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CHAPTERCHAPTER

UNDERSTANDING CUSTOMERS: BUSINESS TO CONSUMER MARKETS

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Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reservedMcGraw-Hill/Irwin

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LEARNING OBJECTIVES

Understand the value of knowing the consumer

Recognize how internal factors affect consumer choices

Consider the role of personal and psychological factors in consumer decision making

Identify significant factors outside the consumer that have an effect on consumer choices

Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision

Understand the consumer decision making process 7-2

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THE POWER OF THE CONSUMER

Marketers are interested in learning about the process people use to make purchase decisions.

A company can only deliver value with an accurate and timely understanding of the customer.

Complex forces influence consumer choices and these forces change over time.

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MODEL OF THE CONSUMER DECISION PROCESSEXHIBIT

7.1

Marketing Activities Affect Consumer

Decision Process:Value Proposition

DistributionMarketing Communications

Environmental Forces AffectConsumer Decision Process:

EconomicTechnology

Political

Post-Purchase

Assessment

Search forInformation

ProductChoice

Decision

Evaluationof

AlternativeSolution

Problem Recognition

Internal Forces:Personal

CharacteristicsPsychological

Attributes

External FactorsCultural

SituationalSocial

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PERSONAL CHARACTERISTICS

Life Cycle Stage

Occupation

LifestyleGender Roles

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PSYCHOLOGICAL ATTRIBUTES

Motivation

Attitude

PerceptionLearning

Personality

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LIFESTYLE TRENDS IN THE UNITED STATESEXHIBIT

7.4

Trend Marketing Example

Health-consciouseating

Americans are turning to healthier eatingstyles

Season’s 52—Darden Restaurantsnew restaurant chain features achanging menu of healthy foods.

Single-parent homes Single-parent homes are increasing steadily

Target, Wal-Mart, and other retailersoffer a wide range of books, DVDs,and other products targeted atsingle parents.

Online era There has been a steady increase inonline shopping and information gathering

Amazon—One of the first andlargest online shopping websites,Amazon continues to experiencedouble-digit growth every year.

Women in theworkforce

In 2007, 46% of the workforce wasmade up of women and is continuouslygrowing.

Day care centers—Companies areincluding on-premise day care centersas part of their benefits packages;in addition, private centerscontinue to see significant growth.

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PSYCHOLOGICAL ATTRIBUTES

Motivation

Attitude

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CONTEMPORARY THEORIES OF MOTIVATIONEXHIBIT

7.5

Theory Key ElementsMarketingImplications

Maslow’s Hierarchy of Needs Theory

Humans have wants and needs which influence their behavior. People advance only to the next level if the lower needs are meet.

1. Physiological2. Safety3. Love/Social4. Self Esteem5. Self Actualization

Individuals are not interested in luxuries until they have had basic needs (food, shelter) met

Herzberg’s Two Factor Theory

Certain factors in the workplace result in job satisfaction.

1. Motivators: challenging work, recognition, and responsibility

2. Hygiene factors: status, job security, salary, and benefits

Satisfying hygiene factors does not create a loyal employee or customer. For a company to really create really satisfied employees it is important to focus on motivators

Aldelfer’s ERG Theory

Expansion on Maslow’s Hierarchy placing needs in three categories.

1. Existence2. Relatedness3. Growth

People need a sense of belonging and social interaction. Creating a relationship with the customers extends the customers satisfaction with the product

McClelland’s Achievement Motivation Theory

There are three categories of needs and people differ in the degree in which the various needs influence their behavior

1. Need for Achievement

2. Need for Power3. Need For Affiliation

Companies can be successful targeting one of three basic needs.

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PSYCHOLOGICAL ATTRIBUTES

Perception Selective RetentionSelective DistortionSelective Awareness

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PSYCHOLOGICAL ATTRIBUTES

Learning

◦ Conditioning

◦ Cognitive learning

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PSYCHOLOGICAL ATTRIBUTES

Personality

◦ Each person has a set of consistent, enduring personal characteristics.

◦ Those characteristics can be measured to identify differences between individuals.

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PSYCHOLOGICAL ATTRIBUTES

Brand personality

Sincerity

Down-to-

Earth, Honest, Wholesome,

Cheerful

Excitement

Daring, Spirite

d, Imaginative, And

Current

Competence

Reliable,

Intelligence, And

Successful

Sophistication

Upper Class And

Charming

Ruggedness

Outdoorsy And Tough

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EXTERNAL FACTORS SHAPE CONSUMER CHOICESCultural Factors

Language

ValuesSubcultur

e

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SUBCULTURE GROUPS IN THE UNITED STATESEXHIBIT

7.7

Source: U.S. Census Bureau, www.census.gov, accessed August 4, 2008.

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EXTERNAL FACTORS SHAPE CONSUMER CHOICESSituational Factors

Physical Surrounding

s

Personal Circumstanc

es

Time7-16

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EXTERNAL FACTORS SHAPE CONSUMER CHOICESSocial Factors

FamilyHousehold Life Cycle

Opinion Leaders

References Groups

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THE LEVEL OF INVOLVEMENT INFLUENCES THE PROCESSDecision Making with High

Involvement

◦ High Involvement Learning

Decision Making with Limited Involvement

◦ Low Involvement Learning

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CONSUMER DECISION MAKING PROCESSEXHIBIT

7.10

ProblemRecogniti

on

Product Choice

Decision

PostPurchaseEvaluatio

n

Evaluation of

Alternatives

Search for Informatio

n

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THE CONSUMER DECISION MAKING PROCESS

Problem Recognition

Real State

Preferred State

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THE CONSUMER DECISION MAKING PROCESS

Search for Information

Minimal Information

Search

Limited Information

Search

Extensive Information

Search

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THE CONSUMER DECISION MAKING PROCESS

Search for Information

Information Sources

Internal Information Search

External Information Sources

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THE CONSUMER DECISION MAKING PROCESS

Search for Information

Defining the Set of Alternatives

Complete Set

Awareness Set

Consideration (Evoked) Set

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THE CONSUMER DECISION MAKING PROCESS

Evaluation of Alternatives

Emotional Choice

Attitude based Choice

Attribute based Choice

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Product Choice DecisionPhysical

Surroundings

Social Circumstances

Time

State of Mind

THE CONSUMER DECISION MAKING PROCESS

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Product Choice Decision

What

Where

How Much

When

Payment

THE CONSUMER DECISION MAKING PROCESS

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THE CONSUMER DECISION MAKING PROCESS

Post Purchase AssessmentDissonance

Use/Non Use

Disposal

SatisfactionDissatisfaction

Instrumental Performance

Symbolic Performance

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