Understanding Consumer Behavior

1. Understanding Consumer Behavior Chapter 6

2. Consumer Behavior • The study of consumers and how they make decisions is called consumer behavior. • Consumer behavior includes factors that influence the purchase and use of products.

3. Final Consumers • Most people picture a customer as someone who enters a store, purchases a product, takes it home, and uses it. • For example, when you buy a notebook and use it in your marketing class, you are a final consumer. • A final consumerbuys a product or service for personal use.

4. Business Consumer • The second category is a business consumer. • A business consumer buys goods and services to produce and market other goods and services or for resale. • An example is a notebook manufacturer. The manufacturer buys paper, glue, ink, wire and other raw materials to produce the notebook.

5. Consumers’ Wants & Needs • All consumers have wants and needs. • A want is an unfulfilled desire. Consumers want pizzas, BMW’s, vacations, different hair color, etc. • A need is anything you require to live. You need nutritious food, a good night’s sleep, shelter from the weather, air to breathe, and clean water

6. Hierarchy of Needs • Abraham Maslow’s classic work on motivation theory has helped marketers immensely in their study of needs. • Maslow identified five areas of needs that people have. They are physiological, security, social, esteem, and self-actualization.

7. Maslow’s Theory • Maslow believed that these groups of needs are satisfied in a hierarchy and that the needs of people change as they satisfy the needs at each level. • Everyone must satisfy physiological needs. They are not options. You must eat, sleep, and breathe to exist. Once these are satisfied you can start to move on to security needs, etc.

8. Hierarchy of Needs

9. Trivia Game • Identify which need is satisfied from Maslow’s Hierarchy: • A Gym Membership • Online Dating • Water • Health Insurance • College Degree • Bible/Koran/Torah • Air Conditioning

10. Buying Motives • As you decide you want or need products or services, you are motivated by buying motives: the reasons that you buy. • There are three motives that drive consumers: • Emotional Motives • Rational Motives • Patronage Motives

11. Emotional Motives • Emotional Motives are reasons to purchase based on feelings, beliefs, or attitudes. • Forces of love, affection, guilt, fear, or passion often compel consumers to buy. • Marketers realize that emotional motives are very strong.

12. Examples • Hallmark card advertisements encourage you to buy greeting cards because of love and affection. • Folger’s presents drinking coffee as a relaxing social experience. • McDonald’s appeals to family values by showing busy young parents taking children to their restaurants. • Security systems prey on families fear to maintain safety and prevent robberies.

14. Rational Motives • Rational motives are reasons to buy based on facts or logic. • These include factors such as saving money, durability, and saving time. • Usually these products or services are expensive. • You can be convinced to upgrade your computer because it’s more powerful, faster, and as more memory.

15. Rational Motives Continued • Automobile purchases are rational when you consider features such as price, gas mileage, warranties, or extended mileage protection packages. • Rational Motives can turn into Emotional Motives when you really want that Mercedes Convertible!!

16. Patronage Motives • Patronage Motives are based on loyalty. • They encourage consumers to buy at a particular business or to buy a particular brand. • It is important to remember that people who are motivated by this are very loyal to the product, service or brand. • Companies use this approach to eliminate the competition.

17. The Consumer Decision Making Process • A consumer goes through five steps when making a purchase decision

18. Problem Recognition • First the consumer must recognize a need, desire, or problem • In order to play the piano, you recognize you need to find a good piano instructor.

19. Information Search • Next, the consumer gathers information about alternative solutions. • After you recognize the need for a piano instructor, you talk to your parents, teachers, or friends about piano teachers. • You might look through the phone book or search the classified section, etc.

20. Evaluation of Alternatives • After gathering information, the consumer evaluates the various alternatives to determine which is best. Sometimes this involves summarizing information, comparing pros and cons of each choice, making tradeoffs between price and various options, etc. • You may need to decide between what you can afford, what hours are convenient, and reputation of instructor.

21. Post-Purchase Evaluation • After the purchase of course the consumer judges the satisfaction or dissatisfaction with the product or service purchased. • Recently, marketers have been focusing on this by gathering feedback. Toll-Free numbers allow customers to let companies know.

22. Influences on the Consumer Decision Making Process • The first influence is personality. Personality is a well defined, enduring pattern of behavior. • Personalities influence buying decisions because everyone has individual preferences based on his or her patterns of behavior.

23. Personality and a Car • You may be the flashy convertible type • The laid back pick-up type • Or the conservative four-door sedan type

24. Social Class • A second influence is social class; or the lifestyle, values, and beliefs that are common to a group of people. • These are usually identified by income level or neighborhood. • Your social class affects whether or not you have the money available to purchase something • This will affect what brands or particular types of products you choose.

26. Cultural Environment • The third influence is cultural environment; a set of beliefs or attitudes that are passed on from generation to generation. • In Long Valley many students have access to a car, but in the inner cities students very rarely have access to a car.

27. Reference Groups • Reference groups are groups or organizations from which you take your values and attitudes. • They might include church groups, fraternities, work groups, civic organizations, families, or friendship circles.

28. Types of Decision Making • Routine – are for purchases that are made quickly and do not require thought. Customers are familiar with the product • Limited – often associated with a product that is more expensive or is purchased less frequently. You need to evaluate alternatives before making decision • Extensive – occurs when the consumer methodically goes through all five steps of decision making process.