CONSUMER CONSUMER BEHAVIORBEHAVIOR

Refers to the Refers to the ACQUISITIONACQUISITION, , USEUSE, and , and DISPOSALDISPOSAL of of products, ideas, or services.products, ideas, or services.

CONSUMING GROUPS include CONSUMING GROUPS include families, clubs, organizations, families, clubs, organizations, corporations, and governments.corporations, and governments.

ACQUIRINGACQUIRING

ReceivingReceiving FindingFinding InheritingInheriting ProducingProducing purchasingpurchasing

CONSUMINGCONSUMING CollectingCollecting NurturingNurturing CleaningCleaning PreparingPreparing EvaluatingEvaluating ServingServing DisplayingDisplaying StoringStoring SharingSharing DevouringDevouring EatingEating

DISPOSINGDISPOSING GivingGiving Throwing awayThrowing away RecyclingRecycling depletingdepleting

Why SHOULD we study Why SHOULD we study CONSUMER BEHAVIOR?CONSUMER BEHAVIOR?

Businesses stay in business by Businesses stay in business by ATTRACTING AND RETAINING ATTRACTING AND RETAINING CUSTOMERS.CUSTOMERS.

The endless desire of businesses to The endless desire of businesses to attract and retain customers is attract and retain customers is important to COPYWRITERS.important to COPYWRITERS.

As individuals, we “market” As individuals, we “market” ourselves to the other members of ourselves to the other members of the society.the society.

THE CONSUMPTION THE CONSUMPTION PROCESSPROCESS

From disposal to acquisition From disposal to acquisition ((ukay-ukay ukay-ukay stylestyle))

From disposal to production (From disposal to production (recyclingrecycling))From disposal to consumption From disposal to consumption ((hand-me-hand-me-

down)down)

From production to consumption From production to consumption (starting (starting from scratch)from scratch)

From acquisition to consumption From acquisition to consumption (buying (buying meals from restaurant)meals from restaurant)

From acquisition to disposal From acquisition to disposal (buying for gift-(buying for gift-giving)giving)

THE CONSUMER THE CONSUMER DECISION DECISION

PROCESS MODELPROCESS MODEL

Need Recognition

Search for Information

Pre-purchase Evaluation of Alternatives

PURCHASE

Consumption

Post-consumption Evaluation

Feedback to future decisions

Stage One:Stage One: NEED RECOGNITIONNEED RECOGNITION

Occurs when an individual senses a Occurs when an individual senses a difference between what he or she difference between what he or she perceives to be the ideal versus the perceives to be the ideal versus the actual state of affairs.actual state of affairs.

Includes: Includes: NEEDS, DESIRESNEEDS, DESIRES Marketers should know the Marketers should know the

consumers “itch” so they’ll know consumers “itch” so they’ll know where to “scratch” new products.where to “scratch” new products.

Memory NeedRecognition

Environmental influencesCultureSocial classPersonal influencesFamilySituation

IndividualDifferencesConsumer resourcesMotivationKnowledgeAttitudesPersonality, valuesAnd lifestyle

THE THE SEGMENTATION SEGMENTATION

OF OF MARKETMARKET

GEOGRAPHIC SEGMENTATION

Divides the market into different geographical units such as regions, countries, or neighborhoods.

DEMOGRAPHIC SEGMENTATION

Consists of dividing the market into groups on the basis of variables as AGE, SEX, OCCUPATION, EDUCATION, RELIGION, FAMILY SIZE, ETHNICITY, INCOME, etc.

PSYCHOGRAPHIC SEGMENTATION

Buyers are divided into groups on the basis of differences in consumer lifestyle.

LIFESTYLE refers to how people live: INTERESTS, ACTIVITIES and OPINION.

BEHAVIORAL SEGMENTATION

Buyers are divided into groups on the basis of differences in their knowledge, attitude, use, or response to a product.

Segment Rich Yuppies Salary class

Working poor

Size of segment

100,000 60 million 300 million 840 million

Geographics Coastal urban areas

Major urban areas

Small cities

Small towns and rural areas, esp. in the west of China

Demographics

•HH income

•Age

•Education

•Occupation

Above $5,000

30-65

Various

Entrepreneur;

Government officials;

celebrities

$2,000-$5,000

25-45

College

Managers, professionals, technical

$1,000-$1,999

18-60

High school

Office clerks; factory workers

Less than $1,000

All age groups

Elementary

school

Manual laborers, peasants

Psycho-graphicsOrientation

Innovative-ness

Risk aversionReadiness for foreign goods

Optimistic

Innovators;

Trend-setters

Low

high

Hopeful

Early adopter; opinion leaders

Moderate

moderate

Status quo

Early majority;Emulators

High

low

Uncertain

Late majority; laggard

Very high

minimum

LifestylesMobilityActivities

Active

Wheel and deal, dine and wine in exclusive clubs, frequent shopping

MobileBusy work sked; frequent dining out and excursion

Confined

Trapped 8-5; limited disposable income; occasional outing; cameras and parks

Immobile

Menial labor; hand-to-mouth; mass entertainment such as sports on TV

CULTURE

Frameworks for action and understanding that enable one to operate in a manner acceptable to other members.

Includes VALUES, NORMS, LANGUAGE, OBJECTS, RITUALS, etc.

VALUES – enduring beliefs about desirable outcomes that transcend specific situations and shape one’s behavior. Example: honesty, dependability, etc.

NORMS – informal, usually unspoken rules that govern behavior.

Examine the following:

How do Filipinos and Westerners differ in terms of food consumption?

The “maid” cultureExamine vanity among people of different

culture Consumers in Netherlands and UK use three

times as much toothpaste as those in Spain and Greece. Spanish consumers view toothpaste as a cosmetic product.

Domestic animals vs livestock

Clothes represent cultural principles.We don’t wear cocktail dress at work.

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INSTRUMENTAL VALUES – shared beliefs about how people should behave

TERMINAL VALUES – desirable life goals

Examples of INSTRUMENTAL VALUES:

Free choice

Competence

Compassion

Integrity

independence

Examples of TERMINAL VALUES:

Personal gratification

Security

Love & affection

Self-actualization

Security

Social harmony

Core Japanese and American Values

Harmony

Hierarchy

Organization

Right action

Face-savingWarm,

accepting love

Japanese Values

Activity,Work Equality

Materialism

MOrality

Achievement

RomanticIndividualism

American Values

Thinking points:Thinking points:

Pick an instrumental or terminal value you Pick an instrumental or terminal value you believe is important in your culture. What believe is important in your culture. What product can support or promote that value?product can support or promote that value?

Think of a cultural ritual in your community. Think of a cultural ritual in your community. Describe the ritual. How does this ritual relate Describe the ritual. How does this ritual relate to important cultural values?to important cultural values?