Part 2: Understanding Buyers and Markets

1. Part 2: Understanding Buyers and Markets • Consumer Behavior • Business-to-Business (B2B) Marketing • Serving Global Markets

2. Chapter 5 Consumer Behavior

3. Chapter Objectives • Distinguish between customer behavior and consumer behavior. • Explain how marketers classify behavioral influences on consumer decisions. • Describe cultural, group, and family influences on consumer behavior. • Explain each of the personal determinants of consumer behavior; needs and motives, perceptions, attitudes, and self-concept theory. • Distinguish between high-involvement and low-involvement purchase decisions. • Outline the steps in the consumer decision process. • Differentiate among routinized response behavior, limited problem solving, and extended problem solving by consumers.

4. Customer vs. Consumer Behavior • Customer behavior: a broad term that covers both individual consumers who buy goods and services for their own use and organizational buyers who purchase business products • Consumer behavior: the process through which the ultimate buyer makes purchase decisions

5. Interpersonal Determinants ofConsumer Behavior • Figure 5.1: Why People Buy New Products

6. Cultural Influences • Culture: values, beliefs, preferences, and tastes handed down from one generation to the next • It is important to recognize the concept of ethnocentrism, or the tendency to view your own culture as the norm, as it relates to consumer behavior.

7. Core Values in the U.S. Culture • While some cultural values change over time, basic core values do not • Examples of American core values include: • Importance of family and home life • Education • Youthfulness • Individualism

8. International Perspective on Cultural Influences • Cultural differences are particularly important for international marketers • Successful strategies in one country often cannot extend to other international markets because of cultural variations

9. Subcultures: subgroup of culture with its own, distinct modes of behavior • Cultures are not homogeneous entities with universal values. • Subcultures can differ by: • Ethnicity or Nationality • Age or Gender • Religion • Social class or Profession • Figure 5.2 (next slide) • Ethnic and Racial Minorities as a Percentage of the Total U.S. Population

11. Hispanic-American Consumers • The 40 million Hispanics in the U.S., coming from a wide range of countries, are not homogenous • There are important differences in acculturation • The Hispanic market is large and fast-growing • Hispanics tend to be younger than the general U.S. population • Hispanics are geographically concentrated

12. African-American Consumers • African-American buying power is rising rapidly compared to U.S. consumers in general • Family structures may differ for African-American consumers, creating differences in preferences for clothing, music, cars, and many other products

13. Asian-American Consumers • Marketing to Asian-Americans presents many of the same challenges as reaching Hispanics • Asian-Americans are spread among culturally diverse groups, including Chinese, Japanese, Indians, Koreans, Filipinos, and Vietnamese--many retaining their own languages

14. Social InfluencesGroup membership influences an individual’s purchase decisions and behavior in both overt and subtle ways. • Norms: are the values, attitudes, and behaviors that a group deems appropriate for its members • Status: is the relative position of any individual member in a group • Roles define behavior that members of a group expect of individuals who hold specific positions within the group

15. The Asch Phenomenon: the effect of a reference group on individual decision-making • Reference groups: groups whose value structures and standards influence a person’s behavior • Requires two conditions: • The purchased product must be one that others can see and identify • The purchased item must be conspicuous; it must stand out as something unusual, a brand or product that not everyone owns

16. Social classes: groups whose rankings are determined by occupation, income, education, family background, and residence location W. Lloyd Warner identifiedsix classes: • Upper-upper • Lower-upper • Upper-middle • Lower-middle • Working class • Lower class

17. Opinion leaders: trendsetters who purchase new products before others in a group and then influence others in their purchases • Figure 5.4: Alternative Channels for Communications Flow

18. Family Influences • Autonomic role is when the partners independently make equal numbers of decisions. • Husband-dominant role is when the husband makes most of the decisions. • Wife-dominant role is when the wife makes most of the decisions. • Syncratic role is when both partners jointly make most decisions.

19. Children and Teenagers in Family Purchases • Growing numbers are assuming responsibility for family shopping • They also influence what parents buy • They represent over 50 million consumers in their own right

20. Personal Determinants of Consumer Behavior

21. Needs and Motives • Need: an imbalance between a consumer’s actual and desired states • Motives: inner states that direct a person toward the goal of satisfying a felt need

22. Self-Actualization Esteem Needs Social Needs Safety Needs Physiological Needs • Maslow’s Hierarchy of Needs

25. Perceptions: the meaning that a person attributes to incoming stimuli gathered through the five senses – sight, hearing, touch, taste, and smell. • Perceptual screens: the filtering processes through which all inputs must pass

26. Subliminal Perception: subconscious receipt of information • Almost 50 years ago, a New Jersey movie theater tried to boost concession sales by flashing the words Eat Popcorn and Drink Coca-Cola. • Subliminal advertising is aimed at the subconscious level of awareness. • Subliminal advertising has been universally condemned as manipulative, and is exceedingly unlikely that it can induce purchasing. • Research has shown that subliminal messages cannot force receivers to purchase goods that they would not consciously want.

27. Attitudes • A person’s enduring favorable or unfavorable evaluations, emotional feelings, or action tendencies toward some object or idea • Attitude components: • Cognitive • Affective • Behavioral

28. Changing Consumer Attitudes • Attempt to produce consumer attitudes that will motivate the purchase of a particular product • Evaluate existing consumer attitudes and then make the product characteristics appeal to them • Modifying the Components of Attitude • Attitudes change in response to inconsistencies among the three components • Marketers can work to modify attitudes by providing evidence of product benefits and by correcting misconceptions

29. Learning • An immediate or expected change in behavior as a result of experience. • The learning process includes the component of: • Drive • Cue • Response • Reinforcement

30. Applying Learning Theory to Marketing Decisions • Shaping: process of applying a series of rewards and reinforcements to permit more complex behavior to evolve over time

31. Self-Concept • A person’s multifaceted picture of himself or herself, composed of the: • Real self • Self-image • Looking-glass self • Ideal self

32. The Consumer Decision Process Problem Opportunity Recognition • Consumers complete a step-by-step process when making purchase decisions • High-involvement purchase decisions are those with high levels of potential social or economic consequences • Low-involvement decisions are routine purchases that pose little risk to the consumer Search Alternative Evaluation Purchase Decision Purchase Act Post-purchase Evaluation

33. Figure 5.8 • Integrated Model of the Consumer Decision Process

34. Problem or Opportunity Recognition • Consumer becomes aware of a significant discrepancy between the existing situation and the desired situation • Motivates the individual to achieve the desired state of affairs

35. Search • Consumer gathers information related to their attainment of the desired state of affairs • Identifies alternative means of problem solution • May cover internal or external sources of information • Brands that a consumer actually considers buying before making a purchase decision are known as the evoked set

36. Evoked Set Model All Brands Known Brands Unknown Brands EvokedSet AcceptableBrands UnacceptableBrands OverlookedBrands InertSet PurchasedBrand Rejected Brands

37. Evaluation of Alternatives • Consumer evaluates the evoked set • Difficult to completely separate the second and third steps, since some evaluation takes place as the search progresses • Outcome of the evaluation stage is the choice of a brand or product (or possibly a decision to renew the search) • Evaluative criteria: features that a consumer considers in choosing among alternatives

38. Purchase Decision and Purchase Act • Consumer narrows the alternatives down to one • The purchase location is decided

39. Postpurchase Evaluation • After the purchase, consumers are either satisfied or experience post-purchase anxiety • Cognitive dissonance: Post-purchase anxiety that results from an imbalance among an individual’s knowledge, beliefs, and attitudes after an action or decision is taken

40. Classifying Consumer Problem-Solving Processes • Three categories of problem-solving behavior • Routinized Response Behavior • Limited Problem Solving • Extended Problem Solving