Chapter 5 Flashcards
Consumer 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
Consumer markets = are made up of all the individuals and households that buy goods and services for personal consumption
< 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.
< Characteristics Affecting Consumer Behavior >
subCultural Factors
Subcultures = are groups of people
within a culture with shared value
systems based on common life
experiences and situations.
Cultural factors - social classes
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
groups and social networks
Groups and Social Networks
* Reference groups
* Opinion leaders
* Word-of-mouth influence
* Influencer marketing
* Bloggers & Vloggers
* Online social networks
social factors
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
Lifestyle = is a person’s
pattern of living as expressed
in his or her psychographics.
Personality = refers to the
unique psychological
characteristics that
distinguish a person or group.
Characteristics Affecting Consumer
Behavior
Psychological Factors
- Motive (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.
- Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world.
Perceptual Processes
* Selective attention
* Selective distortion
* Selective retention
- Learning is changes in an individual’s behavior arising from experience.
- Beliefs and Attitudes are difficult to change.
Psychological factors
Perceptual Processes
* Selective attention
* Selective distortion
* Selective retention
Psychological Factors
People can form different perceptions of the same stimulus bec of:
- Selective attention is the tendency for people to screen out most of the information to which they are exposed.
- Selective distortion is the tendency for people to interpret information in a way that will support what they already believe.
- Selective retention is the tendency to remember good points made about a brand they favor and forget good points made
about competing brands.
Psychological factors
Learning
Learning is the change in an individual’s behavior arising from
experience and occurs through the interplay of:
* Drives. A strong internal stimulus that calls for action
* Stimuli. A drive becomes a motive when it is directed toward a particular
stimulus object.
* Cues. are minor stimuli that determine when, where, and how the person
responds
* Responses
* Reinforcement – If satisfied will use the brand/service more and more, reinforcing the positive experience
Psychological factors
beliefs
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.
Involvement
Definition: The degree of importance or personal
relevance of product
– High involvement:
▪ Infrequent purchase, significant risk
▪ Extensive information gathering
▪ Extensive time commitment to decision making
– Low involvement:
▪ Routinized buying behavior
▪ Familiar or inexpensive product purchases
▪ Limited information gathering
▪ Quick decision
Types of Buying Decision Behavior
involvement & difference between brands
high involvement + significant diff = complex buying behavior
high involvement + few diff = dissonance reducing buying behavior
low involement + singnificant diff = variety seeking behavior
low inv, + few diff = habitual buying behavior
high involvement + significant diff = complex buying behavior
Complex: expensive, risky, purchased infreq, self expressive– Laptops, cars,
perfume, designer jeans: Theory: beliefs → attitudes → behavior purchase
choice
high involvement + few diff = dissonance reducing buying behavior
Dissonance reducing: Cs shop around but buy relatively quickly → based on
good price, convenience, speed of delivery and then seek further confirmation,
after the purchase, that they made the right choice
Consumers are highly involved in the purchase, but have difficulties determining the differences
between brands.
‘Dissonance’ can occur if consumers worry afterwards that they may have made the wrong choice.-
e.g., financial services products, (insurance or investment/stocks
low involement + singnificant diff = variety seeking behavior
Variety seeking →leader wants to encourage habitual beh (shelf space, freq
reminder adv, high product variety
Challenger → encourages switching by lower prices, coupons, free samples,
special deal
low inv, + few diff = habitual buying behavior
Habitual: low cost freq purchased, salt, habit vs loyalty
C’s Passively receive infor as watching TV, add repetition creates brand
familiarity rather than conviction
Symbols & imagery imp → high repetion & short duration, Theory: classical
conditioning;
buyer decision process
need recongition –>
information search –>
evalaution of alternatives –>
purchase decision –>
postpurchase behavior
1- need recognition
Need recognition is the first stage of the buyer decision
process, in which the consumer recognizes a problem or
need triggered by:
* Need can be triggered by:
– Internal Stimuli: hunger, thirst etc..
– External Stimuli: influencer, blogger, friend, TV,
advertising, sales promotions, billboards etc (subliminal
advertising, drink Coke! Eat popcorn…
2- information search
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
3- alternative evalution
- Alternative evaluation is the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.
- What attributes are relevant?
- How important are these attributes to the
consumer? - How does the product/brand rate on these
attributes? - Which products/brands are under consideration
(consideration set)?
4- Purchase decision
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
4- purchase decision – > compensatory decision rule
Compensatory decision rules
Weighted additive rule
⚫ Utility of Brand A = ∑ Imp. Weighti * ratingi
Simple additive rule
⚫ Each attribute of the brand is evaluated separately
⚫ And then they are combined to form an overall evaluation of Brand X
∑ (Imp. Weight of Attributei) * (Rating of Brand X on Attributei)
→Consumer will select the alternative with the highest overall evaluation
→Positive evaluations for some attributes can offset (compensate for) negative evaluations on some other attributes
4- purchase decision – > non-compensatory decision rule
Non-Compensatory Decision Rule
Conjunctive rule: Consider the brand only if it meets acceptable standards on key attributes (e.g., ≥ 3
Lexicographic rule: first evaluate brands on the most important attribute. If there is a tie, then evaluate on the 2nd most important, until a brand is selected.
Consumers usually use a combination of
compensatory & noncompensatory decision rules.
Screen out certain brands with non-compensatory,
then evaluate the final candidates with compensatory.
Example: first eliminate expensive brands, then
evaluate on Q, style, warranty, features.
5- postpurchase behavior
Postpurchase behavior is the stage of the buyer decision
process in which consumers take further action after
purchase, based on their satisfaction or dissatisfaction.
5- postpurchase behavior –> cognitive dissonnance
Cognitive dissonance is buyer discomfort caused by postpurchase conflict. Postpurchase cognitive
dissonance: Consumers feel
uneasy about acquiring the
drawbacks of the chosen brand
and about losing the benefits of
the brands not purchased
Postpurchase customer
satisfaction is a key to
decreasing cog dissonance and
building profitable customer
relationships. Most marketers go
beyond merely meeting the
customer expectations—they
aim to delight customers.
The Customer Journey
Customer journey: the sum of the ongoing experiences consumers have with a brand that affect their buying behavior,
engagement, and brand advocacy over time.
The customer journey: By
understanding the customer
journey, marketers can work to
create brand experiences that
will result in positive purchase
behavior, engagement, and
brand advocacy over time.
< The Buyer Decision Process for New
Products >
the adoption process
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
How do we approach Innovations?
5- stages of people
1 * Innovators
2 * Early Adopters
3 * Early Mainstream
4 * Late Mainstream
5 * Lagging Adopters
How do we approach Innovations?
5- stages of people
innovators
( 2.5 ) the first individuals to adopt an innovation; are willing to take risks, youngest
in age, have the highest social class, have great financial resources, very social and have closest
contact to scientific sources and interaction with other innovators. Risk tolerance has them
adopting technologies which may ultimately fail. Financial resources help absorb these failures.
How do we approach Innovations?
5- stages of people
early adopters
–( 13,5 ) the second fastest group of individuals who adopt an innovation; have
the highest degree of opinion leadership among the other adopter categories. typically younger,
have a higher social status, have more financial resources, advanced education, and are more
socially forward than late adopters. More discrete in adoption choices than innovators. Realize
judicious choice of adoption will help them maintain central communication position/op leadership.
How do we approach Innovations?
5- stages of people
early mainstream
( 34 % )–adopt an innovation after a varying degree of time. Time of adoption is
significantly longer than the innovators and early adopters; tend to be slower in the adoption
process, have above average social status, contact with early adopters, and seldom hold positions
of opinion leadership in a system
How do we approach Innovations?
5- stages of people
late mainstream
(34%)–adopt an innovation after the average member of the society; approach an
innovation with a high degree of skepticism and after the majority of society has adopted the
innovation. Typically skeptical about an innovation, have below average social status, very little
financial resources, in contact with others in late majority and early majority, very little opinion
leadership.
How do we approach Innovations?
5- stages of people
laggards
(16%)–the last to adopt an innovation; show little to no opinion leadership. Typically
have an aversion to change-agents and tend to be advanced in age. Tend to be focused on
“traditions”, likely to have lowest social status, lowest financial resources, be oldest of all other
adopters, in contact with only family and close friends, very little to no opinion leadership.
Product/service characteristics that
influence rate of adoption
5 stages
- Relative advantage
- Compatibility
- Complexity
- Divisibility
- Communicability
Product/service characteristics that influence
rate of adoption
relative advantage
The degree of superiority to existing products. HDTV
offers substantially improved picture quality, speeding up its rate of adoption.
Product/service characteristics that influence
rate of adoption
COMPATIBILITY
The degree of fit to the values &behaviors of potential consumers. Adoption will be slow if it is not compatible with their existing
habits & behaviors. HDTV is highly compatible w/ the lifestyles of TV-watchers. You would not buy a battery-driven car if there were no chargers available to charge it.
Product/service characteristics that influence
rate of adoption
complexity
The degree to which an innovation is difficult to understand or
to use. HDTVs are not very complex. As more programming has become
available and prices have fallen, the rate of HDTV adoption is increasing faster than
that of complex innovations.
Product/service characteristics that influence
rate of adoption
Divisibility.
The degree to which an innovation may be tried on a limited
basis. Would you buy an expensive innovative new car without having the
opportunity to test drive it? Spottify, Netflix offer free trial periods to help Cs
understand the benefits on a limited time basis.
Communicability.
Communicability is the degree to which the results of
using an innovation can be observed or described to others. Because HDTV
lends itself to demonstration and description, its use has spread faster among
consumers. Same for EVs.
Consideration set
The set of perhaps 10 or more brands that consumers begin evaluating in order to generate a smaller choice set.
Alternative evaluation
The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands.
Choice set
The smaller set of brands—say, five or fewer—that consumers carefully evaluate in order to make their final choice.
Purchase decision
Generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision.
