MGT 252, Lecture 4

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MGT 252, Lecture 4

• Cosnsumer Market and Behaviour

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Learning Goals

• Define the consumer market and construct a simple
  model of consumer buyer behaviour
• Name the four major factors that influence buyer
  behaviour
• List and understand the types of buying decision
  behaviour and stages in the buying decision
  process
• Describe the adoption and diffusion process for
  new products

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Some Examples

• McDonalds in China
• Michael Dells secret
• Its really a pretty data-driven process. We
  have enormous amounts of information on what
  customers like and dont like. Michael Dell

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Definitions

• Consumer buyer behaviour refers to the buying
  behaviour of final consumers individuals and
  households who buy goods and services for
  personal consumption
• All of these final consumers combine to make up
  the consumer market

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Factors AffectingConsumer Behaviour

• Culture
• Influence a persons wants and behaviour
• Subculture
• Smaller groups with shared value systems
• Social Class
• Societys divisions who share values, interests
  and behaviours

• Cultural
• Social
• Personal
• Psychological

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Factors AffectingConsumer Behaviour

• Groups
• Membership
• Reference
• Aspirational
• Opinion leaders
• Buzz marketing
• Family
• Many influencers
• Roles and status

• Cultural
• Social
• Personal
• Psychological

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Factors AffectingConsumer Behaviour

• Age and life-cycle stage
• Occupation
• Economic situation
• Lifestyle
• AIO - Activities, interests and opinions
• VALS
• Lifestyle segmentation
• Personality and self-concept

• Cultural
• Social
• Personal
• Psychological

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Brand Personality Dimensions

• The specific mix of human traits that may be
  attributed to a particular brand
• Match brand personality to the consumers
  personality
• Brand personality traits
• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness

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Factors AffectingConsumer Behaviour

• Cultural
• Social
• Personal
• Psychological

• Motivation
• A need that drives the person to seek
  satisfaction of the need
• Perception
• The process by which people select, organize, and
  interpret information
• Learning
• Changes in an individuals behaviour arising from
  experience
• Beliefs
• A descriptive thought about something
• Attitudes
• A persons consistently favourable or
  unfavourable evaluations, feelings, and
  tendencies towards something

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Psychological FactorsMotivation

• A motive is a need that is sufficiently pressing
  to direct the person to seek satisfaction
• Motivation research is based on Freud. Looks for
  hidden and subconscious motivation
• Maslow ordered needs based on how pressing they
  are to the consumer

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Maslows Hierarchy of Needs
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Psychological Factors Perception

• Perception is the process by which people select,
  organize, and interpret information.
• Perception Includes
• Selective attention
• Consumers screen out information
• Selective distortion
• People interpret to support beliefs
• Selective retention
• People retain points to support attitudes

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Discussion QuestionPerception

• How many ads were you exposed to today?
• Which ones do you remember? Why?

?
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Psychological Factors Learning

• Learning describes changes in an individuals
  behaviour arising from experience
• Learning occurs through
• Drives
• A strong internal stimulus that calls for action
• Stimuli
• Objects that move drive to motive
• Cues
• Minor stimuli that affect response
• Reinforcement
• Feedback on action

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Psychological Factors Beliefs and Attitudes

• Belief
• a descriptive thought about a brand or service
• may be based on real knowledge, opinion, or faith
• Attitude
• describes a persons evaluations, feelings and
  tendencies toward an object or idea
• They are difficult to change

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Learning Goals

• Define the consumer market and construct a simple
  model of consumer buyer behaviour
• Name the four major factors that influence buyer
  behaviour
• List and understand the types of buying decision
  behaviour and stages in the buying decision
  process
• Describe the adoption and diffusion process for
  new products

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Types of Buying Decision Behaviour

• Degree of involvement
• How much the consumer cares about the purchase
  decision
• Higher levels for products that are expensive,
  risky, purchased infrequently, and highly
  self-expressive
• Degree of perceived differences between brands
• The type of decision will influence the
  promotional strategy most likely to be effective

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The Buyer Decision Process

• Need Recognition
• Triggered by internal (persons normal needs) or
  external stimuli (advertisements, friends)
• Must reach an intensity high enough to become a
  drive
• Needs are basic, wants are learned behaviour to
  satisfy them

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The Buyer Decision Process

• Information Search
• Influenced by level of involvement (interest) in
  the decision
• Memory (internal) search
• External search personal, commercial, public,
  experiential sources of information
• Word-of-mouth sources are most influential
  (credibility)

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The Buyer Decision Process

• Evaluation of Alternatives
• Evaluation procedure depends on the consumer and
  the buying situation
• Attributes and importance weights are chosen as
  criteria
• Alternatives compared against the criteria
• Marketers can influence this stage personal
  selling

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The Buyer Decision Process

• Purchase Decision
• Two factors intercede between purchase intentions
  and the actual decision
• Attitudes of others
• Unexpected situational factors

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The Buyer Decision Process

• Postpurchase Behaviour
• What the consumer thinks and does after
  purchasing and using the product or service
• Satisfaction relationship between consumer
  expectation and perceived performance
• Delighted consumers engage in positive
  word-of-mouth.
• Unhappy customers tell on average 11 other
  people.
• Cognitive dissonance

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Learning Goals

• Define the consumer market and construct a simple
  model of consumer buyer behaviour
• Name the four major factors that influence buyer
  behaviour
• List and understand the types of buying decision
  behaviour and stages in the buying decision
  process
• Describe the adoption and diffusion process for
  new products

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Buyer Decision Process for New Products

• New Products
• Good, service or idea that is perceived by
  customers as new.
• The Adoption Process
• Mental process through which an individual passes
  from first hearing about an innovation to final
  adoption.
• Five Stages in the Adoption Process
• Awareness, interest, evaluation, trial, and
  adoption.

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Buyer Decision Process for New Products

• Individual Differences in Innovativeness
• Consumers can be classified into five adopter
  categories, each of which behaves differently
  toward new products.

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Buyer Decision Process for New Products

• Influence of Product Characteristics on Rate of
  Adoption
• Relative Advantage
• Compatibility
• Complexity
• Divisibility
• Communicability

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Buyer Decision Process for New Products

• Consumer Behaviour Across International Borders
• Values, attitudes and behaviours differ greatly
  in other countries.
• Physical differences exist which require changes
  in the marketing mix.
• Customs vary from country to country.
• Marketers must decide the degree to which they
  will adapt their marketing efforts.

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Learning Goals

• Define the consumer market and construct a simple
  model of consumer buyer behaviour
• Name the four major factors that influence buyer
  behaviour
• List and understand the types of buying decision
  behaviour and stages in the buying decision
  process
• Describe the adoption and diffusion process for
  new products