your imagination begins to form a story about it. There are no rules except that your story should have a beginning(what has happened in the story so far), middle (what is happening now), and an end (how things turn out).

Another example of projective techniques...

Describe the person who composed this shopping list (List A or List B)

10 pounds of potatoes 5 pound of sugar

3 pounds of ground round 1 lb of ground coffee <--> 16oz instant

1 loaf of white bread 2 pounds of carrots

1 box of laundry detergent 1 pound of tomatoes

2 qts milk

Influences on Consumer Behavior

Personal InfluencesPersonal Influences

Age and Family Life Cycle Stage

Age and Family Life Cycle Stage LifestyleLifestyle

Occupation &Economic Circumstances

Occupation &Economic Circumstances

Personality & Self-Concept

Personality & Self-Concept

Family Life Cycle stages

Single YoungMarried

FullNest I

FullNest II

EmptyNest

SoleSurvivor

Consumption in Family Life Cycle stages

Single YoungMarried

FullNest I

FullNest II

EmptyNest

SoleSurvivor

CAR Small Small 4 door Mini-van

Sportscar

HOME Apart-ment

Apart-ment

Smallhouse

Largerhouse

Smallerhouse

Nursinghome

Other Vaca-tions

China Toys +cribs

Bail Vaca-tions

Healthcare

SOCIAL PSYCHOLOGICAL MODEL

MANY FACTORS AFFECT BEHAVIOR:

INDIVIDUALFAMILYREFERENCE GROUPS

(Opinion Leadership)SOCIAL CLASSCULTURE

Personal Influence : PERSONALITY

Personality = The collection of relatively permanent tendencies to behavior in consistent ways in certain situations.

Personal Influence: ATTITUDES

Attitudes = Enduring feelings, evaluations, and responses - tendencies directed toward an object or idea.

May be positive or negative.

Attitudes does not equal buying intentions.

Resistant to changes.

Components of attitudes

BELIEFS about an object (bi)EVALUATION of those beliefs as good

or bad (e i)

Ao=biei

My attitude toward spinach

Aspinach= b1e1+b2e2+b3e3+b4e4 1 - it is good for me 2 - it is low calorie 3 - it reduces cholesterol?? 4 - it tastes bad

Aspinach= (1)(+1)+ (1)(+1)+ (0)(+10)+ (1)(-6) = - 4

How do you change a person’s attitude?

Change the beliefs - not the evaluation

Example: 9 out of 10 doctors eat spinach to lower their cholesterol

Do you see the black dots?

Personal Influence : Perceptions?

Personal Influence: PERCEPTION

Perception = The process through which an individual selects relevant stimuli from the environment, organizes them and assigns meaning to them.

SELECTIVE EXPOSURE

SELECTIVE DISTORTION

SELECTIVE RETENTION

Is this perceived?

Personal Influence: MOTIVATION

Motivation = The driving force that causes a person to take action to satisfy specific needs or wants.

Example: Maslow’s hierarchy.

PhysiologicalSafetyLove and belongingEsteemSelf-esteem

How believable is Maslow?

There is no evidence that needs beyond safety needs exist widely throughout society.

Personal Influence: LEARNING

Learning = The process through which a relatively permanent change in behavior results from the consequences of past behavior.

Source of Learning

Direct Experience = actual use

Indirect Experience = information obtained from others or observation of the behavior of others.

Result of Learning

Brand Loyalty -> learned through positive reinforcement.

Extinction -> weakening of well-established habit by unsatisfactory experiences.

Social Factors

ReferenceGroups

ReferenceGroups

Roles &Statuses

Roles &StatusesFamilyFamily

Culture

Cultural Factors

Subculture

Social Class

BuyerBuyer

Diffusion of Innovation

CONCERNED WITH THE ADOPTION OF NEW PRODUCTS

How do products diffuse through thepopulation over time?

2 1/2%Innovators

13 1/2%Early

adopters

34%Early

majority

34%Late

majority

16%Laggards

Time of adoption innovations

The Diffusion of Innovations through a market

Which group pays the most money for a product or service?

Which group expects to pay the least money for a product or service?

Buying is work - let’s look at the effort needed to buy something….

How much effort do you spend to buy gum?

________________________________

How much effort do you spend to buy a new textbook?

________________________________

How much effort do you spend to buy your first house?

________________________________

CONSUMER BEHAVIORWhen the product is familiar but not

important - ROUTINE RESPONSE BEHAVIOR

When the product is unfamiliar and not important - LIMITED DECISION MAKING

When the product is IMPORTANT ($$) - EXTENSIVE DECISION MAKING

When ya gotta have it - IMPULSE BUYING

When your car blows blue smoke, makes a funny very loud noise and dies….what do you do?

Consumer Decision Process

PROBLEM RECOGNITIONINFORMATION SEARCHALTERNATIVE EVALUATIONPURCHASE DECISIONPOSTPURCHASE EVALUATION

Consumer BuyingProcess

ProblemProblemrecognitionrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Postpurchasebehavior

Four Types of Buying Behavior

ComplexBuying

Behavior

Dissonance-Reducing Buying

Behavior

Variety-SeekingBehavior

HabitualBuying

Behavior

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

HighInvolvement

LowInvolvement

How does organization buying behavior differ from consumer buyer behavior?

Organizational Buying Behavior

CHARACTERISTICS Derived Demand Fewer Buyers More Concentrated Geographically Greater $ per Transaction

Organizational Buying Behavior

DIFFERENCES FROM CONSUMER BEHAVIOR More Rational (Value Analysis) Large Volume Purchases Many Individuals Involved Evaluation Specific Service and Leasing Important

Organizational Buying Behavior

“THE BUYING CENTER”BASED ON ROLES USER - ACTUALLY USES IT BUYER - BUYS IT (PROCESSES THE PAPERWORK) INFLUENCER - SHAPES THE EXPECTATIONS FOR

IT GATEKEEPER - INFLUENCES THE FLOW OF

INFORMATION ABOUT THE DECISION DECIDER - ACTUALLY MAKES THE DECISION

Which role is the most important?

Organizational Buying Behavior

BUY TASKSNEW TASK - NEW PRODUCT- NEW

VENDORSTRAIGHT REBUY - OLD PRODUCT -

NEW VENDORMODIFIED REBUY - NEW PRODUCT

- OLD VENDOR/ OR OLD PRODUCT - NEW VENDOR

Organizational Buying BehaviorNAIS( old SIC) CODE - STANDARD INDUSTRIAL

CLASSIFICATIONA WAY OF LUMPING LIKE COMPANIES

TOGETHEREXAMPLE

27 -> PRINTING, PUBLISHING, AND ALLIED INDUSTRIES

272 -> PERIODICALS: PUBLISHING, PUBLISHING AND PRINTING

2721 -> COMIC BOOKS, MAGAZINES, PERIODICALS, STATISTICAL REPORTS, TRADE JOURNALS

UPCOMING TOPIC

PRODUCT