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The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how the psychology of how consumers think, feel, reason, and select between different alternatives (e. g. , brands, products); the the psychology of how the consumer is influenced by his or her environment (e. g. culture, family, signs, media); the behavior of consumers while shopping or making other marketing decisions; limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; how consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and how marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
Understanding these issues helps us adapt our strategies by taking the consumer into consideration. For example, by understanding that a number of different messages compete for our potential customers’ attention, we learn that to be effective, advertisements must usually be repeated extensively. We also learn that consumers will sometimes be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the consumer, we will be able to make a more informed decision as to which strategy to employ. Bottom of Form
One “official” definition of consumer behavior is “The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. ” Although it is not necessary to memorize this definition, it brings up some useful points: • Behavior occurs either for the individual, or in the context of a group (e. g. , friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e. g. , motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest. • Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy. There are four main applications of consumer behavior: • The most obvious is for marketing strategy—i. e. , for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon.
By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices. • A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women.
Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers’ attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers. • Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use.
The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. • As a final benefit, studying consumer behavior should make us better consumers.
Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. There are several units in the market that can be analyzed. Our main thrust in this course is the consumer. However, we will also need to analyze our own firm’s strengths and weaknesses and those of competing firms.
Suppose, for example, that we make a product aimed at older consumers, a growing segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. To assess a competing firm’s potential threat, we need to examine its assets (e. g. , technology, patents, market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to assess conditions (the marketing environment). For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically.
What is Consumer Buying Behavior? Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand: • why consumers make the purchases that they make? • what factors influence consumer purchases? • the changing factors in our society. Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: • Buyers reactions to a firms marketing strategy has a great impact on the firms success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. • Marketers can better predict how consumers will respond to marketing strategies. Return to Contents List Stages of the Consumer Buying Process Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity… iscussed next. The 6 stages are: 1. Problem Recognition (awareness of need)–difference between the desired state and the actual condition. Deficit in assortment of products. Hunger–Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information–did not know you were deficient? I. E. , see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search– o Internal search, memory. o External search if you need more information. Friends and relatives (word of mouth).
Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is o chinese food o indian food o burger king o klondike kates etc 3. Evaluation of Alternatives–need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indian gets highest rank etc. If not satisfied with your choice then return to the search phase. Can you think of another restaurant?
Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by “framing” alternatives. 4. Purchase decision–Choose buying alternative, includes product, package, store, method of purchase etc. 5. Purchase–May differ from decision, time lapse between 4 & 5, product availability. 6. Post-Purchase Evaluation–outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an indian meal, may think that really you wanted a chinese meal instead.
Handout… Pillsbury 1-800#s 1-800 #s gives the consumer a way of communicating with the marketer after purchase. This helps reduce cognitive dissonance when a marketer can answer any concerns of a new consumer. Return to Contents List Types of Consumer Buying Behavior Types of consumer buying behavior are determined by: • Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. • Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.
High involvement purchases–Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk: • Personal risk • Social risk • Economic risk The four type of consumer buying behavior are: • Routine Response/Programmed Behavior–buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. • Limited Decision Making–buying product occasionally.
When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes–know product class but not the brand. • Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. Impulse buying, no conscious planning. The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. Return to Contents List Categories that Effect the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three factors: 1. Personal 2. Psychological 3. Social The marketer must be aware of these factors in order to develop an appropriate MM for its target market. Return to Contents List Personal Unique to a particular person. Demographic Factors. Sex, Race, Age etc. Who in the family is responsible for the decision making. Young people purchase things for different reasons than older people. Handout… From choices to checkout… Highlights the differences between male and female shoppers in the supermarket.
Return to Contents List Psychological factors Psychological factors include: Motives– A motive is an internal energizing force that orients a person’s activities toward satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix. MASLOW hierarchy of needs!! o Physiological o Safety o Love and Belonging o Esteem o Self Actualization Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases. Handout… Nutrament Debunked…
Nutrament, a product marketed by Bristol-Myers Squibb originally was targeted at consumers that needed to receive additional energy from their drinks after exercise etc. , a fitness drink. It was therefore targeted at consumers whose needs were for either love and Belonging or esteem. The product was not selling well, and was almost terminated. Upon extensive research it was determined that the product did sell well in inner-city convenience stores. It was determined that the consumers for the product were actually drug addicts who couldn’t not digest a regular meal.
They would purchase Nutrament as a substitute for a meal. Their motivation to purchase was completely different to the motivation that B-MS had originally thought. These consumers were at the Physiological level of the hierarchy. BM-S therefore had to redesign its MM to better meet the needs of this target market. Motives often operate at a subconscious level therefore are difficult to measure. Perception– What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it.
Information inputs are the sensations received through sight, taste, hearing, smell and touch. Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies current needs, intensity of input changes (sharp price drop). Selective Distortion-Changing/twisting current received information, inconsistent with beliefs. Advertisers that use comparative advertisements (pitching one product against another), have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A current example… MCI and AT&T… do you ever get confused?
Selective Retention-Remember inputs that support beliefs, forgets those that don’t. Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can’t be expected to be aware of all these inputs, and certainly will not retain many. Interpreting information is based on what is already familiar, on knowledge that is stored in the memory. Handout… South Africa wine…. Problems marketing wine from South Africa. Consumers have strong perceptions of the country, and hence its products. Ability and Knowledge–
Need to understand individuals capacity to learn. Learning, changes in a person’s behavior caused by information and experience. Therefore to change consumers’ behavior about your product, need to give them new information re: product… free sample etc. South Africa… open bottle of wine and pour it!! Also educate american consumers about changes in SA. Need to sell a whole new country. When making buying decisions, buyers must process information. Knowledge is the familiarity with the product and expertise. Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product.
Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality. Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior. Attitudes– Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non- living….. Drive perceptions Individual learns attitudes through experience and interaction with other people. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm’s marketing strategy.
Handout… Oldsmobile….. Oldsmobile vs. Lexus, due to consumers attitudes toward Oldsmobile (as discovered by class exercise) need to disassociate Aurora from the Oldsmobile name. Exxon Valdez-nearly 20,000 credit cards were returned or cut-up after the tragic oil spill. Honda “You meet the nicest people on a Honda”, dispel the unsavory image of a motorbike rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning to hard core. To change this they have a new slogan “Come ride with us”. Attitudes and attitude change are influenced by consumers personality and lifestyle.
Consumers screen information that conflicts with their attitudes. Distort information to make it consistent and selectively retain information that reinforces our attitudes. IE brand loyalty. There is a difference between attitude and intention to buy (ability to buy). Personality– all the internal traits and behaviors that make a person unique, uniqueness arrives from a person’s heredity and personal experience. Examples include: o Workaholism o Compulsiveness o Self confidence o Friendliness o Adaptability o Ambitiousness o Dogmatism o Authoritarianism o Introversion o Extroversion Aggressiveness o Competitiveness. Traits effect the way people behave. Marketers try to match the store image to the perceived image of their customers. There is a weak association between personality and Buying Behavior, this may be due to unreliable measures. Nike ads. Consumers buy products that are consistent with their self concept. Lifestyles– Recent US trends in lifestyles are a shift towards personal independence and individualism and a preference for a healthy, natural lifestyle. Lifestyles are the consistent patterns people follow in their lives. EXAMPLE healthy foods for a healthy lifestyle.
Sun tan not considered fashionable in US until 1920’s. Now an assault by the American Academy of Dermatology. Handout… Here Comes the Sun to Confound Health Savvy Lotion Makers.. Extra credit assignment from the news group, to access Value and Lifestyles (VALS) Program, complete the survey and Email alex@udel. edu the results. This is a survey tool that marketers can use to better understand their target market(s). Return to Contents List Social Factors Consumer wants, learning, motives etc. are influenced by opinion leaders, person’s family, reference groups, social class and culture.
Opinion leaders– Spokespeople etc. Marketers try to attract opinion leaders… they actually use (pay) spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc. ) Can be risky… Michael Jackson… OJ Simpson… Chevy Chase Roles and Family Influences– Role… things you should do based on the expectations of you from your position within a group. People have many roles. Husband, father, employer/ee. Individuals role are continuing to change therefore marketers must continue to update information. Family is the most basic group a person belongs to.
Marketers must understand: o that many family decisions are made by the family unit o consumer behavior starts in the family unit o family roles and preferences are the model for children’s future family (can reject/alter/etc) o family buying decisions are a mixture of family interactions and individual decision making o family acts an interpreter of social and cultural values for the individual. The Family life cycle: families go through stages, each stage creates different consumer demands: o bachelor stage… most of BUAD301 o newly married, young, no children… me full nest I, youngest child under 6 o full nest II, youngest child 6 or over o full nest III, older married couples with dependant children o empty nest I, older married couples with no children living with them, head in labor force o empty nest II, older married couples, no children living at home, head retired o solitary survivor, in labor force o solitary survivor, retired o Modernized life cycle includes divorced and no children. Handout… Two Income Marriages Are Now the Norm Because 2 income families are becoming more common, the decision maker within the family unit is changing… lso, family has less time for children, and therefore tends to let them influence purchase decisions in order to alleviate some of the guilt. (Children influence about $130 billion of goods in a year) Children also have more money to spend themselves. Reference Groups– Individual identifies with the group to the extent that he takes on many of the values, attitudes or behaviors of the group members. Families, friends, sororities, civic and professional organizations. Any group that has a positive or negative influence on a persons attitude and behavior.
Membership groups (belong to) Affinity marketing is focused on the desires of consumers that belong to reference groups. Marketers get the groups to approve the product and communicate that approval to its members. Credit Cards etc.!! Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda, tries to disassociate from the “biker” group. The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group.
Social Class– an open group of individuals who have similar social rank. US is not a classless society. US criteria; occupation, education, income, wealth, race, ethnic groups and possessions. Social class influences many aspects of our lives. IE upper middle class Americans prefer luxury cars Mercedes. o Upper Americans-upper-upper class, . 3%, inherited wealth, aristocratic names. o Lower-upper class, 1. 2%, newer social elite, from current professionals and corporate elite o Upper-middle class, 12. %, college graduates, managers and professionals o Middle Americans-middle class, 32%, average pay white collar workers and blue collar friends o Working class, 38%, average pay blue collar workers o Lower Americans-lower class, 9%, working, not on welfare o Lower-lower class, 7%, on welfare Social class determines to some extent, the types, quality, quantity of products that a person buys or uses. Lower class people tend to stay close to home when shopping, do not engage in much prepurchase information gathering. Stores project definite class images.
Family, reference groups and social classes are all social influences on consumer behavior. All operate within a larger culture. Culture and Sub-culture– Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom. In american culture time scarcity is a growing problem. IE change in meals. Big impact on international marketing.
Handout… Will British warm up to iced tea? No… but that is my opinion!!… Tea is a part of the British culture, hot with milk. Different society, different levels of needs, different cultural values. Culture can be divided into subcultures: o geographic regions o human characteristics such as age and ethnic background. IE West Coast, teenage and Asian American. Culture effects what people buy, how they buy and when they buy. Understanding Consumer Buying Behavior offers consumers greater satisfaction (Utility). We must assume that the company has adopted the Marketing Concept and are consumer oriented.