Session 2 Understanding the Market Flashcards
What is consumer behavior?
Consumer Behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.
Consumer Characteristics dealt within consumer behavior are: Cultural, Social, and Personal.
Consumer Psychology dealt within consumer behavior are: Motivation, Perception, Emotions, and Memory
What is the cultural factor of consumer characteristics?
Culture is the fundamental determinant of a person´s wants and behavior. Core cultural values are usually passed on from parents to children and reinforced by major social institutions. Secondary Beliefs, are more open to change.
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.
What is the social factor of consumer characteristics?
In addition to cultural factors, social factors such as reference groups, family, and social roles and statutes affect our buying behavior.
Reference groups include all the groups that have a direct (face-to-face) or indirect influence on their attitudes or behavior.
What kind of reference Groups are there?
- Membership Groups: Groups having a direct influence are called Membership Groups. Some of these are primary groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbors, and coworkers. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction.
- Aspirational Groups: are those a person hopes to join.
- Dissociative Groups: are those whose values or behavior an individual rejects.
- An opinion leader (or influencer): is the person who offers informal advice or information about a specific product or product category.
- Family of orientation: consists of parents and siblings.
- Family of procreation: A more direct influence on everyday buying behavior is the family of procreation - namely, the person´s spouse and children.
What are the personal factors of consumer characteristics?
Personal factors that influence buyer´s decision include
- their age and stage in the life cycle,
- occupation, and economic circumstances,
- personality, self-concept, and lifestyle (shaped partly by whether consumers are money-constrained or time-constrained), and
- values (a set of principles and notions of right or wrong).
Consumers often choose and use brands with a brand personality consistent with their actual self-concept (how we view ourselves), though the match may instead be based on the consumer´s ideal self-concepts (how we would like to view ourselves) or even on others´ self-concept (how we think others see us).
What is consumer psychology?
Four key psychological processes - motivation, perception, learning, and memory - fundamentally influence consumer responses.
What is consumer motivation in consumer psychology?
Understanding consumer motivation begins with understanding the needs (basic human requirements biologically or psychologically as well as wants and demands).
Consumer motivation explains that a need becomes a motive when it is aroused to a sufficient level of intensity to drive us to act.
What is perception in consumer psychology?
A motivated person is ready to act, however how it is ready to act is influenced by his or her perception of the situation. This means that Perception is the process by which we select, organize, and interpret information inputs to create a picture of the world.
Perception further comprises:
- Selective attention: means that marketers must work hard to attract consumers´ notice.
- Subliminal perception: Marketers embed subliminal messages in ads or packaging - consumers are not consciously aware of them, yet they affect behavior.
- Selective distortion: is the tendency to interpret information in a way that fits our preconceptions.
Consumer Psychology also includes Emotion and Memory Models (short-term, long-term, associative memory, memory encoding, memory retrieval).
What is the buying decision process?
Consumers typically pass through the following stages when wanting to buy something: Problem recognition, information search, evaluation of alternatives, purchase decision, post-purchase decision.
The process by which consumers make purchase decisions and their post-purchase behavior are often referred to as the consumer decision journey. The reference to a journey stems from the fact that the manner in which consumers make purchase decisions is not always linear.
How is a consumer´s decision influenced?
A consumer´s decision to modify, postpone, or avoid a purchase decision is heavily influenced by one or more types of perceived risk:
1) Functional Risk: The product does not perform to expectations.
2) Physical Risk: The product poses a threat to the well-being of the user or others.
3) Financial Risk: The product is not worth the price paid.
4) Social Risk: The product results in embarrassment in front of others.
5) Psychological Risk: The product affects the mental well-being of the user.
6) Time Risk: The failure of the product results in an opportunity cost of finding another satisfactory product.
What is a business market?
A business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.
What are the characteristics of business markets?
- Fewer, larger buyers
- close supplier-customer relationships
- direct purchasing
- fluctuating demand
- inelastic demand
What types of buying situations are there?
- Straight Rebuy
- Modified Rebuy
- New Task
What is Straight Rebuy?
Straight Rebuy is a buying situation. In a straight rebuy, the purchasing department offers items like office supplies and bulk chemicals on a routine basis and chooses from suppliers on an approved list.
What is Modified Rebuy?
Modified Rebuy is a buying situation. The buyer in a modified rebuy wants to change product specifications, process, delivery requirements, or other terms. This usually requires participants on both sides. The in-suppliers become nervous and want to protect the account, the out-suppliers see an opportunity to propose a better offer to gain some business.
What is New Task?
New Task is a buying situation. A new Task purchaser buys a product or service for the first time (an office building, a new security system). The greater the cost or risk, the larger the number of participants, and the greater their information gathering, the longer the time to decide.
What are the eight stages in the business- buying process?
Starting from the top, the stages are:
- Problem recognition
- Need description
- Product Specification
- Supplier Search
- Proposal Solicitation
- Supplier Selection
- Contract Negotiation
- Performance View
