ENT4310 Business Economics and Marketing

ENT4310Business Economics and Marketing Consumer Behavior Arild Aspelund IØT, NTNU

Outline • A model for consumer behavior • Factors influencing consumer behavior • Theories of motivation • The buying decision process • A five-step model

A Model for Consumer Behavior

Cultural Factors Social Factors Personal Factors Key Factors Influencing Consumer Behavior

The fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions Culture

Nationalities Religions Racial groups Geographic regions Special interests Subculture influence

Social Factors • Reference groups • A reference group is all individuals or institutions that have direct or indirect influence on a person’s attitudes or behavior • Family • The most influential reference group • Influence varies over a person’s life time • Social roles and statuses • Individuals belong to several groups • To each group one is associated with a certain social role and status

Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups Reference Groups

Age Self- concept Life cycle stage Occupation Lifestyle Wealth Values Personality Personal Factors

Motivation Perception Learning Memory Key Psychological Processes

Freud’s Theory Behavior is guided by subconscious motivations Maslow’s Hierarchy of Needs Behavior is driven by lowest, unmet need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene factors Motivation

Motivation - Maslow’s Hierarchy of Needs

Motivation - Herzberg’s Two-Factor Theory

Perceptions • Selective attention • A cognitive screening process to save your brain from information overload • Selective distortion • Tendency to interpret information to fit with your preconceptions • Selective retention • Tendency to remember the good about the things you like, and forget the good about those you don’t • Subliminal perception • Messages to your subconscious

Problem recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior Buying Decision Processes- A Five-Stage Model

Successive Sets

Awareness Familiarity Consideration Purchase Loyalty Ambassador 84 50 50 60 41 95 80 40 20 12 5 73 15 11 Buying Decision Processes- Conversion Rates

Summary and Continuation • Summary • In this lecture we have presented some factors that influence consumer behavior • Culture • Social • Personal • We have also presented some fundamental theories of motivation • Freud • Maslow • Herzberg • Finally, we have presented a five-step model to the purchase decision process • Continuation • Segmentation and targeting

ENT4310 Business Economics and Marketing