CH 06 Analyzing Consumer Markets

8/8/2019 CH 06 Analyzing Consumer Markets

1/47

MarketingManagement 1

Marketing Management

Chapter-06

Analyzing Consumer Markets

Part : 03

Connectingwith

Customers


2/47


3/47


4/47


Consumer Market and Consumer Behavior Consumer Market : They include companies selling goods and

services to end customers for their personal or familyconsumption.

Consumer Behaviour : It is defined as the behaviour thatconsumers display in searching for, purchasing, using,evaluating, and disposing of products and services that theyexpect will satisfy their needs.

Consumer Behaviour focuses on how individuals makedecisions to spend their available resources (time, money,effort) on consumption-related items.


5/47


What influences Consumer Behavior? A consumers buying behaviour is influenced by cultural,

social, and personal factors.

a. Cultural Factorsb. Social Factors

c. Personal Factors


6/47


7/47


Emerging Trends in Consumer Behavior

Metrosexual

Straight urban manwho enjoys shopping

and using grooming

products


8/47


What influences Consumer Behavior?

a) Cultural Factors Cultural factors exert the broadest and deepest influence.

Culture : Acquiring a set of values, perceptions, preferencesand behaviours through family and other key institutions.

Subculture : Nationalities, Religions, Racial Groups,Geographical Regions.

Multicultural Marketing : Differentiating marketing strategieswith respect to different ethnic and demographic niches.

Social Classes : Virtually all human societies exhibit socialstratification. More frequently it takes the form ofSocial Classeswhich are hierarchically ordered and whose members sharesimilar values, interests and behaviour. The Social Class levelsare : Lower Lowers, Upper Lowers, Working Class, Middle Class,Upper Middles, Lower Uppers, Upper Uppers.


9/47



a) Cultural Factors

Upper Uppers

Lower UppersUpper Middles

Middle Class

Working ClassUpper Lowers

Lower Lowers

SocialClasses
http://factfinder.census.gov/


10/47



b) Social Factors

Reference

Groups

Social

RolesStatuses

Family


11/47


What influences Consumer Behavior?b) Social Factors

1-Reference Groups In addition to cultural factors, a consumers behaviour is

influenced by such social factors as Reference Groups, Family,Social Roles and Statuses.

Reference Groups (Apersons reference groups consist of allthe groups that have a direct (face-to-face) or indirectinfluence on his/her attitudes or behaviour. Groups having adirect influence on a person are calledMembershipGroups.Some membership groups are Primary Groups such as

family, friends, neighbours and co-workers with whom theperson interacts fairly continuously and informally. Peoplealso belong to Secondary Groups, such as religious,professional and trade-union groups which tend to be moreformal and require less continuous interaction.


12/47



1-Reference Groups People are also influenced by groups to which they do not

belong.

Aspirational Groups (are those a person hopes to join)

Dissociative Groups (are those whose values or behaviour anindividual rejects)

Manufacturers of products and brands where group influenceis strong must determine how to reach and influence OpinionLeaders in these reference groups.

Opinion Leader (Person in informal, product-relatedcommunications who offers advice or information about aspecific product or product category, such as which of severalbrands is the best or how a particular product may be used)


13/47


What influences Consumer Behavior?b) Social Factors1-Reference Groups

Membership groups

Primary groups

Secondary groups

Aspirational groups

Dissociative groups


14/47



2-Family The Family is the most important consumer buying organization

in society and family members constitute the most influentialprimary reference group.

We can distinguish two families in the buyers life.

i. Family of Orientation (consists of parents and siblings)

ii. Family of Procreation (consists ofones spouse and children)

Marketers are interested in the roles and relative influence offamily members in the purchase of a large variety of products

and services.


15/47



2-Family

Marketers are interested in the roles and relative influenceof family members in the purchase of a large variety of

products and services.


16/47



2-Family The wife has actually acted as the familys main purchasing

agent, especially for foods, sundries and staple-clothing items,however the traditional purchasing roles are changing and the

marketers would be wise to see both men and women aspossible targets.

Another shift in buying patterns is an increase in the amount ofdollars spent and the direct and indirect influence wielded bychildren and teens.


17/47



3-Roles and Statuses

The persons position in each group can be defined in termsof roles and status.

A Role consists of the activities a person is expected to

perform.

Each role carries a Status. A senior vice president ofmarketing has more status than a sales manager, and salesmanager has more status than an office clerk.

People choose products that reflect and communicate theirrole and actual or desired status in society.


18/47



3-Roles and Statuses

What degree of status isassociated with various

occupational roles?
http://rds.yahoo.com/S=96062857/K=President/v=2/SID=w/l=II/R=1/SS=i/OID=c16fb183d86d5c6a/SIG=1nr8bq8fm/EXP=1112293733/*-http%3A//images.search.yahoo.com/search/images/view?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3DPresident%26ei%3DUTF-8%26fr%3DFP-tab-img-t%26fl%3D0%26x%3Dwrt&h=360&w=282&imgcurl=www.immigrantsforamerica.com%2Fimages%2FUS%2520President%2520George%2520W.%2520Bush.jpeg&imgurl=www.immigrantsforamerica.com%2Fimages%2FUS%2520President%2520George%2520W.%2520Bush.jpeg&size=19.3kB&name=US%20President%20George%20W.%20Bush.jpeg&rcurl=http%3A%2F%2Fwww.punt.nl%2Fcount_url.php%3FUrl%3Dhttp%253A%252F%252Fpuntjepuntjepuntje.punt.nl%252Findex.php%253Fgr%253D39554&rurl=http%3A%2F%2Fwww.punt.nl%2Fcount_url.php%3FUrl%3Dhttp%253A%252F%252Fpuntjepuntjepuntje.punt.nl%252Findex.php%253Fgr%253D39554&p=President&type=jpeg&no=1&tt=1,831,044


19/47



c) Personal Factors A buyers decisions are also influenced by personal

characteristics. These include the followings.

i. Age and Stage in the Life Cycle

ii. Occupation and Economic Circumstances

iii. Personality and Self-Concept

iv. Lifestyle and Values


20/47


Behavior changes

according to life

cycle stage

Family

Psychological

Critical life events


21/47



c) Personal Factorsi. Age and Stage in the Life Cycle (Age, Family Life Cycle,

Psychological Life Cycle, Critical Life Events or Transitions)

ii. Occupation and Economic Circumstances (Occupation alsoinfluences consumption patterns. Product choice is greatly

affected by economic circumstances)iii. Personality and Self-Concept (Each person has personality

characteristics that influence his/her buying behaviour.Personality is a set of distinguishing human psychologicaltraits that lead to relatively consistent responses toenvironmental stimuli. Brands also have personalities and

consumers are likely to choose brands whose personalitiesmatch their own. Brand Personality is the specific mix ofhuman traits that may be attributed to a particular brand. e.g.sincerity, excitement, competence, sophistication,ruggedness.


22/47


What influences Consumer Behavior?c) Personal Factors

Brand Personality

Sincerity

Excitement

Competence

Sophistication

RuggednessMTVpersonality is identified

as an Excitement.
http://www.mtv.com/http://www.mtv.com/


23/47



c) Personal Factors Consumers often choose and use brands that have a brand

personality consistent with their own actual self-concept (howone views oneself) or with their ideal self-concept (how onewould like to view oneself) or with others self-concept (howone thinks others see one) .

IV. Life-Style and Values (People from the same sub-culture,social-class and occupation may lead quite different lifestyles.A Lifestyle is a persons pattern of living in the world asexpressed in activities, interests and opinions.

Lifestyles are shaped partly by whether consumers are money-

constrained or time-constrained. The consumers whoexperience time famine are prone to Multi-tasking.

Consumer decisions are also influenced by core values.Marketers who target consumers on the basis of their valuesbelieve that by appealing to peoples inner selves, it is possibleto influence their outer selves-their purchase behaviour.


24/47


Key Psychological Processes

Motivation

MemoryLearning

Perception


25/47


Key Psychological Processes The marketers task is to understand what happens in the

consumers consciousness between the arrival of the outsidemarketing stimuli and the ultimate purchase decisions.

Four key psychological processes-Motivation, Perception,Learning and Memory-fundamentally influence consumerresponses to the various marketing stimuli.

Motive is a need that is sufficiently pressing to drive the

person to act. Three of the best-known theories of human motivation are of

Sigmund Freud, Abraham Maslow and Frederick Herzberg.


26/47


Key Psychological Processes1- Motivation

a) Freuds Theory Freuds Theory : Sigmund Freud assumed that the

psychological forces shaping peoples behaviour are largelyunconscious and that a person cannot fully understand his orher own motivations.

It means when a person examines specific brands, he or shewill react not only to their stated capabilities, but also toother, less conscious cues; shape, size, weight, material,colour and brand name cal all trigger certain associations and

emotions.

Today motivational researchers continue the tradition ofFreudian interpretation.


27/47



b) Maslows Theory Maslows Theory : Abraham Maslow sought to explain why

people are driven by particular needs at particular times.Maslows answer is that human needs are arranged in ahierarchy, from the most pressing to the least pressing; theyare

i. Physiological Needs (food, water, shelter)ii. Safety Needs (security, protection)iii. Social Needs (sense of belonging, love)iv. Esteem Needs (self-esteem, recognition, status)v. Self-Actualization Needs (self-development)

People will try to satisfy their most important needs first,after its fulfilment, he/she will try to satisfy the next-most-important need and so on.


28/47



b) Maslows Hierarchy of Needs


29/47


Key Psychological Processes1-Motivation

c) Herzbergs Theory Herzbergs Theory : Frederick Herzberg developed a two-

factor theory that distinguishes dissatisfiers (factors thatcause dissatisfaction, also called Hygiene Factors) andsatisfiers (factors that cause satisfaction, also calledMotivator Factors).

The absence of dissatisfiers is not enough; satisfiers must bepresent to motivate a purchase.

Herzbergs theory has two implications; first sellers should dotheir best to avoid dissatisfiers; second the seller shouldidentify the major satisfiers or motivators of purchase in themarket and then supply them.


30/47


Key Psychological Processes1-Motivation

c) Herzbergs Theory


31/47



2- Perception How the motivated person actually acts is influenced by his or

her perception of the situation.

Perception is the process by which an individual selects,

organizes and interprets information inputs to create ameaningful picture of the world.

In marketing, perceptions are more important than the realityas it is perception that will affect consumers actual

behaviour. People can emerge with different perceptions of the same

object because of three perceptual processes : SelectiveAttention, Selective Distortion, Selective Retention.


32/47


Key Psychological Processes2- Perception

a) Selective Attention An average person is exposed lots of ads and brand

communications a day; he/she obviously cannot attend to allof these and most stimuli will be screened out-this process iscalled Selective Attention.

For marketer, Selection Attention means that they will haveto work hard to attract consumersnotice.

According to some findings,

The people are more likely to notice stimuli that relate to acurrent need.

The people are more likely to notice stimuli that theyanticipate.

The people are more likely to notice stimuli whose deviationsare large in relation to the normal size of the stimuli.


33/47



b) Selective Distortion Selective Distortion is the tendency to interpret information

in a way that will fit our perceptions.

Consumers will often distort information to be consistent

with prior brand and product beliefs; for example in case ofblind taste testsconducted by Pepsi and Coca Cola.

Selective Distortion can work to the advantage of marketswith strong brands when consumers distort neutral or

ambiguous brand information to make it more positive.


34/47



c) Selective Retention Because of Selective Retention, people are likely to

remember good points about a product/service they like andforget good points about competing products.

Selective Retention again works to the advantage of strongbrands.

It also explains why marketers need to use repetition insending messages to their target market to make sure their

message is not overlooked.


35/47



c) Selective Retention-Subliminal Perception A topic that has fascinated marketers for ages is Subliminal

Perception.

The argument is that marketers embed covert, subliminal

messages in ads or packages. Consumers are not consciouslyaware of these messages, but yet they affect their behaviour.

Although it is clear that many subtle subconscious effects canexist with consumer processing, however no evidence

supports the notion that marketers can systematically controlconsumers at that level.


36/47



3- Learning Learning involves changes in an individuals behaviour arising

from experience.

Most human behaviour is learned. Learning theorists believe

that learning is produced through the interplay of drives,stimuli, cues, responses and reinforcement.

Drive is a strong internal stimulus impelling action. Cues areminor stimuli that determine when, where and how a person

responds.


37/47



3- Learning For example, you buy a Dell computer, if your experience is

rewarding, your response to computers and Dell will bepositively reinforced. Later on, when you want to buy aprinter, you would prefer Dell as you generalize yourresponse to similar stimuli.

Learning theory teaches marketers that they can builddemand for a product by associating it with strong drives,using motivating cues and providing positive reinforcement.


38/47



4- Memory All the information and experiences individuals encounter as

they go through life can end-up in their long-term memory.

Cognitive psychologists distinguish between Short-TermMemory (STM) which is a temporary repository ofinformation-and Long-Term Memory (LTM) which is a morepermanent repository.

Marketing can be seen as making sure that consumers have

the right types of product and service experiences such asthe right brand knowledge structures are created andmaintained in memory.


39/47


Consumer Buying Process

Problem Recognition

Information Search

Evaluation

Purchase Decision

Postpurchase

Behavior


40/47


The Buying Decision Process Marketing scholars have developed a stage model of the

buying decision process. The consumer passes through 5stages.

1. Problem Recognition

2. Information Search (Two Levels : Heightened Attention,Active Information Search) (Information Sources arePersonal, Commercial, Public, Experiential)

3. Evaluation of Alternatives (Beliefs and Attitudes) (See NextSlide)

4. Purchase Decision (In executing a purchase decision, theconsumer may make up to 5 sub-decisions : Brand, Dealer,Quantity, Timing and Payment Method)

5. Post-purchase Behaviour (Postpurchase Satisfaction,Postpurchase Action, Postpurchase Use and Disposal)


41/47


The Buying Decision Process Note : Consumers do not always pass through all 5 stages in

buying a product and they may skip or reverse some stages.

Example : A woman buying her regular brand of toothpastegoes directly from the need for toothpaste to the purchasedecision, skipping information search and evaluation.


42/47


The Buying Decision ProcessStep-2 : Evaluation of Alternatives

Beliefs and Attitudes Evaluations often reflect beliefs and attitudes. Through

experience and learning, people acquire beliefs and attitudeswhich in turn influence buying behaviour.

Belief : A belief is a descriptive thought a person holds

about something. Peoples beliefs about the attributes andbenefits of a product or brand influence their buyingdecisions.

Attitude : An attitude is a persons consistent favourable orunfavourable evaluation, emotional feeling and actiontendencies towards some object. Attitudes put people into aframe of mind : liking or disliking an object, moving towardsor away from it. They can be very difficult to change.


43/47


Types of Consumer Buying Decision Behavior Consumer Buying Behaviour differs greatly for a tube of

toothpaste, a tennis racket, financial services, and a new car.More complex decisions usually involve more buyingparticipants and more buyer deliberation.

Following are the types of Consumer Buying Behaviour basedon the degree of buyer involvement and the degree ofdifferences among brands.

a. Complex Buying Behaviour

b. Dissonance-Reducing Buying Behaviour

c. Habitual Buying Behaviour

d. Variety Seeking Buying Behaviour


44/47


Types of Consumer Buying Decision Behavior

Complex

Buying Behavior

Variety-

SeekingBuying Behavior

Dissonance-

Reducing

Buying Behavior

Habitual

Buying Behavior

HighInvolvement

Significant DifferencesBetween Brands

LowInvolvement

Few Differences

Between Brands


45/47



a. Complex Buying Behaviour : Consumers undertake thisbehaviour when they are highly involved in a purchase andperceive significant differences among brands. Like whilepurchasing a personal computer.

b. Dissonance-Reducing Buying Behaviour : Consumers undertakethis behaviourwhen they are highly involved in a purchase, butsee little difference among brands. Like while purchasing acarpet.


46/47



c. Habitual Buying Behaviour : It occurs under conditions of low

consumer involvement and little significant brand difference.Like the purchase of salt.

d. Variety Seeking Buying Behaviour : It occurs under conditionsof low consumer involvement, but significant perceived branddifferences. Like the purchase of cookies.


47/47

Activity

CH 06 Analyzing Consumer Markets

Documents

Transcript of CH 06 Analyzing Consumer Markets