Chapter 5 Consumer Markets and Consumer Buyer Behavior

Chapter 5: Consumer Markets and Consumer Buyer Behavior 1. Overview of Consumer Buyer Behavior ● Consumer Buyer Behavior: The behavior of final consumers (individuals and households) who purchase goods and services for personal use. ● Consumer Market: Made up of all final consumers who buy products or services for personal consumption. ● Large companies study consumer buying behavior to answer key questions: ○ What do consumers buy? ○ Why do they buy it? ○ How, when, and where do they make purchases? ● Marketers aim to understand consumer responses to marketing efforts and the underlying factors influencing these responses. 2. Model of Consumer Behavior ● Stimulus-Response Model: Marketing stimuli (product, price, place, promotion) and other major stimuli (economic, technological, social, cultural) enter the consumer's "black box," producing responses (purchase choice, brand choice, timing, amount). ● The central question for marketers is how consumers respond to different marketing strategies. 3. Characteristics Affecting Consumer Behavior ● There are four major categories of factors that influence consumer behavior: Cultural, Social, Personal, and Psychological. A. Cultural Factors ● Culture: The set of values, perceptions, preferences, and behaviors learned from family and other key institutions. ○ Example: American culture values individualism, achievement, and freedom. ● Cultural Shifts: Marketers study these shifts to identify opportunities (e.g., the shift toward health and fitness leading to growth in wellness products). ● Subculture: Smaller groups within a culture with distinct value systems, often based on ethnicity, religion, or geography. ○ Examples: Hispanic Americans, African Americans, Asian Americans. Companies tailor products and marketing to resonate with these subcultures. ● Social Class: Relatively permanent societal divisions whose members share similar values, interests, and behaviors. ○ Determined by factors such as income, education, and occupation. ○ Social class affects preferences for products like cars, clothing, and entertainment. B. Social Factors ● Groups: People belong to various groups that directly influence their behavior. ○ Membership Groups: Groups to which a person belongs and that have a direct influence. (e.g. friends, family, classmates) ○ Aspirational Groups: Groups to which a person wishes to belong (e.g., celebrities, professional organizations). ○ Reference Groups: Groups that serve as points of comparison for attitudes and behavior. (e.g. using someone as a guide) ● Opinion Leaders: Individuals within a reference group who exert influence over others; often targeted in “buzz marketing” to create positive word-of-mouth. (e.g. influencers) ● Family: The most significant consumer-buying organization, influencing individual preferences and brand loyalty. ● Roles and Status: A person's position in groups (family, clubs, work) affects their behavior and purchasing choices, as people often buy products that reflect their social status. C. Personal Factors ● Age and Life-Cycle Stage: Needs and wants change with age, family life cycle, and major life changes. ○ Example: RBC Royal Bank categorizes stages: Youth (under 18), Getting Started (18-35), Builders (35-50), Accumulators (50-60), and Preservers (over 60). ● Occupation: Affects the types of products people buy (e.g., professional clothing for business people). ● Economic Situation: Income levels, savings, and interest rates impact consumer purchasing power. ○ Following economic downturns, companies may redesign, reposition, or reprice products. ● Lifestyle: Describes a person’s pattern of living in terms of activities, interests, and opinions (AIOs). ○ Marketers segment markets based on lifestyle differences to target specific groups. ● Personality and Self-Concept: Each individual’s unique psychological traits that influence behavior. ○ Brand Personality: Five primary traits used by brands to convey personality—sincerity, excitement, competence, sophistication, and ruggedness (e.g., Apple embodies excitement; Ford trucks represent ruggedness). D. Psychological Factors ● Motivation: A need that is pressing enough to direct an individual toward satisfying it. ○ Motivation Research: Uses qualitative methods to uncover consumers' subconscious motivations. ○ Maslow’s Hierarchy of Needs: Model describing needs from basic physiological needs up to self-actualization. ● Perception: The process by which individuals select, organize, and interpret information. ○ Selective Attention: Consumers screen out most information they are exposed to. Focus on the information that is more relevant to them. ○ Selective Distortion: Consumers interpret information in a way that aligns with their beliefs. ○ Selective Retention: Consumers retain information that supports their attitudes. ● Learning: Changes in behavior arising from experience. ○ Consumers learn through drive (internal stimulus), cues (external signals), response, and reinforcement. ○ Marketers use this understanding to encourage product trials and brand loyalty. ● Beliefs and Attitudes: Descriptive thoughts (beliefs) and consistent evaluations (attitudes) that shape consumer preferences and buying choices. ○ Marketers often try to shape or adapt to consumer attitudes toward their products. 4. Types of Buying Decision Behavior ● Complex Buying Behavior: High involvement, significant differences between brands (e.g., buying a new car). ● Dissonance-Reducing Buying Behavior: High involvement, few perceived differences among brands (e.g., choosing a brand of carpet). ● Habitual Buying Behavior: Low involvement, minimal brand differences (e.g., buying grocery items like salt or soap). ● Variety-Seeking Buying Behavior: Low involvement, significant perceived differences between brands, often driven by desire for variety rather than dissatisfaction (e.g., trying different snack brands).