1. A Global PerspectivePhilip Kotler Gary Armstrong Swee Hoon Ang5Siew Meng Leong Chin Tiong TanOliver Yau Hon-Consumer Markets andMingConsumer Buyer Behavior5-1

2. Learning ObjectivesAfter studying this chapter, you should be able to:1. Define the consumer market and construct a simple modelof consumer buyer behavior2. Name the four major factors that influence consumer buyer behavior3. List and understand the major types of buying decision behavior and the stages in the buyer decision process4. Describe the adoption and diffusion process for new products 5-2 3. Chapter Outline1. Model of Consumer Behavior2. Characteristics Affecting Consumer Behavior3. Types of Buying Decision Behavior4. The Buyer Decision Process5. The Buyer Decision Process for New Products6. Consumer Behavior Across International Borders5-3 4. Model of Consumer Behavior Consumer buyer behavior refers to the buyingbehavior of final consumersindividuals andhouseholds who buy goods and services forpersonal consumption. Consumer market refers to all of the personalconsumption of final consumers.5-4 5. Model of Consumer BehaviorMarketing stimuli consists Other stimuli include:of the 4 Ps Economic forces Product Technological forces Price Political forces Place Cultural forces Promotion5-5 6. Model ofConsumerBehavior 5-6 7. Factors influencing Consumer Behavior5-7 8. Characteristics Affecting Consumer BehaviorCultural Factors Social Factors Buyers culture Reference groups Buyers subculture Family Buyers social class Roles and status5-8 9. Characteristics Affecting Consumer BehaviorPersonal Factors Psychological Factors Age and life-cycle stage Motivation Occupation Perception Economic situation Learning Lifestyle Beliefs and attitudes Personality and self-concept 5-9 10. Characteristics Affecting Consumer Behavior Culture is the learned values,perceptions, wants, andbehavior from family andother important institutions.5-10 11. Characteristics Affecting Consumer BehaviorSubcultures are groups of people within a culturewith shared value systems based on common lifeexperiences and situations. Chinese Indians Malays Eurasians5-11 12. Characteristics Affecting Consumer Behavior Social classes are societys relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Measured by a combination of occupation, income, education, wealth, and other variables5-12 13. Characteristics Affecting Consumer BehaviorThe major social classes: Upper class Middle class Working class Lower class 5-13 14. Characteristics Affecting Consumer BehaviorSocial FactorsGroups Membership groups have a direct influence and to which aperson belongs. Aspirational groups are groups to which an individual wishesto belong. Reference groups are groups that form a comparison orreference in forming attitudes or behavior. 5-14 15. Characteristics Affecting Consumer BehaviorSocial FactorsGroups Opinion leaders are people within a reference group withspecial skills, knowledge, personality, or other characteristicsthat can exert social influence on others. Buzz marketing enlists opinion leaders to spread the word. Social networking is a new form of buzz marketing MySpace.com Facebook.com 5-15 16. Characteristics Affecting Consumer BehaviorSocial Factors Family is the most important consumer-buyingorganization in society. Social roles and status are the groups, family, clubs, andorganizations to which a person belongs that can definerole and social status. 5-16 17. Characteristics Affecting Consumer BehaviorPersonal Factors Personal characteristics Age and life-cycle stage Occupation Economic situation Lifestyle Personality and self-concept 5-17 18. Characteristics Affecting Consumer BehaviorPersonal FactorsAge and life-cycle stage RBC (Royal Bank of Canada) Royal Bank has identified five life-stage segments: Youthyounger than 18 years Getting started18-35 years Builders35-50 years Accumulators50-60 years Preserversover 60 years5-18 19. Characteristics Affecting Consumer BehaviorPersonal Factors Occupation affects the goods and services bought byconsumers. Economic situation includes trends in: Personal income Savings Interest rates5-19 20. Characteristics Affecting Consumer BehaviorPersonal Factors Lifestyle is a persons pattern of living as expressed inhis or her psychographics. Measures a consumers AIOs (activities, interests, and opinions) to capture information about a persons pattern of acting and interacting in the environment.5-20 21. Characteristics Affecting Consumer BehaviorPersonal FactorsSRI Consultings Values and Lifestyle (VALS) typology: Classifies people according to how they spend moneyand time: Primary motivations Resources 5-21 22. Characteristics Affecting Consumer BehaviorPersonal FactorsPrimary motivations Ideals Achievement Self-expression 5-22 23. Characteristics Affecting Consumer BehaviorPersonal FactorsResources High resources Innovators exhibit all primary motivations. Low resources Survivors do not exhibit strong primarymotivation.5-23 24. VALS LifestyleClassifications5-24 25. Characteristics Affecting Consumer BehaviorPersonal FactorsPersonality and Self-Concept Personality refers to the unique psychologicalcharacteristics that lead to consistent and lastingresponses to the consumers environment.5-25 26. Characteristics Affecting Consumer BehaviorPersonal FactorsPersonality and Self-ConceptBrand personality refers to the specific mix of human traitsthat may be attributed to a particular brand: Sincerity Excitement Competence Sophistication Ruggedness 5-26 27. Characteristics Affecting Consumer BehaviorPersonal FactorsPersonality and Self-Concept Self-concept refers to peoplespossessions that contribute to andreflect their identities. 5-27 28. Characteristics Affecting Consumer BehaviorPsychological Factors Motivation Perception Learning Beliefs and attitudes 5-28 29. Characteristics Affecting Consumer BehaviorPsychological FactorsMotivation A motive is a need that is sufficiently pressing to direct theperson to seek satisfaction. Motivation research refers to qualitative research designedto probe consumers hidden, subconscious motivations. 5-29 30. Characteristics Affecting Consumer BehaviorPsychological FactorsAbraham Maslows Hierarchy of Needs People are driven by particularneeds at particular times. Human needs are arranged in ahierarchy from mostpressing to least pressing. 5-30 31. Characteristics Affecting Consumer BehaviorPsychological Factors Perception is the process by which people select, organize,and interpret information to form a meaningful picture ofthe world from three perceptual processes: Selective attention Selective distortion Selective retention5-31 32. Characteristics Affecting Consumer BehaviorPsychological Factors Selective attention is the tendency for people to screenout most of the information to which they are exposed. Selective distortion is the tendency for people tointerpret information in a way that will support whatthey already believe. Selective retention is the tendency to remember goodpoints made about a brand they favor and to forgetgood points about competing brands. 5-32 33. Characteristics Affecting Consumer BehaviorPsychological Factors Learning is the changes in an individuals behavior arisingfrom experience and occurs through interplay of: Drives Stimuli Cues Responses Reinforcement5-33 34. Characteristics Affecting Consumer BehaviorPsychological FactorsBeliefs and Attitudes Belief is a descriptive thought that a person has aboutsomething based on: Knowledge Opinion Faith5-34 35. Characteristics Affecting Consumer BehaviorPsychological FactorsBeliefs and AttitudesAttitudes describe a persons relatively consistentevaluations, feelings, and tendencies toward an objector idea. 5-35 36. Four Types of Buying Decision Behavior Complex buying behavior Dissonance-reducing buying behavior Habitual buying behavior Variety-seeking buying behavior5-36 37. Types of Buying Decision BehaviorComplex Buying Behavior Occurs when consumers are highly motivated in a purchaseand perceive significant differences among brands. Purchasers are highly motivated when: Product is expensive Product is risky Product is purchased infrequently Product is highly self-expressive 5-37 38. Types of Buying Decision Behavior Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. Post-purchase dissonance occurs when the consumernotices certain disadvantages of the product purchased orhears favorable things about a product not purchased.5-38 39. Types of Buying Decision Behavior Habitual buying behavior occurs when consumers have low involvement and there is little significant brand difference. Variety-seeking buying behavior occurs when consumers have low involvement and there are significant brand differences. 5-39 40. The Buyer Decision ProcessFive stages in the buyer decision process1. Need recognition2. Information search3. Evaluation of alternatives4. Purchase decision5. Post-purchase behavior5-40 41. The Buyer Decision ProcessNeed Recognition Need recognition occurs when the buyer recognizes a problem or need triggered by: Internal stimuli External stimuli5-41 42. The Buyer Decision ProcessInformation SearchInformation search is the amount of information neededin the buying process and depends on: The strength of the drive, The amount of information you start with, The ease of obtaining the information, The value placed on the additional information, and The satisfaction from searching. 5-42 43. The Buyer Decision ProcessInformation SearchSources of information: Personal sourcesfamily and friends Commercial sourcesadvertising, Internet Public sourcesmass media, consumerorganizations Experiential sourceshandling, examining, usingthe product5-43 44. Sources and Role of Information5-44 45. The Buyer Decision ProcessEvaluation of AlternativesEvaluation of alternatives is how the consumerprocesses information to arrive at brand choices.5-45 46. The Buyer Decision ProcessPurchase Decision The purchase decision is the act by the consumer to buy the most preferred brand. The purchase decision can be affected by: Attitudes of others Unexpected situational factors5-46 47. The Buyer Decision ProcessPost-Purchase Decision The post-purchase decision is the satisfaction or dissatisfaction the consumer feels about the purchase. Relationship between: Consumers expectations Products perceived performance5-47 48. The Buyer Decision ProcessPost-Purchase Decision The larger the gap between expectation and performance, the greater the consumers dissatisfaction. Cognitive dissonance is the discomfort caused by a post-purchase conflict 5-48 49. The Buyer Decision ProcessPost-Purchase Decision Customer satisfaction is a key to building profitable relationships with consumersto keeping and growing consumers and reaping their customer lifetime value.5-49 50. The Buyer Decision Process forNew Products New product is a good, service, or idea that isperceived by some potential customers as new. Adoption process is the mental process anindividual goes through from first learning about aninnovation to final regular use. 5-50 51. The Buyer Decision Process forNew ProductsStages in the Adoption Process1. Awareness2. Interest3. Evaluation4. Trial5. Adoption 5-51 52. The Buyer Decision Process forNew ProductsStages in the Adoption Process Awareness is when the consumer becomes awareof the new product but lacks information. Interest is when the consumer seeks informationabout the new product.5-52 53. The Buyer Decision Process forNew ProductsStages in the Adoption Process Evaluation is when the consumer considerswhether trying the new product makes sense. Trial is when the consumer tries the new productto improve his or her estimate of value. Adoption is when the consumer decides to makefull and regular use of the product 5-53 54. The Buyer Decision Process forNew ProductsIndividual Differences in Innovation Early adopters are opinion leaders and adopt new ideasearly but cautiously. Early majority are deliberate and adopt new ideas beforethe average person. Late majority are skeptical and adopt new ideas only afterthe majority of people have tried it. Laggards are suspicious of changes and adopt new ideasonly when they become tradition. 5-54 55. The Buyer Decision Process forNew ProductsIndividual Differences in Innovation 5-55 56. The Buyer Decision Process forNew ProductsInfluence of Product Characteristics on Rate of Adoption Relative advantage is the degree to which an innovation appears to be superior to existing products. Compatibility is the degree to which an innovation fits the values and experiences of potential consumers. 5-56 57. The Buyer Decision Process forNew ProductsInfluence of Product Characteristics on Rate of Adoption Complexity is the degree to which the innovation is difficult to understand or use. Divisibility is the degree to which the innovation may be tried on a limited basis. 5-57 58. Consumer Behavior Across InternationalBorders Differences can include: Values Attitudes Behaviors The question for marketers is whether to adapt orstandardize the marketing.5-58