2011.05 marketing

MarketingStephan Langdon, MBA, M.Ed.

Week 5

Chapter FiveConsumer Markets and Consumer Buyer Behavior

Consumer Markets and Consumer Buyer Behavior

• Model of Consumer Behavior• Characteristics Affecting Consumer Behavior• Types of Buying Decision Behavior• The Buyer Decision Process• The Buyer Decision Process for New Products

Topic Outline

Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption

Consumer market refers to all of the personal consumption of final consumers

Model of Consumer Behavior

Model of Consumer Behavior

http://www.youtube.com/watch?v=befugtgikMg

Buyer characteristics and the buyer decision process are two parts of _______.

1. buyer’s black box2. buyer’s white box3. buyer’s red box4. buyer’s shopping box

Characteristics Affecting Consumer Behavior

Factors Influencing Consumer Behavior

Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics.

1. cost2. social3. health4. profit

Culture is the learned values, perceptions, wants, and behavior from family and other important institutions



Subculture are groups of people within a culture with shared value systems based on common life experiences

and situations• Hispanic• African American• Asian• Mature consumers

Four examples of subculture groups include Hispanic, African American, Asian American, and ________.

1. middle-class2. mature consumers3. RVers4. echo boomers

Groups of people with shared value systems based on common life experiences are called ________.

1. cohorts2. generations3. subcultures4. affiliate groups

The fastest-growing and most affluent subculture in the United States is the _____ population.

1. Hispanic2. African American3. Asian American4. mature

Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors

• Measured by a combination of occupation, income, education, wealth, and other variables


Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ________.

1. subculture2. families3. social class4. reference groups

Which of the following is not one of the major American social classes?

1. Upper class2. Working class3. Lower-upper class4. Lower-working class


http://www.rhodeislandhousing.org/


Membership Groups

• Groups with direct influence and to which a person belongs

Aspirational Groups

• Groups an individual wishes to belong to

Reference Groups

• Groups that form a comparison or reference in forming attitudes or behavior

Groups and Social Networks


• Word-of-mouth influence and buzz marketing• Opinion leaders are people within a reference

group who exert social influence on others• Also called influentials or leading adopters• Marketers identify them to use as brand

ambassadors


http://www.tremor.com/

A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ________.

1. opinion leader2. mature consumer3. marketer4. upper class citizen


• Online Social Networks are online communities where people socialize or exchange information and opinions

• Include blogs, social networking sites (facebook), virtual worlds (second life)



• Family is the most important consumer-buying organization in society

• Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status

Social Factors


• Age and life-cycle stage• RBC Royal Band stages

• Youth: younger than 18• Getting started: 18–35• Builders: 35–50• Accumulators: 50–60• Preservers: over 60

Personal Factors


Occupation affects the goods and services bought by consumers

Economic situation includes trends in:

Personal Factors

Personal

income

Savings

Interest rates


Lifestyle is a person’s pattern of living as expressed in his or her psychographics

• Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment

Personal Factors

The VALS classification system measures a person’s ________.1. income2. occupation3. lifestyle4. personality


• Personality and self-concept• Personality refers to the unique psychological characteristics that

lead to consistent and lasting responses to the consumer’s environment

Personal Factors

http://www.youtube.com/watch?v=kkZdkHylJ3w

A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting.

1. self-esteem2. self-concept3. lifestyle4. personality


Personal Factors Dominance Autonomy

Defensiveness

Adaptability

Aggressiveness

Which of the following is not one of the five brand personality traits?

1. Ruggedness2. Sophistication3. Self-concept4. Sincerity


Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes


A motive is a need that is sufficiently pressing to direct the person to seek satisfaction

Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations

Psychological FactorsMotivation


Maslow’sHierarchy of Needs

Maslow’s hierarchy of needs are psychological, safety, ________, esteem, and self-actualization.

1. social2. economic3. lifestyle4. education


Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes• Selective attention• Selective distortion• Selective retention


The process by which people select, organize, and interpret information to form a meaningful picture of the world is ________.

1. sensation2. learning3. perception4. motivation


Selective attention is the tendency for people to screen out most of the information to which they are exposed

Selective distortion is the tendency for people to interpret information in a way that will support what they already believe

Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands



• Learning is the change in an individual’s behavior arising from experience and occurs through interplay of:


Drives Stimuli Cues

Responses Reinforcement


Belief is a descriptive thought that a person has about something based on:

• Knowledge• Opinion• Faith

Psychological FactorsBeliefs and Attitudes


Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea


http://www.gotmilk.com/

Types of Buying Decision Behavior

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

Types of Buying Decision Behavior

Four Types of Buying Behavior

A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ________ buying behavior.

1. dissonance-reducing 2. variety-seeking3. complex4. habitual

________ buying behavior is characterized by low consumer involvement but significant perceived brand differences.

1. Dissonance-reducing 2. Variety-seeking3. Complex4. Habitual

The Buyer Decision Process

Buyer Decision Making Process


• Occurs when the buyer recognizes a problem or need triggered by:• Internal stimuli• External stimuli

Need Recognition


• Personal sources—family and friends

• Commercial sources—advertising, Internet

• Public sources—mass media, consumer organizations

• Experiential sources—handling, examining, using the product

Information SearchSources of Information


• How the consumer processes information to arrive at brand choices

Evaluation of Alternatives

http://computers.pricegrabber.com/laptop/p/13/st=sort/sortby=rating


• The act by the consumer to buy the most preferred brand• The purchase decision can be affected by:

• Attitudes of others• Unexpected situational factors

Purchase Decision


• The satisfaction or dissatisfaction that the consumer feels about the purchase

• Relationship between:• Consumer’s expectations• Product’s perceived performance

• The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction

• Cognitive dissonance is the discomfort caused by a post-purchase conflict

Post-Purchase Decision


Customer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime value

Post-Purchase Decision

The Buyer Decision Process for New Products

Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.

• Stages in the process include:

Awareness

Interest

Evaluation Trial Adoption

What are the two largest statistical populations in the adoption process?

1. Innovators and early majority 2. Early adopters and early majority3. Early majority and late majority 4. Innovators and laggards

The Buyer Decision Process for New Products

Influence of Product Characteristics on Rate of Adoption

Relative advantage

Compatibility Complexity

Divisibility Communicability

The Company’s Macroenvironment

Cultural EnvironmentShifts in Secondary Cultural Values

• People’s view of nature• Some feel ruled by it• Some feel in harmony with it• Some seek to master it

• People’s view of the universe• Renewed interest in spirituality

A woman who drives a hybrid car, consistently recycles, and buys “earth-friendly” products is acting out her view of ________.

1. cost2. non-profit organizations3. others4. nature

Which of the following are included in the major forces affecting a company’s macroenvironment?

1. Marketing mix, positioning, price2. cultural, political/legal, economic3. Marketing concept, goal setting, cultural4. Baby boomers, minimum wage rates, product/service

Which of the following are included in the major forces affecting a company’s macroenvironment?

1. Marketing mix, positioning, price2. Cultural, political/legal, economic3. Marketing concept, goal setting, cultural4. Baby boomers, minimum wage rates, product/service

Responding to the Marketing Environment

Uncontrollable

• React and adapt to forces in the environment

Proactive

• Aggressive actions to affect forces in the environment

Reactive

• Watching and reacting to forces in the environment

Views on Responding

A company has several options with regard to its marketing environment. A strong company takes a(n) ________ approach.

1. proactive2. reactive3. ingenuous4. peaceful

A company’s macroenvironment consists of all of the following except ________.

1. demographic forces2. economic forces3. competitive forces4. technological forces

Marketing Information and Customer Insights

• Fresh and deep insights into customers needs and wants• Difficult to obtain

• Not obvious• Customer’s unsure of their behavior

• Not derived from more information but better information and more effective use of existing information

Customer Insights are:

http://www.pearsonhighered.com/educator/sms_terms/1,3076,23516:US,00.html


• Companies are forming customer insights teams• Include all company functional

areas• Use insights to create more

value for their customers• Customer controlled could be a

problem

Customer Insights


Marketing information system (MIS) consists of people and procedures for:

• Assessing the information needs• Developing needed information• Helping decision makers use the information for customer

Marketing Information Systems (MIS)

Marketing Information System

In a marketing information system, the first step is ________.1. distributing data to managers2. forming focus groups3. determining the marketing mix4. assessing information needs

A marketing information system begins and ends with information from ________.

1. customers2. databases3. administrators4. users

Assessing Marketing Information Needs

MIS provides information to the company’s marketing and other managers and external partners such as suppliers, resellers, and marketing service agencies

Assessing Marketing Information Needs

• Balancing what the information users would like to have against what they need and what is feasible to offer

Characteristics of a Good MIS

User’s Needs

MIS Offering

s

Developing Marketing Information

Internal data

Marketing intelligence

Marketing research

Marketers obtain information from


Internal databases are electronic collections of consumer and market information obtained from data sources within the company network

Internal Data

Marketing managers can access and work with information in the _______ database to identify opportunities and threats and to evaluate performance.

1. internal2. external3. cost4. profit

Which of the following is a problem with using internal databases?1. The information was collected for another reason.2. The information is in the wrong format.3. The information may be incomplete.4. All of the above


Marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketplace

Marketing Intelligence

http://www2.acnielsen.com/site/index.shtml


Marketing Research

• Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

The systematic collection and analysis of publicly available information about your competitors is referred to as ________.

1. marketing concept2. marketing strategy3. marketing intelligence4. focus groups


Steps in the Marketing Research Process

The marketing research process includes four steps. The final step of this process is ________.

1. defining your problem2. developing a plan to collect data3. collecting and analyzing data4. interpreting and reporting your findings

What is often the hardest step in the marketing research process?1. Defining the problem2. Developing the research plan3. Implementing the research plan4. Reporting the findings


Marketing ResearchDefining the Problem and Research Objectives

Exploratory research

Descriptive research

Causal research

________ research is marketing research to test hypotheses about cause-and-effect relationships.

1. Causal2. Exploratory3. Descriptive4. Written

The objective of _____ is to gather preliminary information that will help define the problem and suggest reasons.

1. causal research2. competitive research3. descriptive research4. exploratory research


• Outlines sources of existing data

• Spells out the specific research approaches, contact methods, sampling plans, and instruments to gather data

Marketing ResearchDeveloping the Research Plan


Management problem

Research objectives

Information needed

How the results will help management

decisions

Budget

Marketing ResearchWritten Research Plan Includes:


Secondary data consists of information that already exists somewhere, having been collected for another purpose

Primary data consists of information gathered for the special research plan

Marketing ResearchDeveloping the Research Plan

________ consist(s) of information that already exists, having been collected prior to the research plan.

1. Primary data2. Secondary data3. Exploratory data4. Focus groups

Research approaches, contact methods, sampling plans, and research instruments are decisions that need to be made in the ______ data collection process.

1. secondary2. primary3. external4. internal


Advantages

Cost

Speed

Could not get data otherwise

Disadvantages

Current

Relevant

Accuracy

Impartial


Planning Primary Data Collection

Research approaches

Contact methods

Sampling plan

Research instruments

Marketing Research


Observational research involves gathering primary data by observing relevant people, actions, and situations

Ethnographic research involves sending trained observers to watch and interact with consumers in their natural environment

Market ResearchResearch Approaches


Survey research is the most widely used method and is best for descriptive information—knowledge, attitudes, preferences, and buying behavior

• Flexible• People can be unable or unwilling to answer• Gives misleading or pleasing answers• Privacy concerns



Experimental research is best for gathering causal information—cause-and-effect relationships


Experiments involving matched groups of subjects—giving them different treatments, controlling unrelated factors, and checking for different responses—is a type of __________.

1. causal information2. descriptive information3. secondary data4. ethnographic research

The three types of research approaches a marketer may use are ________, ________, and ________.

1. surveys; observations; historic reviews2. observations; surveys; databases3. observations; experiments; surveys4. experiments; databases; surveys


Marketing Research Strengths and Weakness of Contact Methods

Mail Telephone Personal Online

Flexibility Poor Good Excellent Good

Quantity of data collected

Good Fair Excellent Good

Control of interviewer effects

Excellent Fair Poor Fair

Control of sample Fair Excellent Good Excellent

Speed of data collection

Poor Excellent Good Excellent

Response rate Poor Poor Good Good

Cost Good Fair Poor Excellent


• Focus Groups• Six to 10 people with a trained moderator• Challenges

• Expensive• Difficult to generalize from small group• Consumers not always open and honest

Marketing ResearchContact Methods


Online marketin

g research

Internet surveys

Online panels

Online experime

nts

Click-stream

data

Online focus

groups

Marketing Research Contact Methods


Advantages

• Low cost• Speed• Higher

response rates

• Good for hard to reach groups

Disadvantages

• Restricted internet access

• Not sure who is answering

Marketing Research Online Research


Sample is a segment of the population selected for marketing research to represent the population as a whole• Who is to be surveyed?• How many people should be surveyed?• How should the people be chosen?

Marketing ResearchSampling Plan

Which of the following is not one of the decisions a marketer must make when designing a sample?

1. Who should be sampled2. How many people should be sampled3. How the people in the sample should be chosen4. What type of research method should be utilized


Probability Sample

Simple random sample Every member of the population has a known and equal chance of selection

Stratified random sample

The population is divided into mutually exclusive groups and random samples are drawn from each group

Cluster (area) sample The population is divided into mutually exclusive groups and the researcher draws a sample

Nonprobability Sample

Convenience sample The research selects the easiest population members

Judgment sample The researcher uses their judgment to select population members

Quota sample The researcher finds and interviews a prescribed number of people in each of several categories

Marketing ResearchSampling Plan – Types of Samples


Marketing ResearchResearch Instruments

Questionnaires• Most common• Administered in person, by

phone, or online• Flexible• Research must be careful

with wording and ordering of questions


• Closed-end questions include all possible answers, and subjects make choices among them• Provide answers that are easier to interpret and tabulate

• Open-end questions allow respondents to answer in their own words• Useful in exploratory research

Marketing ResearchResearch Instruments—Questionnaires

If a marketer wanted to collect large amounts of information at a low cost per respondent, she could use ________.

1. personal interviews2. mail questionnaires3. focus groups4. approach interviews

If a marketer wanted to collect information quickly and allow for flexible answers, he should use ________.

1. telephone interviews2. mail questionnaires3. focus groups4. approach interviews

Interviewer bias is often greater with ________.1. telephone interviews2. mail questionnaires3. focus groups4. online surveys

If an interviewer wanted to reach the teen market, a fast and low-cost method would be to use ________.

1. telephone interviews2. mail questionnaires3. focus groups4. online surveys


Mechanical

devices

People meters

Checkout scanners

Neuro-marketing

Marketing ResearchResearch Instruments


Collecting the information

Processing the information

Analyzing the information

Interpret findings

Draw conclusions

Report to management

Marketing ResearchImplementing the Research Plan

Analyzing Marketing Information

• CRM consists of sophisticated software and analytical tools that integrate customer information from all sources, analyze it in depth, and apply the results to build stronger customer relationships

Customer Relationship Management (CRM)

Analyzing Marketing Information

Customer purchase

s

Sales force

contacts

Service and

support calls

Web site visits

Satisfaction

surveys

Credit and

payment interactio

ns

Research studies

Customer Relationship ManagementTouchpoints

Distributing and Using Marketing Information

Information distribution involves entering information into databases and making it available in a time-useable manner

• Intranet provides information to employees and other stakeholders

• Extranet provides information to key customers and suppliers

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