Lesson 20 buyer behavior

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Marketing Management

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Introduction:In the first chapter we have seen that marketing is consumer centric .In this lesson taking anextension of the same we will see in details why the consumer makes a particular decision of buying.Just imagine that you are a consumer and you have decided to buy say Pepsi. Now what are thevarious factors responsible for this decision. Along with the external factors there is also an internalfactor called as behavior of an individual.

In this class we will see in details how the behavior of a consumer influences the decision makingprocess. The study of this is very important for the marketers.

Learning Outcomes:Meaning of the consumer market and the components of a consumer behavior modelFactors affecting consumer buying decisionsTypes of consumer buying decisions and steps in consumer decision making processAdoption and diffusion process for new products.Relation of consumer behavior and marketing strategyMeaning of organizational / industrial markets and Difference between consumer and organiza-tional marketsThe different types of organizational consumers and their buying objectives, buying structure,and purchase constraints.

The central focus of marketing is the consumer. To devise good marketing plans, it is necessary toexamine consumer attributes and needs, lifestyles, and purchase processes and then make propermarketing-mix decisions. The study of Consumer behavior includes the study of what they buy, whythey buy, how they buy, when they buy, from where they buy, and how often they buy. An open-minded consumer-oriented approach is imperative in today’s diverse global marketplace so a firmcan identify and serve its target market, minimize dissatisfaction, and stay ahead of competitors.Final consumers purchase for personal, family, or household use. Organizational consumers pur-chase for further production, usage in operating the organization, or resale to other consumers.

In the above model, marketing and other stimuli enter the customers “black box” and produce certainresponses. The consumer receives information from the Marketing and other stimuli. This informa-tion enters in to the buyer’s black box. This is termed as black box of buyers as what ever goes onhere results in a particular response i.e. product choice, brand choice etc. The main task of themarketer is to find out what goes on in the black box. in the mind of the consumer, so in that we aredealing with the consumer decision making process which is affected by certain factors that affects

Unit 2Scanning Marketing Opportunities

Chapter 7 - Buyer BehaviorLesson 20 - Factors influencing consumer buyer behavior,

buying decision process

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© Copy Right : Rai University

its decision.

Factors affecting consumer behavior

Each of these factors is discussed in more detail in the following sections on buyer behavior.

Cultural factors: Cultural factors have a significant impact on customer behavior.Culture is the most basic cause of a person’s wants and behavior. Growing up, children learn basicvalues, perception and wants from the family and other important groups. Marketers are alwaystrying to spot “cultural shifts” which might point to new products that might be wanted by customersor to increased demand. For example, the cultural shift towards greater concern about health andfitness has created opportunities (and now industries) servicing customers who wish to buy:

Low calorie foods Health club memberships Exercise equipment Activity or health-related holidays etc.

Similarly the increased desire for “leisure time” has resulted in increased demand for convenienceproducts and services such as microwave ovens, ready meals and direct marketing service busi-nesses such as telephone banking and insurance.

Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures can includenationalities, religions, racial groups, or groups of people sharing the same geographical location.Sometimes a sub-culture will create a substantial and distinctive market segment of its own. Forexample, the “youth culture” or “club culture” has quite distinct values and buying characteristicsfrom the much older “gray generation”

Similarly, differences in social class can create customer groups. In fact, the official six socialclasses in the UK are widely used to profile and predict different customer behavior. In the UK’ssocioeconomic classification scheme, social class is not just determined by income. It is measured asa combination of occupation, income, education, wealth and other variables

Activity:

Take a product of your choice and prepare a marketing strategy taking in to consideration the culturalproducts.

Social factors: A customer’s buying behavior is also influenced by social factors, such asthe groups to which the customer belongs and social status.

In a group, several individuals may interact to influence the purchase decision. The typical roles insuch a group decision can be summarized as follows:

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Reference groupsAs a consumer, your decision to purchase and use certain products and services, is influenced notonly by psychological factors, your personality and lifestyle, but also by the people around you withwhom you interact and the various social groups to which you belong. The groups with whom youinteract directly or indirectly influence your purchase decisions and thus their study is of great impor-tance to marketer to understand are:I) Primary and secondary groups: a primary group is one with which an individual interacts on a

regular basis and whose opinion is of importance to him, family, neighbors, close friends, col-leagues and co- workers are examples of primary groups. Secondary groups are those withwhich an individual interacts only occasionally and does not consider their opinion very impor-tant.

II) Formal and informal groups: Rotary, lions, Jaycees are some of the well – known socialgroups in our society. Labor unions, social clubs and societies are other types of formal groups towhich individuals may belong. A formal group has a highly defined structure, specific roles andauthority positions and specific goals.In contrast, an informal group is loosely defined and may have no specified roles and goals.Meeting your neighbors over lunch once a month for friendly exchange of news is an instance ofan informal group.

III)Membership and symbolic groups: A membership group is one to which a person belongs orqualifies for membership. All workers in a factory qualify for membership to the labor union. Asymbolic group is one which an individual aspires to belong to, but is not likely to be received asa member. A head clerk in an office may act as if he belongs to the top membership and symbolicgroups influence consumer behaviors but membership groups have a more direct influence.Primary, informal and small groups exert the maximum influence on consumers and are of greatinterest for marketers.Any of these groups can sever as a reference group for a consumer if it serves as a point ofreference or comparison ion the formation of the values, attitudes and behavior. Different kindsof groups, whether small or large, formal or reference group is a very wide one and includes bothdirect and indirect or group influences.

Indirect reference groups comprise those individuals or groups with whom an individual dews nothave any direct face to face contact, such as film stars, TV stars, sportsman, politicians. Referencegroups are used in advertising to appeal to different market segments, group situation with whichpotential customers can identify are used to promote products and services. Hidden in this appeal isthe subtle inducement to the customer to identify himself with the user the product in question. Thethree types of reference groups appeals most commonly used are:a) Celebrities,b) Experts, andc) The ‘common man’

Celebrities are well known people (in their specific field of activity) who are admired and their fansaspire to emulate their behavior. Film stars and sports heroes are the most popular celebrities. Softdrink (Thums up), shaving cream (Palmolive), toilet soaps (Lux) , textiles ( Dinesh , Graviera) areadvertised using celebrities from the sports and film fields. Experts such as doctors, lawyer, accoun-tants and authors are used for establishing the benefits of the product. Colgate and Forhans tooth-pastes are examples of products, which use the expert reference groups appeal for promotion.

Another reference group appeal is that which uses the testimonials of a satisfied customer. It demon-strates to the prospective customer that demonstrates just like him uses and is satisfied with theproduct.

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Direct reference groups, which exert a significant influence on consumer’s, purchase decisions andbehavior can be classified into six categories. There arei) The familyii) Friendship groups,iii) Formal social groups,iv) Formal shopping groups,v) Consumer action groups, andvi) Work groups.

Family: The family is the most important of all these groups and we shall discuss it in detail. Thefamily, as a unit, is an important of all these groups and we shall discuss it in detail. The family, as Iunit, is an important consumer for many products which are purchased for consumption by all familymembers. It is a source of major influence on the individual members’ buying behavior. We canidentify two families which shape an individual’s consumption behavior .one is the family of orienta-tion that is the family in which you are born and consists of your parents, brothers and sisters. It isfrom parents that we imbibe most of our values, attitudes, beliefs and purchase behavior patterns.Long after an individual has ceased to live with his parents, their influence of the sub –consciousmind still continues to be great. In our country, where children continue to live with parents even afterattain adulthood, the latter’s influence is extremely important.

The second type of family is the family of procreation consisting of the consumer’s spouse andchildren. Within the family, different member play different roles. Marketers are interested in findingout exactly the role played by individual members so that they can appropriately design their promo-tion strategy to suit these differing roles. Traditionally, it has been the wife’s role to purchase food,clothing and other household sundries, while the husband played a dominant role in the purchased ofautomobiles and life insurance. But with the emergence of the working-women, these lines of tradi-tional role demarcation have been getting increasingly blurred. Husbands now have to shoulder agreater part of the household duties while women are asserting themselves in areas so far treated asthe husband’s domain. Thus, the same decision, in different families may be made either by thehusband or wife, or both may have an equal voice. Children are also beginning to exert their influenceon the family’s purchase decisions. This is especially true in case of products such as television,stereo music systems, records, personal computers, etc. where the children are likely to have moreupdated information about various brands and product attributes.

The family also plays a role in consumer decision-making, as shown in the following table.

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Roles: An individual may participate in many groups. His position within each group can be definedin terms of the activities he is expected to perform. You are probably a manager, and when in yourwork situation you play that role. However, at home you play the role of spouse and parent. Thus indifferent social positions you play different roles. Each of these roles influences your purchase deci-sions.

Status: Each role that a person plays has status, which is the relative prestige accorded by society.Status is often measured by the degree of influence an individual exerts in the behavior and attitudeof others.People buy and use products that reflect their status. The managing director of a companymay drive a Mercedes to communicate his status in society. He may go to Europe or U.S.A. for aholiday, rather than going to Mussoorie or Ooty.

Group norms: Are the norms of a group are the implicit rules of conduct and behavior that areexpected of its member. For instance, in certain multinational companies in India, the norm for officewear includes a full – sleeved shirt and tie, not with standing the terrible heat condition. If marketerscan identify the various groups to which potential consumers belong, they can successfully marketthose products and services whose consumption is dictated by the group norms.

Stage in family life cycle

Single stage Young, unmarried peopleliving away from home

Young newly married:No children

Full nest I: Youngest child under 6

Full neat II: Youngest couples withdependant children

Full neat III: Old married couples withdependant children

Empty nest I: olderMarried couples,no children living at home, householdhead still working.

Empty nest II: olderMarried, no chil-dren at home, head retiredSolitary sur-vivor: in Labor force

Solitary survivor: Retired

Buying or behavior pattern

- Few financial burdens. Spend on rent, food ,very basic kitchen equipment and furniture,recreation and leisure time accessories such asstereo systems.

- Better off financially than they will be in nearfuture, wife is usually working highest purchaserate. Spend on furniture, durables such as re-frigerators, gas stoves, vacations etc.

- Spend maximum on home purchases. Inter-ested in new products and influenced by adver-tising, buy TV, baby foods, cough medications,toys such as tricycle.

- Some wives return to work. Better financialposition, less influenced by advertising, buy largesized packages, various kinds of foods, bicycles,education, house appliances care.

- Financial position still better. Spend on educa-tion, more tasteful furniture, cars, non – neces-sary appliances etc.

- Spend on travel, recreation , self – improve-ment, home – improvement ,health care.

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Personal Factors:Age and Life cycle Stage:Like the social class the human life cycle can have a significant impact onconsumer behaviour. The life cycle is an orderly series of stages in which consumer attitude andbehavioural tendencies evolve and occur because of developing maturity, experience, income, andstatus. Marketers often define their target market in terms of the consumers present lifecycle stage.The concept of lifecycle as applied to marketing will be discussed in more details.

Occupation And Income: Today people are very concerned about their image and the status in thesociety which is a direct outcome of their material prosperity. The profession or the occupation aperson is in again has an impact on the products they consume. The status of a person is projectedthrough various symbols like the dress, accessories and possessions.

Life Style: Our life styles are reflected in our personalities and self-concepts, same is the case withany consumer. We need to know what a life-style is made of. It is a person’s mode of living asidentified by his or her activities, interest and opinions. There is a method of measuring a consumer’slifestyle. This method is called as the psychographics-which is the analysis technique used to mea-sure consumer lifestyles- peoples activities, interests and opinions. Then based upon the combina-tions of these dimensions, consumers are classified. Unlike personality typologies, which are difficultto describe measure lifestyle analysis has proven valuable in segmenting and targeting consumersaccording to their lifestyle classification. I would like to cite one example which I have come acrosswas the a company had organized this study to identify the market segments of their place for thetelevision sets.

Personality: personality is the sum total of an individual’s enduring internal psychological traits thatmake him or her unique. Self-confidence, dominance, autonomy, sociability, defensiveness, adaptabil-ity, and emotional stability are selected personality traits.

Motivation: Motivation involves the positive or negative needs, goals, and desires that impel a personto or away from certain actions. By appealing to motives (reasons for behavior), a marketer cangenerate motivation. Economic and emotional motives are possible. Each person has distinct motivesfor purchases; these change by situation and over time.

Consumer needs and motivations: We all have needs we consume different goods and serviceswith the expectation that they will help fulfill these needs. When a need is sufficiently pressing, itdirects the person to seek its satisfaction. It is known as motive. all our needs can be classified intotwo categories—primary and secondary. Primary needs or motives are the physiological needs,

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which we are born with, such as the need for air, water, food, Clothing, shelter and sex. The second-ary needs are our acquired needs, which we have developed in response to the individuals’ psycho-logical mike- up and his relationship with other members of the society. The secondary needs mayinclude the need for power, prestige, esteem, affection, learning, status etc. clothing is a primary needfor all of us. But the need for three piece tweed suit, or bananas brocade sari or silk kimonos areexpressions of our acquired needs. The man wearing a three-piece tweed suit may be seeking tofulfill his status need or his ego need by impressing his friends and family.

All human needs can be classified in to five hierarchical categories and his this hierarchy is univer-sally applicable the theory of hierarchy of needs can be ranked in order of importance from the lowbiological needs to the higher level psychological needs. Each leveled of need is fulfilled people keepmoving on the next higher level of need. In figure below, the different levels of needs have beendepicted as being watertight compartments, but in reality there is always overlap amongst the differ-ent levels of needs, since no need is ever totally satisfied. There is always scope for further fulfill-ment.

MASLOW’S HIERACHY OF NEEDS

How does the Hierarchy Work?A person starts at the bottom of the hierarchy (pyramid) and will initially seek to satisfy basicneeds (e.g. food, shelter)Once these physiological needs have been satisfied, they are no longer a motivator. The indi-vidual moves up to the next levelSafety needs at work could include physical safety (e.g. protective clothing) as well as protectionagainst unemployment, loss of income through sickness etc)Social needs recognize that most people want to belong to a group. These would include the needfor love and belonging (e.g. working with colleague who support you at work, teamwork, com-munication)Esteem needs are about being given recognition for a job well done. They reflect the fact thatmany people seek the esteem and respect of others. A promotion at work might achieve thisSelf-actualization is about how people think about themselves - this is often measured by theextent of success and/or challenge at work

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Maslow’s model has great potential appeal in the business world. The message is clear - if manage-ment can find out which level each employee has reached, then they can decide on suitable rewards.

Maslow’s hierarchy of human needs helps us understand consumer motivations. It is useful for themarketer who can identify what generic level need his product is capable of fulfilling and accordinglyposition his product and back it up with relevant marketing inputs. Products such as food and clothesare bought to fulfill physiological needs. Insurance, burglar alarms, security services are purchasedbecause the fulfill safety needs; most personal care products such as soap, toothpaste, shaving cream,perfume are bought primarily because they serve social needs. And luxury products such as jeweler,expensive clothing, fancy house and cars are bought mainly to serve ego and self- actualizationneeds. The same products can be sold to entirely distinct customers segments provided the marketercan correctly identify the need which the products is fulfilling. For instance, a bicycle serves arecreational/ leisure need while for a third segment; it fulfils the need of a health aid. Still anothercustomer segment buys a bicycle for converting into a rickshaw or bicycle cart for selling fruits,vegetables etc. a bicycle is also purchased for use in competitive sport.

Activity:Considering Maslow’s Hierarchy of Needs theory, give some examples of how marketers appeal tobasic human motivations.

Perception: The second major psychological factor that influences consumer behavior is perception.Perception can be described as “how we see the world around us”. All the time we are recedingmessages through our five organs viz.., eyes, ears, nose, mouth and skin. The different sights, sounds,smells, tastes and sensations that we feel are known as stimuli. Each person recognizes, selects,organizes and interprets thes3e stimuli in his own individual manner based in his needs, values andexpectations and this is known as perception. Since each individual’s needs, motive and expectationsare unique therefore each individual’s perception is unique.

Perception helps to explain the phenomenon of why different individuals respond differently to thesame stimulus under the same condition. As a marketing manager, you are providing stimulus to yourconsumers through the physical shape, color, size, fragrance, feel, taste of your product, its package,advertisement and commercials. Your interest is to the stimuli so that you can highlight that particularstimulus of combination of stimuli, which evokes the most favorable perception in the maximumnumber of consumers. For example, generally consumers tend to perceive the quality of performs onthe basis of package, brand name, price and manufacture’s image.

Everyday, every hour of our life we are being bombarded with a variety of stimuli. If we were toanalyze and interpret each one of these stimuli, it may drive us crazy. But we al have an in- builtscreening system which helps us to ‘select’ and recognize’ only the relevant stimuli and ignore all theothers. As a person involved in marketing, you would like to ensure that the consumers do not ignorethe stimuli, which you are providing, but rather they are recognized, interpreted and retained in theconsumer memory. In this context, there are three aspects of perception, which are of immediateinterest to the marketer. These are selective exposure, selective distortion and selective retention.

Selective exposure: you must have noticed that when you are on the look out for purchasing aspecific product, be it camera, refrigerator, television or any other high value product or services, yousuddenly seem to notice more than the usual number of advertisements pertaining to that specificproduct. This is because of your selective exposures. People are more likely to notice stimuli, whichrelate to their immediate needs. For the marketer, the implication is that he has to carefully andaccurately identifies his potential customers since other customers are not at all likely to notice thestimuli. Having identified the potential customers, the marketer has to ensure that the stimuli areinteresting enough to attract and hold their attention..

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Selective Distortion: let us suppose you have decided to purchase a specific brand “A” of pressurecooker. Since you have already made your decision you would seek only that information whichreinforces the correctness of your decision.

If you hear some positive remarks made about brands ‘B’ you would tend to find some shortcomingor flaw in that brand so that you so not feel that you have made a wrong decision by buying brand ‘A’when you attempt to fit information to suit your join ideas or personal meaning, the process is knownas selective distortion. Thus, a marketer may find that his message is often not received in theintended manner but different consumers twist it in different ways.Selective retention: people forget much of the stimuli which they receive3 and only retain thatinformation which reinforces their clause and decision. You are more likely to remember the positivefeature of brand ‘A’ pressure cooker since they help reassure you that the decision, which you havemade, was correct.

Learning: A newborn infant’s sucking at the feeding bottle is instinctive behavior, but a five year oldclamoring for chocolate or chewing gum is the result of learned behavior. Much of an adult’s humanbehavior sis leaned behaviors.

This is a very significant factor marketer, because it implies that consumers can be made to learn thedesired behaviors through in interplay of motives, stimuli, cues, responses and reinforcements. Ahousewife has the need is strong enough to propel her to take action it becomes a motive. The motiveis directed towards the stimulus object – a pressure cooker. The stimuli are the various advertise-ments about the product, which she sees and hears. Cues are minor stimuli that determine when,where and how the housewife responds. Positive feedback about pressure cooker from a friend,seeing it on display in a show- window, a special introductory price offer are all examples of cueswhich influence a housewife’s response to the motive for buying a pressure cooker. Suppose thehousewife buys the pressure cooker and is satisfied with its performance, and then the changes arethat she would like to use it as often as possible, and in the future may buy another one. Thehousewife’s response to pressure cookers has been reinforced.

At some later stage, the same housewife wants to buy an electric oven. Since she has had a positiveexperience with brand ‘A’ pressure cooker, she may infer that the company-manufacturing brand‘A’ also makes good electric ovens and choose it over other brands. This is known as ‘generaliza-tion’ of response.

Learning refers to the skill and knowledge gained from past experience that we apply to evaluatefuture decisions and situations. A marketer can build up demand for his brand by associating it withstrong motives, using the appropriate stimuli and cues and providing positive reinforcement. Thusmaking the consumer ‘learn ‘ that the brand is good and worth patronizing.

Class-consciousness: Is the extent to which a person seeks social status. An inner-directed personis interested in pleasing him- or her. An outer-directed person is interested in pleasing the peoplearound him or her; products attract this person with social visibility, well-known brands, and unique-ness.

Beliefs & Attitudes: Attitudes or opinions are positive, neutral, or negative feelings about goods,services, firms, people, issues, and/or institutions. Success cannot normally be attained without posi-tive consumer attitudes. A belief is a descriptive thought that a person has about something. Aperson may believe that a certain coking oil ‘X’ has the lowest fat content and is best for health. Thisbelief may be based on some real facts or it may merely be a notion or opinion that the person has.The beliefs constitute the brand image about the brand. The marketer must ensure that consumershave relevant and correct information about the brand to facilitate formation of a positive brandimage.

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Attitude is a person’s enduring feeling, evaluation and tendency towards a particular idea or object.Starting from childhood, attitude develops over the time with each fresh knowledge input, experienceand influence. Attitudes get settled into specific patterns and are difficult to change. It is easier tomarket product that fits in well with the existing patterns of attitudes rather than change the attitudesto fit a new product concept.

STEPS IN CONSUMER DECISION MAKING PROCESSThe final consumer’s decision process is the way in which people gather and assess information andmake choices among alternative goods, services, organizations, people, places, and ideas. It consistsof the process itself and factors affecting the process.

The decision process consists of six basic stages (the next six sections). Factors affecting the pro-cess are a consumer’s demographic, social, and psychological characteristics.

Sometimes, all six stages in the process are used; other times, only a few steps are utilized .At anypoint in the process, it may be ended.

STIMULUS: A stimulus is a cue or drive meant to motivate a person to act.

A stimulus can be any of the following:Social.Commercial.Noncommercial.Physical.

A prospective consumer may be exposed to any or all of these types of stimuli. If a person issufficiently stimulated, he or she will go on to the next step in the decision process.

PROBLEM AWARENESS: During problem awareness, the consumer recognizes that the good,service, organization, person, place, or idea may solve a problem of shortage or unfulfilled desire.Many consumers are hesitant to react to unfulfilled desires because there are risks and the benefitsmay be hard to judge.

INFORMATION SEARCH: Information search involves listing alternatives that will solve the problemat hand and a determination of the characteristics of each. Search can be internal and/or external .Asrisk increases; the amount of information sought also increases. Once the information search iscompleted, it must be determined whether the shortage or unfulfilled desire can be satisfied by anyalternative.

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The Internet has become a major source for consumer shopping information. Seven useful sourcesare provided.

EVALUATION OF ALTERNATIVES: The alternatives are evaluated on the basis of the consumer’scriteria and the relative importance of these criteria. They are then ranked and a choice made.

PURCHASE - The purchase act involves the exchange of money or a promise to pay for a product,or support in return of ownership of a specific good, the performance of a specific service, and so on.Purchase decisions remaining at this stage center on

The place of purchase.Terms.Availability.

If the above elements are acceptable, a consumer will make a purchase.

POST-PURCHASE BEHAVIOR: Frequently, the consumer engages in post-purchase behavior.Buying one item may lead to the purchase of another. Re-evaluation of the purchase occurs whenthe consumer rates the alternative selected against performance standards. Cognitive dissonance,doubt that a correct purchase decision has been made, can be reduced by follow-up calls, extendedwarranties, and post-purchase advertisements.

FACTORS AFFECTING THE FINAL CONSUMER’S DECISION PROCESS

A. Demographic, social, and psychological factors affect consumer decision making.

B. By understanding how these factors affect decision making, a firm can fine-tune its strategies tocater to the target market.

TYPES OF DECISION PROCESSESThe decision process is used each time a good or service is bought, often subconsciously.

There are three ways in which the decision process may be used.

Extensive decision-making: Occurs when a consumer makes full use of the process. It is used forexpensive, complex items with which the consumer has little or no experience. Perceived risk is highand time pressure is low.

Limited decision making: takes place when each step of the process is used, but the consumerdoes not need to spend a great deal of time on any of them. The consumer has some experience. Thethoroughness with which the process is used depends on the amount of experience, the importanceof the purchase, and time pressure.

Routine decision-making: involves habitual behavior and skips steps in the process. Regularly pur-chased items are bought in this manner. Information search, evaluation, and post-purchase behaviorare normally omitted.

Several differences between consumers in industrialized nations and those in less-developed anddeveloping ones are cited by the text.With low-involvement purchasing, the consumer minimizesdecision making for those goods and services perceived to be socially and/or psychologically unim-portant. Brand loyalty is the consistent repurchase of and preference toward a brand. It enables aconsumer to minimize risk, time, and thought.

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The text explains how Gateway generates and sustains customer loyalty.

MARKETING APPLICATIONS OF THE FINAL CONSUMER’S DECISIONPROCESSThere have been many studies on the marketing implications of the final consumer’s decision pro-cess.1. When acquiring information for a leisure trip, travelers consult friends and relatives, a travel

agent, the Internet, and travel magazines.2. Nearly a third of Chinese consumers are “enthusiastic shoppers,” who enjoy shopping and like to price bargain.3. For several reasons, “substantial time often elapses between the time people recognize the need for a product and the time they actually purchase it.”

These may be the reasons for this:They don’t think they have time to devote to the decision.They may feel shopping is an unpleasant experience.They may feel perceived risk.They may need advice from others.They may not know how to gather adequate information.They may expect prices to fall.They may expect improved products to be introduced later.

4. Satisfied consumers discuss their experiences with far fewer people than dissatisfied ones. Somestudies the ratio is 3:11.

LIMITATIONS OF THE FINAL CONSUMER’S DECISION PROCESS1. The hidden nature of many elements.2. The subconscious performance of the process.3. The impact of demographic, social, and psychological factors.4. Differences in decision making among consumers in different countries.

CUSTOMER BUYING PROCESS FOR NEW PRODUCTSHow do customers approach the process of buying a new product? How does this differ from theprocess for buying a product, which the customer has bought before? What does a “new product”mean?

A new product can be defined as: “A good, service or idea that is “perceived” by some potentialcustomers as new. It may have been available for some time, but many potential customershave not yet adopted the product nor decided to become a regular user of the product”

Research suggests that customers go through five stages in the process of adopting a new product orservice: these are summarized below:(1) Awareness - the customer becomes aware of the new product, but lacks information about it(2) Interest - the customer seeks information about the new product(3) Evaluation - the customer considers whether trying the new product makes sense(4) Trial - the customer tries the new product on a limited or small scale to assess the value of the

product(5) Adoption - the customer decides to make full and/or regular use of the new product

What is the role of marketing in the process of new-product adoption?A marketing team looking to successfully introduce a new product or service should think about howto help customers move through the five stages.

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For example, what kind of advertising or other promotional campaign can be employed to buildcustomer awareness? If customers show a desire to trial or sample a product, how can this bearranged effectively?

Research also suggests that customers can be divided into groups according to the speed with whichthey adopt new products.

Rogers, in his influential work on the diffusion of innovations, suggested the following classification:

The “innovators” (those who adopt new products first) are usually relatively young, lively, intelli-gent, and socially and geographically mobile. They are often of a high socioeconomic group (“AB’s”).Conversely, the “laggards” (those who adopt last, if at all) tend to be older, less intelligent, less welloff and lower on the socioeconomic scale.

It follows from the above model that when a business launches a new product or service, the custom-ers who buy first are likely to be significantly different from those who buy the product much later.This needs to be borne in mind when developing the marketing mix.

Points to remember:

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Lesson 20 buyer behavior

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Transcript of Lesson 20 buyer behavior