consumer markets and consumer buyer behavior alokesh banerjee
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Consumer Markets Consumer Markets and Consumer and Consumer Buyer BehaviorBuyer Behavior
Alokesh BanerjeeAlokesh Banerjee
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Objectives
Be able to define the Be able to define the consumer market and consumer market and construct a simple model of construct a simple model of consumer buyer behavior.consumer buyer behavior.
Know the four major factors Know the four major factors that influence consumer that influence consumer buyer behavior.buyer behavior.
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Objectives
Understand the major types of Understand the major types of buying decision behavior and buying decision behavior and the stages in the buyer decision the stages in the buyer decision process.process.
Be able to describe the Be able to describe the adoption and diffusion process adoption and diffusion process for new products.for new products.
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Harley “Hogs” “Hogs” account for 1/5 of account for 1/5 of U.S. cycle salesU.S. cycle salesSales have Sales have exceeded supply exceeded supply for yearsfor years1986-2000: Four 1986-2000: Four stock splits, stock splits, increase of 7,100%increase of 7,100%
Fiercely loyal clientele Fiercely loyal clientele revolves around 7 revolves around 7 core customer typescore customer typesHarley owners use Harley owners use their bikes to express their bikes to express their lifestyle and their lifestyle and attitudesattitudesAdvertising reflects Advertising reflects the Harley mystiquethe Harley mystique
cHarley-DavidsonHarley-Davidson
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Definitions
Consumer Buying BehaviorConsumer Buying Behavior Buying behavior of individuals and Buying behavior of individuals and
households that buy products for households that buy products for personal consumption.personal consumption.
Consumer MarketConsumer Market All individuals/households who buy All individuals/households who buy
products for personal consumption.products for personal consumption.
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Figure 6-1:
Model of Buyer Behavior
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Stimulus Response ModelStimulus Response Model Marketing and other stimuli enter the Marketing and other stimuli enter the
buyer’s “black box” and produce buyer’s “black box” and produce certain choice / purchase responses.certain choice / purchase responses.
Marketers must figure out Marketers must figure out what is inside of the buyer’s what is inside of the buyer’s “black box” and how stimuli “black box” and how stimuli are changed to responses.are changed to responses.
Model of Consumer Behavior
?
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Figure 6-2:
Factors Influencing Consumer Behavior
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Characteristics Affecting Consumer Behavior
CultureCulture
SubcultureSubculture Hispanic Hispanic
consumersconsumers African AmericansAfrican Americans Asian AmericansAsian Americans Mature consumersMature consumers
Social ClassSocial Class
CulturalCultural
SocialSocial
PersonalPersonal
PsychologicalPsychological
Key FactorsKey Factors
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HispanicsHispanics 35 million consumers 35 million consumers
purchase $425 billion purchase $425 billion worth of goods and worth of goods and services.services.
Expected to grow 64% Expected to grow 64% in 20 years.in 20 years.
Spanish media makes Spanish media makes group easy to reach.group easy to reach.
Brand loyal group.Brand loyal group.
Characteristics Affecting Consumer
Behavior
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Sears uses the Fiesta mobile to visit Hispanic neighborhoods regularly
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African AmericansAfrican Americans 35 million consumers 35 million consumers
purchase $527 billion purchase $527 billion worth of goods and worth of goods and services.services.
Growing more affluent / Growing more affluent / sophisticated.sophisticated.
Price and brand name Price and brand name conscious; quality and conscious; quality and selection are important.selection are important.
Certain media target this Certain media target this group.group.
Characteristics Affecting Consumer
Behavior
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Hallmark offers an Afrocentric line of greeting cards called Mahogany. What other brands have been targeted specifically to African Americans?
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Asian AmericansAsian Americans 10 million consumers 10 million consumers
purchase $229 billion purchase $229 billion worth of goods and worth of goods and services.services.
Fastest growing, most Fastest growing, most affluent subculture.affluent subculture.
Many nationalities Many nationalities comprise this group.comprise this group.
Consumer packaged Consumer packaged goods firms now target goods firms now target this group more heavily.this group more heavily.
Characteristics Affecting Consumer
Behavior
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Mature ConsumersMature Consumers 75 million consumers age 50+will grow to 115 75 million consumers age 50+will grow to 115
million within 25 years.million within 25 years. Mature consumers Mature consumers
control 50% of all control 50% of all discretionary income.discretionary income.
Attractive market for Attractive market for travel, restaurant, and travel, restaurant, and cosmetics products, cosmetics products, among others.among others.
Characteristics Affecting Consumer
Behavior
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Characteristics Affecting Consumer Behavior
GroupsGroups MembershipMembership Reference
Aspirational Aspirational groups groups
Opinion leadersOpinion leaders Buzz marketingBuzz marketing
FamilyFamily Kids can influenceKids can influence
Roles and StatusRoles and Status
CulturalCultural
SocialSocial
PersonalPersonal
PsychologicalPsychological
Key FactorsKey Factors
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Characteristics Affecting Consumer Behavior
Age and life-cycleAge and life-cycle
OccupationOccupation
Economic situationEconomic situation
LifestyleLifestyle Activities, interests, and Activities, interests, and
opinionsopinions Lifestyle segmentationLifestyle segmentation
Personality and self-Personality and self-conceptconcept Brand personalityBrand personality
CulturalCultural
SocialSocial
PersonalPersonal
PsychologicalPsychological
Key FactorsKey Factors
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Lifestyles:Jeep targets people who want to “leave the civilized world behind”
What other types of images could be used to appeal to this lifestyle?
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Figure 6-3:
VALS Lifestyle Classification
Learn more about VALS and take the VALS survey online by clicking the web link icon below.
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Characteristics Affecting Consumer Behavior
Brand Personality DimensionsBrand Personality Dimensions
SinceritySincerity
RuggednessRuggedness
ExcitementExcitement
CompetenceCompetence
SophisticationSophistication
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Think about Tide detergent.
What brand personality seems to describe Tide best?
Can you think of examples of brands that fit each personality type?
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Characteristics Affecting Consumer Behavior
MotivationMotivation Needs provide motivesNeeds provide motives Motivation researchMotivation research Maslow’s hierarchy of Maslow’s hierarchy of
needsneeds
PerceptionPerception Selective attention, Selective attention,
selective distortion, selective distortion, selective retentionselective retention
LearningLearning Drives, stimuli, cues, Drives, stimuli, cues,
responses and responses and reinforcementreinforcement
Beliefs and attitudesBeliefs and attitudes
CulturalCultural
SocialSocial
PersonalPersonal
PsychologicalPsychological
Key FactorsKey Factors
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Figure 6-4:
Maslow’s Hierarchy
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The milk moustache campaign changed attitudes toward milk.
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Figure 6-5:
Types of Buying Behavior
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Figure 6-6:
The Buyer Decision Process
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The Buyer Decision Process
Need recognitionNeed recognition
Information searchInformation search
Evaluation of Evaluation of alternativesalternatives
Purchase decisionPurchase decision
Postpurchase Postpurchase behaviorbehavior
Needs can be Needs can be triggered by:triggered by: Internal stimuliInternal stimuli
Normal needs Normal needs become strong become strong enough to drive enough to drive behaviorbehavior
External stimuliExternal stimuliAdvertisementsAdvertisementsFriends of friendsFriends of friends
StagesStages
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Attempt to stimulate need recognition
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The Buyer Decision Process
Need recognitionNeed recognition
Information searchInformation search
Evaluation of Evaluation of alternativesalternatives
Purchase decisionPurchase decision
Postpurchase Postpurchase behaviorbehavior
Consumers exhibit Consumers exhibit heightened attention or heightened attention or actively search for actively search for information.information.
Sources of information:Sources of information: PersonalPersonal CommercialCommercial PublicPublic ExperientialExperiential
Word-of-mouthWord-of-mouth
StagesStages
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The Buyer Decision Process
Need recognitionNeed recognition
Information searchInformation search
Evaluation of Evaluation of alternativesalternatives
Purchase decisionPurchase decision
Postpurchase Postpurchase behaviorbehavior
Evaluation procedure Evaluation procedure depends on the depends on the consumer and the buying consumer and the buying situation.situation.Most buyers evaluate Most buyers evaluate multiple attributes, each multiple attributes, each of which is weighted of which is weighted differently.differently.At the end of the At the end of the evaluation stage, evaluation stage, purchase intentions are purchase intentions are formed.formed.
StagesStages
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The Buyer Decision Process
Need recognitionNeed recognition
Information searchInformation search
Evaluation of Evaluation of alternativesalternatives
Purchase decisionPurchase decision
Postpurchase Postpurchase behaviorbehavior
Two factors Two factors intercede between intercede between purchase purchase intentions and the intentions and the actual decision:actual decision: Attitudes of othersAttitudes of others Unexpected Unexpected
situational factorssituational factors
StagesStages
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The Buyer Decision Process
Need recognitionNeed recognition
Information searchInformation search
Evaluation of Evaluation of alternativesalternatives
Purchase decisionPurchase decision
Postpurchase Postpurchase behaviorbehavior
Satisfaction is key:Satisfaction is key: Delighted consumers Delighted consumers
engage in positive engage in positive word-of-mouth.word-of-mouth.
Unhappy customers Unhappy customers tell on average 11 tell on average 11 other people.other people.
It costs more to attract It costs more to attract a new customer than it a new customer than it does to retain an does to retain an existing customer.existing customer.
Cognitive dissonanceCognitive dissonance
StagesStages
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Buyer Decision Process for New Products
New ProductsNew Products Good, service or Good, service or
idea that is idea that is perceivedperceived by by customers as new.customers as new.
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Buyer Decision Process for New Products
Stages in the Adoption Stages in the Adoption ProcessProcess Marketers should help Marketers should help
consumers move from consumers move from awareness to adoption.awareness to adoption.
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Buyer Decision Process for New Products
Stages in the Adoption ProcessStages in the Adoption Process
AwarenessAwareness
InterestInterest
EvaluationEvaluation
TrialTrial
AdoptionAdoption
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Buyer Decision Process for New Products
Individual Differences Individual Differences in Innovativenessin Innovativeness Consumers can be Consumers can be
classified into five classified into five adopter categories, adopter categories, each of which behaves each of which behaves differently toward new differently toward new products.products.
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Figure 6-7:
Adopter Categories Based on Relative Time of
Adoption
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Buyer Decision Process for New Products
Product Characteristics Product Characteristics and Adoptionand Adoption Five product Five product
characteristics characteristics influence the influence the adoption rate.adoption rate.
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Buyer Decision Process for New Products
Product CharacteristicsProduct Characteristics
Relative AdvantageRelative Advantage CompatibilityCompatibility ComplexityComplexity DivisibilityDivisibility CommunicabilityCommunicability
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Describe how each Describe how each of the five product-of the five product-related innovation related innovation characteristics will characteristics will influence the rate of influence the rate of the adoption for this the adoption for this product. product.
Discussion Question
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Buyer Decision Process for New Products
International ConsumerInternational Consumer BehaviorBehavior Values, attitudes and behaviors differ greatly Values, attitudes and behaviors differ greatly
in other countries.in other countries. Physical differences exist that require Physical differences exist that require
changes in the marketing mix.changes in the marketing mix. Customs vary from country to country.Customs vary from country to country. Marketers must decide the degree to which Marketers must decide the degree to which
they will adapt their marketing efforts.they will adapt their marketing efforts.
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