Topic Two: Buying Behavior

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Topic Two Buying Behavior

• Principles of Marketing

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Consumer Behavior

• The material and emotional processes and the
  physical activities that people engage in when
  they select, purchase, use and dispose of
  products or services to satisfy particular needs
  and desires

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Consumer Buying Decision Process
Problem Awareness
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Buying Behavior

• Level of involvement
• Routinized response
• Limited problem solving
• Extended problem solving
• Attitudes
• Experiential choices
• Impulse buying

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Possible Influences on Consumer Buying Decisions
Social Environ-ment
Individual Differences
Situational Influences
Outcomes
Consumer Buying Decision Process
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Social Influences

• Culture
• Subculture
• Ethnic
• Religious
• Age
• Region
• Social class

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Hispanic Americans

• Levels of acculturation
• Family orientation and values
• Demographics
• Consumption patterns
• Food-consumption patterns
• Influence of acculturation

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African Americans

• Characteristics
• Very diverse
• 54 live in South
• Consumption patterns
• Many aspects mainstream

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Asian Americans

• Characteristics
• MOST diverse
• Consumption patterns

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Native Americans

• Median income 31,799
• Approximately 1.5 of US population
• 30 live in California, Texas, Oklahoma, Florida
• 46 below the age of 24
• Community leaders hold a great deal of influence
• Value personal touch
• Variations between tribes
• Diverse gender roles
• Spirituality plays a strong role

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Social Influences

• Family influences
• Consumer socialization
• Roles
• Family life cycle

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Social Class

• Social class hierarchy
• Types of social class systems
• Overprivileged
• Class average
• Underprivileged

• Social class influences
• Trickle-down effect
• Status float
• How social class is determined
• Income versus social class
• Occupation and education

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How Social Class Changes Over Time

• Upward mobility
• Downward mobility
• Status panic
• Social class fragmentation

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How Does Social Class Affect Consumption?

• Status symbols and judging others
• Status symbols
• Parody display
• Fraudulent symbols

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Age Affects Consumer Behavior

• Teens
• Generation X (twentysomethings)
• Baby boomers
• Baby boomlet (generation Y)
• Fifty and older
• Young again
• Gray market

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Gender and Sexual Orientation

• Sex roles have changed
• Agentic goals
• Communal goals
• Gender vs. sexual orientation
• Differences in acquisition and consumption
  behaviors
• Compensatory eating

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Household Influences

• Types of households
• Nuclear family
• Extended family
• Household
• Family life cycle

• Changing trends in household structure
• Delayed marriage
• Cohabitation
• Dual-career families
• Divorce
• Smaller families
• Single, never married
• Gay/lesbian
• Pets as kids

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Family Life Cycle
Bachelor I
Bachelor II
Bachelor III
One AdultTwo AdultTwo Adult
Children One Adult Children
Young couple
Childless couple
Older couple
Full nest I
Full nest II
Delayed full nest
Full nest III
Singleparent I
SingleparentII
Single parent III
Divorce/death Children enter or leave
Marry Aging
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Household Members Roles

• Household decision roles
• Instrumental roles
• Expressive roles
• The roles of spouses
• Husband (or wife) dominant decision
• Autonomic decision
• Syncratic decision
• Roles of Children

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Social Influence

• Positive outcomes
• Personal knowledge
• Greater certainty
• Better choices
• Charitable, philanthropic, humanitarian behaviors
• Values consistent with higher social good

• Negative outcomes
• Materialism
• Anorexia/bulimia
• Conspicuous consumption
• Theft
• Drugs/Smoking/Alcohol
• Hazing deaths
• Gangs
• The media and violence

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Reference Groups

• Aspirational reference group
• Associative reference group
• Dissociative reference group

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Informational Influence

• What happens when consumers experience
  informational influence?
• What makes informational influence strong or
  weak?
• Product characteristics
• Consumer and influencer characteristics
• Group characteristics

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Nature and Type of Influence
Normative Informational
Example Your friend tells you you
shouldnt wear that outfit again. Example
Your friend looks at you in a weird way whenever
you wear the outfit.
Example Your friend tells you there is a sale
at Nordstroms (WOM).
Communicated Verbally Communicated Non-verbally
Example You see a throng of people walking
into Nordstroms and decide to go in.
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Individual Differences

• Word of mouth
• Personality
• Lifestyles psychographics
• Motivation

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Word of Mouth Special Sources of Influence

• Opinion leaders
• Gatekeepers
• Knowledgeable about products
• Heavy users of mass media
• Buy new products when introduced
• Perceived as credible
• Market mavens
• Knows a lot about marketplace in general
• Where/when to shop whats on sale

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Personality

• Personality
• How has personality been studied?
• Psychoanalytic approaches
• Trait theories
• Phenomenological approaches
• Locus of control
• Social-psychological theories
• Behavioral approaches

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Personalitys Impact on CB

• Optimal stimulation level (OSl)
• Dogmatism
• Need for uniqueness
• Need for cognition (NFC)

• Susceptibility to influence
• Frugality
• Self-monitoring behavior
• National character

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Lifestyles

• Lifestyles
• Activities, interests, and opinions (AIOs)
• Market segmentation
• Communications

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Definition

• Psychographics a description of consumers on
  the basis of their psychological and behavioral
  characteristics
• Psychographics combining values, personality,
  and lifestyles
• Values and Lifestyle Survey (VALS)

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VALS 2 - LIFESTYLE SEGMENTATION
ACTUALIZERS8
Abundant Resources
Principle Oriented
Status Oriented
Action Oriented
EXPERIENCERS11
FULFILLED12
ACHIEVERS10
STRIVERS14
MAKERS12
BELIEVERS17
Minimal Resources
STRUGGLERS16
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Maslows Hierarchy of Needs
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Types of Perceived Risk

• Performance
• Financial
• Physical or safety
• Social
• Psychological
• Time

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Whether They Have the Ability Is Based on. . .

• Knowledge and experience
• Cognitive style
• Intelligence, educationand age
• Money

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Situational Influences

• Environment
• Time
• Buyers mood
• Purchase reason
• Social surroundings

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Outcomes

• Consumer learning
• Disconfirmation
• Consumer satisfaction, dissatisfaction and
  complaint behavior
• Exit, voice, loyalty
• Cognitive dissonance

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Learning From Consumer Experience
Consumerfamiliarity withthe domain
Consumermotivationto learn
Revisedbeliefs
Priorbeliefs
Hypothesisgeneration
Exposureto evidence
Encodingof evidence
Integrationof evidence prior beliefs
Ambiguity ofthe informationenvironment
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Learning from Consumer Experience

• What affects learning from experience?
• Motivation
• Prior knowledge or ability
• Ambiguity of the information environment or lack
  of opportunity
• Processing biases

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Importance of Customer Satisfaction

• Satisfied customers come back
• Leads to profitability
• Example Consumer in supermarket spends over
  50,000 in a life time
• Satisfied customer can provide 150,000 of
  business for a car dealer over a life time

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The Disconfirmation Paradigm
Expectations
Positive
Disconfirmation
Satisfaction Dissatisfaction
Performance
Negative
Feelings
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How Do Consumers Make Satisfaction or
Dissatisfaction Judgments?

• Attribution Theory
• Equity Theory

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Dimensions of Organizational Buying

• Characteristics of organizational transactions
• Larger orders, complex, expensive
• Long-term relationships
• Tied to
• Consumer market
• Other products
• Attributes of organizational buyers
• Better informed, more deliberate
• More people involved

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Organizational Buying

• Types of organizational purchases
• New-task purchase
• Straight re-buy purchase
• Modified re-buy purchase

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Organizational Buying Decision Process
Problem Awareness