-05-CONSUMERMARKETSANDCONSUMERBUYERBEHAVIOR

8/17/2019 -05-CONSUMERMARKETSANDCONSUMERBUYERBEHAVIOR

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Consumer Markets and

Consumer Buyer Behavior

Prof. Alexander Chan Trajano

Principles of MarketingMARPR!

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Consumer Buyer Behavior

• Consumer buyer behavior is the#uying #ehavior of $nal consumers%individuals and households that #uygoods and services for personalconsumption


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Consumer Market

• Consumer market composed of allthe individuals and households that#uy or ac'uire goods and services for

personal consumption


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The American and )orld

Consumer Markets

• Consists of more than (*+ million people

• Consume more than ,"* trillion -orth of goodsand services each year making it one of themost attractive consumer markets in the -orld

• The -orld consumer market consists of morethan /.+ #illion people -ho annually consume anestimated ,0* trillion -orth of goods andservices

• Consumers around the -orld vary tremendouslyin age income education level and tastes. Theyalso #uy an incredi#le variety of goods andservices


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Marketing 2timuli

• Marketers can study actual consumerpurchases to $nd out -hat they #uy-here and ho- much. But learning a#out

the -hys of consumer #uying #ehavior isnot so easy%the ans-ers are often lockeddeep -ithin the consumer3s mind

• 4o- do consumers respond to various

marketing e5orts the company might use6• Marketing stimuli consist of the four Ps7

product price place and promotion


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Characteristics A5ectingConsumer Behavior 9Cultural :actors;

• Culture is the set of #asic values perceptions-ants and #ehaviors learned #y a mem#er ofsociety from family and other important institutions

• ciency and practicalitymaterial comfort youthfulness and $tness andhealth


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• Subculture is a group of people -ithshared value systems #ased on commonlife experiences and situations

• 2u#cultures include nationalities religionsracial groups and geographic regions

• Many su#cultures make up importantmarket segments and marketers oftendesign products and marketing programstailored to their needs


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4ispanic AmericanConsumers

•

The nation3s nearly 8* million 4ispanic consumers have anannual #uying po-er of more than ,?8* #illion a $gure that-ill gro- to an estimated ,".1 trillion #y &*"(. 4ispanicconsumer spending has gro-n at more than t-ice the rateof general@market spending over the past four years

•

Although 4ispanic consumers share many characteristicsand #ehaviors -ith the mainstream #uying pu#lic there arealso distinct di5erences

• They tend to #e deeply family oriented and make shoppinga family a5air children have a #ig say in -hat #rands they

#uy. Perhaps more important 4ispanic consumersparticularly $rst@generation immigrants are very #randloyal and they favor #rands and sellers -ho sho- specialinterest in them


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African AmericanConsumers

• )ith an annual #uying po-er of ,?"( #illionestimated to reach ,".& trillion #y &*"( the nation3s1& million African American consumers also attractmuch marketing attention

• The =.2. #lack population is gro-ing in auenceand sophistication. Although more price conscious

than other segments #lacks are also stronglymotivated #y 'uality and selection

•

Brands are important. 2o is shopping. Blackconsumers seem to enjoy shopping more than othergroups even for something as mundane asgroceries


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Asian American Consumers•

Asian Americans are the most auent =.2. demographicsegment. They no- num#er nearly "8 million and -ieldmore than ,8** #illion in annual spending po-er expectedto reach ,08* #illion in &*"(

• They are the secondfastest@gro-ing population su#segment

after 4ispanic Americans. And like 4ispanic Americans theyare a diverse group. Chinese Americans constitute thelargest group follo-ed #y :ilipinos Asian !ndiansietnamese orean Americans and Dapanese Americans

• Asian consumers may #e the most tech@savvy segment

more than ?* percent of Asian Americans go onlineregularly and are most comforta#le -ith !nternettechnologies such as online #anking

• As a group Asian consumers shop fre'uently and are themost #rand conscious of all the ethnic groups


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Mature Consumers

• As the =.2. population ages mature consumers are #ecominga very attractive market. By &*"8 -hen all the #a#y #oomers-ill #e 8*@plus people ages 8* to 08 -ill account for 1*percent of adult consumers

• By &*(* adults ages /8 and older -ill represent nearly &*percent of the population. And these mature consumersegments #oast the most expenda#le cash. The 8*@plusconsumer segment no- accounts for nearly 8* percent of allconsumer spending more than any current or previousgeneration. They have &.8 times the discretionary #uying

po-er of those ages "+ to (1. As one marketing executive putsit they have Eassets not allo-ances.F

• Gespite some $nancial set#acks resulting from the recenteconomic crisis mature consumers remain an attractivemarket for companies in all industries from pharmaceuticals

furniture groceries #eauty products and clothing to consumerelectronics travel and entertainment and $nancial servicesPrinciples of Marketing

MARPR!""


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• Social class are the relatively permanent and ordereddivisions in a society -hose mem#ers share similar

values interests and #ehaviors

• 2ocial class is not determined #y a single factor such as

income #ut is measured as a com#ination of occupationincome education -ealth and other varia#les. !n some

social systems mem#ers of di5erent classes are rearedfor certain roles and cannot change their social positions

• Marketers are interested in social class #ecause people

-ithin a given social class tend to exhi#it similar #uying#ehavior. 2ocial classes sho- distinct product and #rand

preferences in areas such as clothing home furnishingsleisure activity and automo#iles


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The 2even Major American 2ocial Classes9=pper Class;

• Upper Uppers (1 percent)7 The socialelite -ho live on inherited -ealth. Theygive large sums to charity o-n more than

one home and send their children to the$nest schools

• Lower Uppers (2 percent)7 Americans-ho have earned high income or -ealth

through exceptional a#ility. They areactive in social and civic a5airs and #uyexpensive homes educations and cars


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The 2even Major American 2ocialClasses 9Middle Class;

• Upper Middles (12 percent)7 Professionalsindependent #usinesspersons and corporatemanagers -ho possess neither family status norunusual -ealth. They #elieve in education are

joiners and highly civic minded and -ant theE#etter things in life.F

• Middle Class (32 percent)7 Average@pay -hite@and #lue@collar -orkers -ho live on Ethe #etter

side of to-n.F They #uy popular products to keepup -ith trends. Better living means o-ning a nicehome in a nice neigh#orhood -ith good schools


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The 2even Major American 2ocialClasses 9)orking Class;

• orkin! Class (3" percent)7 Those -ho lead a E-orking@classlifestyleF -hatever their income

school #ackground or jo#. Theydepend heavily on relatives foreconomic and emotional support

advice on purchases and assistancein times of trou#le


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The 2even Major American 2ocial

Classes 9Ho-er Class;

• Upper Lowers (# percent)7 The -orkingpoor. Although their living standard is justa#ove poverty they strive to-ard a higher

class. 4o-ever they often lack educationand are poorly paid for unskilled -ork

• Lower Lowers ($ percent)7 isi#ly pooroften poorly educated unskilled la#orers.

They are often out of -ork and somedepend on pu#lic assistance. They tend tolive a day@to@day existence


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Characteristics A5ectingConsumer Behavior 92ocial :actors;

• %roup is composed of t-o or more people -ho interact toaccomplish individual or mutual goals

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• pinion leader is a person -ithin a referencegroup -ho #ecause of special skills kno-ledgepersonality or other characteristics exerts socialinIuence on others 9-ord of mouth inIuence;

• u** marketin! involves enlisting or evencreating opinion leaders to serve as E#randam#assadorsF -ho spread the -ord a#out acompany3s products. Many companies no-

create #rand am#assador programs in anattempt to turn inIuential #ut everydaycustomers into #rand evangelists


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• nline social networks are online socialcommunities%#logs social net-orking )e# sitesor even virtual -orlds%-here people socialiJe orexchange information and opinions

• Marketers are -orking to harness the po-er ofthese ne- social net-orks and other E-ord@of@)e#Fopportunities to promote their products and #uildcloser customer relationships. !nstead of thro-ing

more one@-ay commercial messages at consumersthey hope to use the !nternet and social net-orksto interact -ith consumers and #ecome a part oftheir conversations and lives


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• +amily members can stronglyinIuence #uyer #ehavior. The familyis the most important consumer

#uying organiJation in society and ithas #een researched extensively

• Marketers are interested in the roles

and inIuence of the hus#and -ifeand children on the purchase ofdi5erent products and services


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• A person #elongs to many groups%familyclu#s organiJations online communities. The person3s position in each group can #e

de$ned in terms of #oth role and status• A role consists of the activities people are

expected to perform according to the peoplearound them. Kach role carries a status

reIecting the general esteem given to it #ysociety. People usually choose productsappropriate to their roles and status


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Characteristics A5ectingConsumer Behavior 9Personal :actors;

• People change the goods and services they #uy overtheir lifetimes. Tastes in food clothes furniture andrecreation are often a!e related . Buying is alsoshaped #y the stage of the family life cycle%the stages

through -hich families might pass as they mature overtime

• Li'esta!e changes usually result from demographicsand life@changing events%marriage having childrenpurchasing a home divorce children going to college

changes in personal income moving out of the houseand retirement

• Marketers often de$ne their target markets in terms oflife@cycle stage and develop appropriate products andmarketing plans for each stage


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• A person3s occupation a5ects the goodsand services #ought. Blue@collar -orkerstend to #uy more rugged -ork clothes

-hereas executives #uy more #usiness suits• Marketers try to identify the occupational

groups that have an a#ove@average interestin their products and services. A company

can even specialiJe in making productsneeded #y a given occupational group


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• A person3s economic situation -illa5ect his or her store and productchoices

• Marketers -atch trends in personalincome savings and interest rates

• :ollo-ing the recent recession most

companies have taken steps toredesign reposition and reprice theirproducts


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• Li'estyle is a person3s pattern of living as expressed inhis or her activities interests and opinions

• People coming from the same su#culture social class andoccupation may have 'uite di5erent lifestyles

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!t involves measuring consumers3 major A!L dimensions%activities 9-ork ho##ies shopping sports social events;interests 9food fashion family recreation; and opinions9a#out themselves social issues #usiness products;

• Hifestyle pro$les a person3s -hole pattern of acting and

interacting in the -orld• )hen used carefully the lifestyle concept can help

marketers understand changing consumer values and ho-they a5ect #uying #ehavior


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• Personality refers to the uni'ue psychological characteristicsthat distinguish a person or group

• Personality is usually descri#ed in terms of traits such as self@con$dence dominance socia#ility autonomy defensivenessadapta#ility and aggressiveness. Personality can #e useful in

analyJing consumer #ehavior for certain product or #randchoices

• The idea is that #rands also have personalities and consumersare likely to choose #rands -ith personalities that match theiro-n. A brand personality is the speci$c mix of human traits

that may #e attri#uted to a particular #rand. Lne researcheridenti$ed $ve #rand personality traits7 sincerity 9do-n@to@earth honest -holesome and cheerful; e,citement 9daringspirited imaginative and up@to@date; competence 9relia#leintelligent and successful; sophistication 9upper class andcharming; and ru!!edness 9outdoorsy and tough;


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Ch t i ti A5 ti


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Characteristics A5ectingConsumer Behavior 9Psychological

:actors;• Motive (drive) is a need that is su>ciently pressingto direct the person to seek satisfaction of the need

• A need #ecomes a motive -hen it is aroused to asu>cient level of intensity

• The term motivation research refers to 'ualitativeresearch designed to pro#e consumers3 hiddensu#conscious motivations

• Consumers often don3t kno- or can3t descri#e -hy

they act as they do. Thus motivation researchers usea variety of pro#ing techni'ues to uncoverunderlying emotions and attitudes to-ard #randsand #uying situations


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Ch t i ti A5 ti


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:actors;• 2igmund :reud assumed that people are largelyunconscious a#out the real psychological forcesshaping their #ehavior

• 4e sa- the person as gro-ing up and repressingmany urges. These urges are never eliminated orunder perfect control they emerge in dreams inslips of the tongue in neurotic and o#sessive#ehavior or ultimately in psychoses

• :reud3s theory suggests that a person3s #uyingdecisions are a5ected #y su#conscious motivesthat even the #uyer may not fully understand


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Characteristics A5ecting


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:actors;

2elf@actualiJation

needs

9selfdevelopmentand

realiJation

Ksteem needs 9self@esteem recognition

status;

2ocial needs 9sense of #elonginglove;

2afety needs 9security protection;

Physiological needs 9hunger thirst sex;


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:actors;• -erception is the process #y -hich peopleselect organiJe and interpret information toform a meaningful picture of the -orld

• A motivated person is ready to act. 4o- theperson acts is inIuenced #y his or her o-nperception of the situation

• All of us learn #y the Io- of informationthrough our $ve senses7 sight hearing smelltouch and taste. 4o-ever each of us receivesorganiJes and interprets this sensoryinformation in an individual -ay


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Three Perceptual Processes• People are exposed to a great amount of stimuli every day. :or

example people are exposed to an estimated (*** to 8*** admessages every day. !t is impossi#le for a person to pay attentionto all these stimuli

• Selective attention is the tendency for people to screen outmost of the information to -hich they are exposed%means that

marketers must -ork especially hard to attract the consumer3sattention

• Selective distortion descri#es the tendency of people tointerpret information in a -ay that -ill support -hat they already#elieve. People also -ill forget much of -hat they learn. Theytend to retain information that supports their attitudes and #eliefs

• Selective retention means that consumers are likely toremem#er good points made a#out a #rand they favor and forgetgood points made a#out competing #rands

• Because of selective attention distortion and retentionmarketers must -ork hard to get their messages through


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:actors;• Learnin! involves changes in an individual3s #ehavior arisingfrom experience

• )hen people act they learn

• Hearning occurs through the interplay of drives stimuli cuesresponses and reinforcement

• A drive is a strong internal stimulus that calls for action. A drive#ecomes a motive -hen it is directed to-ard a particularstimulus ob.ect . :or example a person3s drive forselfactualiJation might motivate him or her to look into #uying acamera. The consumer3s response to the idea of #uying a camera

is conditioned #y the surrounding cues. Cues are minor stimulithat determine -hen -here and ho- the person responds. :orexample the person might spot several camera #rands in a shop-indo- hear of a special sale price or discuss cameras -ith afriend. These are all cues that might inIuence a consumer3sresponse to his or her interest in #uying the product


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:actors;• elie' is a descriptive thought that a person holdsa#out something

• Beliefs may #e #ased on real kno-ledge opinionor faith and may or may not carry an emotional

charge• Marketers are interested in the #eliefs that people

formulate a#out speci$c products and services#ecause these #eliefs make up product and #rand

images that a5ect #uying #ehavior. !f some of the#eliefs are -rong and prevent purchase themarketer -ill -ant to launch a campaign to correctthem


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:actors;• /ttitudes descri#es a person3s relativelyconsistent evaluations feelings and tendenciesto-ard an o#ject or idea

• People have attitudes regarding religion politicsclothes music food and almost everything else

• Attitudes put people into a frame of mind ofliking or disliking things of moving to-ard ora-ay from them

• Attitudes are di>cult to change. A person3sattitudes $t into a pattern changing one attitudemay re'uire di>cult adjustments in many others


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Types of Buying GecisionBehavior

• Comple, buyin! behavior is theconsumer #uying #ehavior insituations characteriJed #y high

consumer involvement in a purchaseand signi$cant perceived di5erencesamong #rands


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• 0issonancereducin! buyin!behavior is consumer #uying#ehavior in situations characteriJed

#y high involvement #ut fe-perceived di5erences among #rands


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• abitual buyin! behavior isconsumer #uying #ehavior insituations characteriJed #y lo-@

consumer involvement and fe-signi$cantly perceived #randdi5erences


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• arietyseekin! buyin! behavior is consumer #uying #ehavior insituations characteriJed #y lo-

consumer involvement #utsigni$cant perceived #randdi5erences


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Types of Buying Gecision Behavior

92ummary;

High Involvement Low Involvement

2igni$cant di5erences#et-een #rands

Complex buyingbehavior

Variety seekingbuying behavior

:e- di5erences#et-een #rands

Dissonance-

reducing buyingbehavior

Habitual buying

behavior


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The Buyer Gecision Process

• 4eed reco!nition is the $rst stage of the #uyerdecision process in -hich the consumer recogniJesa pro#lem or need

• 5n'ormation search is the stage of the #uyer

decision process in -hich the consumer is arousedto search for more information the consumer maysimply have heightened attention or may go intoan active information search

•

/lternative evaluation is the stage of the #uyerdecision process in -hich the consumer usesinformation to evaluate alternative #rands in thechoice set 9cont3d;


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• -urchase decision is the #uyer3sdecision a#out -hich #rand to purchase

• -ostpurchase behavior is the stage of

the #uyer decision process in -hichconsumers take further action afterpurchase #ased on their satisfaction ordissatisfaction -ith a purchase -hich can

result in co!nitive dissonance or the#uyer discomfort caused #y postpurchaseconIict


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:or e- Products

• 4ew product is a good service oridea that is perceived #y somepotential customers as ne-

• /doption process is the mentalprocess through -hich an individualpasses from $rst hearing a#out an

innovation to $nal adoption

Principles of MarketingMARPR! 1&

2t ! Th Ad ti


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2tages !n The AdoptionProcess

• /wareness7 The consumer #ecomes a-are ofthe ne- product #ut lacks information a#out it

• 5nterest 7 The consumer seeks information a#outthe ne- product

• 6valuation7 The consumer considers -hethertrying the ne- product makes sense

• 7rial 7 The consumer tries the ne- product on asmall scale to improve his or her estimate of itsvalue

• /doption7 The consumer decides to make fulland regular use of the ne- product

-05-CONSUMERMARKETSANDCONSUMERBUYERBEHAVIOR

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