Nothing Special   »   [go: up one dir, main page]

IM1019 L5 Consumer Markets and Buyer Behavior

Download as pdf or txt
Download as pdf or txt
You are on page 1of 51

CONSUMER MARKETS AND BUYER BEHAVIOR

IM1019 Principles of Marketing


Sem 2, 2023-2024

Adapted from Kotler P. T. & Amstrong G. 2018, Principles of Marketing (17th Global Edition), Pearson.
Learning objectives
1. Define the consumer market and construct a simple model of consumer buyer
behavior.

2. Name the four major factors that influence consumer buyer behavior.

3. List and define the major types of buying decision behavior and the stages in the
buyer decision process.

4. Describe the adoption and diffusion process for new products.


Discussion question

What have you recently purchased that cost over $100?

1. Why did you buy that item?


2. How and where did you search for information?
3. Why did you choose that particular brand/ retailer?
4. How do you feel about your purchase now?
Consumer markets and buyer behavior

 Consumer buyer behavior is the buying behavior of final consumers -


individuals and households that buy goods and services for personal
consumption.

 Consumer markets are made up of all the individuals and households that
buy or acquire goods and services for personal consumption.
Consumer markets and buyer behavior

The buyer’s characteristics influence how he/she perceives and reacts to the stimuli.
The buyer’s decision process itself affects the buyer’s behavior.
The ‘Why’ of consumer behavior

Stimulus Black box Consumer decision

A knowledge of consumer behaviour can help managers understand why people


behave as they do and that this understanding can help managers predict behavior.
Characteristics affecting consumer behavior
Characteristics affecting consumer behavior

 Cultural factors
 Culture is the set of basic values, perceptions, wants, and behaviors learned
by a member of society from family and other important institutions.
 Subcultures are groups of people within a culture with shared value systems
based on common life experiences and situations (e.g. nationalities,
religions, racial groups, and geographic regions).
 Social classes are society’s relatively permanent and ordered divisions whose
members share similar values, interests, and behaviors. Measured as a
combination of occupation, income, education, wealth, and other variables.
Cross-cultural marketing strategy
 There is controversy about the extent to which cross-cultural
marketing strategies, particularly advertising, should be standardized.

 The same advertisement can be interpreted differently in different countries

 Consumers' interpretations of the brand personality may be different in different


countries

 Some companies acknowledge national differences and make suitable


adaptations in their marketing mix.
Characteristics affecting consumer behavior

 Social factors
 Groups and social networks
• Membership groups: Groups with direct influence and to which a person
belongs.
• Reference groups: Groups that form a comparison or reference in
forming attitudes or behavior.
• Aspirational groups: Groups an individual wishes to belong to.
Characteristics affecting consumer behavior

 Reference groups
… expose a person to new behaviors
and lifestyles
… influence the person’s attitudes and
self-concept
… create pressures to conform that
may affect the person’s product and
brand choices.
Characteristics affecting consumer behavior

 Groups and social networks


• Online social networks
• Buzz marketing
• Social media sites
• Virtual worlds
• Word of mouth
• Opinion leaders
Key opinion leaders
 Consumers crave authenticity,
something a KOL can effectively
communicate for your brand.

 KOLs can help brands target their


ideal audience or niche.

 A KOL is similar to an influencer in


regards to follower size, but a KOL
has a more targeted audience.

 A KOL can help you generate sales.


Characteristics affecting consumer behavior

 Social factors
 Family is the most important consumer-buying organization in society.
 Role and status can be defined by a person’s position in a group.
Characteristics affecting consumer behavior

 Personal factors
 Age and life-cycle stage
 Occupation
 Economic situations include trends in: spending, personal income, savings,
interest rates.
 Lifestyle - a person’s pattern of living as expressed in his or her
psychographics (e.g. activities, interests, opinions)
 Personality - the unique psychological characteristics that distinguish a
person or group.
Characteristics affecting consumer behavior

 Psychological factors
 Motivation
 Perception
 Learning
 Beliefs and attitudes
Characteristics affecting consumer behavior

 A motive (or drive) is a need that is sufficiently pressing to direct the person
to seek satisfaction of the need.
 Motivation research refers to qualitative research designed to probe
consumers’ hidden, subconscious motivations.
Characteristics affecting consumer behavior

 Perception is the process by which people select, organize, and interpret


information to form a meaningful picture of the world.

Exposure Attention Interpretation Memory


Characteristics affecting consumer behavior

 Perceptual process
 Selective attention - people tend to screen out most of the information to
which they are exposed.

 Selective distortion - people tend to interpret information in a way that will


support what they already believe.

 Selective retention - people tend to remember good points made about a


brand they favor and forget good points made about competing brands
Marketing implications of perception process

 Retail strategy
 Location of often-sought-after items and high-
margin items
 Shelf position
 Point-of-purchase displays

 Brand name and logo development

 Advertisement and packaging design


Characteristics affecting consumer behavior

 Learning is the change in an individual’s behavior arising from experience and


occurs through the interplay of:
 Drives
 Stimuli
 Cues
 Responses
 Reinforcement
Characteristics affecting consumer behavior

 A belief is a descriptive thought that a person has about something based on:
 knowledge
 opinion
 faith

 An attitude describes a person’s relatively consistent evaluations, feelings,


and tendencies toward an object or idea.
In summary …
Motivation is the action taken by a person to satisfy an unmet need. Consumers do not
always know the emotions and attitudes they carry about products. Motivation
theories help marketers understand motivation and need satisfaction. Perception is
the process by which people select, organize, and interpret information to form a
meaningful picture of the world. Marketers have challenges in attracting the
consumer’s attention and communicating a clear message. People receive, organize,
and interpret messages through their own lenses. Learning describes changes in an
individual’s behavior arising from experience. Marketers can use motivating cues and
positive reinforcement to build demand for a product. Beliefs are descriptive thoughts
about something. Marketers want consumers to have true and accurate beliefs about
products. Attitudes are a person’s consistently favorable or unfavorable evaluations,
feelings, and tendencies toward an object or idea. Beliefs and attitudes are acquired
through doing and learning, and they influence consumer buying behavior.
Types of buying decision behavior
Continuum of consumer buying decision

Habitual Limited Extensive

Involvement Low Low to moderate High


Time Short Short to moderate Long
Cost Low Low to moderate High
Information search Internal only Mostly internal Internal and external
Number of alternatives One Few Many
The buyer decision process
Quester P., Pettigrew S., Rao Hill S., Kopanidis F.,
Hawkins D. I. 2014, Consumer Behaviour -
Implications for Marketing Strategy, McGraw-
Hill Education.
The buyer decision process

 Need recognition is the first stage of the buyer decision process, in which the
consumer recognizes a problem or need triggered by:
 Internal stimuli
 External stimuli
Problem recognition
 Ideal state

• Where individuals want to be

 Actual state

• Where individuals are now


Stimulating problem recognition

 Creating a new ideal state

• A firm can change a consumer's desired state by offering features not


previously offered. These additional attributes are often highlighted as unique
features of the product.

 Encouraging dissatisfaction with the actual state

• Marketers can activate problem recognition by emphasizing the importance of


addressing an existing discrepancy between consumers' desired and existing
states
Consumers may not always recognize problems.

Advertising may activate problem recognition and position a good or


service as a solution.
The buyer decision process

 Information search is the stage of the buyer decision process in which the
consumer is motivated to search for more information.
 Sources of information:
 Personal sources
 Commercial sources
 Public sources
 Experiential sources
The buyer decision process

 Evaluation of alternatives is the stage of the buyer decision process in which


the consumer uses information to evaluate alternative brands in the choice
set.
Cognitive choice

 Compensatory models
 Mental cost-benefit analysis model
 Negative features can be compensated for by positive ones

 Noncompensatory models
 Simple decision model
 Negative information leads to rejection of option
Hoyer W. D., MacInnis D. J. and Pieters R. (2018), Consumer Behavior, 7th ed., Cengage Learning.
Mothersbaugh D., Hawkins D., Kleiser S.D. (2019), Consumer Behavior - Building Marketing Strategy 14th, McGraw Hill
The buyer decision process

 Purchase decision is the buyer’s decision about which brand to


purchase.
 The purchase intention may not be the purchase decision due to:
 Attitudes of others
 Unexpected situational factors
Mothersbaugh D., Hawkins D., Kleiser S.D. (2019), Consumer Behavior - Building Marketing Strategy 14th, McGraw Hill
This is a common consumer reaction after making a difficult, relatively permanent decision.
The buyer decision process

 Postpurchase behavior is the stage


of the buyer decision process in
which consumers take further action
after purchase, based on their
satisfaction or dissatisfaction.

 Cognitive dissonance is buyer


discomfort caused by postpurchase
conflict.
Customer satisfaction outcomes

Mothersbaugh D., Hawkins D., Kleiser S.D. (2019), Consumer Behavior - Building Marketing Strategy 14th, McGraw Hill
Responses to dissatisfaction

 Complaining

 Responding to service recovery

 Engaging in negative word-of-mouth


communication

 Switching

What was the last negative e-WOM you left


for a business and what motivated that?
The buyer decision process for new products

 The adoption process is the mental process an individual goes through from
first learning about an innovation to final regular use.
 Stages in the adoption process include:

Awareness Interest Evaluation Trial Adoption


The buyer decision process for new products

 Individual differences in innovativeness


 Innovators
 Early adopters
 Early mainstream
 Late mainstream
 Lagging adopters
The buyer decision process for new products
Analyzing and using marketing information

Influence of product characteristics on rate of adoption

Relative
Compatibility Complexity
advantage

Divisibility Communicability

You might also like