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The consumer buying process

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- we as individuals are influenced by different; 1.cultural 2. social 3. personal 4. psychological factors

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social

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- family - reference groups -Roles & staus

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Family

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the most important group influenced

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Family trends

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- wives: have more influence purchases outside the home ( cars) - husbands: have more influence on purchases inside the home (food) -children: have a stronger influence on family buying decisions ( vacations, cell phones)

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Reference Groups

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-groups that serves to influence attitudes and behaviors

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Example of Reference groups

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-general: business professionals wear suits, while professors often dress informally -opinion leaders: investors may be influenced by warren buffet if he says "now is a good time to buy stock ". ( People within a group that exert special influence) -Aspirational groups: Jeff hopes to be like Lebron James and play pro, so he buys Nikes Lebron zoom basketball shoes

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Roles and Status

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-a persons role or status within a group may influence buying behavior

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Example of Role and Status

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- John is promoted to IT manager and then considers that owning the best smartphone technology is required for him to set a good example for his team.

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Cultural

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- Cultures -Subcultures -Social class

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Cultures

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-the set of basic value and behaviors shared by members of society - basic cause of people wants and behaviors learned while growing up

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Example of cultures

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- a trend --->that U.S. cultural shift toward greater health means large opportunities for health/ fitness companies

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Subcultures

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- smaller groups in culture that share values

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subculture examples

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- 1. trend---> U.S Latino market is the fastest growing sub-segment in the U.S. Population is due to family shopping, children have more influence in buying brands -2. U.S mature (over 65) consumer subculture are a growing target for cosmetics and health food in efforts to look younger

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Social Class

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(upper, middle, lower class) - shared values and behaviors in these ordered divisions -determined by many factors including income, education, and wealth within occupation. (most important determinant)

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Personal

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- Age and Life cycle stage -Occupation -Economic situation -Personality

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Age and Life Cycle Stage (personal)

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- Over ones lifetime, their needs and purchases change -ex: 2 people become parents and decide that they needed a bigger car

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Occupation (personal)

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ex: Dickies makes rugged work clothes for blue collar workers

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Economic Situation (personal)

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ex. 1) During economic recessions, many firms advertise their goods as a "good value" ex2.) Maxwell House coffee might target lower- income consumers who may not be able to afford starbucks

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Personality (personal)

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- enduring psychological characteristics (e.g. highly social extrovert or shy introvert) -marketers try to match brand personality w/ target markets personality. This is often difficult to identitfy a segment by personality - How to determine # of shy introverts?

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Psychological

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- motivation - perception -learning -belifs -attitudes

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Motivation (psychological)

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- motive: a need that is sufficient enough to trigger the person to satisfy it. - *** Motives are often subconscious and difficult to uncover ***

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Example of Motivation

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- Joel told people he bought a sports car because he liked its style, but really it was bc he's insecure and wants to impress people

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Perception (psychological)

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-Process people use to select, organize, and interpret information

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Selective attention (perception)

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people screen out most information, they're exposed to , so ads must be striking

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Selective distortion (perception)

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- the tendency for people to interpret information in a way that conforms to their prior beliefs

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Selective retention (perception)

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- tendency to retain only information that supports existing attitudes and beliefs

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Learning (psychological)

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- changes in behavior arise from experience - a drive (internal stimulus) becomes a motive when directed towards a stimulus object. ( something to satisfy the drive) -Cues--> stimuli that determine when, where, and how one might respond -marketers can increase demand for products by pairing them with strong drives, using motivating cues and providing good consumer experience to reinforce another purchase

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Beliefs (psychological)

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a descriptive thought about something ex:) I think the newest Tesla is to expensive for me

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Attitudes (psychological)

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-consistent evaluation toward something ex:) one should always pay more for furniture - promotion can counter some beliefs if they're incorrect, but attitudes are hard to change

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stages of consumer buying process

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- 1. need recognition - 2.information search -3. Alternative evalutation -4. Purchase decision - 5. postpurchase evalutation

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1.) need recognition

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recognition that there's a need/ want that requires satisfaction- triggered by stimuli

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primary needs Vs. Secondary

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- primary needs are the things like food, water, shelter, comfort, and safety. - secondary needs are acquired or learned; power affiliation and achievements

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External Vs. Internal Stimulus

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- internals is the feeling of hunger or thirst -external is seeing/ hearing from outside enviroment

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Two types of external stimulus (common types)

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- 1st types comes from having a problem with a product -ex: drop your TV while moving, now you recognize you need a new TV - 2nd type comes from marketing mix elements- the creation of a new product can stimulate the need for recognition - ex: Instatransporter- new product people then wanted *** Most frequently used marketing mix stimulus is promotion, specifically advertisement***

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2.) Information search

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- excludes impulsive purchases - most often, following need recognition, a consumer will search for information about alternatives that may satisfy the need

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internal VS. External

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- internal: Search is the process of recalling information stored in memory. ** most confident in internal sources** -external: information search entails seeking information from outside environment; friends, family, colleagues or consulting public sources of information and marketing sources of information. - Marketing sources of info. ; firms ad, website, or salesperson, yet consumers are more skeptical about these sources. ( stresses the postives)

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more on internal Vs. external

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- ** Most confidence internal resources. less confidence is non- marketable external sources. and even less confidence from marketing sources.*** - *** most powerful marketing source of information is trial- getting a potential customer to try a product** - trial converts the source from external to internal by giving consumers "use" experience - reduces consumer risk when buying a product .

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3. Alternative Evaluation

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- a consumers information search process should yield a set of most preferred alternatives - evoked/ consideration set

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In theory

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- a perfectly rational consumer, with a large amount of effort/ motivation, may rate each alternative on every attribute, multiply the attribute importance weight by each rating, then sum up the totals for each alternative 1. this type of process is seldom used by consumers 2. but is used in business to business buying contexts to provide rationale for a purchasing decision

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Hierarchial Heuristic (often used)

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- we originally use one ( most important) attribute to exclude alternatives, then make a comparison of remaining alternatives based on another attribute or two -ex:) evaluating alternatives for a gasoline purchase Location: most important attribute - you don't drive far for cheap prices, you look at the closest gas stations based on locations and that you base your decison on price per gallon

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4. Purchase Decision

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this stage of the consumer buying process includes whether: 1. to buy the product/ service or not 2. where to buy 3. how to buy

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To buy or Not?

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- sometimes purchases are postponed due to circumstances 1. emergencies (personal/ business) 2. One of many benign distractions that lower importance of purchase ( made right now) 3. Occasionally, we postpone buying even after spending considerable time and effort in choosing the best alternative ex.) Poor w/ electronic purchases like HDTVs. He gets to a point where he's ready to make a purchase, then realizes how muchless the coast will be in six months

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Where to buy?

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1. sometimes theres no decision to make ex:) particularly when buying at a retail outlet or supermarket 2. other times, deciding where to make a purchase require an information search (within itself)

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How to buy?

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1. This refers to method of payment to use and ancillary decisions ex:) one buys a fridge from Sears: - Pay by check or credit card -will the fridge be delivered? - whether to buy an extended warranty ( decisons to be made)

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5. Post-purchase Evaluation

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-Critical phase of the consumer buying process that involves what happens after the purchase

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Cognitive Dissonance ( very significant to marketers)

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1. The feeling of tension or anxiety the buyer often feels after a purchase. - Particularly when: i. The chosen alternative wasn't too different from the others or ii. When the item purchased was expense 2. Cognitive dissonance can either lead to a returned purchase or a negative evaluation of the brand 3. To combat cognitive dissonance. marketers can use either personal selling or advertising communication Ex.) After purchasing an automobile (personal selling) it is not uncommon to receive a letter or call from sales person (Lexus and flower gift) ex.) Honda --> relax and reliable honda quote (advertising communication) " relax you bought a "...

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Evaluation leads to certain level of satisfication

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- Expectancy Gap Theory - **(performance- expectations= level of satisfication)** 1. For most products---> consistent level of quality, so theres less variance between expectations and performance. - through manufacturing processes 2. For service---> there's often inconsistency with the actual performance & are chosen based on expectations without trial. Therefore, expectancy gap theory is very important for service contexts EX.) Evaluation for movie - haven't seen reviews, movies good= increase in satisfaction - seen good reviews, movies good = less good evaluation ** this is why sequels to films often fail ***

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Expectancy gap book examples

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1. High expectations for a Nebraska football team that fires its coach after and 8-3 season 2. low expectations for presidential candidate receives a "shot of momentum" by gaining 16% of the vote in Iowa

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What is difficult for marketers with expectancy gap book examples

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is to deliver on performance through quality products and consistent services and attracting customers without exaggerating what they should expect

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Heuristics & Biases

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page 48 ( information) after this slide

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2 ways consumers evaluate/ choose alternatives

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1. Alternative model 2. Attribute model

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alternative model

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-each attribute is rated and multiplied by the importance of weight. These weighted ratings are summed for each alternative and compared

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attribute model

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- each alternative is compared to each attribute rating ex.) alternate having the most, highest attribute ratings being selected *** but, consumers don't have the motivation to consider all of the relevant attributes or devote large amounts of time and effort **

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Heuristics---> time & effort- saving tricks / shorts -cuts

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Hierarchical Rule Ex.) If campells is on sale buy, if not buy store brand-- works even if store brands on sale too! - Psychologists have uncovered a number of simplifying heuristics that people use incorrectly leading to deficit decisions & bias ( people are aware)

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3 cognitive Heuristic Tendencies that lead to faulty decision making

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- Routine decisions -Limited decisions -extensive decisons

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Routine Decisions

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for low- priced, everyday items - low involvement indecision

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Limited Decisions

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-for moderately priced items like small appliances -moderate involvement

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Extensive Decisions

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-high - priced purchases, like a house - high involvement in decisions

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What causes higher involvement in decision making?

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- in general, the more expensive the item is the consumer, the more involved they'll be in spending time searching for info, evaluating alternatives, and evaluating the performance of a product

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example #1 for what causes higher involvement in decision making?

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ex.) chewing gum---> little time/ effort in the process, the choice is sometimes, almost subconscious

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example #2 for what causes higher involvement in decision making?

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ex.) buying a house--> opposite extreme. Significant time and effort will be spent on searching for information & evaluating alternatives. Purchase decision may be postponed or there might be cognitive dissonance in the pot purchase evaluation

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example #3 for what causes higher involvement in decision making?

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For limited decisions, like a blender, there will be a moderate information search within one store & there may be an evaluation of alternatives ( in store)

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There is some relativity associated with price level and involvement relationship

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ex.) for bill gates, buying a Rolex might be a routine purchase

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Involvment also increases when theres percieved risk (social or physical)

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ex.) Teenager may be highly involved in buying first homecoming dress, even if her parents are paying for it

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