Chapter 3: consumer behaviour PDF

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summary for chapter 3 from the book '' Marketing: The core'' ....

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CONSUMER BEHAVIOUR Learning objectives - Describe the stages in the consumer purchase decision process - Distinguish among three variations of the consumer purchase decision process: routine, limited and extended problem-solving - Describe how situational influences affect the consumer purchase decision process - Explain how psychological influences affect consumer behaviour, particularly consumer purchase decision process - Identify major socio-cultural influences on consumer behaviour and their effects on purchases decisions - Discuss the importance of culture and subculture in determining consumer behaviour

Consumer purchase decision process -

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The stages that a consumer passes through when making choices about which products and services to buy - Problem recognition - Information search - Evaluation of alternatives - Purchase decision - Post purchase behaviour A consumer’s involvement with the purchase decisions varies based on the complexity of the decision

Problem recognition: Perceiving a need -

Occurs when a person realized that the difference between what he or she has and what he or she would like to have is big enough to actually do something about it Can be solved by purchasing a good or a service In marketing, the consumer purchase decision process is activated by highlighting the shortcomings of existing products and services

Information search: seeking value Internal search: - The consumer scan their memory for knowledge of a previous experiences with products or brands External search: - Is beneficial when a consumer lacks experience with or knowledge about a product, the risk of making a bad decision is high, and the cost of gathering info is low -

Sources Personal = relatives and friends Public = product-rating organizations or gov agencies Marketer-dominated = company websites, salespeople and point of purchase displays in stores

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Showrooming: optimize the overall customer experience Online marketing is critical to small and medium-size businesses as consumers in Asia and North America have a high tendency to exhibit showrooming behaviour

Evaluation of Alternatives: Assessing Value -

information- search stage clarifies the problem for the consumer by suggesting criteria, or points to consider, for the purchase

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Evaluative criteria  = r epresent both the objective attributes of a brand and the subjective ones (the status of a business executive owning a Iphone) you use to compare different products and brands

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 t he group of brands that a consumer would consider acceptable among all Evoked set = the brands in the product class of which he or she is aware

Purchase Decision: Buying Value -

Factors that can affect when to make the purchase: - Store atmosphere - Pleasantness of the shopping experience - Salesperson persuasiveness

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Time pressure Financial circumstances

The addition of technology to the consumer purchase decision process can accelerate it because it puts the information at consumers’ fingertips (gathering info, evaluating alternatives, etc)

Effects of mobile technology on purchase behaviour -

Mobile devices are enablers of the consumer purchase decision Make the information-search and purchase-decision stage easier Younger and future consumer uses technology to research products, voice opinions and express needs

Post-Purchase Behaviour: Value in Consumption or Use -

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A company’s sensitivity to a customer’s consumption experience strongly affects the value a customer perceives after the purchase Satisfaction or dissatisfaction affects consumer communications and repeat-purchase behaviour Mobile tec allows buyers to share complaints and dissatisfactions in a more timely manner with even more reach Progressive companies use social media feedback as an opportunity to link up with this disgruntled customers and resolve the problems. Cognitive dissonance = the feeling of post-purchase psychological tension or anxiety - Firms often use ads of follow-up calls from salespeople in this stage to assure buyers that they made the right decision. - Consumers feelings of dissonance impacts on satisfaction and loyalty levels

Involvement and Problem-Solving Variations Involvement = personal, social and economic significance of a purchase to the consumer -

Low involvement: basic products such as toothpaste, consumers usually skip or minimize one or more steps in the purchase decision process

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High involvement:typically have at least one of the three characteristics

❏ The item to be purchase is expensive ❏ It is bought infrequently ❏ Could reflect on one’s social image -

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For this, consumers usually engage in extensive information search, considering many products variations and brands, form attitudes and use word of mouth communication. Marketers must understand the information gathering and evaluation process of consumers so they can know how to sell products such as homes, computers, cars, etc

Routine Problem-Solving -

Typically the case for low-priced, frequently purchased products The consumer doesn’t ponder the potential benefits Marketers strive to attract and maintain habitual buying behaviour by creating strong brand relationships

Limited Problem-Solving -

Low consumer involvement but significant perceived differences among brands Consumer has the desire to try something new Consumers rely on past experiences more than external info but pay attention to new varieties shown through advertising and displays Marketers need to dominate shelf space and run advertisements that reminds consumers of the benefits of their brands

Extended Problem-Solving -

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The five stages of the consumer purchase decision process is used in the purchase - Considerable time and effort on external info search and identifying evaluating alternatives Exists a high-involvement purchase situations for items like automobiles, houses, and financial investments

Consumer Purchase Decision Process Influencers -

A company’s marketing mix influences the consumer purchase decision process The decision can be impacted by important situational, psychological and socio-cultural influences

Situational Influences on Consumer Decision 1. Purchase task: the reason for engaging in the decision. Information searching and evaluating alternatives may differ depending on what is the purpose of the purchase 2. Social surroundings: including the other people present when a purchase decision is made. 3. Physical Surroundings: decor, music and crowding in retail store may alter how purchase decisions are made. 4. Temporal Effects: time of the day or the amount of time available. 5. Antecedent States: consumer’s mood or the amount of cash on hand.

Psychological influences on Consumer Behaviour -

Concepts such as motivation, personality, perception, learning, values, beliefs etc are useful for interpreting buying processes and directing marketing efforts Although every consumer is unique, common factors can cause similar behaviours

Motivation and personality Are both used frequently to describe why people do some things and not others Motivation -

Is the energizing force that stimulates behaviour to satisfy a need (marketers try to arouse these needs Individuals have psychological needs (basics) and learned needs (esteem, achievement and affection)

1. Psychological needs: basic to survival and must be satisfied first. Food advertisement attempts to activate the need for food. 2. Safety needs: involve self-preservation and physical well being 3. Social needs: are concerned with love and friendship 4. Esteem needs: are represented by the need for achievement, status, prestige and self-respect. 5. Self actualization needs: involve personal fulfillment (trips for ex) -

Is critical for marketers to first understand our consumers needs in order to satisfy them.

Personality -

Refers to a person’s character that influence behavioural responses Self concept = the way people see themselves and the way they believe others see them. ❏ Actual self concept: how people actually see themselves ❏ ideal self concept: describes how people would like to see themselves

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Marketers appeal to self concepts in the products and brands a person buys

Perception The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world. Selective Perception -

How the human brain organizes and interprets all the environment information Filters the info so that only some of it is understood or remembered

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Selective exposure = when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent. - Often occurs in the post purchase stage of the decision process - Also occurs when a need exists.

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Selective comprehension = interpreting information so that is consistent with your attitudes and beliefs (prod names for ex)

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Selective retention = consumers do not remember all the info they see, read or hear even after minutes of it. This affects the internal and external info-search stage of the purchase decision process.

Perceived risk -

Represents the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences Perceived risk affects the information-search step of the purchase decision process - The greater the risk, the more extensive the external search is likely to be

Strategies developed my marketers to make consumers feel more at ease about their purchases: -

Obtaining seals of approval Securing endorsements from influential people Providing free trials of the products Providing illustrations Providing warranties and guarantees

Learning Refers to those behaviours that result from repeated experience and reasoning Behavioural Learning The process of developing automatic responses to a type of situation built up through repeated exposure to it - Drive = a need - Cue = stimulus or symbol that one perceives - Response = action taken to satisfy the drive - Reinforcement = reward Negative reinforcement: If what the consumer experiences upon responding to a stimulus is not pleasant Stimulus generalization: when a response brought about one stimulus (cue) is generalized to another stimulus - Using the same brand name to launch new product Stimulus discrimination: one’s ability to perceive differences among similar products. - Low involvement purchases, advertisers work to point out the differences Cognitive Learning Involves making connections between two or more ideas or simply observing the outcomes of others’ behaviours and adjusting your own accordingly. Firms also influence this type of learning by advertisements Brand loyalty Developing habits = consumer is solving problems routinely and consistently without much through

Brand loyalty = favourable attitude toward and consistent purchase of a single brand over time, it is the result from positive reinforcement

Values, Beliefs and Attitudes Attitude formation Attitude = tendency to respond to something in a consistently favourable or unfavourable way. Are shaped by our values and beliefs which we develop in the process of growing up. -

Personal values affect attitudes by influencing the importance assigned to specific product attributes or features Beliefs = one’s perception of how a product or brand performs on different attributes. - Are based on personal experience, advertising and discussions with other people. - Along with personal values, they create the favourable or unfavourable attitude the consumer has toward certain products and services. Attitude change 1. Changing beliefs about the extent to which a brand has certain attributes 2. Changing the perceived importance of attributes 3. Adding new attributes to the product

Lifestyle Is the way of living that reflects how people spend their time and resources (activities), what they consider important in their environment (interests) and how they think of themselves and the world around them (opinions) -

Psychographics: the analysis of consumer lifestyle ❏ VALS - system from strategic business insights (USA): identifies eight interconnected categories of adult lifestyles based on a person’s self-orientation and resources ❏ Self orientation = describe the patterns of attitudes and activities that help a person reinforce his or her social image (principle, status and action) ❏ Environics Analytics - PRIZM5: segmentation of the canadian population (canadian insights) into a variety of data points such as demographics, lifestyles and values. Provides an overall theme of the expected consumer behaviour of the individuals living in postal codes associated with specific segments.

SOCIO-CULTURAL INFLUENCES ON CONSUMER BEHAVIOUR Evolve from a consumer’s formal and informal relationships with other people

Personal Influence A consumer’s purchase are often influenced by the views, opinions or behaviours of others. Opinion Leadership -

Individuals who have social influence over others Opinion leaders are more likely to be important for products that provide a form of self-expression - automobiles, clothing and club memberships. Identifying, reaching and influencing opinion leaders is a major challenge - Some firms use celebrities as spokespersons to represent their brand/product

Word of Mouth -

People influencing each other during conversations The most powerful information source for consumers because involves friends and family (trustworthy) Teaser advertising campaigns (stimulate conversation) Slogans, musics and humour Supplying factual info, providing toll free numbers and giving product demonstrations are essential to combat bad word of mouth.

Buzz marketing: A brand becoming popular as a result of people talking about it to friends and neighbours. - Another way to create buzz  is hiring outside agencies Product seeding: consists of hiring people to talk up a brand to others Viral marketing: online version of word of mouth. Includes the use of messages that consumers pass along to others through online networks

Reference Groups

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A group of people who influence a person’s attitudes, values and behaviours Reference groups affect consumer purchases because they influence the information, attitudes and aspiration levels that help set a consumer’s standards. Have an important influence on the purchase of luxury products

Membership group: one to which a person actually belongs, including fraternities, sororities, social clubs and family. Are easily identifiable and are targeted by firms that sells insurances, insignia products and vacation packages. Aspiration group: one that the person wishes t o be part of. Dissociative group: one that a person wishes to maintain a distance from because of differences in values or behaviours.

Family influence Consumer socialization The process by which people acquire skills, knowledge and attitudes necessary to function as consumers. People learn how to purchase by interacting as a kid in purchase situations and through their own purchasing experience. Family Life Cycle Describes the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviours Young single consumers - Nondurable items - Represent a significant target market for recreational travel, automobile and electronic firms Young married couples - no children - Furniture, houseware and gifts for each others Young married couples - children - Are driven by the need of their children - Life insurance, children products and home furnishing Single parents with children - Least financially secure type of household - Buying preferences are usually affected by a limited economic status and tend toward convenience food, child care services and personal care items.

Middle-aged couples with children - Significant market for leisure products and home improvement items Middle-aged couples without children - Large amount of discretionary income - Home furnishing, status automobiles and financial services Old married and Older unmarried - Make up a sizable market for prescription drugs, medical services, vacation trips and gifts for younger relatives.

Family Decision-making - Relationship dynamics of the household - Roles of individual family members in the purchase process are also an element of family decision making. ❏ Information gatherer, influencer, decision maker, purchaser and user spouse -dominant: either the husband or the wife has more influence in the purchase decision Joint decision-making: most decisions are made by both husband and wife - Is common for cars, vacations, houses, medical care, etc - Increases with the education of the spouses

Culture and Subculture Culture = a set of values, ideas and attitudes that are learned and shared among the members of a group Subcultures = subgroups within a larger, or national, culture with unique values, ideas and attitudes. Can be defined by regions, demographic groups or by values - Most prominent types of subcultures are racial and ethnic Examples of Canadian Subcultures French-speaking quebecers - exhibit different consumption behaviour than the rest of Canada - more likely to believe that everybody should be free to do what they want - More willing to pay higher prices for premium brands - Cautious about new products - Will switch brands if offered a special

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Care for luxury Calculate their food purchases Like things that please the senses.

Chineses - Consumers are relatively young, educated and affluent - Tend to spend money on their home, home furnishing, automobiles, kids education, travelling, etc - Like to do business within their own communities - Prefer media in their own languages - Very family-oriented - Word of mouth is very important to them - Prefer luxury vehicles

Global cultural diversity -

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The multicultural environment works to increase canadian’s companies’ sensitivity and orientation toward other cultures, so the transition to global activities and relationships is facilitated Marketers must appreciate the cultural differences of people in the other countries if they want to market products and services to them

Cross-cultural analysis: the study of similarities and differences among consumers in two or more nations or societies - Involves an understanding of and an appreciation for the values, customs, symbols and language of other societies. Values -

Represent socially preferable modes of conduct or states of existence that tend to persist over time. Important factors in global marketing

Customs -

What is considered normal and expected about the way people do things in a specific country or culture. OECD = international body whose goal is to foster democratic government and a market-driven economy.

Cultural Symbols

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Objects, ideas or processes that represent a particular group of people or society. Symbol and symbolism play an important role is cross-cultural analysis because different cultures attach different meanings to things By positively using symbols, global marketers can tie positive symbolism to their products and services to attract consumers

Language -

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Global...