Consumer Markets and Consumer Buying Behavior

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Consumer Markets and Consumer Buying Behavior

• To be a bullfighter, you must first learn to be a
  bull.
• Anonymous

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Objectives

• After reading the chapter, you should be able to
  
• Explain the model of buyer behavior.
• Outline the major characteristics affecting
  consumer behavior, and list some of the specific
  cultural, social, personal, and psychological
  factors that influence consumers.
• Explain the buyer decision process and discuss
  need recognition, information search, evaluation
  of alternatives, the purchase decision, and
  post-purchase behavior.

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Consumer Behavior

• Consumer buying behavior refers to the buying
  behavior of final consumers the ultimate,
  end-user of the product or service those
  individuals and households who buy goods and
  services for personal consumption.
• Consumer buying behavior is never simple! It is
  affected by many factors, yet understanding it is
  the essential task of marketing management.
• This chapter considers the dynamics of consumer
  buying behavior and the consumer market.

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Consumer Behavior

• Consumers vary greatly in age, income, education
  level, and tastes
• They buy an incredible variety of goods and
  services
• Your objective, from a marketing perspective, is
  to understand how consumers make their choices
  from among all the alternatives available to them!

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Model of Consumer Behavior

• The purpose of a model of consumer behavior is to
  predict how consumers will respond to the various
  marketing stimuli that a company might employ.

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Buyer Characteristics

• Consumer purchases are strongly influenced by
  cultural, social, personal, and psychological
  characteristics.
• For the most part, these cannot be coontrolled by
  the marketerbut they must be taken into account.

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Factors Influencing Behavior
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Cultural Factors

• Culture is the most basic determinant of a
  persons wants and behavior and exerts the
  broadest and deepest influence on consumer
  behavior.
• It comprises basic values, perceptions, wants,
  and behaviors a person learns continuously in a
  society.
• Culture is an integral part of the hospitality
  travel business and determines what we eat, how
  we travel, where we travel, and where we stay
• Marketers try continuously to identify cultural
  shifts in order to devise new products and
  services that might find a receptive market.

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Cultural Factors

• Each culture contains smaller subcultures, or
  groups of people with shared value systems based
  on common life experiences and situations.
• nationalities, religions, racial groups
  geographic regions
• Subcultures make up important market segments,
  and marketers often design products programs
  tailored to their needs.
• Three such important subculture groups include
  Hispanic, African American, and Asian consumers.
• each major subculture is made of many smaller
  subcultures, each with its own preferences and
  behavior

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Cultural Factors

• The US Hispanic market consists of Americans of
  Cuban, Mexican, Central American, South American,
  and Puerto Rican descent.
• The Hispanic population is over 45 million
  growth rate at 13 is almost four times the total
  population.
• Many Hispanics may be reached through the growing
  selection of Spanish-language broadcast and print
  media that cater to them.
• Hispanics are very brand loyal, and they favor
  companies who show special interest in them.

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Cultural Factors

• African-American consumers attract much marketing
  attention with annual buying power of 799
  billion.
• The US black population is growing in affluence
  and sophistication.
• More price conscious than other segments, blacks
  are also strongly motivated by quality and
  selection.
• blacks are the most fashion conscious ethnic
  group
• Brands are important. So is shopping.
• black consumers seem to enjoy shopping more than
  other groups, even for mundane things such as
  groceries

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Cultural Factors

• The most affluent US demographic segment are
  Asian-Americans, numbering more than 14.4 million
  with over 400 billion in annual spending power.
• The second-fastest-growing subsegment after
  Hispanics, Asian-American population is expected
  to make up over 9 of the US population by 2050.
• Over 85 go online regularly are comfortable
  with Internet technologies.
• As a group, Asian consumers shop frequently are
  the most brand conscious of all the ethnic
  groups.
• they can be fiercely brand loyal

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Cultural Factors

• For companies operating in many countries across
  international cultures, serving understanding
  the needs of consumers is daunting.
• While consumers in different countries and
  cultures may have some things in common, their
  values, attitudes, and behaviors often vary
  dramatically.
• international marketers must understand such
  differences and adjust products marketing
  programs accordingly
• Failing to understand differences in customs and
  behaviors from one country to another can spell
  disaster for a companys products and programs,
  however, those companies who adapt can be winners.

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Cultural Factors

• Social classes are relatively permanent and
  ordered divisions in a society whose members
  share similar values, interests, and behaviors
• almost every society has a form of social class
  structure
• Social scientists have identified the seven
  American social classes
• upper uppers (1 ), lower uppers (2 )
• upper middles (12 ), middle (32 )
• working (38 )
• upper lowers (9 ), and lower lowers (7 )

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Cultural Factors

• In many older nations, social class is something
  into which one is born and bloodlines often mean
  more than income or education in such societies
• In newer nations such as the US, Canada,
  Australia, and New Zealand it is not indicated by
  a single factor such as income but measured as a
  combination of occupation, source of income,
  education, wealth, and other variables
• Marketers are interested in social class because
  people within a given class tend to exhibit
  similar behavior, including buying behavior.

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Cultural Factors

• Social classes show distinct preferences in
  suchareas as food, travel leisure activity.
• Some marketers focus on only one social class.
• Four Seasons restaurant in upper Manhattan
  targets upper-class patrons
• Joes Coffee Shop in lower Manhattan serves
  lower-classes
• Social classes differ in media preferences with
  upper-class consumers preferring magazines and
  books and lower-class consumers preferring
  television.
• Language differences between social classes means
  advertisers must compose copy dialogue
  carefully.

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Social Factors

• Consumer behavior is also influenced by social
  factors, including the consumers groups, family,
  social roles, and status
• Individual attitudes behavior are influenced by
  many small groups
• those which have direct influence and to which
  aperson belongs are called membership groups
• They include primary groups, such as family,
  friends, neighbors, and coworkersspecifically,
  those with whom there is regular but informal
  interaction

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Social Factors

• Secondary groups are more formal and have less
  regular interaction they include religious
  groups, professional associations, and trade
  unions.
• secondary groups may be membership groups
• The importance of group influence varies across
  products and brands.
• it tends to be strongest when the product is
  visible toothers whom the buyer respects
• Reference groups serve as direct (face-to-face)
  or indirect points of comparison or reference in
  forming a persons attitudes or behavior.

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Social Factors

• People can also be influenced by aspirational
  groups to which they do not belong but would like
  toas when a young basketball player hopes to
  someday emulate a basketball star and play
  professionally
• Groups commonly have opinion leaders, people who,
  because of special skills, knowledge,
  personality, or other characteristics, exert
  influences over others
• A business should identify opinion leaders in
  their community and invite them to important
  events

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Social Factors

• The family remains the most important consumer
  buying organization in American society and has
  been researched extensively because family
  members have strong influence on buyer behavior
• Marketers are interested in the roles and
  influence of the husband, wife, and children on
  the purchase of different products and services
• buying roles change with evolving consumer
  lifestyles
• Women now make or influence up to 80 of
  car-buying decisions and men account for about
  40of food-shopping dollars

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Social Factors

• A role consists of activities a person is
  expected to perform according to the persons
  around him/her such as son or daughter, wife or
  husband, manager or worker
• A persons role at time of purchase significantly
  affects his/her behavior.
• Our roles are also influenced by our surroundings
• people dining at an elegant restaurant behave
  differently than when they dine at a fast-food
  restaurant

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Social Factors

• Recently, a new type of social interaction has
  exploded onto the scene online social networking
  whereby people socialize or exchange information
  opinions
• Social networking media range from blogs to web
  sites, such as myspace.com and youtube.com, to
  entire virtual worlds, such as Second Life.
• Marketers are working to harness the power of
  these new social networks to promote their
  products and build closer customer relationships
  where they hope to interact with consumers and
  become a part of their conversations and lives

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Personal Factors

• Age and Life-cycle stage
• Buyer decisions are influenced by characteristics
  such as age life-cycle stage, occupation,
  economic situation, lifestyle, personality, and
  self-concept.
• the types of goods services people buy change
  during their lifetimes
• Preferences for leisure activities, travel
  destinations, food, and entertainment are often
  age related, factors are often overlooked by
  marketersprobably due to age differences between
  those determining marketing strategies those
  purchasing the products and services

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Personal Factors

• Occupation
• A persons occupation affects the goods
  services bought.
• construction workers often buy their lunches from
  industrial catering trucks that come out to the
  job site
• business executives purchase meals from a
  full-service restaurant
• clerical employees may bring their lunch or
  purchase lunch from a nearby quick-service
  restaurant
• Marketers try to identify occupational groups
  that have an above-average interest in their
  products.

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Personal Factors

• Economic Status
• A persons economic situation greatly affects
  product choice decision to purchase a
  particular product.
• Consumers cut back on restaurant meals,
  entertainment, and vacations during recessions.
• restaurants may need to add lower-priced menu
  itemsthat will still appeal to their target
  markets
• Marketers need to watch trends in personal
  income, savings, and interest rates.
• if economic indicators point to a recession, they
  can redesign, reposition, and re-price their
  products

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Personal Factors

• Periods of economic prosperity create
  opportunities.
• consumers buy more expensive wines and imported
  beers, menus can upgrade, air travel leisure
  spending increase
• Managers sometimes react too slowly to changing
  economic conditions. It pays to remain
  continuously aware of the macroenvironment facing
  customers.
• Companies must take advantage of opportunities in
  an upturn take defensive steps in a downturn.
• Publications such as the Wall Street Journal, the
  business section of the local press, and regional
  economic reports help to keep managers informed.

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Personal Factors

• Lifestyle - a persons pattern of living as
  expressed in activities, interests opinions
• People from the same subculture, social class,
  and occupation may have quite different
  lifestyles
• Personality and self-concept
• Personality means distinguishing psychological
  characteristics that lead to relatively
  consistent and enduring responses to the
  environment.
• A persons personality influences buying behavior
  and can be useful in analyzing consumer
  behaviorfor some product or brand choices
• Marketers also use a concept related to
  personality a persons self-concept (also called
  self-image).
• each of us has a complex mental self-picture, and
  our behavior tends to be consistent with that
  self-image

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Psychological Factors

• Buying choices are also influenced by four major
  psychological factorsmotivation, perception,
  learning, and beliefs attitudes
• A person has many needs at any given time
• most are not strong enough to motivate a person
  to act
• need becomes motive when aroused to sufficient
  intensity
• creating a tension state causes the person to act
  to release the tension
• Theories by Maslow by Herzberg have different
  meanings for consumer analysis and marketing

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Psychological Factors

• Abraham Maslow sought to explain why people are
  driven by particular needs at particular times
• his answer is that human needs are arranged in a
  hierarchy, from most pressing to least pressing
• Maslows hierarchy of needs in order of
  importance
• physiological, safety, social, esteem
  self-actualization
• A person tries to satisfy the most important need
  first. When that is satisfied, it will stop being
  a motivator
• As each important need is satisfied, the next
  most important need will come into play

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Psychological Factors

• Frederick Herzberg developed a two-factor theory
  that distinguishes dissatisfiers (factors that
  cause dissatisfaction) and satisfiers (causing
  satisfaction).
• absence of dissatisfiers is not enough
• satisfiers must be actively present to motivate a
  purchase
• The theory has two implications.
• sellers should do their best to avoid
  dissatisfiers, things that will not sell a
  product and might easily unsell it
• manufacturers should identify major
  satisfiers/motivators of purchase in the market
  and then supply them

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Psychological Factors

• Perception
• A motivated person is ready to act, how a person
  acts is influenced by his/her perception of the
  situation.
• two people with the same motivation may act quite
  differently based on how they perceive
  conditions.
• All of us experience a stimulus by the flow of
  information through our five senses.
• each of us receives, organizes, and interprets
  thissensory information in an individual way
• Perception is the process by which an individual
  selects, organizes, and interprets information to
  create a meaningful picture of the world.

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Psychological Factors

• Selective Attention
• People are exposed tremendous amounts of stimuli
• an average person may be exposed to over 1,500
  ads a day
• Because a person cannot possibly attend to all of
  these, most stimuli is screened out.
• a process called selective attention
• The real challenge is explaining which stimuli
  people will notice
• people are more likely to notice stimuli that
  relate to a current need, or stimuli that they
  anticipate
• people are more likely to notice stimuli whose
  deviations are large in relation to the normal
  size of the stimuli

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Psychological Factors

• Selective distortion
• is the tendency to twist information into
  personal meanings interpret it in a way that
  will fit our preconceptions
• marketers cant do much about selective
  distortion
• Selective retention
• People forget much of what they learn but tend to
  retain information that supports their attitudes
  and beliefs.
• Selective retention explains why marketers use
  drama and repetition in sending messages to their
  target market.
• we are likely to remember good points mentioned
  about competing products

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Psychological Factors

• Learning describes changes in an individuals
  behavior arising from experience.
• when consumers experience a product, they learn
  about it
• Theorists say learning occurs through the
  interplay of drives, stimuli, cues, responses,
  and reinforcement.
• Hotels should help guests to learn about the
  quality of their facilities and services.
• luxury hotels give tours to first-time guests and
  inform them of the services offered
• repeat guests should be updated on the hotels
  servicesby employees and by letters and
  literature

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Psychological Factors

• Beliefs and Attitudes
• Through acting and learning, people acquire
  beliefs and attitudes which influence their
  buying behavior.
• a belief is a descriptive thought that a person
  holds about something
• Marketers are interested in the beliefs that
  people have about specific products and services.
  
• Beliefs may be based on real knowledge, opinion,
  or faith, and may or may not carry an emotional
  charge.
• People act on beliefs.
• if unfounded consumer beliefs deter purchases,
  marketers will want to launch a campaign to
  change them

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Psychological Factors

• Attitude describes relatively consistent
  evaluations, feelings, and tendencies toward an
  object or an idea.
• attitudes put people into a frame of mind for
  liking or disliking things and moving toward or
  away from them
• People have attitudes about almost everything
• religion, politics, clothes, music, and food
• Understanding attitudes and beliefs is the first
  step toward changing or reinforcing them.
• attitudes are very difficult to change
• A persons attitudes fit into a pattern
  changing one attitude may require many difficult
  adjustments.

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Psychological Factors

• Attitudes developed as children often influence
  purchases, as adults may retain negative
  attitudes toward certain vegetables, people
  possibly, places.
• It is easier for a company to create products
  that are compatible with existing attitudes than
  to change the attitudes toward their products.
• hospitality travel companies are particularly
  subject to consumer attitudes resulting from
  childhood experiences
• Once negative attitudes are developed, they are
  hard to change, though there are times when the
  high costof trying to change attitudes may pay
  off.

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Buyer Decision Process

• The buyer decision process consists of five
  stages
• need recognition, information search, evaluation
  of alternatives, purchase decision, postpurchase
  behavior
• This model emphasizes that the buying
  processstarts long before and continues long
  after theactual purchase.
• encouraging the marketer to focus on the entire
  buying process rather than just the purchase
  decision

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Buyer Decision Process

• The model appears to imply that consumers pass
  through all 5 stages with every purchase they
  make.
• in routine purchases, consumers skip or reverse
  some of these stages
• A customer in a bar purchasing a glass of beer
  may go right to the purchase decision, skipping
  information search and evaluation.
• this is referred to as an automatic response loop

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Buyer Decision Process Need Recognition

• The buying process starts when the buyer
  recognizes a problem or need.
• the buyer senses a difference between his/her
  actual state and a desired state
• The need can be triggered by internal or external
  stimuli.
• from previous experience, the person has learned
  how to cope with this need and is motivated
  toward objects that will satisfy it
• Marketers must determine the factors and
  situations that trigger consumer problem
  recognition.

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Buyer Decision Process Need Recognition

• Marketers should research to find out what kinds
  of needs or problems led consumers to purchase an
  item, what brought the needs about, and how
  theyled to this particular product choice.
• Gathering such information, marketers can
  identify stimuli that most often trigger interest
  in the product.
• and develop marketing programs involving these
  stimuli, showing how their product is a solution
  to a problem
• Marketers must understand the needs of their
  customers how the needs are translated into
  wants.

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Buyer Decision Process Information Search

• An aroused consumer may or may not search for
  more information.
• if consumer drive is strong a satisfying
  product nearat hand, the consumer is likely to
  buy it at that moment
• if not, the consumer may simply store the need in
  memory and search for relevant information
• How much searching a consumer does depends
  onstrength of the drive
• amount of initial information
• ease of obtaining more information
• value placed on additional information
• satisfaction one gets from searching.

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Buyer Decision Process Information Search

• Consumers obtain information from many sources
• personal commercial sources, advertising,
  salespeople, dealers, packaging, displays, public
  sources the Internet
• For hospitality travel products, personal
  public sources of information are more important
  than ads.
• because customers do not know what they are going
  to receive until they have received it
• People often ask others for recommendations, so
  companies have a strong interest in building such
  word-of-mouth sources.
• satisfied customers are repeat buyers, and
  walking, talking billboards for your business

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Buyer Decision Process Information Search

• Since a customer cannot try out an intangible
  product before purchase, these sources of
  information as ways can reduce the risk of
  purchasing a service seeking information from
  respected personal sources (family, friends,
  peers)
• relying on a firm with a good reputation,
  guarantees warranties
• visiting facilities or trying aspects of the
  service before purchasing, examining tangible
  cues or other physical evidence
• asking knowledgeable employees about competing
  services
• using the Internet to compare service offerings

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Buyer Decision Process Information Search

• A company must design its marketing mix to make
  prospects aware of and knowledgeable about the
  features and benefits of its products or brands.
• a company must also gather information about
  competitors and plan a differentiated appeal
• Marketers should carefully identify consumers
  information sources the importance of each one.
  
• There is no simple single evaluation process
  used by all consumers or even by one consumer in
  all buying situations.
• there are several evaluation processes

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Buyer Decision Process Evaluation of
Alternatives

• Certain basic concepts help explain consumer
  evaluation processes.
• First - we assume each consumer sees a product as
  a bundle of product attributes.
• consumers vary as to which they consider relevant
• most attention is paid to those connected with
  their needs
• Second - a consumer attaches different degrees of
  importance to each attribute.
• each consumer attaches importance to each
  attribute according to his/her unique needs and
  wants

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Buyer Decision Process Evaluation of
Alternatives

• Third - a consumer likely to develops a set of
  beliefs about where each brand stands on each
  attribute, known as the brand image.
• the effects of selective perception, distortion
  retention
• Fourth - a consumer is assumed to have a utility
  function for each attribute.
• how the consumer expects total product
  satisfaction tovary with different levels of
  different attributes
• Fifth - a consumer arrives at attitudes toward
  the different brands through some evaluation
  procedure
• one or more, depending on consumer buying
  decision

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Buyer Decision Process Purchase Decision

• In the evaluation stage, the consumer ranks
  brandsin the choice set and forms purchase
  intentions.
• Generally, the consumer buys the most preferred
  brand, but two factors can come between the
  purchase intention and the purchase decision.

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Buyer Decision Process Purchase Decision

• Attitudes of others - the more intense anothers
  attitude the closer that person is to the
  decision maker, the more influence the other
  person will have
• nowhere better identified than in the case of
  children
• children do not hide their desires and parents
  and grandparents are affected intensely
• Unexpected situations - a consumer forms purchase
  intention based on expected factors like income,
  price, and expected benefits from the product.
• when the consumer is about to act, unexpected
  situations may arise to change the purchase
  intention

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Buyer Decision Process Post Purchase Behavior

• Almost all major purchases result in cognitive
  dissonance, a discomfort from postpurchase
  conflict.
• consumers feel uneasy about acquiring drawbacks
  of chosen brands losing benefits of rejected
  brands
• Consumers often take steps to reduce dissonance.
• dissatisfied consumers may return the product and
  askfor a refund or exchange
• they may initiate a lawsuit or complain to an
  organization or group that can help them get
  satisfaction
• Buyers may also simply stop purchasing the
  product and discourage purchases by family and
  friends.
• in each of these cases, the seller loses

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Buyer Decision Process Post Purchase Behavior

• Understanding the consumers needs and buying
  process is the foundation of successful
  marketing.
• By understanding how buyers proceed through the
  buyer decision process, marketers can
  acquiremany clues as to how to better meet buyer
  needs.
• By understanding the participants in the buying
  process and major influences on buying behavior,
  marketers can develop a more effective marketing
  program.