Consumer Behavior

Model of Buyer Behavior

Factors Influencing Consumer Behavior

Culture
Culture is often the most powerful cause of a person's needs, wants and behavior. Characteristics of Culture
Culture is learned. Certain aspects of culture never change. Cultural shifts create opportunities. Subcultures can be of even greater interest to marketers than cultures.

Marketing to Subcultures
Procter & Gamble targets Hispanics using print and TV and has developed special Spanish versions of some brands.

Social Class
Societys relatively permanent and ordered divisions Social Class Members share similar values, interests, and purchase behaviors Indentify by: income, occupation, education, wealth, and other variables Opportunity: Social Mobility products

The Major American Social Classes

Social Factors
Groups:
Reference Groups Aspirational Groups Dissociative Groups

Opinion Leaders Family Roles and Status

Toyota caters to family buying influences.

Personal Factors
Age and Life-Cycle Stage
Tastes and preferences change over time.

Occupation
Occupation influences the purchase of clothing, cars, memberships, etc.

Economic Situation
Income-sensitive goods Counter-cyclical goods

Personal Factors
Lifestyle:
Pattern of living (AIO)
Activities Interests Opinions.

VALS:
Classifies consumers with respect to motivation and resources.
Predicts purchase behavior

Personality and Self-Concept

Personality
One Definition: Unique psychological characteristics that lead to relatively consistent and lasting responses to ones environment.

Freudian Theory
Subconscious motivations

Big 5 - OCEAN
Openness Conscientiousness Extraversion Agreeableness Neuroticism

Brands as expressions of identity Ideal Self vs. Actual Self

Maslows Hierarchy of Needs

Perception
Process by which people select, organize, and interpret information to form a meaningful picture of the world.

People can form different perceptions of the same stimulus.

Selective Attention

People screen out most stimuli.

Selective Distortion vs. Retention

Selective Distortion
Interpreting information in a way that supports what you already believe.

Selective Retention
Remembering the good aspects of something you like and forgetting the bad aspects of something you dislike.

Learning
One Definition:
A relatively permanent change in behavior due to experience.

Driven by stimulus-response chains (conditioning). Strongly influenced by behavioral consequences (Operant Conditioning)
Behaviors with satisfying results are repeated. Behaviors with unsatisfying results are avoided.

Different from deliberation

Beliefs and Attitudes

A belief is a descriptive thought that a person holds about something.
An attitude is a persons consistently favorable or unfavorable feelings, evaluations, and tendencies toward an object or idea.

Both have lots of staying power.

Emotional precedents Advertising tries to modify beliefs and attitudes.

The Buyer Decision Process

Need Recognition
Buyers recognize a need or problem as a result of internal or external stimuli.
Marketing communications often stimulate need recognition.

Triggering Need Recognition

Hungry yet?

Information Search
High vs. Low Involvement Purchases Cost vs. Benefit Model Big-Ticket Anomolies Cognitive Economy

edmunds.com

Information Sources
Personal
Family, friends, neighbors, and casual or work acquaintances

Public
Mass media articles or news programs, Internet searches, consumer rating organizations

Commercial
Advertising, salespeople, dealers, Web sites, packaging, and displays

Experiential
Using, handling, examining or sampling the product

Which source is most influential?

Evaluation of Alternatives
ELM: Central vs. Peripheral Route processing Some Types of Evaluation Calculus:
Compensatory vs. Non-compensatory Weighted Tally Processes Elimination-by-aspects Lexicographic Checkbox Choice Affect Referral

Weighted Tally Process Example

Assume consumer weighs Memory, Graphics, Size/Weight and Price 30%, 20%, 40%, and 10%, respectively.

Computer As score would be: (30% x 10) + (20% x 8) + (40% x 6) + (10% x 4) = 7.4

Successive Sets

Purchase Decision
Intentions to purchase are sometimes interrupted. Potential Interrupters:
Attitudes & influences of others Unexpected situational factors Buyers Remorse Speed of decision

Postpurchase Behavior
Consumer satisfaction/dissatisfaction results from gaps between expectations and perceived performance.
Performance BELOW Expectations Disappointment Performance EQUALS Expectations Satisfaction Performance GREATER than Expectations Delight Performance MUCH GREATER than Expectations Expectation Recalibration

Cognitive Dissonance
Cognitive Dissonance: Did I make the right purchase? Should I have bought this? Minimize dissonance by:
Offering mechanisms for making complaints (Customer Service, 800 hotlines, e-mail, etc.) Being responsive to problems and questions Advertising (remind consumer why choice made sense) Minimizing the potential for product misuse (good product instructions) and Poke-Yoke.

Question du Jour

Is this for real?

The Adoption Process

1. 2. 3. 4. 5. 6. Awareness Interest Evaluation Trial Re-Trial Adoption

Product Adopter Categories

Not everyone adopts at the same pace.

Innovators: venturesome, try new ideas at some risk. Early adopters: opinion leaders who adopt new ideas early, but carefully. Early majority: deliberate adopters, who adopt before the average person. Late majority: skeptical, adopt only after the majority of people have tried a product. Laggards: last to adopt, tradition bound, and skeptical of change.

Adopter Categorization Distribution

Product Characteristics That Influence the Rate of Adoption

Relative Advantage
Is the innovation perceived as superior to existing products?

Compatibility
Does the innovation fit the values, behavior and experience of the target market?

Complexity
Is the innovation difficult to understand or use or perceived as such?

Utility & Cost-Benefit

Can the innovation be used extensively or on a more limited basis?

Communicability
Can results be easily observed and described to others?

Question du Jour
Do consumers always know what they really want or need?

Other Consumer Behavior Models & Theories

Reactance
Reactance is an emotional reaction in direct contradiction to rules or regulations that threaten or eliminate specific behavioral freedoms. - Wikipedia

Variety-Seeking vs. Habit Persistence

Variety-Seeking
Often driven by need for arousal Preference-testing utility Consumers often overestimate their variety needs

Habit Persistence
Different from Loyalty Typically driven by risk aversion

Sunk Cost Bias

Investing more resources in something you previously invested in, solely because you previously invested in it.

False Consensus Bias

Not everyone thinks like you, expects what you expect, believes what you believe.
Very dangerous for marketers.

Decision Heuristics
Anchoring & Adjustment
Reference Points

Emotion
Mood Regulation
Elevation Maintenance

Affect Evaluation Effects on Risk Taking

Prospect Theory

Mental Accounting
Consumers
Segregate gains Integrate losses Integrate smaller losses with larger gains Segregate small gains from large losses
Implications for marketing strategy?

In-Class Activity WHY WE BUY

Choose a product, product line, brand, or company and answer the following:

What are the obvious (i.e. more superficial) reasons why consumers buy these products?
What are the not-so-obvious, more deep-seated reasons/motivations why consumers buy these products? What are the obvious (i.e. more superficial) reasons why consumers do not buy these products? What are the not-so-obvious, more deep-seated reasons/motivations why consumers do not buy these products? Choose one or more of the above reasons/motivations to buy or not buy and provide an appropriate implication for Marketing strategy.