PoM-W4-Ch.5-Consumer Markets and Buyer Behavior

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Transcript of PoM-W4-Ch.5-Consumer Markets and Buyer Behavior

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The modelofconsumer behavior shows that marketingand other stimuli enter the consumer’s “blackbox”and produce certain responses.Marketers must figure out what isinthe buyer’s black box.Marketingstimuli consist ofthe four Ps:product,price,place,and promotion.Other stimuli includemajor forces and events inthe buyer’s environment:economic,technological,social,and cultural.Allthese inputs enter the buyer’s black box,where they are turned into asetofbuyer responses—thebuyer’s attitudes and preferences,brand engagements and relationships,and what heor she buys,when,where,and howmuch.Marketers want to understand howthe stimuli are changed intoresponses insidethe consumer’s black box,which hastwo parts.First,the buyer’s characteristicsinfluence howheor she perceives and reacts to the stimuli.Second,the buyer’s decision process itselfaffects hisor herbehavior.

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Consumerpurchases are influenced strongly by cultural,social,personal,and psychologicalcharacteristics.For the most part,marketers cannot control such factors,butthey must take them intoaccount.

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Culture isthe most basic cause ofaperson’s wants and behavior.Humanbehavior islargely learned.Growing up inasociety,achild learns basic values,perceptions,wants,and behaviors from hisor herfamily and other important institutions.Marketers are always trying to spotcultural shifts so astodiscover new products that might bewanted.For example,the cultural shift toward greater concernabout health and fitness hascreated ahuge industry for health-and-fitness services,exerciseequipment and clothing,organic foods,and avariety ofdiets.

Subcultures include nationalities,religions,racial groups,and geographic regions.Many subculturesmake up important marketsegments,and marketers often design products and marketingprogramstailored to their needs.

Socialclassisnotdeterminedbyasinglefactor,suchasincome,butismeasuredasacombinationofoccupation,income,education,wealth,andothervariables.Marketersareinterestedinsocialclassbecausepeoplewithinagivensocialclasstendtoexhibitsimilarbuyingbehavior.Socialclassesshowdistinctproductandbrandpreferencesinareassuchasclothing,homefurnishings,travelandleisureactivity,financialservices,andautomobiles.

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Groups that have adirect influence and to which aperson belongs are calledmembership groups.In contrast,reference groupsserve asdirect (face-to-face interactions)or indirect points ofcomparison or reference informing aperson’s attitudes orbehavior.Peopleoften are influenced by reference groups to which they donotbelong.For example,anaspirational group isone to which the individual wishes to belong,aswhen ayoung basketball player hopes to someday emulate basketball starLeBron Jamesand play inthe NBA.Marketers try to identify the reference groups oftheir target markets.Referencegroupsexpose aperson to new behaviors and lifestyles,influence the person’s attitudes and selfconcept,and create pressures toconform that may affect the person’s product and brand choices.Word-of-mouth influence canhave apowerful impact onconsumer buying behavior.The personal words and recommendationsoftrusted friends,family,associates,and other consumers tend to bemore credible than those coming from commercialsources,such asadvertisements or salespeople.Marketers ofbrands subjected to strong group influence must figure out howto reach opinion leaders—people within areference group who,because ofspecial skills,knowledge,personality,or other characteristics,exert social influence onothers.Buzz marketinginvolves enlisting or even creating opinion leaders to serve as“brand ambassadors”who spreadthe word aboutacompany’s products.Overthepastseveralyears,anewtypeofsocialinteractionhasexplodedontothescene—onlinesocialnetworking.Onlinesocialnetworksareonlinecommunitieswherepeoplesocializeorexchangeinformationandopinions.Socialnetworkingcommunitiesrangefromblogs(Consumerist,Gizmodo,Zenhabits)andmessageboards(Craigslist)tosocialmediasites(Facebook,Twitter,YouTube,Pinterest,andFoursquare)andvirtualworlds(SecondLifeandEverquest).Marketersareworkingtoharnessthepowerofthesenewsocialnetworksandother“word-of-Web”opportunitiestopromotetheirproductsandbuildclosercustomerrelationships.Thefamilyisthemostimportantconsumerbuyingorganizationinsociety,andithasbeenresearchedextensively.Marketersareinterestedintherolesandinfluenceofthehusband,wife,andchildrenonthepurchaseofdifferentproductsandservices.Apersonbelongstomanygroups—family,clubs,organizations,onlinecommunities.Aroleconsistsoftheactivitiespeopleareexpectedtoperformaccordingtothepeoplearoundthem.Eachrolecarriesastatusreflectingthegeneralesteemgiventoit bysociety.Peopleusuallychooseproductsappropriatetotheirrolesandstatus.Considerthevariousrolesaworkingmotherplays.Inhercompany,shemayplaytheroleofabrandmanager andinherfamily,sheplaystheroleofwifeandmother.Asabrandmanager,shewillbuythekindofclothingthatreflectsherroleandstatusinhercompany.

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Peoplechange the goods and services they buyover their lifetimes.Tastes infood,clothes,furniture,andrecreation are often age related.Buying isalso shaped by the stage ofthe family lifecycle—the stages throughwhich families might pass asthey mature over time.Lifestage changes usually result from demographics and life-changing events—marriage,having children,purchasing ahome,divorce,children going to college,changes inpersonal income,moving out ofthe house,and retirement.Marketers often definetheir target markets intermsoflife-cycle stage and develop appropriate products and marketingplans for each stage.Peoplecomingfromthesamesubculture,socialclass,andoccupationmayhavequitedifferentlifestyles.Lifestyleinvolvesmeasuringconsumers’majorAIOdimensions—activities(work,hobbies,shopping,sports,socialevents),interests(food,fashion,family,recreation),andopinions(aboutthemselves,socialissues,business,products).Lifestylecapturessomethingmorethantheperson’ssocialclassorpersonality.Itprofilesaperson’swholepatternofactingandinteractingintheworld.Whenusedcarefully,thelifestyleconceptcanhelpmarketersunderstandchangingconsumervaluesandhowtheyaffectbuyerbehavior.Consumersdon’tjustbuyproducts;theybuythevaluesandlifestylesthoseproductsrepresent.Eachperson’sdistinctpersonalityinfluenceshisorherbuyingbehavior.Personalityisusuallydescribedintermsoftraitssuchasself-confidence,dominance,sociability,autonomy,defensiveness,adaptability,andaggressiveness.Personalitycanbeusefulinanalyzingconsumerbehaviorforcertainproductorbrandchoices.Theideaisthatbrandsalsohavepersonalities,andconsumersarelikelytochoosebrandswithpersonalitiesthatmatchtheirown.Abrandpersonalityisthespecificmixofhumantraitsthatmaybeattributedtoaparticularbrand.Manymarketersuseaconceptrelatedtopersonality—aperson’sself-concept(alsocalledself-image).Theideaisthatpeople’spossessionscontributetoandreflecttheiridentities—thatis,“wearewhatweconsume.”Thus,tounderstandconsumerbehavior,marketersmustfirstunderstandtherelationshipbetweenconsumerself-conceptandpossessions.

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Aperson hasmany needs atany given time.Some are biological,arising from states oftension such ashunger,thirst,or discomfort.Others are psychological,arising from the needfor recognition,esteem,or belonging.Aneed becomes amotivewhen itisaroused to asufficient levelofintensity.The termmotivation research refers to qualitative research designed to probe consumers’hidden,subconscious motivations.Consumers often don’t know or can’t describe why they act astheydo.Thus,motivation researchers use avariety ofprobing techniques to uncover underlying emotionsand attitudes toward brands and buying situations.Many companies employ teams ofpsychologists,anthropologists,and other social scientists to carry out motivation research.One adagency routinelyconducts one-on-one,therapy-like interviews to delve into the inner workings ofconsumers.Anothercompany asks consumers to describe their favorite brands asanimals or cars (say,aMercedesversus aChevy)to assess the prestige associated with various brands.Still others rely onhypnosis,dreamtherapy,or soft lights and mood music to plumb the murky depths ofconsumer psyches.

Amotivated person isready to act.Howthe person acts isinfluenced by hisor herown perception ofthe situation.All ofuslearn by the flow ofinformation through our five senses:sight,hearing,smell,touch,and taste.However,each ofusreceives,organizes,and interprets this sensory information inanindividual way.Perception isthe process by which people select,organize,and interpretinformation to formameaningful picture ofthe world.Peoplecanformdifferent perceptions ofthesame stimulus because ofthree perceptualprocesses:selective attention,selective distortion,and selective retention.Selective attention—thetendency for people to screen out most ofthe information to which they are exposed—means thatmarketers must work especially hardto attract the consumer’s attention.Selective distortiondescribes the tendency ofpeople to interpret information inaway that will support what they already

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believe.Selective retention means that consumers are likely to remember good points made about abrand they favor and forget good points made about competing brands.

When people act,they learn.Learningdescribes changes inanindividual’s behavior arising fromexperience.Learningtheorists saythat most human behavior islearned.Learningoccurs through theinterplay ofdrives,stimuli,cues,responses,and reinforcement.

Beliefs may bebased onreal knowledge,opinion,or faith and may or may notcarry anemotionalcharge.Marketers are interested inthe beliefs that people formulate about specific products andservices because these beliefs make up product and brand images that affect buying behavior.If someofthe beliefs are wrong and prevent purchase,the marketer will want to launch acampaign to correctthem.

Peoplehave attitudes regarding religion,politics,clothes,music,food,and almost everything else.Attitude describes aperson’s relatively consistent evaluations,feelings,and tendencies toward anobject or idea.Attitudes putpeople into aframe ofmind ofliking or disliking things,ofmoving towardor away from them.

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Consumers undertake complex buying behavior when they are highly involved inapurchase and perceive significantdifferences among brands.Consumers may behighly involved when the product isexpensive,risky,purchased infrequently,and highly self-expressive.This buyer will pass through alearning process,first developing beliefs about the product,thenattitudes,and then make athoughtful purchase choice.Marketers ofhigh-involvement products must understand theinformation-gathering and evaluation behavior ofhigh-involvement consumers.They need to help buyers learn about product-class attributes and their relative importance.Dissonance-reducing buying behavior occurs when consumers are highly involved with anexpensive,infrequent,or riskypurchase butsee little difference among brands.In this case,because perceived brand differences are notlarge,buyers mayshop around to learn what isavailable butbuyrelatively quickly.They may respond primarily to agood price or purchaseconvenience.After the purchase,consumers might experience postpurchase dissonance (after-sale discomfort)when theynotice certain disadvantages ofthe purchased brand or hear favorable things about brands notpurchased.To counter suchdissonance,the marketer’s after-sale communications should provide evidence and support to help consumers feel good abouttheir brand choices.Habitual buying behavior occurs under conditions oflow-consumer involvement and little significant brand difference.Forexample,take table salt.Consumers have little involvement inthis product category—they simply go to the store and reach forabrand.If they keep reaching for the same brand,itisout ofhabit rather than strong brand loyalty.Consumers appear to havelow involvement with most low-cost,frequently purchased products.Because buyers are nothighly committed to any brands,marketers oflow-involvement products with few brand differences often use price and sales promotions to promote buying.Alternatively,they canadd product features or enhancements to differentiate their brands from the restofthe pack and raiseinvolvement.Consumers undertake variety-seeking buying behavior insituations characterized by low consumer involvement butsignificantperceived brand differences.In such cases,consumers often doalotofbrand switching.For example,when buying cookies,aconsumer may hold some beliefs,choose acookie brand without much evaluation,and then evaluate that brand duringconsumption.Butthe next time,the consumer might pick another brand out ofboredom or simply to try something different.Brand switching occurs for the sake ofvariety rather than because ofdissatisfaction.In such product categories,the marketingstrategy may differ for the marketleader and minor brands.The marketleader will try to encourage habitual buying behavior bydominating shelf space,keeping shelves fully stocked,and running frequent reminder advertising.Challengerfirms willencourage variety seeking by offering lower prices,special deals,coupons,free samples,and advertising.

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The buying process starts with need recognition—the buyer recognizes aproblemor need.The needcanbetriggered by internal stimuli when one ofthe person’s normalneeds—for example,hunger orthirst—rises to alevel high enough to become adrive.Aneed canalso betriggered by external stimuli.For example,anadvertisement or adiscussion with afriend might get you thinking about buying anew car.Atthis stage,the marketer should research consumers to find out what kinds ofneeds orproblems arise,what brought them about,and howthey led the consumer to this particular product.

Actual state; isthewayanindividual perceiveshisorherfeelingsandsituationtobeatthepresenttime.Desired /idealstate; is thewayanindividualwantstofeelorbeatthepresenttime.

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Whileproblemrecognitioncananddoesoccurnaturally,thisprocessisoftenspurredby marketingefforts.Insomecases,marketersattempttocreateprimarydemand ,whereconsumers areencouragedtouseaproductorserviceregardlessofthebrandtheychoose.Such needsareoftenencouragedintheearlystagesofaproduct’slifecycle,as,forexample,when microwaveovenswerefirstintroduced.Secondarydemand,whereconsumersareprompted topreferaspecificbrandinsteadofothers,canoccuronlyifprimarydemandalreadyexists. Atthispoint,marketersmustconvinceconsumersthataproblemcanbebestsolvedby choosingtheirbrandoverothersinthesamecategory.Ingeneral,marketersusetwomajortechniquestotrytostimulateproblemrecognition.First,theycanattempttocreateanewideal state.Thirtyyearsago,fewpeoplegavemuchthoughtto theperformanceorstyleoftheirathleticshoes.Todaywe arebombardedwithmarketingmessagesfeaturingathletic shoesthatwillmakeusrunfaster,jumphigher,andlook morefashionable—anewidealstate.Second,marketerscantrytoencourageourdissatisfaction withtheactualstate,asSaksFifthAvenuedidbyfostering shoppers’dissatisfactionwithordinaryshoppingbags. WhenSakscreatedboldlystylish,eco-friendly,reusablebagstoholdpurchases,itencouragedconsumerstoviewfree bagsaspersonalstatementsaboutfashionandenvironmental consciousness.

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Informationsourcescanberoughlybrokendownintotwokinds:internalandexternal.Asa resultofpriorexperienceandsimplylivinginaconsumerculture,eachofusoftenhassome degreeofknowledgeaboutmanyproductsalreadyinourmemory.Whenconfrontedwitha purchasedecision,wemayengageininternalsearchbyscanningourownmemorybankto assemble information about different product alternatives.Usually,though,eventhemostmarket-aware ofusneedstosupplementthisknowledgewithexternalsearch, bywhichweobtaintheinformationfromadvertisements,friends,orjustplainpeoplewatching.What kind ofinformation isretrieved from internal search?(1) brands,(2)attributes, (3)evaluations,and(4)experiences.What kind ofinformation isretrieved from external search?(1)brand name,(2)price,(3)other attributes.Where canwe search for external information?(1)retailer search,(2)media search, (3)interpersonal search,(4)independent search,(5)experiential search.Deliberate vs ‘accidental’search: Ourexistingknowledgeofaproductmaybetheresultofdirectedlearning:onapreviousoccasion wemightalreadyhavesearchedforrelevantinformationorexperiencedsomeofthealternatives.Aparentwhoboughtabirthdaycakeforonechildlastmonth,forexample,probablyhasagoodideaofthebestkindtobuyforanotherchildthismonth. Alternatively,wemayacquireinformationinamorepassivemanner.Eventhoughaproduct maynotbeofdirectinteresttousrightnow,exposuretoadvertising,packaging,salespromotion andviralmarketingactivitiesmayresultinincidentallearning.Mereexposureovertimetoconditioned stimuliandobservationsofothersresultsinthelearningofmuchmaterialthatmaynot beneededforsometime,ifever.Formarketers,thisisoneofthebenefitsofsteady,‘low-dose’ advertising,astheyestablishandmaintainproductassociationsuntilthetimeweneedthem.

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Arecentstudyofinformationsearchin hightechnologymarketssuggestedthatuseofinformationchannelscanbesegmentedbyage andeducation,witholderconsumersaccessinginformationchannelswithlesscomplexinformation comparedwithmorehighlyeducatedconsumerswhotendtosearchallinformation channels.Inaddition,‘duringeachsegmentofthesearchconsumerstendtousemultiplesources ofinformation’.

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Awareness set: The alternatives that aconsumer canthink of.Unawareness set:The alternatives that aconsumer does notknow about.Evoked set(consideration set):Thealternativesaconsumeractually considers andwill evaluate for solving the problem.This setincludes productsalreadyinmemory(theretrievalset),plusthose prominentintheretailenvironment.Inert set:The alternatives that are notunder consideration.Consumerswillgenerallyacceptfavorableinformationaboutbrandsintheinertset, althoughtheydonotseekoutsuchinformation.Brandsinthissetaregenerallyacceptable whenpreferredbrandsarenotavailable.Inept set:The alternatives that aconsumer wouldnotconsiderbuying.These are thealternatives that are activelydislikedoravoidedbythe consumer.

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In the evaluation stage,the consumer ranks brands and forms purchase intentions.Generally,the consumer’s purchase decision will beto buythe most preferred brand,buttwo factors cancome between the purchase intention and the purchase decision.The first factor isthe attitudes ofothers.If someone important to you thinks that youshould buythe lowest-priced car,then the chances ofyou buying amore expensivecarare reduced.The second factor isunexpected situational factors.The consumermay formapurchase intention based onfactors such asexpected income,expectedprice,and expected product benefits.However,unexpected events may change thepurchase intention.For example,the economy might take aturn for the worse,aclose competitor might drop its price,or afriend might report being disappointed inyour preferred car.Thus,preferences and even purchase intentions donotalwaysresult inanactual purchase choice.

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The marketer’s job does notend when the product isbought.After purchasing the product,theconsumer will either besatisfied or dissatisfied and will engage inpostpurchase behavior ofinterest tothe marketer.What determines whether the buyer issatisfied or dissatisfied with apurchase?Theanswer lies inthe relationship between the consumer’s expectations and the product’s perceivedperformance.If the product falls short ofexpectations,the consumer isdisappointed;if itmeetsexpectations,the consumer issatisfied;if itexceeds expectations,the consumer isdelighted.Thelarger the gap between expectations and performance,the greater the consumer’s dissatisfaction.This suggests that sellers should promise only what their brands candeliverso that buyers aresatisfied.

Some purchasesarefollowedbyaphenomenoncalledpostpurchase dissonance. Thisoccurswhenaconsumerdoubtsthewisdomofapurchaseheorshehas made.Otherpurchasesarefollowedbynonuse.Theconsumerkeepsorreturnstheproduct withoutusingit.Mostpurchasesarefollowedbyproductuse,evenifpost purchasedissonance ispresent.Productuseoftenrequiresthedispositionoftheproductpackageor theproductitself.Duringandafteruse,thepurchaseprocessandtheproductareevaluated bytheconsumer.Unsatisfactoryevaluationsmayproducecomplaintsbythoseconsumers. Appropriateresponsesbythefirmmayreversetheinitialdissatisfactionamongthosewhocomplained.Theresultofalltheseprocessesisafinallevelofsatisfaction,whichinturn canresultinaloyal,committedcustomer,onewhoiswillingtorepurchase,orinacustomer whoswitchesbrandsordiscontinuesusingtheproductcategory.

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Anew product isagood,service,or ideathat isperceived by some potential customers asnew.It mayhave been around for awhile,butour interest isinhowconsumers learn about products for the firsttimeand make decisions onwhether to adopt them.We definethe adoption process asthe mentalprocess through which anindividual passes from first learning about aninnovation to finaladoption.Adoption isthe decision by anindividual to become aregular user ofthe product.

Peoplediffergreatlyintheirreadinesstotrynewproducts.Ineachproductarea,thereare“consumptionpioneers”andearlyadopters.Otherindividualsadoptnewproductsmuchlater.Peoplecanbeclassifiedintotheadoptercategoriesshowninthefigure.Thefiveadoptergroupshavedifferingvalues.Innovatorsareventuresome—theytrynewideasatsomerisk.Earlyadoptersareguidedbyrespect—theyareopinionleadersintheircommunitiesandadoptnewideasearlybutcarefully.Earlymainstreamadoptersaredeliberate—althoughtheyrarelyareleaders,theyadoptnewideasbeforetheaverageperson.Latemainstreamadoptersareskeptical—theyadoptaninnovationonlyafteramajorityofpeoplehavetriedit.Finally,laggingadoptersaretraditionbound—theyaresuspiciousofchangesandadopttheinnovationonlywhenithasbecomesomethingofatraditionitself.Thisadopterclassificationsuggeststhataninnovatingfirmshouldresearchthecharacteristicsofinnovatorsandearlyadoptersintheirproductcategoriesanddirectinitialmarketingeffortstowardthem.

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