Consumer behavior notes
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Consumer Behavior
Model of Buyer Behavior
Factors Influencing Consumer Behavior
• Culture is often the most powerful cause of a person's needs, wants and behavior.
• Characteristics of Culture– Culture is learned. – Certain aspects of culture never change.– Cultural shifts create opportunities.– Subcultures can be of even greater interest to
marketers than cultures.
Culture
Marketing to Subcultures
Procter & Gamble targets Hispanics using print and TV and has developed special Spanish versions of some brands.
• Society’s relatively permanent and ordered divisions
• Social Class Members share similar values, interests, and purchase behaviors
• Indentify by: income, occupation, education, wealth, and other variables
• Opportunity: “Social Mobility” products
Social Class
The Major American Social Classes
• Groups:– Reference Groups– Aspirational Groups– Dissociative Groups
• Opinion Leaders• Family• Roles and Status
Social Factors
Toyota caters to family buying influences.
• Age and Life-Cycle Stage– Tastes and preferences change over time.
• Occupation– Occupation influences the purchase of clothing, cars, memberships, etc.
• Economic Situation– Income-sensitive goods– Counter-cyclical goods
Personal Factors
Personal Factors
• Lifestyle:– Pattern of living (AIO)
• Activities• Interests• Opinions.
• VALS:– Classifies consumers with
respect to motivation and resources.• Predicts purchase behavior
• Personality– One Definition: Unique psychological characteristics that lead to relatively consistent and lasting
responses to one’s environment.
• Freudian Theory– Subconscious motivations
• “Big 5” - OCEAN– Openness– Conscientiousness– Extraversion– Agreeableness– Neuroticism
• Brands as expressions of identity
• Ideal Self vs. Actual Self
Personality and Self-Concept
Maslow’s Hierarchy of Needs
Perception
Process by which people Process by which people select, organize, and select, organize, and
interpret information to interpret information to form a meaningful picture of form a meaningful picture of
the world.the world.
People can form different perceptionsof the same stimulus.
Selective Attention
People screen out most stimuli.
Selective Distortion vs. Retention
• Selective Distortion– Interpreting information in a way that supports what you already
believe.
• Selective Retention– Remembering the good aspects of something you like and forgetting
the bad aspects of something you dislike.
• One Definition:– A relatively permanent change in behavior due to experience.
• Driven by stimulus-response chains (conditioning).• Strongly influenced by behavioral consequences
(Operant Conditioning)– Behaviors with satisfying results are repeated.– Behaviors with unsatisfying results are avoided.
• Different from deliberation
Learning
Beliefs and Attitudes
• A belief is a descriptive thought that a person holds about something.
• An attitude is a person’s consistently favorable or unfavorable feelings, evaluations, and tendencies toward an object or idea.
• Both have lots of staying power.– Emotional precedents– Advertising tries to modify beliefs and
attitudes.
The Buyer Decision Process
Need Recognition
Buyers recognize a Buyers recognize a need or problem as need or problem as a result of internal a result of internal or external stimuli.or external stimuli.
Marketing communications often stimulate need recognition.
Hungry yet?
Triggering Need Recognition
Information Search
• High vs. Low Involvement Purchases
• Cost vs. Benefit Model• “Big-Ticket” Anomolies• Cognitive Economy
edmunds.com
Information Sources
– Personal• Family, friends, neighbors,
and casual or work acquaintances
– Commercial• Advertising, salespeople,
dealers, Web sites, packaging, and displays
– Public• Mass media articles or news
programs, Internet searches, consumer rating organizations
– Experiential• Using, handling, examining or
sampling the product
Which source is most influential?
• ELM: Central vs. Peripheral Route processing
• Some Types of Evaluation Calculus:– Compensatory vs. Non-compensatory– Weighted Tally Processes– Elimination-by-aspects– Lexicographic– “Checkbox Choice”– Affect Referral
Evaluation of Alternatives
Weighted Tally Process Example
Assume consumer weighs Memory, Graphics, Size/Weight and Price 30%, 20%, 40%, and 10%, respectively.
Computer A’s score would be: (30% x 10) + (20% x 8) + (40% x 6) + (10% x 4) = 7.4
Successive Sets
Purchase Decision
• Intentions to purchase are sometimes interrupted.
• Potential “Interrupters”:– Attitudes & influences of others– Unexpected situational
factors– Buyer’s Remorse– Speed of decision
Postpurchase Behavior
• Consumer satisfaction/dissatisfaction results from gaps between expectations and perceived performance.
– Performance BELOW Expectations → Disappointment– Performance EQUALS Expectations → Satisfaction– Performance GREATER than Expectations → Delight
– Performance MUCH GREATER than Expectations → Expectation Recalibration
• Cognitive Dissonance: “Did I make the right purchase? Should I have bought this?”
• Minimize dissonance by:– Offering mechanisms for making complaints
(Customer Service, 800 hotlines, e-mail, etc.)– Being responsive to problems and questions– Advertising (remind consumer why choice made sense)– Minimizing the potential for product misuse (good product
instructions) and “Poke-Yoke”.
Cognitive Dissonance
Question du Jour
Is this for real?
1. Awareness2. Interest3. Evaluation4. Trial5. Re-Trial6. Adoption
The Adoption Process
Not everyone adopts at the same pace.
• Innovators: venturesome, try new ideas at some risk.
• Early adopters: opinion leaders who adopt new ideas early, but carefully.
• Early majority: deliberate adopters, who adopt before the average person.
• Late majority: skeptical, adopt only after the majority of people have tried a product.
• Laggards: last to adopt, tradition bound, and skeptical of change.
Product Adopter Categories
Adopter Categorization Distribution
• Relative Advantage– Is the innovation perceived as superior to existing products?
• Compatibility– Does the innovation fit the values, behavior and experience of the
target market?
• Complexity– Is the innovation difficult to understand or use or perceived as such?
• Utility & Cost-Benefit– Can the innovation be used extensively or on a more limited basis?
• Communicability– Can results be easily observed and described to others?
Product Characteristics That Influence the Rate of Adoption
Question du Jour
Do consumers always know what they really want or need?
Other Consumer Behavior Models & Theories
Reactance
• Reactance is an emotional reaction in direct contradiction to rules or regulations that threaten or eliminate specific behavioral freedoms. - Wikipedia
Variety-Seeking vs. Habit Persistence
• Variety-Seeking– Often driven by need for arousal– Preference-testing utility– Consumers often overestimate their variety needs
• Habit Persistence– Different from “Loyalty”– Typically driven by risk aversion
Sunk Cost Bias
• Investing more resources in something you previously invested in, solely because you previously invested in it.
False Consensus Bias
• Not everyone thinks like you, expects what you expect, believes what you believe.
Very dangerous for marketers.
Decision Heuristics
• Anchoring & Adjustment– Reference Points
• Emotion– Mood Regulation• Elevation• Maintenance
– Affect Evaluation– Effects on Risk Taking
Prospect Theory
Mental Accounting
• Consumers…– Segregate gains– Integrate losses– Integrate smaller losses with larger gains– Segregate small gains from large losses
Implications for marketing strategy?
In-Class Activity – WHY WE BUYChoose a product, product line, brand, or company and answer the following:
• What are the obvious (i.e. more superficial) reasons why consumers buy these products?
• What are the not-so-obvious, more deep-seated reasons/motivations why
consumers buy these products? • What are the obvious (i.e. more superficial) reasons why consumers do not buy
these products? • What are the not-so-obvious, more deep-seated reasons/motivations why
consumers do not buy these products?
• Choose one or more of the above reasons/motivations to buy or not buy and provide an appropriate implication for Marketing strategy.