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Final Consumers and Their Buying Behavior

Final Consumers and Their Buying Behavior

For use only withPerreault/Cannon/McCarthy or Perreault/McCarthy texts.© 2008 McGraw-Hill Companies, Inc.McGraw-Hill/Irwin

CHAPTER FIVE

1. Be able to describe how economic needs and income influence the buyer decision process.

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

3. Understand how social influences affect an individual’s buying behavior.

4. Be able to explain how characteristics of the purchase situation influence consumer behavior.

5. Be able to explain the process by which consumers make buying decisions

When we finish this lecture you should

Consumer Behavior for Marketing Strategy Planning (Exhibit 5-1)

FinalFinalConsumersConsumers

Economic needsEconomic needs PsychologicalPsychological variablesvariables Social influencesSocial influences PurchasePurchase

SituationSituation

Marketing mixes All other stimuliMarketing mixes All other stimuli

Consumer decision processConsumer decision process

Person making a buying decision

Person does or does not purchase (response)Person does or does not purchase (response)

BusinessBusiness CustomersCustomers

Consumer Behavior for Marketing Strategy Planning (Exhibit 5-1)

Economic Needs Affect Many Buying Decisions—But They’re Not the Whole Story

They call it a They call it a crash test. We crash test. We call it a product call it a product demonstration.demonstration.

Discretionary income determines spending for many items

TotalIncome

TotalIncome

TaxesTaxes

NecessitiesNecessitiesDiscretionaryIncome

DiscretionaryIncome

== minusminus

++

Appealing to Higher Income Consumers

Income Dimensions of the US Market (Exhibit 5-2)

A Luxury Item

Person Making DecisionPerson Making Decision

Economic needsEconomic needs•Economy of Economy of purchasepurchase•ConvenienceConvenience•Efficiency in useEfficiency in use•DependabilityDependability

PsychologicalPsychological variablesvariables•MotivationMotivation•PerceptionPerception•LearningLearning•AttitudeAttitude•Personality/Personality/ lifestylelifestyle

Social influenceSocial influence•FamilyFamily•Social classSocial class•ReferenceReference groupsgroups•CultureCulture

PurchasePurchasesituationsituation•Purchase reasonPurchase reason•TimeTime•SurroundingsSurroundings

Marketing mixes All other stimuliMarketing mixes All other stimuli

Consumer decision processConsumer decision process

Person does or does not purchase (response)Person does or does not purchase (response)

How We Will View Consumer Behavior (Exhibit 5-3)

WantsWantsWantsWants

NeedsNeedsNeedsNeeds

Psychological Influences within an Individual

DrivesDrives

Consumers seek benefits to match Consumers seek benefits to match needs and wants!needs and wants!

DrivesDrives

Physiological Needs

Several Needs at the Same Time: PSSP Hierarchy of Needs (Exhibit 5-5)

Safety Needs

Social Needs

PersonalNeeds

Ads for Haynes Jeep-Chrysler feature the slogan, “Come to Haynes, where the fun begins.” This is an appeal to the consumer’s:

A. physiological need.

B. safety need.

C. personal need.

D. social need.

E. information need.

Checking your knowledge

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Interactive Exercise: Needs

If you have If you have a fauceta faucet

You can You can have a have a facial.facial.

Personal Needs

Selective Exposure

Selective Exposure

Selective Perception

Selective Perception

Selective Exposure

Selective Exposure

Selective Perception

Selective Perception

Perception Determines What Consumers See and Feel

Selective Retention

Selective Retention

Pat purchased a Ford Taurus, but traded it for another brand before it was out of warranty because it constantly needed repairs. Now, every time Pat sees an ad that mentions the quality of Ford’s new vehicles all she can think about is the problems she had with her Taurus. This an example of:

A. need-based thinking.B. selective retention.C. selective exposure.D. selective perception.E. psychographics.

Checking your knowledge

DriveDriveDriveDrive

CuesCuesCuesCues

ResponseResponseResponseResponse

Learning Determines What Response Is Likely (Exhibit 5-6)

ReinforcementReinforcement

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Cue

Work with Existing Attitudes

Work with Existing Attitudes

Work with Existing Attitudes

Need To Understand Attitudes &

Beliefs

Need To Understand Attitudes &

Beliefs

Need To Understand Attitudes &

Beliefs

Belief: An Opinion

Belief: An Opinion

Belief: An Opinion

Attitude: A Point of ViewAttitude: A

Point of ViewAttitude: A

Point of ViewAttitude: A

Point of View

Attitudes Relate to Buying

Ethical Issues May Arise

Ethical Issues May Arise

Ethical Issues May Arise

Meeting Expectations Is Important

Meeting Expectations Is Important

KeyConcepts

KeyConcepts

InterestsInterests

ActivitiesActivitiesActivitiesActivities

InterestsInterests

Personality and Lifestyle Analysis

Personality: How People See Things

Personality: How People See Things

OpinionsOpinions

Social Influences Affect Consumer Behavior

The Family Life Cycle (Exhibit 5-8)

Empty nestersEmpty nesters

Reallocation for teenagersReallocation for teenagersReallocation for teenagersReallocation for teenagers

Acceptance of new ideas

Acceptance of new ideas

KeyIssuesKey

Issues

Acceptance of new ideas

Acceptance of new ideas

Family Life Cycle Implications

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Family Life Cycle

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Interactive Exercise: Family Life Cycle

Which group likely spends the most money on durable goods?

A.Young single.

B.Young married without children.

C.Young married with children.

D.Middle-aged married with children

E.Older married without children

Checking your knowledge

Simple Approaches for Measuring Social Class in the U.S.

Income Is Not the Main Determinant!Income Is Not the Main Determinant!

OccupationOccupation EducationEducation Type of HousingType of Housing

Location of Housing

Location of Housing

Reference GroupsReference GroupsReference GroupsReference Groups

Opinion LeadersOpinion LeadersOpinion LeadersOpinion Leaders

CultureCulture

Other Social Influences

Anime, the cartoon-like Japanese art form, has generated significant interest among Generation Y consumers in the U.S. Anime conventions occur frequently and the largest ones draw more than 20,000 attendees. Anime fans, many in costume, come to these conventions to shop, participate in anime workshops, and to simply hang out with people with similar interests. Promotion of these conventions capitalizes mainly on:

A. learning.B. psychological needs.C. selective processes.D. reference group influences.E. culture.

Checking your knowledge

Buy Differently

Buy Differently

Increasing Median Income

Increasing Median Income

High Growth Rate

High Growth Rate

Buy Differently

Buy Differently

Increasing Median Income

Increasing Median Income

High Growth Rate

High Growth Rate

Ethnic Dimensions of the US Market

Avoid Stereotypes

Avoid Stereotypes

Appealing to Minority Consumers

Purchase Reason

Purchase Reason

Time Available

Time Available

Purchase Reason

Purchase Reason

Time Available

Time Available

Individuals Are Affected by the Purchase Situation

Physical Surroundings

Physical Surroundings

Marketing mixes All other stimuliMarketing mixes All other stimuli

Economic needsEconomic needs PsychologicalPsychologicalVariablesVariables Social influencesSocial influences PurchasePurchase

situationsituation

Consumer decision processConsumer decision process

NeedNeedawarenessawareness

Problem SolvingProblem Solving•Information searchInformation search•Identify alternativesIdentify alternatives•Set criteriaSet criteria•Evaluate alternativesEvaluate alternatives

ExperienceExperienceAfter theAfter thepurchasepurchase

Postpone decisionPostpone decisionFeedback based on experienceFeedback based on experience

PurchasePurchasedecisiondecision

Routinized responseRoutinized response

Expanded Model of Consumer Behavior (Exhibit 5-9)

Problem Solving Continuum (Exhibit 5-11)

Routinized Response Behavior

Routinized Response Behavior

Low involvementFrequently purchasedInexpensiveLittle riskLittle information

Limited Problem Solving

Limited Problem Solving

Extensive Problem Solving

Extensive Problem Solving

High involvementInfrequently purchased

Expensive High risk

Much information desired

Low involvement High involvement

Try Triaminic – the widest range of symptom-specific children’s cold formulas. So you can choose exactly the medicine your child needs, with no side effects from unnecessary ingredients.

Limited or Extensive Problem Solving?

AwarenessAwareness

InterestInterest

AwarenessAwareness

InterestInterest

EvaluationEvaluationEvaluationEvaluation

TrialTrialTrialTrial

DecisionDecision

ConfirmationConfirmation

DecisionDecision

Adoption Process Steps

Dissonance may set in after the decision!

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Problem Solving

Alice was a bit unsure about her decision after buying a new car. Her uneasiness was diminished after receiving a congratulatory note from the owner of the dealership. The note contained a coupon stating that her first scheduled maintenance on the vehicle would be free. These tactics are part of the dealer’s strategy to reduce:

A. dissonance.B. low involvement purchasing.C. routinized response behavior.D. social influences.E. information search.

Checking your knowledge

Decision-making steps Adoption process steps Learning steps Decision-making steps Adoption process steps Learning steps

DriveDrive

CuesCues

ResponseResponse

Rein

forcem

ent

Rein

forcem

ent

1.1. Becoming Becoming aware of needaware of need

2.2. Gathering info Gathering info about choicesabout choices

3.3. Setting criteria, Setting criteria, evaluation, evaluation, possible trialpossible trial

4.4. Deciding on Deciding on the solutionthe solution

5.5. Evaluating the Evaluating the purchase purchase experienceexperience

Awareness and Awareness and interestinterest

Interest and Interest and evaluationevaluation

Evaluation, maybe Evaluation, maybe trialtrial

DecisionDecision

ConfirmationConfirmation

Decision Making

1. Be able to describe how economic needs and income influence the buyer decision process.

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

3. Understand how social influences affect an individual’s buying behavior.

4. Be able to explain how characteristics of the purchase situation influence consumer behavior.

5. Be able to explain the process by which consumers make buying decisions

You now

• Economic buyers

• Economic needs

• Discretionary income

• Needs

• Wants

• Drive

• Physiological needs

• Safety needs

• Social needs

• Personal needs

• Perception

• Selective exposure

• Selective perception

• Selective retention

• Learning

• Cues

• Response

• Reinforcement

• Attitude

• Belief

• Expectation

• Psychographics

• Lifestyle analysis

• Empty nesters

Key Terms

• Social class

• Reference group

• Opinion leader

• Culture

• Extensive problem solving

• Limited problem solving

• Routinized response behavior

• Low-involvement purchases

• Dissonance

• Adoption process

Key Terms