MKTG CH5 – Flashcards

The buying behavior of FINAL consumers

all the individuals that buy or acquire goods and services for personal consumption American market: $15T from 314M people

environmental marketing stimuli (4Ps and other) Buyer's Black Box Buyer's Response

Culture Social Personal Psychological

Culture Subculture Social Class

Most basic cause of a person's wants and behavior cultural shifts occur and can be cause of new product/service

Groups w/i culture with shared beliefs ie. minority, ethnicity, nationality, age. etc.

Relatively permanent and ordered divisions w/i a society with shared beliefs

Reference Groups Networks Family Roles and Status

Membership, reference groups, aspirational groups - opinion leaders (influentials or leading adopters) are recruited as brand ambassadors/buzz marketing - Word of mouth influence - online social networks

Most important consumer buying organization in society Husband-Wife-Kids CHANGING FAMILY - Gender stereotypes are relaxing - Children Very influential with substantial disposable income

A person belongs to many groups and the person's position in each group is defined by role and status ie. Mom & CEO

- Age and Life-Cycle Stage - Occupation - Economic Situation - Lifestyle - Personality - Self-Concept

- life-cycle changes usually result from demographics and life-changing events

blue collar vs white collar

price sensitivity or not

A person's pattern of living as expressed in their psychographics ->> AIO Activities Interests Opinions ie. pet parents

Personality: unique psychological characteristics that distinguish a person or group Brand Personality - described in 5... - sincerity - excitement - competence - sophistication - ruggedness

Motivation Perception Learning Beliefs and Attitudes

A need that is sufficiently pressing to direct the person to seek satistfaction

Freud = subconscious motives - motivation research/interpretive consumer research is qualitative research on subconscious and dig into psyche Maslow = human needs are hierarchical, satisfy primary needs first - Self-actualization - Esteem - Social needs - Safety Needs - Physiological Needs

Process which people select, organize and interpret information to form meaningful picture of the world Subliminal Advertising is not real but people were afraid

1. Selective Attention: people SCREEN OUT most information they hear 2. Selective Distortion: people retain and interpret information to SUPPORT their beliefts 3. Selective Retention: remember good points about favored brands and forget good points about competing

Change in an individuals behavior arising from experience DRIVE -> MOTIVE (using stimulus object and cues) -> REINFORCEMENT

Build up product demand by associating with strong DRIVES using motivation CUES to end in positive REINFORCEMENT

Belief: descriptive thought that a person holds about something (knowledge, opinion, faith) with or without emotional charge

Persons CONSISTENT evaluations Frame of Mind!

The purchase decision is part of a much larger BUYING process so marketers must focus on the entire process not just end result 1. Need Recognition 2. Information Search 3. Evaluation of Alternatives 4. Purchase Decision 5. Post Purchase Behavior ^^ Sometimes they are skipped or reversed

triggered by internal or external stimuli

through many sources or combinations - traditionally most information is gathered from COMMERCIAL sources to INFORM - PERSONAL sources LEGITIMIZE products for the buyer

Many diff processes

Purchase intention vs. decision - influences: attitudes of others, unexpected situational factors

Consumers expectations vs. products performance results in disappointment, satisfaction or delight Consumers feel Cognitive Dissonance for EVERY purchase to an extent

"New: Product: percieved by SOME to be new 1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

1. Awareness: aware but lacks information 2. Interest: seeks info 3. Evaluation: considers 4. Trial: tries on small scale 5. Adoption: full and regular use of new products

decision to become product regular user

Mental Process where individual goes from first learning -> final adoption

Innovators - more than 2 Standard deviation - venturesome and try with risk Early Adopters - between 1-2 S.D., guided by respect for products and opinion leaders Early Mainstream - Deliberate but not opinion leader Late Mainstream - Skeptical Lagging Adopters - traditional New Product Marketers aim for INNOVATORS and EARLY ADOPTERS

Innovators = 2.5% Early Adopter= 13.5% Early Mainstream = 34% Late Mainstream = 34% Lagging Adopters = 16%

1. Relative Advantage 2. Compatibility 3. Complexity 4. Divisibility 5. Communicability Other Influences

Degree which the innovation appears superior to existing products - accelerates the rate of adoption

Degree which innovation fits values and experiences of other customers

How easy it is to use

Degree of which innovation may be tried on a limited basis

Is it easy to describe to others?

- Initial/ongoing costs - Risk/Uncertainty - Social Approval

The consumer market consists of all the individuals and house- holds that buy or acquire goods and services for personal con- sumption. A simple model of consumer behavior suggests that marketing stimuli and other major forces enter the consumer's "black box." This black box has two parts: buyer characteristics and the buyer's decision process. Once in the black box, the inputs result in buyer responses, such as buying attitudes and preferences and purchase behavior. Consumer buyer behavior is influenced by four key sets of buyer characteristics: cultural, social, personal, and psychologi- cal. Understanding these factors can help marketers to identify interested buyers and to shape products and appeals to serve consumer needs better. Culture is the most basic determinant of a person's wants and behavior. People in different cultural, subcultural, and social class groups have different product and brand preferences. Social factors—such as small group, social network, and family influences—strongly affect product and brand choices, as do personal characteristics, such as age, life- cycle stage, occupation, economic circumstances, lifestyle, and personality. Finally, consumer buying behavior is influenced by four major sets of psychological factors—motivation, percep- tion, learning, and beliefs and attitudes. Each of these factors provides a different perspective for understanding the workings of the buyer's black box.

When making a purchase, the buyer goes through a decision process consisting of need recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. During need recognition, the consumer recognizes a problem or need that could be satisfied by a product or ser- vice. Once the need is recognized, the consumer moves into the information search stage. With information in hand, the con- sumer proceeds to alternative evaluation and assesses brands in the choice set. From there, the consumer makes a purchase decision and actually buys the product. In the final stage of the buyer decision process, postpurchase behavior, the consumer takes action based on satisfaction or dissatisfaction. The mar- keter's job is to understand the buyer's behavior at each stage and the influences that are operating.

The product adoption process is made up of five stages: awareness, interest, evaluation, trial, and adoption. New prod- uct marketers must think about how to help consumers move through these stages. With regard to the diffusion process for new products, consumers respond at different rates, depend- ing on consumer and product characteristics. Consumers may be innovators, early adopters, early majority, late majority, or laggards. Each group may require different marketing ap- proaches. Marketers often try to bring their new products to the attention of potential early adopters, especially those who are opinion leaders.

The business market comprises all organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them to others at a profit. As compared to consumer markets, business mar- kets usually have fewer, larger buyers who are more geographi- cally concentrated. Business demand is derived demand, and the business buying decision usually involves more, and more professional, buyers. Business buyers make decisions that vary with the three types of buying situations: straight rebuys, modified rebuys, and new tasks. The decision-making unit of a buying organization— the buying center—can consist of many different persons play- ing many different roles. The business marketer needs to know the following: Who are the major buying center participants? In what decisions do they exercise influence and to what de- gree? What evaluation criteria does each decision participant use? The business marketer also needs to understand the major environmental, organizational, interpersonal, and individual in- fluences on the buying process.

The business buying decision process itself can be quite involved, with eight basic stages: problem recognition, general need de- scription, product specification, supplier search, proposal so- licitation, supplier selection, order-routine specification, and performance review. Buyers who face a new task buying situa- tion usually go through all stages of the buying process. Buyers making modified or straight rebuys may skip some of the stages. Companies must manage the overall customer relationship, which often includes many different buying decisions in various stages of the buying decision process. Recent advances in infor- mation technology have given birth to "e-procurement," by which business buyers are purchasing all kinds of products and services online. Business marketers are increasingly connecting with cus- tomers online and through the social media to share marketing information, sell products and services, provide customer