Consumer Buying Behavior

1. Consumer Buying Behavior What makes people consumers?

2. Topics • Buying Behavior • Characteristics Affecting Behavior • Buying Decisions • Buying Process • New Product Adoption

3. Consumers • Consumer Market • All individuals and households who buy for personal use • Consumer buying behavior • Reasons and logic behind purchasing decisions • U.S. market > 300 million • Worldwide > 6 billion • Expected to be over 8 billion by 2025

4. Consumers • How do consumers respond to marketing attempts? • Influences • Marketing Mix: price, place, product, promotion • Consumer • Characteristics and decision process • Responses • Product, brand, dealer choice, purchase timing

5. Behavior Characteristics • Cultural • Broadest and deepest influence • Includes • Culture • Subculture • Social class

6. Culture • Most basic cause of wants and needs • Cultural behavior is learned, not inherited • Different cultures have different values • Recall from earlier sections • Marketers need to be aware of cultural shifts in order to target products correctly

7. Subculture • Smaller groups within a culture that share common interests and traits • Typically identifiable through demographics • 4 major divisions • Hispanics • African Americans • Asian Americans • 50 plus

8. Social Class • Permanent divisions in the subculture • Not just by income, but also occupation, education, type of wealth • Some countries have fixed classes, i.e. India • 7 flexible distinction in U.S.

9. Social Class • Upper Uppers - > 1% • Lower Uppers – 1% • Upper Middle – 15% • Middle Class – 30% • Working Class – 38% • Upper Lower – 13% “Working poor” • Lower Lower – 12%

10. Social Factors • Groups • Membership groups – direct influence • Reference groups – points of comparison • Aspirational groups – a group you want to belong to, sports teams, bands, etc. • Opinion leaders – those who influence based on status, skills or personality

11. Social Factors • Family • Most important buying organization • Continuing changes in family require constant marketing adaptation • Role and Status • Activities people are expected to perform based on others • General esteem given by society

12. Personal Factors • Age and Life Cycle

13. Personal Factors • Occupation • Mechanics buy differently than lawyers • Economic situation • Disposable vs. discretionary income • Lifestyle • Pattern of living, dictated by psychographics

14. Lifestyles • AIO dimensions • Activities, Interests, and Opinions • VALS – Values and Lifestyles • Principle Oriented • Status Oriented • Action Oriented

15. Psychological Factors • Motivation • Perception • Selective Attention • Selective Distortion • Selective Retention

16. Subliminal Messages Cook for President • A 1957 study showed that flashing ads every 5 seconds for 1/300th of a second increased buying rates • Later proved to be false information • Does not work

17. Buying Decisions

18. Buying Decisions • Complex Buying • Product is expensive, risky, purchased infrequently, great difference in brands • Computers, Cars • Dissonance Reducing • Expensive, infrequent, little difference between brands • Carpeting

19. Buying Decisions • Habitual Buying • Low cost, little difference in brands • Salt, butter, toothpaste • Variety Seeking • Low cost, high perceived difference • Cookies, candy, cereal

20. Buying Process • Need Recognition • Realizes want or need • Information Search • Looks for information • Passively – heightened awareness • Actively – internet, in store, word-of-mouth, experiential

21. Buying Process • Evaluate Alternatives • Now informed, considers different brands • Purchase • Intention – decides on brand • Choice – actual purchase of item • Many factors can change the intention • Post purchase • Satisfied customer tells 3 -4 people • Dissatisfied tells at least 10

22. New Product Adoption • Awareness – knows of product • Interest – seeks information • Evaluation – considers purchase • Trial – experiences on small scale • Adoption – accepts or rejects new product

23. Adoption Curve

24. Innovators tries at great cost Early Adopters opinion leaders Early Majority pick up on hot trend Late Majority skeptics Laggards only adopt when it become a tradition Adoption Curve