Chapter 3 Understanding the Customer

1
Chapter 3 Understanding the Customer

• (Consumer Behaviour)

2
Chapter Goals

• To gain an understanding of
• The process of consumer purchase decision making
• The importance of various information sources on
  buying decisions
• The impact on purchasing caused by reference
  groups, family, household, social class, culture,
  subculture, motivation, perception, learning,
  personality, attitudes, and situational factors

3
The Buying-Buying Decision Process

• The consumer goes through a series of
  decision-making stages en route to a decision and
  beyond
• recognition of an unmet need
• choice of an involvement level
• identification of alternatives
• evaluation of alternatives
• purchase and related decisions
• postpurchase behaviour (or consumption experience
  and behaviour)

4
Common Variations in the Purchase Process

• the consumer can withdraw at any stage
• some stages may be skipped
• the stages are generally of varying length
• some stages may be performed subconsciously

5
Level of Involvement

• influences the amount of effort the consumer will
  devote to the purchase decision process
• involvement is higher when
• consumer lacks information about purchase
• product or service is considered important
• risk of a bad decision is perceived to be high
• product or service is socially important
• product or service has the potential to provide
  significant benefits

6
Identification and Evaluation of Alternatives

• search for alternatives may be limited to options
  close at hand or may be more extensive
• influenced by information available, confidence
  in the information, and expected benefit or value
  of additional information
• evaluation of alternatives is based on certain
  criteria, which vary in importance across
  consumers -- this is what make for the existence
  of market segments

7
The Purchase and Related Decisions

• decision to buy is only the beginning of a more
  complex decision process
• marketers must make it as easy as possible for
  the customer to make these decisions
• the additional decisions that have to be made
  include where to buy, how to pay for the
  purchase, how to take delivery, whether to buy
  the extended warranty, etc.
• purchase decision is influences by a series of
  patronage buying motives

8
Postpurchase Behaviour or the Consumption
Experience

• after a purchase, the consumer has learned a
  number of things that affect future purchases
• also goes through a period of anxiety known as
  cognitive dissonance consumer is not sure
  whether he or she has made the right decision
• dissonance is greater when price is high, when
  alternatives are similar, and when the purchase
  is perceived to be important
• consumers try to reduce dissonance by seeking
  positive reinforcement

9
Information Influencing Purchase Decisions

• There are two sources of information
• The commercial information environment consisting
  of all marketing organizations and individuals
  who attempt to communicate with consumers.
• The social information environment, including
  noncommercial word-of-mouth communication and
  observation of others using products.

10
Cultural Influences on Behaviour

• buying decisions are influenced by social forces
• culture has the most indirect impact we are all
  products of a handed-down culture
• cultural influences change very slowly over time
• ethnic subcultures have a profound effect on how
  Canadians lead their lives
• the most obvious subcultural differences are
  between French- and English-Canadians, although
  many other ethnic subcultures exist

11
Multiculturalism inCanada

• Sub-cultures make for profitable market segments
  across Canada
• Notable ethnic markets include
• Italian
• Portuguese
• Chinese
• German
• Middle and Eastern Europeans are clustered in the
  Prairie region
• Italian and Chinese populations are clustered in
  Toronto, Montreal, and Vancouver

12
The Quebecois Market

• The Francophone market differs from the
  Anglophone market in Canada and should be treated
  as distinct
• It is large enough to be considered a culture,
  rather than a sub-culture
• The French live across Canada, but the Quebec
  region is different due to
• Size
• Homogeneity
• Purchasing power
• Social and political orientation

13
Social Class Influence

• social class represents an interesting way to
  look at a market influenced by such factors as
  education, occupation, and place of residence
• may be used as a basis for segmenting markets,
  and may reflect the aspirations of consumers
• social classes exist whether people care to admit
  it or not differences in beliefs and attitudes
  exist across class boundaries and social class
  may be a better predictor of buyer behaviour than
  income

14
Reference Group Influence

• reference groups are those with whom we interact
  and who influence our attitudes, values and
  behaviour
• small reference groups establish norms that
  influence purchase decisions, and their
  word-of-mouth is considered to be more powerful
  than advertising and other commercial forces
• the family and household are considered to be
  very influential reference groups

15
Psychological Factors Impacting Purchasing

• Motivation and Need
• Perception
• Learning
• Personality and Attitude

16
Motivation and Need

• Motivation, a need sufficiently stimulated that
  an individual is moved to seek satisfaction.
• Motives are either physiological or
  psychological.
• Many different motives are often involved in a
  purchase.
• Maslow presents a hierarchy of needs which helps
  us understand motivation.

17
Perception

• The process of receiving, organizing and
  assigning meaning to stimuli detected by the
  senses
• Impacted by selectivity
• Selective attention only those stimuli that
  capture and hold attention can be perceived.
• Selective distortion consumers alter information
  that is inconsistent with their beliefs and
  attitudes.
• Selective retention consumers retain only part
  of what they perceive.

18
Learning

• Changes in behaviour which result from
  observation or experience
• Responses to stimuli are learned as a result of
  rewards or punishments.
• Responses can become habits that replace wilful
  behaviour.

19
Personality and Attitude

• personality is a pattern of traits that influence
  behaviour but it is not always clear how
  personality affects consumption behaviour
• a consumer tends to act in a way that is
  consistent with his or her self-concept
• attitude is one of the most important concepts in
  understanding consumer behaviour it is a learned
  disposition to act in a certain way
• attitudes are formed over time, are slow to
  change, and are excellent predictors of behaviour

20
Values and Lifestyles

• most valuable way of looking at a market and its
  potential
• psychographic research is considered to have
  transcended demographic categories

21
Situational Influences

• Five situations in which consumers find
  themselves often influence their purchase
  behaviour

1. consider how time affects the decision to
buy 2. physical surroundings often influence
purchases 3. the terms and conditions surrounding
the actual purchase will influence the buying
decision 4. the consumers objectives are
important 5. the final buying decision is often
influenced by the consumers physical condition
and mood