Culture is the fundamental determinant of a person’s wants and behavior. The growing child acquires the set of values, perceptions, preferences, and behaviors through his or her family or other key institutions.

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Each culture consists of smaller sub cultures. Sub cultures include nationalities, religions, racial groups, and geographic regions.

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Marketing Stimuli Other Stimuli

ProductPricePlacePromotion

EconomicTechnologicalPoliticalCultural

Buyer’s Characteristics

Buyer’s decision process

CulturalSocialPersonalPsychological

Problem RecognitionInformation searchEvaluation of alternativesPurchase decisionPost purchase behavior

Buyer’s Decision

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

Model of Buyer Behavior

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Virtually all human societies exhibit social stratification. Stratification sometimes takes the form of caste system where the members of different castes are reared for certain roles and cannot change their caste membership. More frequently, it takes the form of social class.

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Social classes reflect not only income, but other indicators such as occupation, education and area of residence.

Social classes differ in dress, speech patterns, recreational preferences and many other characteristics.

Consumer’s behavior is influenced by social factors as reference groups, family, social roles and status.

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REFERENCE GROUPS:A person’s reference groups consist of all the groups that have a direct ( face to face) or indirect influence on the person’s attitudes and behavior.Groups having a direct influence on a person are called membership groups.Some membership groups are primary groups, such as family, friends, neighbors, and co-workers, with whom the person interacts fairly continuously and informally.

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People also belong to secondary groups, such as religious, professional, and trade union groups, which tend to be more formal and require less continuous interaction.Aspirational groups are those a person hopes to join; dissociative groups are those whose values or behavior an individual rejects.

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Manufacturers of products and brands where group influence is strong must determine how to reach and influence opinion leaders in these reference groups.An opinion leader is the person in informal, product-related communications who offers advice or information about a specific product

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or product category, such as which of several brands is best or how a particular product may be used.

FAMILY: The family is the most important consumer-buying organization in society. We can distinguish between two families in the buyer’ life.

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The family of orientation consists of parents and siblings.From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love.A more direct influence on everyday behavior is the family of procreation - namely, one’s spouse and children.

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ROLES & STATUSES: The person’s position in each group can be defined in terms of role and status. A role consists of the activities a person is expected to perform.

Each role carries a status.

e.g: A Supreme Court judge has more status than a sales manager, and a sales manager has more status than an office clerk.

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Personal factors:AGE AND STAGE IN THE LIFE CYCLE: People buy different goods and services over a life time. They eat baby food in the early years, most foods in the growing and mature years and special diets in the later years.

Taste in clothes, furniture, and recreation is also age related.

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OCCUPATION AND ECONOMIC CIRCUMSTANCES:

Occupation also influences consumption patterns. A blue-collar worker will buy clothes, work shoes, and lunch-boxes.A company president will buy expensive suits, air travel, and country club membership.Marketers try to identify the occupational groups that have above-average interest in their products and services.

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Computer software companies, design different products for brand managers, engineers, lawyers, and physicians.

Product choice is greatly affected by economic circumstances: spendable income (level, stability, and time pattern), savings and assets ( including the percentage that is liquid, debts, borrowing power, and attitudes toward spending and saving.

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LIFE STYLE:A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions.Lifestyle portrays the “whole person” interacting with his or her environment.

Marketers search for relationships between their products and lifestyle groups.e.g: a computer manufacturer might find that the most computer buyers are achievement-oriented. 16

Psychographics is the science of using psychology and demographics ( where you live) to better understand consumers.

One of the most popular commercially available classification systems based on psychographic measurements is SRI Consulting Business Intelligence’s (SRIC-BI) VALS™ framework.VALS classifies all U.S. adults into eight primary groups based on psychological attribute and key demographics.

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The major tendencies of the four groups with high resources are:

1. Actualizers: Successful, sophisticated, active, “take-charge” people. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products.

2. Fulfi!ers: Mature, satisfied, comfortable,reflective. favor durability, functionality, and value in products.

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3. Achievers: Successful, career- and work oriented. Favor established, prestige product that demonstrate success to their peers.

4. Experiencers: Young, vital, enthusiastic, impulsive, and rebellious. Spend a comparatively high proportion of income on clothing, fast food, music, movies and video.

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ACTION ORIENTED

STATUS ORIENTED

PRINCIPLE ORIENTED

The VALS Segmentation System : An 8-Part Typology

Fulfillers

Actualizers

Achievers Experiencers

Believers Strivers Makers

Strugglers

High ResourcesHigh Innovation

Low ResourcesLow Innovation

VALS™ Network

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The major tendencies of the four groups with lower resources are:

1. Believers: Conservative, conventional, and traditional. Favor familiar products and established brands.

2. Strivers: Uncertain, insecure, approval-seeking, resource restrained. Favor stylish products that emulate the purchases of those with greater material wealth. (youth)

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3. Makers: Practical, self-sufficient, traditional, family-oriented. Favor only products with a practical or functional purpose such as tools, utility vehicles, fishing equipment etc.

4. Stru"lers: elderly, resigned, passive, concerned, resource constrained. Cautious consumers who are loyal to favorite brands.(old & retired)

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PERSONALITY AND SELF-CONCEPTEach person has personality characteristics that influence his or her buying behavior.By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli.Personality is often described in terms of such traits as self confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. 23

We define brand personality as the specific mix of human traits that may be attributed to a particular brand.Marketers attempt to develop brand personalities that will attract consumers with the same self-concept, but self-concept is somewhat slippery.A person’s actual self concept( how she views herself) may differ from her ideal self-concept (How she would like to view herself) and from her others-self-concept( how she thinks others see her. 24

psychological factorsMOTIVATION: A person has many needs at any given time.Some needs are biogenic; they arise from psychological states of tension such as hunger, thirst or discomfort.Other needs are psychogenic; they arise from psychological states of tension such as the need for recognition, esteem, or belonging.A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act. 25

Psychologists have developed theories of human motivation, and three of the best known-those of Sigmund Freud, Abraham Maslow, and Frederick Herzberg- carry quite different implications for consumer analysis and marketing strategy.

Freud’s Theory: He assumed that the psychological forces shaping people’s behavior are largely unconscious, and that a person cannot fully understand his or her own motivations.

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A technique called laddering can be used to trace a person’s motivations from the stated instrumental ones to the more terminal ones. Then the marketer can decide at what level to develop the message and appeal.

When a person examines specific brands, he or she will react only to their stated capabilities, but also to other, less conscious cues. Shapes, size, weight, material, color, and brand name can trigger certain associations and emotions.

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Self -Actualization

needs(self-development

and realization)

Esteem needs(self-esteem, recognition, status)

Social Needs(sense of belonging, love)

Safety needs(security,protection)

Physiological Needs(food, water,shelter)

❶

❷

❸

❹

❺

MASLOW’S HIERARCHY OF NEEDS THEORY

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HERZBER’S THEORY

Frederick Herzberg developed a two-factor theory that distinguishes dissatisfiers ( factors that cause dissatisfaction) and satisfiers (factors that cause satisfaction).

The absence of dissatisfiers is not enough; satisfiers must be actively present to motivate a purchase.e.g: a computer that does not come with a warranty would be a dissatisfier.

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Yet the presence of a product warranty would not act as a satisfier or motivator of a purchase, because it is not a source of intrinsic satisfaction with the computer. Ease of use would be a satisfier.

Two amplifications of this theory:1. Sellers should do their best to avoid dissatisfiers ( poor training manual, poor service policy etc)

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2. The manufacturer should identify the major satisfiers or motivators of purchase in the market and then supply them.

These satisfiers will make the major difference as to which brand the customer buys.

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PERCEPTIONPerception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world.

People emerge with different perceptions of the same object because of three perceptual processes: a. Selective Attentionb. Selective Distortion c. Selective Retention.

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Selective Attention: The average person may be exposed to over 1500 ads a day. Because a person cannot possibly attend to all these, most stimuli will be screened out - a process called Selective attention.

1. People are most likely to notice stimuli that relate to current need. A person who is motivated to buy a computer will notice computer ads; he or she will probably not notice DVD ads.

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2. People are more likely to notice stimuli that they anticipate. You are likely to notice computer than radios in a computer store because you do not expect the store to carry radios.

3.People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli. You are more likely to notice an ad offering $100 off the list price of a computer than one offering $5 off.

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Selective Distortion: is the tendency to twist information into personal meanings and interpret information in a way that will fit our perceptions.Unfortunately, thereis not much marketers can do about selective distortion.

Selective Retention: Because of selective retention, we are likely to remember good points mentioned about competing products. Selective retention explains why marketers use drama and repetition in 35

LEARNING: involves changes in individual’s behavior arising from experience.Learning theorists believe that learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement.

A drive is a strong internal stimulus impelling action.

Cues are minor stimuli that determine when, where and how a person responds.

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Suppoe you buy an IBM computer. If your experience is rewarding, your response to computers and IBM will be positively reinforced. Later on, when you want to buy a printer, you may assume that because IBM makes good computers, IBM also makes good printer. You generalize your response to similar stimuli.

A counter tendency to generalization is discrimination.

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Discrimination - means that a person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly.

A new company can enter the market by appealing to the same drives that competitors use and by providing similar cue configurations, because buyers are more likely to transfer loyalty to similar brands ( generalization); or the company

Might design its brand to appeal to a different set of drives and offer strong cue inducements to switch ( discrimination).

BELIEFS AND ATTITUDES:Through doing and learning, people acquire beliefs and attitudes.

A belief is a descriptive thought that a person holds about something. People’s beliefs about a product or brand influence their buying decisions.

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An attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea.

A person’s attitudes settle into a consistent pattern.Attitudes economize on energy and thought, they are difficult to change. To change a single attitude may require major adjustments in other attitudes.

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THE BUYING DECISION PROCESS:

A. Buying roles:✓ Initiator : The person who first

suggests the idea of buying the product or service.✓ Influencer: The person whose

view or advice influences the decision.

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✓ Decider: The person whose decision on any component of a buying decision : whether to buy , what to buy, how to buy, and where to buy.✓ Buyer: The person who makes

the actual purchase.✓ User: The person who consumes

or uses the product or service.

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B. Buying behavior:Consumer decision making varies with the type of buying decision.The decisions to buy toothpaste, a tennis racket, a personal computer, and a new car are all very different.

Complex and expensive purchases are likely to involve more buyer deliberation and more participants.

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Complex Buying behavior

Dissonance -reducing Buying behavior

Variety-seeking Buying behavior

Habitual Buying behavior

High Involvement Low Involvement

Significant DifferencesBetween brands

Few DifferencesBetween brands

Four Types of Buying Behavior

A) COMPLEX BUYING BEHAVIOR:Complex buying behavior involves a three step process.First, the buyer develops beliefs about the product.Second, he or she develops attitudes about the product.Third, he or she makes a thoughtful choice. Consumers engage in complex buying behavior when they are highly involved in a purchase and aware of significant difference among brands. 47

B) DISSONANCE-REDUCING BUYER BEHAVIOR

Sometimes the consumer is highly involved in the purchase but sees little difference in the brands. The high involvement is based on the fact that the purchase is expensive, infrequent, and risky. In this case, the buyer will shop around to learn what is available.

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If the consumer finds quality differences in the brands, he or she might go for higher price. If the consumer finds little difference, he or she might simply buy on price or convenience.After the purchase, the consumer might experience dissonance that stems from noticing certain disquieting features or hearing favorable things about other brands, and will be alert to information that supports his or her decision.

C) HABITUAL BUYING BEHAVIOR:

Many products are bought under conditions of low involvement and the absence of significant brand differences.

Consider salt.

Consumers have little involvement in this product category.If they keep reaching for the same brand, it is out of habit, not strong brand loyalty.

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D) VARIETY-SEEKING BUYING BEHAVIOR.

Some buying situations are characterized by low involvement but significant brand differences.

Think about cookies or biscuits.The consumer may reach for another brand out of wish for a different taste. Brand switching occurs for the sake of variety rather than dissatisfaction.

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STAGES OF THE BUYING DECISION PROCESS:

Smart companies will immerse themselves in trying to understand the customer’s overall experience in learning about a product, making a brand choice, using the product, and even disposing it.

E.g: Honda engineers took videos of shoppers loading groceries into car trunks to observe their frustrations and generate

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Possible design solutions.

Intuit, the maker of Quicken financial software, watched first-time buyers try to learn Quicken to sense their problems in learning how to use the software.

Benson Shapiro and his co-authors urged companies to “staple yourself to an order” to appreciate everything that occurs or might go wrong in the ordering business.

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How can marketers learn about the stages in the buying process for their product?

They can think about how they themselves would act (introspective method) .

They can interview a small number of recent purchasers, asking them to recall the events leading to their purchase (introspective method).

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They can locate consumers who plan to buy the product and ask them to think out loud about going through the buying process (prospective method).They can ask the consumers to describe the ideal way to buy the product (prescriptive method).

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Problem recognition

Information search

Evaluation of

alternatives

Purchase decision

Postpurchase behavior

FIVE-STAGE MODELOF THE CONSUMERBUYING PROCESS

Problem recognition:

The buying process starts when the buyer recognizes a problem or need.The need can be triggered by external or internal stimuli.With an internal stimulus, one of the person’s normal needs- hunger, thirst, sex - rises to a threshold level and becomes a drive.Or a need can be aroused by external stimulus. A person passes a bakery and sees

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Freshly baked bread that stimulates hunger.

INFORMATION SEARCHAn aroused consumer will be inclined to search for more information.Two levels of arousal:

The milder search state is called heightened attention. At this level, a person simply becomes more receptive to information about a product.

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At the next level, the person may enter an active information search: looking for reading material, phoning friends, and visiting stores to learn about the product.Consumer information sources fall into 4 groups:Personal groups: family, friends, neighbors, acquaintances.Commercial Sources: Advertising, sales-persons, dealers, packaging, displays.Public sources: Mass media, consumer-rating organizations.

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Experiential sources: Handling, examining, using the product.

Total set Awareness set Consideration set Choice set Decision Set

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?IBMAppleDellHewlett-PackardToshibaCompaqNECTandy---

IBMAppleDellHewlett-PackardToshibacompaq

IBMAppleDellToshiba

IBMAppleDell

EVALUATION OF ALTERNATIVES:

How does the consumer process competitive brand information and make a final value judgement?

There is no single process used by all consumers or by one consumer in all buying situations.

The consumer forms judgement largely on a conscious and rational basis.

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The attributes of interest of buyers vary by product:1.Cameras: Picture sharpness, camera speeds, Camera size, price.2. Hotels: Location, cleanliness, atmosphere, Price.3. Mouthwash: Color, effectiveness, germ- Killing capacity, price, taste, Flavor.4. Tires: Safety, tread life, ride quality, price.

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PURCHASE DECISION:

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Evaluation of alternatives

Purchase Intention

Attitudes of others

Unanticipated situational factors

Purchase Decision

Steps between evaluation of Alternatives and a Purchase Decision

Two factors can intervene between the purchase intention and the purchase decision.

The first factor is the attitude of others .

The second factor is unanticipated situational factors that may erupt to change the purchase decision.

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In executing a purchase intention, the consumer may make up five purchase sub-divisions: A brand decision: (brand A)

Vendor decision: (dealer 2)

Quantity decision: (one computer)

Timing decision: (weekend)

Payment decision: (credit card)65

POST PURCHASE BEHAVIOR

After purchasing the product, the consumer will experience some level of satisfaction or dissatisfaction.

Marketers must monitor post purchase satisfaction, post purchase actions, and post purchase product uses.

Post Purchase Satisfaction: The buyer’s satisfaction is a function of the closeness

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Between the buyer’s expectations and the product’s perceived performance.If the performance falls short of expectations, the consumer is disappointed;If it meets the expectations, the customer is satisfied;If it exceeds expectations, the customer is delighted.These feelings make a difference in whether the customer buys the product again and talks favorably or unfavorably about it to others.

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Post purchase actions: Satisfaction or dissatisfaction with the product will influence a consumer’s subsequent behavior.

If the consumer is satisfied, he or she will exhibit a higher probability of purchasing the product again.

Dissatisfied consumers may abandon or return the product.They may seek information that confirms its high value.

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They may take public action by complaining to the company, going to a lawyer, or complaining to other groups ( such as business, private, or government agencies.)Private actions include making a decision to stop buying the product ( exit option) or warning friends (voice option).

In all these cases, the seller has done a poor job of satisfying the customer.

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Post purchase use and disposal:If consumers store the product in a closet, the product is probably not very satisfying, and word of mouth will not be strong.If they sell or trade the product, new-product sales will be depressed.Consumers may also find new uses for the product.If consumers throw away the product away, the marketer needs to know how they dispose of it, especially if it can hurt the environment (as in the case of beverage containers& disposable diapers.) 70

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Get rid of it permanently

To be (Re)sold

To be used

Direct to consumer

Through middleman

Tointermediary

Product

Get rid of it temporarily

Rent it

Lend it

Keep it

Use it to serve original purpose

Convert it to serve a new purpose

Store it

Give it away

Trade it

Sell it

Throw it away

How Consumers Use or Dispose of Products