Chapter 6 Class Notes

Contents of Chapter 6 Class Notes

What is Consumer Buying Behavior? Stages of Consumer Buying Behavior? Types of Consumer Buying Behavior. Categories That Effect Consumer Buying Behavior.
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Personal Psychological Social

Please Email alex@udel.edu any comments Return to Syllabus Return to Homepage

What is Consumer Buying Behavior?

Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand:

why consumers make the purchases that they make? what factors influence consumer purchases? the changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: Buyers reactions to a firms marketing strategy has a great impact on the firms success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.

Marketers can better predict how consumers will respond to marketing strategies.

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Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next. The 6 stages are: 1. Problem Recognition(awareness of need)--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search-o o

Internal search, memory. External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc.

A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is
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chinese food indian food burger king klondike kates etc

3. Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indian gets highest rank etc. If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives. 4. Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc. 5. Purchase--May differ from decision, time lapse between 4 & 5, product availability. 6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after

sales communication etc. After eating an indian meal, may think that really you wanted a chinese meal instead.

Handout...Pillsbury 1-800#s
1-800 #s gives the consumer a way of communicating with the marketer after purchase. This helps reduce cognitive dissonance when a marketer can answer any concerns of a new consumer. Return to Contents List

Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by: Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others. High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk: Personal risk Social risk

Economic risk

The four type of consumer buying behavior are: Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand.

Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does

not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. Return to Contents List

Categories that Effect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors: 1. Personal 2. Psychological
3. Social

The marketer must be aware of these factors in order to develop an appropriate MM for its target market. Return to Contents List

Personal
Unique to a particular person. Demographic Factors. Sex, Race, Age etc. Who in the family is responsible for the decision making. Young people purchase things for different reasons than older people.

Handout...From choices to checkout...

Highlights the differences between male and female shoppers in the supermarket. Return to Contents List

Psychological factors
Psychological factors include: Motives-A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix. MASLOW hierarchy of needs!!
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Physiological Safety

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Love and Belonging Esteem Self Actualization

Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases.

Handout...Nutrament Debunked...
Nutrament, a product marketed by Bristol-Myers Squibb originally was targeted at consumers that needed to receive additional energy from their drinks after exercise etc., a fitness drink. It was therefore targeted at consumers whose needs were for either love and Belonging or esteem. The product was not selling well, and was almost terminated. Upon extensive research it was determined that the product did sell well in inner-city convenience stores. It was determined that the consumers for the product were actually drug addicts who couldn't not digest a regular meal. They would purchase Nutrament as a substitute for a meal. Their motivation to purchase was completely different to the motivation that B-MS had originally thought. These consumers were at the Physiological level of the hierarchy. BM-S therefore had to redesign its MM to better meet the needs of this target market. Motives often operate at a subconscious level therefore are difficult to measure.

Perception-What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it. Information inputs are the sensations received through sight, taste, hearing, smell and touch. Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies current needs, intensity of input changes (sharp price drop). Selective Distortion-Changing/twisting current received information, inconsistent with beliefs. Advertisers that use comparative advertisements (pitching one product against another), have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A current example...MCI and AT&T...do you ever get confused? Selective Retention-Remember inputs that support beliefs, forgets those that don't. Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30

minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be expected to be aware of all these inputs, and certainly will not retain many. Interpreting information is based on what is already familiar, on knowledge that is stored in the memory.

Handout...South Africa wine....

Problems marketing wine from South Africa. Consumers have strong perceptions of the country, and hence its products.

Ability and Knowledge-Need to understand individuals capacity to learn. Learning, changes in a person's behavior caused by information and experience. Therefore to change consumers' behavior about your product, need to give them new information re: product...free sample etc. South Africa...open bottle of wine and pour it!! Also educate american consumers about changes in SA. Need to sell a whole new country. When making buying decisions, buyers must process information. Knowledge is the familiarity with the product and expertise. Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product. Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality. Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior.

Attitudes-Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non- living.....Drive perceptions Individual learns attitudes through experience and interaction with other people. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy.

Handout...Oldsmobile.....
Oldsmobile vs. Lexus, due to consumers attitudes toward Oldsmobile (as discovered by class exercise) need to disassociate Aurora from the Oldsmobile name.

Exxon Valdez-nearly 20,000 credit cards were returned or cut-up after the tragic oil spill. Honda "You meet the nicest people on a Honda", dispel the unsavory image of a motorbike rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning to hard core. To change this they have a new slogan "Come ride with us". Attitudes and attitude change are influenced by consumers personality and lifestyle. Consumers screen information that conflicts with their attitudes. Distort information to make it consistent and selectively retain information that reinforces our attitudes. IE brand loyalty. There is a difference between attitude and intention to buy (ability to buy).

Personality-all the internal traits and behaviors that make a person unique, uniqueness arrives from a person's heredity and personal experience. Examples include:
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Workaholism Compulsiveness Self confidence Friendliness Adaptability Ambitiousness Dogmatism Authoritarianism Introversion Extroversion Aggressiveness Competitiveness.

Traits effect the way people behave. Marketers try to match the store image to the perceived image of their customers.

There is a weak association between personality and Buying Behavior, this may be due to unreliable measures. Nike ads. Consumers buy products that are consistent with their self concept.

Lifestyles-Recent US trends in lifestyles are a shift towards personal independence and individualism and a preference for a healthy, natural lifestyle. Lifestyles are the consistent patterns people follow in their lives. EXAMPLE healthy foods for a healthy lifestyle. Sun tan not considered fashionable in US until 1920's. Now an assault by the American Academy of Dermatology.

Handout...Here Comes the Sun to Confound Health Savvy Lotion Makers..

Extra credit assignment from the news group, to access Value and Lifestyles (VALS) Program, complete the survey and Email alex@udel.edu the results. This is a survey tool that marketers can use to better understand their target market(s). Return to Contents List

Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social class and culture. Opinion leaders-Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay) spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.) Can be risky...Michael Jackson...OJ Simpson...Chevy Chase

Roles and Family Influences-Role...things you should do based on the expectations of you from your position within a group. People have many roles. Husband, father, employer/ee. Individuals role are continuing to change therefore marketers must continue to update information. Family is the most basic group a person belongs to. Marketers must understand:
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that many family decisions are made by the family unit consumer behavior starts in the family unit

family roles and preferences are the model for children's future family (can reject/alter/etc) family buying decisions are a mixture of family interactions and individual decision making family acts an interpreter of social and cultural values for the individual.

The Family life cycle: families go through stages, each stage creates different consumer demands:
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bachelor stage...most of BUAD301 newly married, young, no children...me full nest I, youngest child under 6 full nest II, youngest child 6 or over full nest III, older married couples with dependant children empty nest I, older married couples with no children living with them, head in labor force empty nest II, older married couples, no children living at home, head retired solitary survivor, in labor force solitary survivor, retired Modernized life cycle includes divorced and no children.

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Handout...Two Income Marriages Are Now the Norm

Because 2 income families are becoming more common, the decision maker within the family unit is changing...also, family has less time for children, and therefore tends to let them influence purchase decisions in order to alleviate some of the guilt. (Children influence about $130 billion of goods in a year) Children also have more money to spend themselves.

Reference Groups-Individual identifies with the group to the extent that he takes on many of the values, attitudes or behaviors of the group members. Families, friends, sororities, civic and professional organizations. Any group that has a positive or negative influence on a persons attitude and behavior. Membership groups (belong to) Affinity marketing is focused on the desires of consumers that belong to reference

groups. Marketers get the groups to approve the product and communicate that approval to its members. Credit Cards etc.!! Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda, tries to disassociate from the "biker" group. The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group.

Social Class-an open group of individuals who have similar social rank. US is not a classless society. US criteria; occupation, education, income, wealth, race, ethnic groups and possessions. Social class influences many aspects of our lives. IE upper middle class Americans prefer luxury cars Mercedes.
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Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names. Lower-upper class, 1.2%, newer social elite, from current professionals and corporate elite Upper-middle class, 12.5%, college graduates, managers and professionals Middle Americans-middle class, 32%, average pay white collar workers and blue collar friends Working class, 38%, average pay blue collar workers Lower Americans-lower class, 9%, working, not on welfare Lower-lower class, 7%, on welfare

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Social class determines to some extent, the types, quality, quantity of products that a person buys or uses. Lower class people tend to stay close to home when shopping, do not engage in much prepurchase information gathering. Stores project definite class images. Family, reference groups and social classes are all social influences on consumer behavior. All operate within a larger culture.

Culture and Sub-culture--

Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom. In american culture time scarcity is a growing problem. IE change in meals. Big impact on international marketing.

Handout...Will British warm up to iced tea?

No...but that is my opinion!!...Tea is a part of the British culture, hot with milk. Different society, different levels of needs, different cultural values. Culture can be divided into subcultures:
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geographic regions human characteristics such as age and ethnic background.

IE West Coast, teenage and Asian American. Culture effects what people buy, how they buy and when they buy.

What is Consumer Behaviour - Meaning and Important Concepts

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Before understanding consumer behaviour let us first go through few more terminologies:
Who is a Consumer ?

Any individual who purchases goods and services from the market for his/her end-use is called a consumer. In simpler words a consumer is one who consumes goods and services available in the market. Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In the above examples, both Tom and Mike are consumers.
What is consumer Interest ?

Every customer shows inclination towards particular products and services. Consumer interest is nothing but willingness of consumers to purchase products and services as per their taste, need and of course pocket. Let us go through the following example: Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The store manager showed them the best dresses available with him. Maria immediately purchased two dresses but Sandra returned home empty handed. The dresses were little too expensive for Sandra and she preferred simple and subtle designs as compared to designer wears available at the store. In the above example Sandra and Maria had similar requirements but there was a huge difference in their taste, mind set and ability to spend. What is Consumer Behaviour ? Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use. Why do you think an individual buys a product ?

Need Social Status Gifting Purpose

Why do you think an individual does not buy a product ?

No requirement Income/Budget/Financial constraints Taste

When do you think consumers purchase products ?

Festive season Birthday Anniversary Marriage or other special occasions

There are infact several factors which influence buying decision of a consumer ranging from psychological, social, economic and so on. The study of consumer behaviour explains as to:

Why and why not a consumer buys a product ? When a consumer buys a product ? How a consumer buys a product ?

During Christmas, the buying tendencies of consumers increase as compared to other months. In the same way during Valentines week, individuals are often seen purchasing gifts for their partners. Fluctuations in the financial markets and recession decrease the buying capacity of individuals. In a laymans language consumer behaviour deals with the buying behaviour of individuals. The main catalyst which triggers the buying decision of an individual is need for a particular product/service. Consumers purchase products and services as and when need arises. According to Belch and Belch, whenever need arises; a consumer searches for several information which would help him in his purchase. Following are the sources of information:

Personal Sources Commercial Sources Public Sources Personal Experience

Perception also plays an important role in influencing the buying decision of consumers. Buying decisions of consumers also depend on the following factors:

Messages, advertisements, promotional materials, a consumer goes through also called selective exposure.

Not all promotional materials and advertisements excite a consumer. A consumer does not pay attention to everything he sees. He is interested in only what he wants to see. Such behaviour is called selective attention. Consumer interpretation refers to how an individual perceives a particular message. A consumer would certainly buy something which appeals him the most. He would remember the most relevant and meaningful message also called as selective retention. He would obviously not remember something which has nothing to do with his need.

Determinants of consumer buying behavior

The buying behavior of consumer is affected by a number of factors which are generally uncontrollable. These factors are also known as determinants of consumer buying behavior. All these factors affect the buying behavior of consumer differently.

I) Cultural factors affecting consumer buying behavior:1) Culture: culture affects a lot the consumer buying behavior. It is the family values, beliefs, perceptions and preferences affect the consumer buying behavior. 2) Subculture: the culture includes subculture in it include nationality, religious group, and communities etc. which affect the consumer behavior. 3) Social class: it means to divide the society in different social classes, the members of different social class has different likings. II) Social factor affecting consumer behavior:1) Family: the members of family also affect the buying behavior of consumer. Family includes of:Influencer- the person who senses the need to buy a product. Decider- the person who takes final decision to buy the product. User- the person who finally uses the product. 2) Reference group: family alone does not affect the consumer buying behavior but also the group outside the family also affects the consumer behavior. It includes the persons with whom we interact like friends, neighbors, co- workers etc. 3) Role and status: role played by the person in the society are so many. Like a person plays the role of son, husband, brother, father, businessman etc. in his life. So the consumer buying behavior depends upon the role played by him. III) Personal factors affecting consumer behavior:1) Age and life style: the consumer buying behavior changes with the change in the age. Like very small child need toys to play with them and when they grow they need games, computer etc. thus, liking of consumer changes with the age.

2) Occupation: occupation also affects the consumer behavior to buy the goods. Like an worker needs simple clothes while his boss needs expensive designer suits to wear. 3) Income: the income also affects the consumer buying behavior because if the person is rich he can buy anything which he wants to buy but for a poor person it is not be easy to buy the things which are beyond his pocket. 4) Life style: it is the way of living of the person. Like some people like luxury livings while some in simple living. 5) Personality: personality includes extrovert or introvert which also affects the consumer buying behavior. IV) Psychological factors affecting consumer behavior:1) Motivation: when the buyers need is raised to a particular level they become the motives which mean I want to achieve this which ultimately affect the consumer buying behavior. 2) Perception: this is how the consumer receives, selects and organizes the information which helps him in buying the goods. 3) Learning: learning experience is helpful in affecting consumer buying behavior. 4) Beliefs and attitude: belief means the opinion or mind set relating to a particular object; attitude means the feeling of buyer towards the object. So the marketer should keep in mind the beliefs and attitude of the consumer. Thus, all these buying characteristics influence consumer buying behavior.

Vanity purchases occur when a customer buys a product with the intention of using it to enhance or support their perceived personality or, as we call it in the Consumer Buying Behavior tutorial, their self concept. The most well known example of this is the personalized license plate, though many other products also fall into this category such as designer clothing, sports cars, housing and jewelry. From this short list, it is pretty clear vanity purchases skew toward high-end, expensive offerings, and are most frequently bought by high-income buyers. What is additionally interesting about some vanity purchases is that these are often viewed as being recession proof. A case in point is mens high-end jewelry. As discussed in this story, this product category experienced a 10% sales increase between 2007 and 2009, the height of U.S. recession. For some, this may not seem all that surprising as the target market for high-end jewelry are those earning over $100,000. However, the recession was widely viewed as impacting a large cross-section of the population including high-income consumers. It would seem logical that the high-end jewelry business would suffer. Yet, the opposite seemed to happen. The motivation for continuing strong purchases in this category, despite a tough economy, is the key characteristic of vanity goods. Purchasers are motivated to acquire these products with the express intention of enhancing their image, which includes how they are perceived by others. As noted in the story, buyers have stated they purchase expensive jewelry so that others will think they are doing well. From a consumer behavior perspective, these buyers believe perception may be more important than reality. Unity's study found that rings accounted for 51% of men's jewelry purchases made last year, excluding wedding bands. The fastest-growing accessories, however, are bracelets and necklaces up 23% and 21% respectively, from 2008. It should be noted, the information was obtained from a comparative survey of affluent purchasers. While it is not clear from the research companys Methodology & Survey Sample Demographics section as to how the survey was distributed, it would appear they are using convenience sampling. While the data obtained from convenience sampling is generally not as reliable as data obtained via random sampling, the size of the sample used in this research (over 1,000 respondents each quarter) does suggest that there could be good information here. How would a marketer of vanity goods, such as jewelry, use the information contained in this study to help with their marketing efforts?

Self-Esteem versus Vanity In fashion and beauty, there is a thin line between having good self-esteem and being vain.

According to many psychologists, however, they are in fact on opposite ends of the spectrum. Good self-esteem simply means positively valuing oneself or having a sense of value or worth; vanity or vain behavior is an attempt to MAKE oneself valuable or good enough.

As psychologist Nathaniel Branden points out in "The Six Pillars of Self Esteem:" "If my aim is to prove I am 'enough,' the project goes on to infinity - because the battle was already lost on the day I conceded the issue was debatable."

This is what vanity is about - the idea that your worth is debatable.

Fashion and beauty can have a huge impact on our self-esteem. In fact, we use the two to help us express value in our self. However, when the pursuit of fashion and beauty products grows out of control, it can become a source of vain behavior and attitudes. These individuals use fashion and beauty as "proof" of their value; it's as though the vain person is saying, "Look at me. I am wearing Brand X. Look how special I am!" They attempt to use certain brands and labels as a way of securing status and acceptability.

It is very easy to get pulled down "vanity lane." Walking around boutiques and stores and reading the glossy fashion magazines can foster a need to be branded and make you feel inadequate about your own style sense. The idea is to nurture your self-esteem and surround yourself with a lifestyle and media that supports it.

Here are some ideas to foster healthy self-esteem and challenge your thinking:

1. Wake up to your wardrobe Find something in your wardrobe that is a true expression of you and your style, rather than what you feel you should be according to fashion standards.

Consider: Start the morning adorning yourself with what inspires you, then you will feel inspired about yourself. Buy a full-length mirror. Most people consider looking in the mirror as a "vain" act. But if you have good self-esteem, seeing and admiring yourself in your favorite clothes is reinforcing and positive.

2. Pamper yourself Nurturing yourself is about giving yourself a treat, caring for your body and rewarding yourself. If you treat yourself like a goddess/god - with, say, a moisturizing body wrap - then you are saying you have healthy self-esteem. If you don't take care of yourself and reward yourself, then you could be saying you aren't worth it.

Consider: A spa retreat - even a day-spa with beauty treatments galore.

3. Discover your body Change your mind about your body image with a yoga class. Trying out new body techniques allows you to see your body differently, and you will start to feel it come alive in a whole new way.

Consider: Taking a yoga class.

4. Monitor self-talk It is a well-established fact in psychology that our internal dialogue, or what we say to ourselves about ourselves, has an enormous effect on how we feel about ourselves. You need to learn how to talk to yourself so that you support your self-esteem, rather than undermining yourself and buying into the illusions of vanity.

Consider: Writing down three things you like about yourself. Next time you look in the mirror, say these things to your reflection.

Reading "Self-Esteem Companion" by Matthew McKay, Patrick Fanning, Carole Honeychurch and Catharine Sutker.

5. Volunteer "Other-esteem" is the necessary and healthy complement to genuine self-esteem. You need to learn to recognize the needs and intrinsic worth of others as well. Helping others can give you a sense of purpose and contribution. You also get to meet and network with a new set of people.