Chapter 6 Analyzing Consumer Markets 6-1 Copyright © 2003 Prentice-Hall, Inc. Key Points for Chapter 6 1. 2. 3. 4. 5. Culture and subculture Social class Reference group Opinion leader Occupation & economic conditions Factors affecting Product Choice 6. Lifestyle & value 6-2 Copyright © 2003 Prentice-Hall, Inc. Key Points for Chapter 6 7. Freud’s theory, Maslow’s theory , and Herzberg theory 8. Perception: Selective attention, distortion, and retention 9. Buying decision process 10. Expectancy-value model 11. Factors affecting purchase decision after purchase intention 12. Postpurchase satisfaction 6-3 Copyright © 2003 Prentice-Hall, Inc. What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors 6-4 Copyright © 2003 Prentice-Hall, Inc. Cultural Factors Cultural factors exert the broadest and deepest influence Culture Fundamental determinant of a person’s wants and behavior Subculture Each culture consists of smaller subcultures Hispanics, African-Americans, AsianAmericans, Matured market 6-5 Copyright © 2003 Prentice-Hall, Inc. Cultural Factors Social Class Relatively homogeneous and enduring divisions in a society, whose members share similar values, interests, and behavior U.S. Social Class (1) Upper uppers, (2) Lower uppers, (3) Upper Middles, (4) Middle class, (5) working class, (6) Upper lowers, (7) Lower lowers Formed by a cluster of variables: Occupation, Income, Wealth, Education, and Value orientation Can move one social class to another 6-6 Copyright © 2003 Prentice-Hall, Inc. Cultural Factors Social Class (continued) Shows distinct product and brand preferences: clothing, home furnishings, leisure activities, and automobiles Different media preferences Upper class: Magazine and books Lower class: Television Different Television programs Upper class: News and drama Lower class: Soap opera and sports Different slangs and accents 6-7 Copyright © 2003 Prentice-Hall, Inc. Social Factors A consumer behavior is also influenced by social factors Reference Groups Membership groups Aspirational groups Dissociative groups Opinion Leader Family Roles and Statuses 6-8 Copyright © 2003 Prentice-Hall, Inc. Personal Factors Age and Stage in the Life Cycle Occupation and Economic Circumstances Personality and Self-Concept Brand personality Levi’s: Ruggedness MTV: Excitement CNN: Competence Campbell’s: Sincerity Self-concept Lifestyle and Values 6-9 Copyright © 2003 Prentice-Hall, Inc. Stimulus-Response Model (Model of Consumer Behavior) (Fig. 6.1) Shows the starting point for understanding consumer behavior Marketing and environmental stimuli enter consumer’s consciousness A set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions Product choice Brand choice Dealer choice Purchase amount Purchasing timing Payment method 6-10 Copyright © 2003 Prentice-Hall, Inc. Key Psychological Processes Motivation Perception Learning Memory 6-11 Copyright © 2003 Prentice-Hall, Inc. Motivation Freud’s Theory Psychological forces shaping people’s behavior are largely unconscious A person cannot fully understand his or her own real motivations Marketers need to find consumers’ real motivations triggered by a product and develop the message and appeal 6-12 Copyright © 2003 Prentice-Hall, Inc. Motivation Maslow’s Theory Explains why people are driven by particular needs at particular times Human needs are arranged in a hierarchy, from the most pressing to the least pressing In order of importance, Physiological needs, Safety needs, Social needs, Esteem needs, and Selfactualization needs People will try to satisfy their most important need first. When a person succeeds in satisfying an important need, he or she will then try to satisfy the next-mostimportant need Maslow’s theory helps marketers understand how various products fit into the plans, goals, and lives of consumers 6-13 Copyright © 2003 Prentice-Hall, Inc. Maslow’s Hierarchy of Needs 6-14 Copyright © 2003 Prentice-Hall, Inc. Motivation Herzberg’s Theory Two-factor theory Dissatisfiers: Factors causing dissatisfaction Satisfiers: Factors causing satisfaction The absence of dissatisfiers is not enough Satisfiers must be actively present to motivate a purchase A computer without warranty or low pay is a dissatisfier The seller must identify the major satisfiers of purchase in the market. These satisfiers will make the major difference as to which brand the consumer buys 6-15 Copyright © 2003 Prentice-Hall, Inc. Perception Perception can vary widely among individuals exposed to the same reality In marketing, perceptions are more important than reality, as it is perceptions that will affect consumers’ actual behavior Three perceptual processes lead to different perceptions Selective Attention Selective Distortion Selective Retention 6-16 Copyright © 2003 Prentice-Hall, Inc. Perception Selective Attention Average person is exposed to 1,500 ads or brand communications a day Most stimuli will be screened out Selective Distortion Tendency interpret it in a way that fits a person’s preconceptions. In blind taste tests, consumer preferences for Diet Coke and Diet Pepsi were the same In branded taste tests: Diet Coke 65%, Diet Pepsi 23%, No difference 12% Selective Retention Consumers’ tendency to retain information that support their attitudes and beliefs 6-17 Copyright © 2003 Prentice-Hall, Inc. Learning Learning induces changes in the consumer’s behavior from experience If a consumer’s experience with a product (computer) of a certain brand (HP) is rewarding, he tends to extend it to other product (printer) of the same brand Hedonic bias: People have general tendency to attribute success to themselves and failure to external causes. More likely to blame a product Copyright © 2003 Prentice-Hall, Inc. Memory Any type of information can be stored in the memory network. Consumers form some kind of associative model. Marketers must make sure that consumers have the right types of product and service experiences to create and maintain them in memory 6-19 Copyright © 2003 Prentice-Hall, Inc. The Buying Decision Process Marketers need to fully understand how consumers actually make their buying decisions Understanding Consumer Behavior (Table 6.3) Five-Stage Model of the Consumer Buying Process (Fig. 6.4) 6-20 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model of Consumer Buying Process Consumers usually pass through five stages But do not always pass through all five stages Skip some stages depending the buying situations 6-21 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Problem Recognition Consumer recognizes a problem or need by internal or external stimuli Marketers need to identify the circumstances that trigger a particular need by gathering information from consumers Can develop marketing strategies that trigger consumer interest 6-22 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Information Search Information Sources Personal sources Commercial sources Public sources Experiential sources 6-23 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Information Search Successive Sets involved in Consumer Decision Making (Fig. 6.5) Total set, Awareness set, Consideration set, Choice set, Decision Company must strategize to get its brand into the prospect’s awareness set, consideration set, and choice set. 6-24 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Evaluation of Alternatives Different evaluation process by each consumer Consumers vary as to which product attributes they see the most relevant and important Pay the most attention to attributes that deliver the sought-after benefits Attributes of interest to buyers vary by product: Hotel: Location, price, cleanliness, atmosphere Mouthwash: Germ-killing capacity, taste/flavor, price, color Tires: Safety, tread life, ride quality, price 6-25 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Evaluation of Alternatives Beliefs and Attitudes Evaluation often reflects beliefs and attitudes A belief is a descriptive thought that a person holds about something An attitude is a person’s enduring favorable or unfavorable evaluation or emotional feeling toward some object or idea Very difficult to change Company needs to fit its product to existing attitudes rather than to try to change attitudes 6-26 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Evaluation of Alternatives Expectancy-Value Model Consumers develop a set of beliefs about where each brand stands on each attribute Assign the weights to each attribute and multiply a belief rating and a weight: 40%, 30%, 20%, 10% Choose the highest scored brand A Consumer’s Brand Beliefs about Computers (Table 6.4) 6-27 Copyright © 2003 Prentice-Hall, Inc. Table 6.3: A Consumer’s Brand Beliefs about Laptop Computers Laptop Computer Attribute Memory Capacity Graphics Capability Size and Weight Price A 8 9 6 9 B 7 7 7 7 C 10 4 3 2 D 5 3 8 5 6-28 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Evaluation of Alternatives Expectancy-Value Model Computer A=0.4x8+0.3x9+0.2x6+0.1x9=8.0 Computer B=0.4x7+0.3x7+0.3x7+0.1x7=7.0 Computer C=0.4x10+0.3x4+0.2x3+0.1x2=6.0 Computer D=0.4x5+0.3x3+0.2x8+0.1x5=5.0 10 represents the highest level on that attribute, but the lowest price. A customer will choose Computer A in this case 6-29 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Evaluation of Alternatives Strategies designed to stimulate interest in a computer Redesign the computer (Real positioning) Alter beliefs about the brand (Psychological repositioning) Alter beliefs about competitors’ brands (Competitive repositioning) Alter the importance weights Call attention to neglected attributes Shift the buyer’s ideas 6-30 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Purchase Decisions Five Purchase Subdecisions Brand decision Dealer decision Quantity decision Timing decision Payment-method decision 6-31 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Purchase Decisions Intervening Factors Figure 6.6: Steps Between Evaluation of Alternatives and a purchase decision 6-32 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Purchase Decisions Intervening Factors Attitudes of others Other persons’ negative attitudes toward consumer’s preferred alternatives Infomediaries who publish their evaluations Consumer Reports Zagat Yelp J.D. Powers 6-33 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Purchase Decisions Intervening Factors Unanticipated situational factors Economic situation-losing a job Store salesperson’s behavior Ad of a better price from other sellers Perceived risk: Functional Risk Physical Risk Financial Risk Social Risk Psychological Risk Time Risk 6-34 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Purchase Decisions Intervening Factors Unanticipated situational factors The amount of risk varies with the amount money at stake the amount of attribute uncertainty the amount of consumer self-confidence Consumers develop routines for reducing risk Decision avoidance Information gathering from friends or experts Preference for well-known national brands Warranties 6-35 Copyright © 2003 Prentice-Hall, Inc. Five-Stage Model Postpurchase Behavior Postpurchase Satisfaction Disappointed, Satisfied, Delighted Postpurchase Actions A high correlation between being highly satisfied and intention to rebuy the brand Postpurchase communications to buyers result in fewer product returns Postpurchase Use and Disposal Should monitor how buyers use and dispose of the product Consumers may find new uses for the product 6-36 Copyright © 2003 Prentice-Hall, Inc.