chapter 5: final consumers and their buying behavior

For use only with Perreault and McCarthy texts.© The McGraw-Hill Companies, Inc., 2000

Irwin/McGraw-Hill

Chapter 5: Final Consumers and their Buying Behavior

For use only with Perreault and McCarthy texts.© The McGraw-Hill Companies, Inc., 2000

Irwin/McGraw-Hill

When you finish this chapter, you should

5-1

Chapter 5 Objectives

1. Know how income affects consumer behavior and spending patterns.

2. Understand the economic-buyer model of buyer behavior.

3. Understand how psychological variables affect an individual’s buying behavior.

4. Understand how social influences affect an individual’s and household’s buying behavior.

5. See why the purchase situation has an effect on consumer behavior.

6. Know how consumers use problem-solving processes.

7. Have some feel for how a consumer handles all the behavioral variables and incoming stimuli.

8. Understand the important new terms.

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Irwin/McGraw-Hill

1960 1980 1996

$26K

$34K

$44K

Med

ian

inco

me

Long term income trends are important to marketing managers because strategy planning must take into account realistic growth potential. A narrow focus on a high growth period that extends a temporary rate too far into the future can ruin chances for long term success

5-2

Median Family Income, 1960-1996

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Income Distribution

5-3

Perc

ent o

f Tot

al In

com

e

Middle 20%Income Group

Lowest 20%Income Group

Top 20%Income Group

46.8%

10

20

30

40

50

4.2% 10.0%15.8%

23.1%

Percent of Total Income Going to Different Income Groups in 1996

$0 19,680 34,315 51,086 75,316

Exhibit 5-1

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Irwin/McGraw-Hill

KeyTerms and

IssuesExpenditure

Data

FamilyLife Cycle

DiscretionaryIncome

Consumer Spending Patterns

5-4

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A Model of Buyer Behavior

5-5

Purchase ReasonTimeSurroundings

PurchaseSituation

MotivationPerceptionLearningAttitudePersonality/Lifestyle

PsychologicalVariables

FamilySocial ClassReference GroupsCulture

SocialInfluence

Problem-Solving Process

Person Does or Does Not Purchase (Response)

Marketing Mixes All Other Stimuli

PersonMakingDecision

Exhibit 5-2

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Irwin/McGraw-Hill5-6

The PSSP Hierarchy of Needs

Physiological Needs

Safety Needs

Social Needs

PersonalNeeds

Exhibit 5-4

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Drive

Cues

Response

Reinforcement

The Learning Process

Exhibit 5-5

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Lifestyle Dimensions

Opinions

Interests

Activities??????????????????????????????????????????????????????????????????????

5-8

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Family Life Cycle

Middle-ageddivorced w/outdep. children

Middle-ageddivorced with

children

Youngdivorced with

children

Middle-agedmarried w/outdep. children*

Middle-agedmarried with

children*

Youngmarried with

children*

Middle-agedmarried w/out

children

Middle-ageddivorced w/out

children

Youngmarriedx-child.*

Youngdivorced

w/outchildren

Youngsingle*

Oldermarried*

Olderun-

married*

Exhibit 5-75-9

Usual flow Recycled flow *Traditional family flow

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Exhibit 5-85-10

Social Class Dimensions

1.5%

32%

12.5%

38%

15%

Lower-middle class

Upper-middle class

Upper-class

Lower-lower class

Upper-lower (“working”) class

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BuyingBehavior

MedianIncomeGrowth

AccurateTarget

GrowthRate

5-11

Ethnic Dimensions of the US Market

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Purchase Situation Influences

Surroundings

Time

Purchase Reason??????????????????????????????????????????????????????????????????????

5-12

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Purchase SituationSocial InfluencesPsychological

Variables

Need-want Awareness

Information Search

Set Criteria

Decide on Solution

Purchase Product

Routinized Response

Postpone Decision Postpurchase

EvaluationResponse

Feedback ofinformationas attitudes

Person making decision

Marketing mixes All other stimuli

Exhibit 5-95-13

The Consumer Problem Solving Process

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Exhibit 5-115-14

Levels of Problem Solving

Extensive Problem Solving

Limited Problem Solving

Routinized Response Behavior

Involvement Continuum

Low Involvement High Involvement

Low involvementFrequently purchasedInexpensiveLittle riskLittle information needed

High involvementInfrequently purchased

ExpensiveHigh risk

Much information desired

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The Adoption Process

Awareness

Interest

Evaluation

Trial

Decision

Confirmation5-15

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Relating the Processes

Problem-solving steps1. Becoming aware of

or interested in the problem

2. Gathering information about possible solutions

3. Evaluating alterative solutions

4. Deciding on the appropriate solution

5. Evaluating the decision

Adoption process stepsAwareness and interest

Interest and evaluation

Evaluation, maybe trial

Decision

Confirmation

Learning steps

Drive

Cues

Response

Reinforcement

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LearningCues ResponseReinforcementAttitudeBeliefExpectationPsychographicsLifestyle AnalysisEmpty NestersSocial ClassReference GroupOpinion LeaderCulture

Discretionary incomeEconomic BuyersEconomic NeedsNeedsWantsDrivePhysiological NeedsSafety NeedsSocial NeedsPersonal NeedsPerceptionSelective ExposureSelective PerceptionSelective Retention

Extensive Problem Solving

Limited Problem Solving

Routinized ResponseBehavior

Low-involvementPurchases

Adoption ProcessDissonance

Key Terms

5-17