Consumer Behavior

1. Consumer Behavior The marketing concept emphasizes that profitable marketing begins with the discovery and understanding of consumer needs and then develops a marketing mix to satisfy these needs. Thus, an understanding of consumers and their needs and purchasing behavior is integral to successful marketing.

2. Social Influences on Consumer Decision Making Culture, social classes, and reference group influences have been related to purchase and consumption patterns. These influences can have both direct and indirect effects on the buying process. Direct effect: direct communication between the individual and other members of society concerning a particular decision. Indirect effect: the influence of society on an individual’s basic values and attitudes as well as the important role that groups play in structuring an individual’s personality. 1- Culture and Subculture Culture antecedents affect everyday behavior “it is a determinant of certain aspects of consumer behavior”

3. Social Influences on Consumer Decision Making Culture and subculture (Cont’d) • Culture–ways of living, built up by a group of human beings, that are transmitted from one generation to another. • Culture has both conscious and unconscious values, ideas, attitudes, and symbols • Culture is acted out in social institutions (family, religious organization, and educational institutions. • Culture is both material or physical (clothing and tools) and non-material “subjective or abstract” nonphysical (religion, attitudes, beliefs, and values). • Subculture: is a group of individuals whose characteristic, values, and behavior patterns are similar, but different from those in the surrounding culture. • Sub-cultural boundaries are usually based on geographic designations and demographic factors.

4. Social Influences on Consumer Decision Making 2- Social class Is developed on the basis of such things as wealth, skill, and power. The single best indicator of social class is occupation. A class is usually referred to as open because people can move into and out of it. • Importance: different social classes tend to have different attitudinal configurations and values that influence the behavior of individual members. (i.e. 1.buying decisions, 2.spending, saving, and credit practices, 3.type, quality, and quantity of products, 4.shopping patterns and stores patronized)

5. Social Influences on Consumer Decision Making 3- Reference group and Families Groups that an individual looks to (uses as a reference) when formulating attitudes and opinions are described as reference groups. Primary reference groups include family, friends, neighbors, and coworker. Those with whom there is regular but informal interaction. Secondary reference groups include fraternal organizations and professional associations. Those are more formal and have less regular interaction. • A buyer may also consult a single individual about decisions, and this individual would be considered a reference individual or (opinion leader) who because of special skills, knowledge, personality, or other characteristics, exert influences over others. • a person may be an opinion leader in one product areaand a follower in another. Reference group influence is generally considered to be stronger for products that are “public” or conspicuous_ that is, products that other people see the individual using, such as clothes or automobiles.

6. Social Influences on Consumer Decision Making 3- Reference group and Families (Cont’d) Family is generally considered to be an important reference group, and it has been suggested that the household rather than individual, is relevant unit for studying consumer behavior. (Gatekeeper, influencer, decider, buyer, and user). Family life cycle: stages of life a person is passing through. (Single, to married, to married with children of different ages, to older couples, to solitary survivors. It may also include divorced people, both with or without children. Life cycle exerts a great influence over needs, income, assets, debts, and expenditures levels.

7. Marketing Influences on Consumer Decision Making 1- Product influences: Attributes of company’s products, including brand name, quality, newness, complexity, physical appearance, packaging, and labeling information, can at a wide extent influence whether consumers notice a product in-store, examine it, and purchase it. 2- Price influences: Whether the price reflects the value of product or service. 3- Promotion influences: Advertising, sales promotions, salespeople, and publicity, should all communicate a consistent messages about company and its products and are placed in media that consumers in the target market are likely to use. 4- Place influences: Products that are convenient to buy in a variety of stores increase the chance of buying and finding them especially for (Low involvement products). Products sold in exclusive outlets may be perceived as with higher quality and is a good distribution for (High involvement products). Offering products by non-store methods, such as internet or catalogs.

8. Situational Influences on Consumer Decision Making Factors particular to time and place of observation that have demonstrable effect on current behavior. 1- Physical features: Most apparent one. Like; location, décor, sounds, aromas, lighting, weather, or any other visible material that all my surround the stimulus object. 2- Social features: Other persons present, their characteristics, their role and interaction. 3- Time: is a dimension may be specified in units ranging from time of day to season of the year. Past or future events for the situational participant. 4- Task features (purchasing purpose): intent or requirement to select, shop for, or obtain information about general or specific purchase. 5- Current condition: Momentary mood “anxiety, pleasantness, hostility, and excitation) or momentary conditions ( cash on hand, fatigue, and illness)

9. Situational Influences on Consumer Decision Making 1- Product Knowledge: Amount of information a consumer has stored in her or his memory about particular product classes, product forms, brands, models, and way to purchase them. • The initial level of product knowledge may influence how much information is sought when deciding to make a purchase. • Product knowledge influences how quickly a consumer goes through the decision making process. 2- Product involvement: Consumer’s perception of the importance or personal relevance of an item. - Purchasing a Harley-Davidson Motorcycle: High involvement purchase. - Purchasing a toothbrush: Low involvement purchase. High involvement products may influence consumer decision making in two ways: 1- Consumers are likely to develop a high degree of product knowledge. 2- It encourages extensive decision making process, by increasing the time required to go through the decision making process.

10. Consumer Decision Making There are three types of decision making , which vary in terms of how complex or expensive a product is and how involved a consumer is 1- Extensive decision making: Requires the most time and effort since the purchase involves a high complex or expensive product that is important to the consumer. 2- Limited decision making: is more moderate but still involves some time and effort searching for and comparing alternatives. 3- Routine decision making: Such products are simple, inexpensive, and familiar, and consumers have often developed favorite brands that they purchase without much deliberation. • Need recognition: The starting point in the buying process is the recognition of an unsatisfied need by the consumer. The buyer senses a difference between his/her actual state and a desired state. • The need can be triggered by internal or external stimuli. • Stimuli: from previous experience, the person has learned how to cope with this need and is motivated toward objects that will satisfy it.

11. Need Recognition (Maslow’s Hierarchy of needs)

12. Consumer Decision Making B. Alternative search: There are five basic sources from which the individual can collect information for a particular purchase decision: 1- internal sources: Previous experience “memory scanning” of previous dealing with the same need. It is quite common for routine purchases. 2- Group sources: Communication with other people, such as family, friends, neighbors, and acquaintances. In short, it’s the experiences of others. The most powerful influence on purchase decision. 3- Marketing sources: advertising, salespeople, dealers, packaging and displays. Generally, this is the primary source of information about particular product. 4- Public sources: publicity sources such as newspaper article about the product, and independent ratings of the product. Credible source because of it’s unbiased nature. 5- Experiential sources: Handling, examining, and perhaps trying the product while shopping. It may be the final source consulted before purchase.

13. Consumer Decision Making C. Alternative evaluation: During the process of collecting information, or in some cases, after information is acquired, the consumer evaluates alternatives on the basis of what he/she has learned. Description of evaluation process Pages 49-50 D. Purchase decision: is the result of previous stage, and normally reflects in the actual purchase if nothing is changed. Because of an inhibitor to purchase or a perceived risk, customer may make decision to modify, postpone, or avoid purchase. The perceived risk based on the possible consequences and uncertainties involved. It could be Functional, Psychological, Physical, Social, Financial etc. Consumer generally try to reduce perceived risk either by reducing the possible negative consequences or by reducing the uncertainty. Reducing quantity purchased, lowering individual’s aspiration level to expect less in the way of results from the product, and seeking additional information are all possible to reduce perceived risk. E. Post-purchase evaluation: Refer to the whole stage in pages 50, 51 and 52.