Chapter 5 Flashcards
Consumer Markets
Individuals and households, personal consumption
Consumer Behaviour
Not only their buying behaviour. How they search, select, buy, use, dispose. Their actions and motives.
Consumer’s Perspective
- Pre-purchase issues: selecting the product and finding the right sources of information to learn about the product and alternative choices.
- Purchase: what is a stressful or satisfying experience?
- Post-purchase: does the product provide pleasure/meet expectations? How will it be disposed of once it degrades and what are the environment consequences?
Marketer’s Perspective
- Pre-purchase: what information is used to measure our product to superiors? How do their attitudes towards our products form and change?
- Purchase: how do situational factors affect consumer’s purchase decision?
- What determines a consumer’s satisfaction or dissatisfaction? Does this person tell others about the experience? How does this affect their purchase decisions?
Name the factors that influence consumer behaviour from external (societal) to internal (personal)
Cultural, social, personal, psychological
Culture
basic values, wants, behaviours learned from society. most basic cause of wants and behaviours. influences one’s views
Subculture
self-organized tradition of shared interests, lifestyles, beliefs, customs, norms, style, tastes. smaller groups with shared values within cultures.
Total Marketing Strategy
integrating ethnic themes and cross-cultural perspective within a brand mainstream marketing, appealing to consumer similarities across sub-cultural segments rather than differences.
Social Class
Group that have similar buying behaviours and share values and interests. Split in three sections: upper, lower and middle class. Some of these groups are well defined while some are not.
Reference Groups
A group that serves as direct or indirect point of comparison or reference in forming a person’s attitudes or behaviour. Family = most important reference group.
Word of Mouth (WOM) Influence
Recommendations coming from trusted friends, families, etc.
Influencer Marketing
sponsorships and partnerships with influencers
Online Social Networks
online communities (reddit)
Role
activities people are expected to perform according to those around them
Status
each role carries a status reflecting the general esteem given to it by society. status means youre formally recognized as such.
Position in a group
role + status. products people choose are appropriate to their roles and status. e.g. consider roles of a working mother. In her company, she plays the role of brand manager; in her family, she plays the role of wife and mother; at sporting events, she plays the role of avid fan.
Age and Life-Cycle
Changes of tastes, preferences and behaviours over time. Life-stage segmentation = precise target market
Occupation
Needs of occupational group. E.g. banker vs mailman
Economic Situation
E.g. different economic situations result in peoples’ decisions to buy a used or new car. Depends on income and savings.
Lifestyle
Pattern of Living. AIO Dimensions (Activity;Interests;Opinions)
Company Personality
(i) Ruggedness
(ii) Sincerity
(iii) Excitement
(iv) Sophistication
(v) Competence
Motivation
Need becomes motive when it inspires customer to seek action.
- External: money, reward
- Internal: self-esteem, sense of accomplishment
- Maslow’s Hierarchy of Needs
Perception
How people select, organize & interpret info
- Selective attention (tendency to screen out); eye-catching stimuli
- Selective distortion (tendency to selectively interpret); biased
- Selective retention (tendency to selectively remember); memory
Learning
changes in behaviour caused by greater life experience
Drives
strong internal stimuli that call for action
Cues
minor stimuli about when, where and how people respond
Buying Decision Process
1) Need recognition
2) Info search
3) Evaluation of Alternatives
4) Purchase Decision
5) Post purchase behaviour
Need Recognition
can be triggered by internal (need, memory, thought) or external (idea for someone, advertisement) stimuli
Purchase Decision
Purchase intention does not always lead to purchase decision. Depends on attitude of others around and unexpected situational factors
Post-Purchase Behaviour
Expectations vs Performance: (dis)satisfied, delighted
Possible cognitive dissonance: discomfort caused by post purchase conflict
Post purchase conversations: encourage complaints
How do consumers make buying decisions for NEW products?
Adoption Process and Strategies
- Awareness: discovery of new product (either brand new or simply new to you)
- Interest: Info is sought out
- Evaluation: Examine and compare it
- Trial: representative sample of product/service
- Adoption: Consumer becomes user
What influences new product adoption rate?
- Individual differences in Innovativeness
- Product Characteristics
Influence of Product Characteristics on Adoption Rate
- Relative advantage
- Compatibility (fit with value and experience of potential customers)
- Complexity
- Divisibility
- Communicability
Business Buyer Behaviour
The behaviour of organizations who purchase resources from suppliers to produce goods and services.
Business Buying Process
Process by which organizations determine which resources they will need to produce their goods and services. They must then evaluate suppliers.
Which market is bigger? Business market or consumer market?
Business market is huge. There are many sets of business purchases, only one set of consumer purchases.
Market Structure
far fewer, but larger buyers
Supplier Development
developing a network of suppliers in order to ensure dependable supply of resources and materials for company usage
What are the 3 Business Buying Situations?
1) Straight rebuy - buyers reorder something without modifications
2) Modified rebuy - buyers want to modify product specifications, prices, terms, or suppliers
3) New task - buyers purchase product or service for the first time
Systems/Solutions Selling
Provide most complete system (all in one)
Buying Centre
Consists of all the individuals and units that play a role in the purchase decision-making process. Includes actual users of product or service, those who make buying decision, those who influence the decision, those who do the actual buying and those who control buying info. Look at illustration in notebook.
Major Influences on Business Buying
1) Environmental - economic, supply conditions, technology, politics, etc…
2) Organizational - objectives, strategies and procedures
3) Interpersonal - intergroup dynamics within buying centre: expertise, authority, dynamics
4) Individual - age, education, lifestyle, etc…
Business Buying Process
1) Problem Recognition (identify Need)
2) General Need Description
3) Product Specification (checking if items may be redesigned to reduce costs)
4) Supplier Search
5) Proposal Solicitation (suppliers submit proposals)
6) Supplier Selection
7) Order-Routine Specification (final order with chosen supplier)
8) Performance Review
