MKT 302 Lecture 8 9 & 10

Copyright © 2007 Pearson Education Canada6-1

Marketing: An Introduction

Second Canadian Edition Armstrong, Kotler, Cunningham, Mitchell and

Buchwitz Chapter SixConsumer and Business Buyer

Behaviour


Consumer Buying Behaviour

• Refers to the buying behaviour of people who buy goods and services for personal use.

• The central question for marketers is:“How do consumers respond to various marketing efforts the

company might use?”


Consumer Buyer Influences

• Cultural factors.– Culture, subculture, social class.

• Social factors.– Reference groups, family, roles, status.

• Personal factors.– Age, lifecycle, occupation, income.

• Psychological factors.– Motivation, perception, learning, beliefs, attitudes.


Culture• Cultural is the most basic cause of a person's wants and behaviour.

• Culture is learned from family, church, school, peers, colleagues.

• Culture includes basic values, perceptions, wants and behaviours.


Sub-Culture• Groups of people with shared value systems based on common life experiences.

• Major groups:– Native Canadians.– French-Canadians.– Ethnic consumers.– Internet users.


Social Class• Relatively permanent, ordered divisions.

• Members share similar values, interests and behaviours.

• Determined by a combination of:– Occupation.– Income.– Education.– Wealth.– Other variables.


Major Canadian Classes• Upper Class (3% - 5%).– Upper Uppers (< 1%).

– Lower Uppers (2%- 4%).

• Middle Class (40% - 50%).– Upper Middles.– Average Middles

• Working Class (33%).

• Lower Class (20%).– Upper Lowers.– Lower Lowers.


Social Factors• Groups.

– Reference groups, aspirational groups.

– Importance of opinion leader.• Family.

– Most important consumer buying organization.

• Roles and status.– Expect activities and esteem given by society to those roles.


Personal Factors• Occupation.–What we do affects what we need and how much we have to spend.

–Trend towards more part-time employment and multiple jobs.

• Economic situation.–Affects real spending and consumer confidence in borrowing.


Personal Factors• Age and family life-cycle stage.

– Consumer needs change over time.– Difference between chronological and perceived age.

• Lifestyle.– a person’s pattern of living as expressed in his or her activities, interests and opinions.


Personality and Self-Concept

• Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.

• Generally defined in terms of traits.

• Self-concept suggests that people’s possessions contribute to and reflect their identities.


Psychological Factors• Motivation.• Perception.• Learning.• Beliefs.• Attitudes.


Maslow’s Hierarchy of Needs

• Physiological needs most important.

• Safety needs – protection, security.

• Social needs – sense of belonging, love

• Esteem needs – status, recognition• Self-actualization needs – self-development


• Information inputs. – The sensations received through the sense organs.

• Perception.– The process of selecting, organizing and interpreting information inputs to produce meaning.

Perception


• Selective attention. – selecting some inputs to attend to while ignoring others.

• Selective distortion.– changing or twisting of information when it is inconsistent with personal feelings or beliefs.

• Selective retention.– remembering information that supports personal feelings and beliefs and forgetting inputs that do not.

Perception


Learning• A relatively permanent change in behaviour due to experience.

• Interplay of drives, stimuli, cues, responses and reinforcement.

• Strongly influenced by the consequences of an individual’s behaviour.– Behaviours with satisfying results tend to be repeated.

– Behaviours with unsatisfying results tend not to be repeated.


Beliefs and Attitudes• Belief

– descriptive thought that a person holds about something.

• Attitude – describes a person’s consistently favorable or unfavourable evaluations, feelings and tendencies toward an object or idea.


Consumer Buyer Decisions

• Need recognition -- Realize requirement.

• Information search -- Assess various products.

• Evaluation of alternatives -- Determine relative value of each.

• Purchase decision -- Select best value.

• Post purchase behaviour – Assess degree of satisfaction.


• Buyer becomes aware of a difference between a desired state and an actual condition.

• Individual may be unaware of the problem or need.

• Marketers may use sales personnel, advertising and packaging to trigger recognition of needs or problems.

• Recognition speed can be slow or fast.

Need Recognition


• This stage begins after the consumer becomes aware of the problem or need.

• The search for information about products will help resolve the problem or satisfy the need.

• There are various sources of information.

Information Search


• Personal – most effective.– Family, neighbours, friends.

• Commercial – most information.– Advertising, salespeople.

• Public– Mass media, consumer rating groups.

• Experiential.– Handling, examining, using the product.

Sources of Information


Evaluate Alternatives• The consumer compares different brands or choices.

• May use specific buying criteria, ranked according to importance.

• May use objective or subjective measures to evaluate.

• May be logical or emotional, depending on the situation.


Post Purchase Behaviour

• Consumer satisfaction is a function of consumer expectations and perceived product performance.– If performance is below expectation, dissatisfaction results.

– If performance meets expectations, satisfaction results.

– If performance exceeds expectations, delight results.


• The consumer compares performance against expectations for the product.

• Level of satisfaction will influence repeat purchase.

• Is it better to over-promise and under-deliver, or under-promise and over-deliver?

Post Purchase Behaviour


• Buyer discomfort caused by post-purchase conflict.

• Affects major purchases; anxiety of not knowing if the right choice was made.

• Customer follow-up programs help to reduce this problem.

Cognitive Dissonance


New Product Adoption• When an organization introduces a new product, people do not begin the adoption process at the same time, nor do they move through it at the same speed.


New Product Adoption Stages

• Awareness – become aware of new product.

• Interest – seek information about product.

• Evaluation – decide whether trial makes sense.

• Trial – try product on small scale.

• Adoption – decide to purchase product.


Product Adopter Categories

• Innovators are the first adopters of new products (2.5% of buyers).– They are venturesome – they try new ideas at some risk.

• Early adopters are guided by respect (13.5%). – They are opinion leaders in their communities and adopt new ideas early but carefully.


Product Adopter Categories

• Early majority are deliberate (34%). – Although they rarely are leaders, they adopt new ideas before the average person.

• Late majority are skeptical (34%).– They adopt an innovation only after a majority of people have tried it.

• Laggards are tradition bound (16%). – They are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.


Adoption Rate Influences

• Relative advantage -- Compared to existing alternatives.

• Compatibility -- Fit with current values and experiences.

• Complexity -- Ease of understanding.• Divisibility -- Ability to trial on limited basis.

• Communicability – Ability to communicate benefits.


Business Markets• Vast and involves far more dollars and items than do consumer markets.

• Business buyers are organizations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others.


Business Markets• Market structure.

– Fewer but larger buyers, concentrated.

• Derived demand.– Based on purchases by consumers.

• Nature of the buying unit.– Multiple decision-makers, rational.

• The decision process.– More complex, formalized, dependent.


Business Markets• Market structure and demand:– Contains far fewer but larger buyers.

– Customers are more geographically concentrated.

– Business demand is derived from consumer demand.

• Nature of the buying unit:– Business purchases involve more decision participants.

– Business buying involves a more professional purchasing effort.


Buyer Business Behaviour

• Marketing and environmental stimuli enter the organization’s Black Box.

• Black Box consists of the buying center and organizational buying processes,

• Black Box prompts buyer responses.– Product, brand choice, supplier choice.

– Order quantity, delivery terms.– Payment and service terms.


Buying Situations• Straight rebuy.

– The buyer routinely reorders something without any modifications.

• Modified rebuy.– The buyer on reorder want to modify specifications, price, terms or suppliers.

• New task buy.– The buyer purchases a product or service for the first time.


Business Buying Process

• New or first-time purchase – new task.– Problem recognition.– General need description.– Product specification.– Supplier search.– Proposal solicitation.– Supplier selection.– Order-routine specification.– Performance review.


Business Buying Centre• Decision-making unit of a buying organization is called its buying centre.

• Buying centre members:– Users.– Deciders.– Influencers.– Buyers.– Gatekeepers.


Business Buying Centre• Larger risk requires more decision participants.

• More professional rational, structured process.

• More formalized routines.• May use multiple buying criteria with higher weights on non-price factors.


Business Buying Influences

• Environmental-- primary demand, economics, supply conditions, laws, etc.

• Organizational -- Objectives, policies, procedures, organizational structure and systems.

• Interpersonal -- Authority, status, empathy and persuasiveness.

• Individual -- Age, education, job position, personality and risk attitudes.


e-Procurement• Advantages for buyers.

– Access to new suppliers.– Lowers purchasing costs.– Hastens order processing and delivery.

• Advantages for vendors.– Share information with customers.– Sell products and services.– Provide customer support services.– Maintain ongoing customer relationships.


Looking Back• Describe the consumer market and

the major factors that influence consumer buyer behaviour.

• Identify and discuss the stages in the buyer decision process.

• Describe the adoption and diffusion process for new products.

• Define the business market and identify the major factors that influence business buyer behaviour.

• List and define the steps in the business buying decision process.

MKT 302 Lecture 8 9 & 10

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Transcript of MKT 302 Lecture 8 9 & 10