Marketing Ch06

Analyzing 6 Consumer Markets
5-1 6-1
Learning Objectives:

Know how consumer characteristics influence buying behavior Know what major psychological processes influence consumer responses to the marketing program Know how consumers make purchasing decisions Know how marketers analyze consumer decision making
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Copyright 2009 Pearson Education South Asia Pte Ltd
A Model of Consumer Behavior (Figure 6.1)
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Consumer Buyer Behavior
The buying behavior of final consumersindividuals & households who buy goods & services for personal consumption.

Consumer Market: All individuals & households who buy or acquire goods & services for personal consumption.
Factors influencing consumer behavior
Cultural Culture
Social Reference Groups Family Roles & status
Personality Age & LifeCycle Stage Occupation Economic Situation Lifestyle Personality & selfconcept
Psychological Motivation Perception Learning Beliefs & attitudes Buyer
Subculture
Social Class
What Influences Consumer Behavior?

Cultural Factors
Social Factors
Personal Factors
Research
provide clues to reach & serve consumers more effectively

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Cultural Factors

Culture: The set of basic values, perceptions, wants & behaviors learned by a member of society from family & other important institutions. Subculture: A group of people with shared value systems based on common life experiences & situations. Social Class: Relatively permanent & ordered divisions in a society whose members share similar values, interests & behaviors. Measured by occupation, income, education, wealth & other variables.
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Cultural Forces

Culture is the fundamental determinant of a persons wants and behaviors. Each culture consists of smaller subcultures that provide more specific identification and socialization for their members.

Subcultures include nationalities, religions, racial groups, and geographic regions. Multicultural marketing grew out of careful marketing research that revealed that different ethic and demographic niches did not always respond favorable to mass-market advertising.
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Cultural Factors

Main determinant of wants & behavior

E.g. Asian child exposed to filial piety, hard work
SUBCULTURE

Subset of each culture - more specific identity for members

E.g. religions, nationalities
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Subcultures
Nationalities
Religions
Racial groups
Geographic regions
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Multi- cultural Marketing

Multicultural marketing Ethnic & demographic niches Dont respond favorably to mass marketing Where applied?
Regional and international marketing Marketers must recognize and respond to differences in cultural norms and values and adapt products and promotions accordingly

Copyright 2009 Pearson Education South Asia Pte Ltd 6-11
Social Class

Virtually all human societies exhibit social stratification. Social stratification sometimes takes the form of a caste system where members of different castes are reared for certain roles and cannot change their caste membership. More frequently, it takes the form of social classes, relatively homogeneous and enduring divisions in a society that are hierarchically ordered and whose members share similar values, interests, and behavior.
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Social Factors
Reference groups
Family
Social roles
Statuses
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Reference Groups
Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups
Group: Two or more people who interact to accomplish individual or mutual goals Membership Groups: groups that have a direct influence to which a person belongs to` Reference Groups: Serve as direct or indirect points of reference in forming a persons attitudes or beliefs Aspirational Group: Group to which a person aspires to belong to Opinion Leader: Person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others.
Impact of Groups

Groups having a direct influence on a person are called membership groups. Some memberships groups are primary groups such as family, friends, neighbors, and co-workers with whom the person interacts fairly continuously and informally. Some membership groups are secondary groups such as religious, professional groups that tend to be more formal.
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Reference Groups

Reference groups expose an individual to new behaviors and lifestyles, influencing attitudes and self-concept. They create pressures for conformity that may affect actual product and brand choices. People are also influenced by groups to which they do no belong:

Aspiration groups are those a person hopes to join. Dissociative groups are those whose values or behavior an individual rejects. The buyer evaluates these elements together with the monetary cost to form a total customer cost.
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Marketing applications of reference groups:

Manufacturers of products and brands where group influence is strong must determine how to reach and influence opinion leaders in these reference groups. An opinion leader is the person in informal, productrelated communications who offers advice or information about a specific product or product category. Marketers try to reach opinion leaders by identifying demographic and psychographic characteristics associated with opinion leadership, identifying the media read by opinion leaders, and directing messages at opinion leaders.
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Social Factors- Family

The family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group. We can distinguish between two families in the buyers life. The family of orientation consists of parents and siblings. A more direct influence on everyday buying behavior is the family of procreation namely, ones spouse and children.
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Family

Family members strongly influence buyer behavior Marketers in roles & influence of husband, wife & children on purchase of different products & services. Men account for 40% food shopping Women make 85% of purchases Children ages 3-11 yield $18 bn in disposable income Children influence $115 bn in areas like food, clothing, entertainment & personal care items.
Application in Marketing
Marketers are interested in the roles and relative influence of family members in the purchase of a large variety of products and services. With expensive products and services, the vast majority of husbands and wives engage in more joint decision-making. Men and women may respond differently to marketing messages. Another shift in buying patterns is an increase in the amount of dollars spent and the direct and indirect influence wielded by children and teens. Marketers of cars, cell phones, restaurants & travel are now placing ads On Cartoon Network, Pogo & Copyright 2009 Pearson Education South Asia Pte Ltd Nickelodeon

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Roles and Status

A person participates in many groups and a persons position in each group can be defined in terms of role and status. A role consists of the activities a person is expected to . Each role carries a status. Marketers must be aware of the status symbol potential of products and brands
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Roles and Status- Marketing Application

People choose products that reflect and communicate their role and actual or desired status in society. Company presidents often drive Mercedes, wear expensive suits. Marketers must be aware of the status symbol potential of products and brands.
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Personal Factors
Age Selfconcept Lifestyle Values Personality Life cycle stage Occupation Wealth
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Age and Life Cycle Stages
People change goods & services they buy over lifetimes. Buying is shaped by stage of the family life cycle- the stages through which families might pass as they mature over time. Marketers should also consider critical life events or transitions, marriage, child birth, illness, relocation, divorce, career change, widowhood, as giving rise to new needs
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Table 7.2: Stages in the Family Life Cycle

1. Bachelor stage: Young, single, not living at home Few financial burdens. Fashion opinion leaders. Recreation oriented. Buy: basic home equipment, furniture, cars,vacations.
2. Newly married couples: Young, no children 3. Full nest I: Youngest child under six
Highest purchase rate and highest average purchase of durables: cars, appliances, furniture, vacations. Home purchasing at peak. Liquid assets low. Interested in new products, advertised products. Buy: washers, dryers, TV, baby food, chest rubs and cough medicines, vitamins, dolls, wagons, sleds, skates. Financial position better. Less influenced by advertising. Buy larger-size packages, multiple-unit deals. Buy: many foods, cleaning materials, bicycles, music lessons, pianos.
4. Full nest II: Youngest child six or over
Age and Life Cycle Stages

Psychological life-cycle stages matter Critical life events/transitions:

Marriage Relocation etc
Give rise to new needs
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Occupation and Economic Circumstances

Identify occupational groups with above-average interest in products Tailor products for some of them, Blue collared individuals buy work clothes, shoes, lunch boxes. Economic conditions also affect product choice, spendable income, savings, assets, debts, purchasing power.
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Occupation and Economic Circumstances

Product choice affected by economic circumstances: income, savings
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Personality and Self-Concept

Each person has personality characteristics that influence his or her buying behavior. Personality: A set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. Defined in terms of traits such as self confidence, dominance, sociability, defensiveness The idea is that brands have personalities and consumers are likely to choose brands whose personalities match their own.
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Brand Personality

Brand personality is defined as the specific mix of human traits that may be attributed to a particular brand. Consumers also choose and use brand that have a brand personality consistent with their own actual self-concept (how one views themselves). Although in some cases, the match may be based on the consumers ideal self-concept (how we would like to view ourselves).
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Five Brand Personality Traits: 1. Sincerity (down to earth, honest, cheerful). 2. Excitement (daring, spirited, imaginative). 3. Competence ( reliable, intelligent, successful) 4. Sophistication ( upper class & charming) 5. Ruggedness (outdoorsy & tough). Nike MTV CNN Campbell ruggedness excitement competence sincerity
Lifestyle and Values

People from the same subculture, social class, and occupation may lead quite different lifestyles. A lifestyle is a persons pattern of living in the world as expressed in activities, interests, and opinions. Lifestyle portrays the whole person interacting with his or her environment.

Marketers search for relationships between their products and lifestyle groups. Lifestyle is a persons pattern of living in the world as expressed in activities, interests, and opinions.
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Lifestyle and Values

Lifestyles shaped partly by being: Money-constrained - lower cost products Time-constrained - multitasking, convenient products
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Core Values

Consumer decisions - core values Core values - choices in long-term Values: Appeal to inner selves Influence outer selves Lead to purchase behavior
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Key Psychological Processes
Motivation
Perception
Learning
Memory
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Motivation

Motive (or Drive ) : A need that is sufficiently pressing to direct the person to seek satisfaction Example : An ageing person seeking skin electrolysis

Drive :

1 To look young and feel independent 2 To feel young
Motivation: Freud, Maslow, Herzberg

A person has many needs at any given time. Some needs are:

Biogenic (arise from physiological states of tension such as hunger). Others are psychogenic and arise from a need for recognition, esteem, or belonging. A motive is a need that is sufficiently pressing to drive the person to act.
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Motivation
Maslows Hierarchy of Needs Behavior is driven by lowest, unmet need Herzbergs Two-Factor Theory Behavior is guided by motivating factors
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Freuds Theory Behavior is guided by subconscious motivations
Freuds Theory

Psychological forces shape behavior that a person cannot fully understand ( will react to less conscious cues such as size, shape, weight, material, color) Laddering Decide message & appeal In-depth interviews - deeper motives Use projective techniques
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Maslows Theory

Human needs arranged in a hierarchy according to importance

Physiological, safety, social, esteem & selfactualization

How products fit in plans & lives If self-actualization apply to Asians Social needs important for Asians: Affiliation, Admiration, Status
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Maslows Hierarchy of Needs
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Herzbergs Theory

2-factor theory - dissatisfiers & satisfiers Absence of dissatisfiers not enough to motivate a purchase, satisfiers must be present Satisfiers required to motivate purchase

Eg computer without warranty dissatisfier
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Marketing implications of Herzbergs model of motivation

Herzbergs theory has two implications: Sellers should do their best to avoid dissatisfiers Sellers should identify the major satisfiers or motivators of purchase in the market and supply them. These satisfiers will make the major difference as to which brand the customer buys
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Perception

How the motivated person actually acts is influenced by his or her view or perception of the situation. Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world. Perception depends not only on the physical stimuli, but also on the stimulis relation to the surrounding field and on conditions within the individual. The key point is that perceptions vary widely among individuals exposed to the same reality.
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Key point to note:

In marketing, perceptions are more important than the reality, as it is perceptions will affect consumers actual behavior.
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Aspects of Perception
Selective Attention Selective Retention Selective Distortion Subliminal Perception
Perception

Selective Attention: the tendency for people to screen but most of the information to which they are exposedmarketers must work hard to attract the consumers attention. Selective Distortion: the tendency of people to interpret information in a way that will support what they will already believe. Selective Retention: Consumers are likely to remember good points made about a brand they favor & to forget good points made about competing brands. Subliminal Advertising: Subconsciously affecting a consumers mind about a product or brand without the consumer even knowing it.
Selective attention: Screening out unnecessary stimuli, marketers have to work hard to attract consumers notice People are more likely to notice stimuli than relate to a current need (A person who is motivated to buy a computer will notice computer ads, he/she will not notice DVDs) People are more likely to notice stimuli than they anticipate. (You are more likely to notice computers than radios in a computer store) People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli. (You are more likely to notice an ad offering Rs.100 off rather than Rs.5)
Drive is a strong internal stimulus that calls for action. Drive becomes a motive when it is directed towards a particular stimulus object. Cues are minor stimuli that determine when, where & how the person responds. If an experience is rewarding, the consumer will use the product more, reinforcing his response.
Selective distortion The tendency to twist information into personal meanings & interpret information in a way that will fit our preconceptions. Selective retention We are likely to remember good points about a product we like & forget good points mentioned about competing products. Selective retentions helps marketers use drama & repetition in sending messages to target market.
Selective Attention

It has been estimated that a person is exposed to over 1,500 ads or brand communications a day. Because a person cannot possibly attend to all of these, most stimuli will be screened out - a process called selective attention.
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Gaining customer attention through product design and presentation
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Selective Distortion

Selective distortion is the tendency to interpret information in a way that will fit our preconceptions. Consumers will often distort information to be consistent with prior brands and product beliefs. Examples of branded differences can be found with virtually every type of product. Selective distortion can work to the advantage of marketers with strong brands when consumers distort neutral or ambiguous brand information to make it more positive.
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Selective Distortion

E.g.: Blind taste tests Only 1 group knows brand Opinions different but same product Earlier brand beliefs changed product perceptions
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Selective Retention

People will fail to register much information to which they are exposed in memory, but will tend to retain information that supports their attitudes and beliefs. Because of selective retention, we are likely to remember good points about a product we like and forget good points about competing products.
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Subliminal Perception
Covert, subliminal messages in ads or packages Unconscious of them but affect behavior No evidence consumers can be controlled at that level

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Learning

Learning - behavior change with experience Drive - strong internal stimulus impel action Cues - minor stimuli- when, where, how person responds Discrimination - recognize differences in similar stimuli & adjust responses
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Belief: A descriptive thought that a person has about something. Attitude: A persons relatively consistent evaluations, feelings & tendencies toward an object or idea.
Memory

Brand knowledge Linked associations determine information recalled on brand Brand associations Brand-related thoughts, feelings, perceptions linked to brand node Right product experience - right brand data created & maintained in memory
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Memory
MEMORY PROCESSES: ENCODING

How & where information enters memory
Determinant of strength of association 1. Quantity & quality of processing 2. Organization & strength in memory 3. Its nature: simple, vivid, concrete
4.
Repeat exposures - stronger associations

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Memory
MEMORY PROCESSES: RETRIEVAL

How information gets out of memory Brand association strength - easy access, recall
Successful brand information recall, 3 factors:

1. 2. 3.
Other information in memory - interference Time since exposure affects strength Information available but not accessible
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The Buying Decision-Process: The Five-Stage Model

Basic psychological processes important - how consumers make buying decisions Stage model of buying decision process 5 stages Buying process starts long before actual purchase and consequences long after May skip or reverse stages
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Figure 6.4 Five-Stage Model of the Consumer Buying Process
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The Buying Decision-Process: The Five-Stage Model Problem Recognition

Buying starts - recognize problem/need Need triggered by stimuli

Internal stimulus: normal needs, hunger External stimulus: love new car- triggers buying one
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The Buying Decision-Process: The Five-Stage Model Information Search Information Search

Aroused consumer search for more
4 sources:
1. 2. 3. 4.
Heightened attention: receptive to information Active information search: find ways to learn about product
Personal Commercial Public Experiential

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The Buying Decision-Process: The Five-Stage Model Information Search

Total brands available total set Know only subset of total awareness set Meet initial criteria consideration set More information, few remain choice set Makes final choice from this set
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Figure 6.5 Successive Sets Involved in Consumer Decision Making
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The Buying Decision-Process: The Five-Stage Model Information Search Marketers need to know:

Consumers other brands in choice set competition Identify sources & importance Prepare effective communications for target market

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Evaluation of Alternatives

The stage in which the consumer uses information to evaluate alternative brands in the choice set.
Example:

Cameras (Picture sharpness, camera speeds, camera size, price) Hotels (Locations, cleanliness, atmosphere, price) Mouthwash (Color, effectiveness, price, taste) Tires (Safety, tread life, ride quality, price)
The Buying Decision-Process: The FiveStage Model Evaluation of Alternatives Evaluation of Alternatives Value judgment process - conscious & rational Consumer evaluation process:
1. 2. 3. 4.
Try to satisfy a need Look for certain benefits in solution Each with attributes, benefits sought Attributes of interest to buyers vary
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The Buying Decision-Process: The FiveStage Model Evaluation of Alternatives BELIEFS & ATTITUDES

Influence buying behavior Belief - descriptive thought on something Attitude enduring evaluation, feeling & action tendencies toward something To fit product into existing attitudes
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A Got Milk ad from the very successful campaign features China star Ziyi Zhang from film Crouching Tiger, Hidden Dragon
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Purchase Decisions:

In the evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also form an intention to buy the most preferred brand. In executing a purchase intention, the consumer may make up to five sub-decisions: Brand Dealer Quantity Timing Payment-method
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Intervening Factors
Between purchase intention & decision
1.

Attitudes of others:
Intensity of others attitude Motivation to comply with others wishes
2.
Unanticipated situational factors
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Figure 6.6 Steps Between Evaluation of Alternatives & a Purchase Decision
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Perceived Risks:
Decision influenced by perceived risk:
1. 2. 3. 4. 5. 6.
Functional risk not up to expectations Physical risk threat to well-being/health Financial risk not worth price Social risk embarrassment from others Psychological risk mental well-being Time risk opportunity cost to find another
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Post-purchase Behavior

After the purchase, the consumer might experience dissonance about their purchase and be alert to information that supports their decision. Marketing communications should supply beliefs and evaluations that reinforce the consumers choice and help him or her feel good about the brand. Marketers must monitor post-purchase satisfaction, post-purchase actions, and post-purchase uses.
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Post-purchase Satisfaction
POSTPURCHASE SATISFACTION
Satisfaction = performance - expectations () disappointed (0) satisfied

(+) delighted
Expectations - from sellers, friends etc Larger gap - greater dissatisfaction Product claims must truthfully represent likely performance
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Post-purchase Actions

Abandon/return product
Seek to confirm high value 2. Public action - complain, go to lawyer 3. Private actions - stop buying or warn friends Post-purchase communications - fewer product returns & cancellations
1.
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Marketing Ch06

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Marketing Ch06

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Analyzing 6 Consumer Markets

Copyright 2009 Pearson Education South Asia Pte Ltd

A Model of Consumer Behavior (Figure 6.1)

Copyright 2009 Pearson Education South Asia Pte Ltd

Consumer Buyer Behavior

Factors influencing consumer behavior

Social Reference Groups Family Roles & status

Psychological Motivation Perception Learning Beliefs & attitudes Buyer

What Influences Consumer Behavior?

provide clues to reach & serve consumers more effectively

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Main determinant of wants & behavior

E.g. Asian child exposed to filial piety, hard work

Subset of each culture - more specific identity for members

E.g. religions, nationalities

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Multi- cultural Marketing

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Marketing applications of reference groups:

Copyright 2009 Pearson Education South Asia Pte Ltd

Social Factors- Family

Copyright 2009 Pearson Education South Asia Pte Ltd

Roles and Status

Copyright 2009 Pearson Education South Asia Pte Ltd

Roles and Status- Marketing Application

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Age and Life Cycle Stages

Copyright 2009 Pearson Education South Asia Pte Ltd

Table 7.2: Stages in the Family Life Cycle

4. Full nest II: Youngest child six or over

Age and Life Cycle Stages

Psychological life-cycle stages matter Critical life events/transitions:

Marriage Relocation etc

Give rise to new needs

Copyright 2009 Pearson Education South Asia Pte Ltd

Occupation and Economic Circumstances

Copyright 2009 Pearson Education South Asia Pte Ltd

Occupation and Economic Circumstances

Product choice affected by economic circumstances: income, savings

Copyright 2009 Pearson Education South Asia Pte Ltd

Personality and Self-Concept

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Lifestyle and Values

Copyright 2009 Pearson Education South Asia Pte Ltd

Lifestyle and Values

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd

Key Psychological Processes

Copyright 2009 Pearson Education South Asia Pte Ltd

1 To look young and feel independent 2 To feel young

Motivation: Freud, Maslow, Herzberg

Copyright 2009 Pearson Education South Asia Pte Ltd

Freuds Theory Behavior is guided by subconscious motivations

Copyright 2009 Pearson Education South Asia Pte Ltd

Copyright 2009 Pearson Education South Asia Pte Ltd