Consumer Markets and Consumer Buyer Behavior

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Consumer Markets and Consumer Buyer Behavior
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Preview Case Study Harley Davidson

• Harley Hogs account for 1/5 of all US bike
  sales more than half of the heavyweight
  segment
• Sales have exceeded supply for years
• 1986-2000 HD shares had split four times
  increase of 7,100
• By 2002 16 years of record sales and income

• HD conducted several mktg research activities
• Fiercly loyal clientele revolves around 7 core
  customer types
• Harley owners use their motorrcycles to express
  their lifestyles and attitudes
• Advertising reflects the Harley mystique

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Consumer Buying Behavior

• Seven Os Framework
• Who constitutes the market ? Occupants
• What does the market buy? Objects
• Why does the market buy? Objectives
• Who participates in the buying? Organizations
• How does the market buy? Operations
• When does the market buy? Occasions
• Where does the market buy? Outlets

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Consumer Buying Behavior

• Consumer Buying Behavior g buying behavior of
  individuals households who buy goods and
  services for personal consumption.
• All these consumers make up the consumer market.

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Simple Response Model

• The central question for marketers is
• How do consumers respond to various marketing
  efforts the company might use?
• The starting point g stimulus-response model

Stimulus
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Model of Buyer Behavior
Marketing and Other Stimuli Marketing Product Pr
ice Place Promotion Other Economic Technological P
olitical Cultural
Buyers Black Box Buyer Characteristics Cultural
Social Personal Psychological Buyer Decision
Process Problem recognition Information
search Evaluation Decision Postpurchase behavior
Buyer Responses Product Choice Brand
Choice Dealer Choice Purchase Timing Purchase
Amount
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Factors Influencing Consumer Behavior

• Social
• Reference
• groups
• Family
• Roles
• and
• status

• Personal
• Age and
• life-cycle
• Occupation
• Economic
• situation
• Lifestyle
• Personality
• and
• self-concept

• Psycho-
• logical
• Motivation
• Perception
• Learning
• Beliefs and
• attitudes

BUYER
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Factors Affecting Consumer Behavior Cultural
Buyer
Culture g set of values, perceptions, wants and
behaviors learned by a member of society from
family other important institutions
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Factors Affecting Consumer Behavior Cultural
Buyer
Subculture g a group of people with shared value
systems based on common life experiences and
situations
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Factors Affecting Consumer Behavior Cultural
Buyer
Social Class g Relatively permanent and ordered
divisions in a society whose members share
similar values, interests and behaviors.
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Factors Affecting Consumer Behavior Social

• Groups
• Membership
• Reference

• Family (most important)
• Husband, wife, kids
• Influencer, buyer, user

Social Factors
Roles and Status
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Social Factors

• Reference Groups g Groups that have a direct or
  indirect influence on the persons attitudes or
  behavior
• Membership Groups g Groups to which a person
  belongs
• Have a direct influence on a persons behavior
• Primary groups g with whom there is regular, but
  informal interaction
• Secondary groups g are more formal and require
  less interaction
• Aspirational Groups g Groups to which a person
  would like to belong

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Social Factors

• Opinion Leader g person within a reference group
  who exert influence on others
• Offers advice or information about a specific
  product or product category
• Can be found in all social classes

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Social Factors

• Family g The most important consumer-buying
  organization
• Family members g primary reference group
• Roles of the family members in buying decisions
• Buying roles vary in different countries and
  social classes
• Buying roles change with evolving life-style
  (joint decision making, women arising as active
  buyers, increasing role of children)

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Social Factors

• The persons position in each group g can be
  defined in terms of both role and status
• A Role g consists of the activities that a person
  is expected to perform according to the people
  around him
• Each role g carries a status
• A Status gis the general esteem given a role by
  society

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Factors Affecting Consumer Behavior Personal
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Personal Factors

• Family Life Cycle g stages throughout which
  families pass as they mature over time
• Stages in family life cycle
• 1.bachelor stage
• 2.newly married couples, no children
• 3.full nest 1 youngest child under 6
• 4.full nest 2 youngest child 6 or over
• 5. full nest 3 older married couples with
  dependent children
• 6.empty nest 1 older married couples no children
  with them
• 7. empty nest 1 older married couples no
  children at homeretired
• 8.solitary survivor, working
• 9.solitary survivor, retired

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Personal Factors

• Personality g a persons unique characteristics
  that lead to relatively consistent and lasting
  responses to his environment
• Self-concept g the self image or general picture
  that people have of themselves

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Personal Factors

• Lifestyle g a persons pattern of living as
  expressed in his activities, interests and
  opinions
• Psychographics g technique of measuring
  lifestyles and developing lifestyle
  classifications
• Major dimensions measured are
• Activities (work, hobbies, social events,
  entertainment, shopping, sports,vacation)
• Interests (family, home, job, recreation,
  fashion, food, media, achievements)
• Opinions (themselves, social issues, politics,
  business, economics, products, future)

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Values and Lifestyles (VALS)
Actualizers
High Resources

High Innovation
Achievers
Fulfilleds
Experiencers
Makers
Strivers
Believers
Strugglers
Low Resources
Low Innovation
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Factors Affecting Consumer Behavior Psychological
Motivation
Psychological Factors Affecting Buyers Choices
Beliefs and Attitudes
Perception
Learning
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Maslows Hierarchy of Needs
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Psychological Factors

• Perception g process by which people select,
  organize and interpret information to form a
  meaningful picture of the world
• 3 perceptional processes
• 1.Selective attention tendency of people to
  eliminate most of the information to which they
  are exposed
• 2.Selective distortion tendency of people to
  interpret information in a way that will support
  what they already believe
• 3.Selective retention tendency of people to
  retain only part of the information to which they
  are exposed usually information that supports
  their attitudes and beliefs

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Psychological Factors

• Learning g changes in a persons behavior,
  arising from experience
• Learning occurs through the interplay of drives,
  stimuli, cues, responses and reinforcement
• A drive strong internal stimulus that calls for
  action
• Cues minor stimuli that determine when, where
  and how the person responds
• If the experience is rewarding g the response
  will be positively reinforced

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Psychological Factors

• A Belief g descriptive thought that a person
  holds about something
• Beliefs may be based on knowledge, opinion or
  faith
• An Attitude g a persons consistently favorable
  or unfavorable evaluations, feelings and
  tendencies toward an object or idea

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Types of Buying Decision Behavior
Complex Buying Behavior
Variety- Seeking Behavior
Dissonance- Reducing Buying Behavior
Habitual Buying Behavior
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The Buying Roles

• 5 roles people might play in a buying decision
• Initiator g who first gives the idea of buying
  the product or service
• Influencer gwhose view or advice influences the
  decision
• Decider gwho decide on any component of buying
  decision
• Buyer gwho makes the actual purchase
• User gwho uses the product or sevice purchased

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The Buyer Decision Process
Purchase Decision
Postpurchase Behavior
Evaluation of Alternatives
Information Search
Need Recognition
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The Buyer Decision Process Step 1. Need
Recognition

Buyer Recognizes a Problem or a
Need.
Desired State
Actual State
Needs Arising From Internal Stimuli
Hunger External Stimuli- Friends
State Where the Buyers Needs are Fulfilled and
the Buyer is Satisfied.
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The Buyer Decision ProcessStep 2. Information
Search
Personal Sources
Commercial Sources

Public Sources

• Family, friends, neighbors
• Most effective source of
• information

• Advertising, salespeople
• Receives most information
• From these sources

Experiential Sources

• Mass Media
• Consumer-rating groups

• Handling the product
• Examining the product
• Using the product

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The Buyer Decision ProcessStep 3. Evaluation of
Alternatives
Consumer May Use Careful Calculations Logical
Thinking
Consumers May Buy on Impulse and Rely on
Intuition
Consumers May Make Buying Decisions on Their Own.
Consumers May Make Buying Decisions Only After
Consulting Others.
Marketers Must Study Buyers to Find Out How They
Evaluate Brand Alternatives
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Consumer Evaluation Process

• The consumer is looking for certain benefits from
  the product solution
• The consumer sees each product as a bundle of
  attributes
• Consumers differ as to which product attributes
  they see as most relevant
• Consumers differ as on the importance of weights
  they attach to each attribute
• The consumer develops a set of brand beliefs
  about where each brand stands on each attribute
• The consumer arrives at attitudes (judgments
  /preferences) toward different brands through an
  attribute evaluation procedure.

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Decision Making Sets
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The Buyer Decision ProcessStep 4. Purchase
Decision

• Purchase Intention
• Desire to buy the most preferred brand

• Purchase Decision

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The Buyer Decision ProcessStep 5. Postpurchase
Behavior
Satisfied Customer!

• Consumers
• Expectations of Products Performance.
• Products Perceived
• Performance.

Dissatisfied Customer
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Stages in the Adoption Process
Awareness Consumer is aware of product, but
lacks information.
Interest Consumer seeks Information about new
product.
Evaluation Consumer considers trying new product.
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Adopter Categories
Early Majority
Late Majority
Early Adopters
Innovators
Percentage of Adopters
Laggards
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13.5
2.5
Time of Adoption
Late
Early
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Influence of Product Characteristics on Rate of
Adoption
Relative Advantage Is the innovation superior
to existing products?
Communicability Can results be easily observed
or described to others?
Divisibility Can the innovation be used on a
trial basis?
Compatibility Does the innovation fit the
values and experience of the target market?
Complexity Is the innovation difficult
to understand or use?