Chapter 7 Analyzing Consumer Markets and Buyer Behavior by

1. Chapter 7Analyzing Consumer Markets and Buyer Behaviorby

2. Ch. 7: Analyzing Consumer Markets and Buyer Behavior “The most important ingredient in the success of an organization is a satisfied customer”

3. Ch. 7: Analyzing Consumer Markets and Buyer Behavior Consumer Behavior (Engel, Kollat, & Blackwell): Those acts of individuals directly involved in obtaining and using goods and services, including the decision processes that precede and determine these acts. How do consumers make buying decisions?

4. Consumer Behavior Models • Consumer Processing Models (CPM): Consumer behavior is rational, highly cognitive, systematic, and reasoned. (e.g., EKB Model) • Hedonic, Experiential Models (HEM): consumer behavior is driven by fun, fantasies, and feelings.

5. Influencing Buyer Behavior Figure 7-1: “Model of Buyer Behavior” (p. 184)** **Use the Engle, Kollat, and Blackwell (EKB) Model of Consumer Behavior handed out in class

6. Influencing Buyer Behavior

7. Influencing Buyer Behavior

8. Influencing Buyer Behavior • Culture (a set of values, perceptions, preferences, and behaviors acquired via the family and other institutions) • Subcultures, diversity marketing (e.g., 50+), social class • Social Factors • Reference Groups • Reference groups • Membership groups • Primary groups • Secondary groups • Aspirational groups • Dissociative groups • Opinion leader

9. Levi-Strauss’s Silver Tab line is also featured on its Web site

10. Table 7.1: Characteristics of Major U.S. Social Classes (p. 186) See text for complete table

11. Influencing Buyer Behavior Social Class Measures • Warner’s Index of Status Characteristics (ISC): • Occupation rating x 4 • Source of income rating x 3 • House type x 3 • Dwelling area x 2 • Hollingshead’s Index of Social Position (ISP): • Occupation, area of residence, and education reducing to occupation and education

12. Influencing Buyer Behavior Social Class Measures, cont. • Coleman’s Computerized Status Index (JCR 1983): • Education • Occupation • Area of residence • Income • Six Class Distinctions (Warner): Lower Lower, Upper Lower, Lower Middle, Upper Middle, Lower Upper, Upper Upper • Problems with using social class as a predictor of purchase behavior?

13. Influencing Buyer Behavior • Family • Family of orientation (how do kids influence purchases? Yet – COPPA) • Family of procreation • Roles and Statuses • Age and Stage in the Life Cycle • Family life cycle (FLC) • Modernized FLC • Lifestyles: activities, interest, opinions • Psychographics: use of psychology and demographics to better understand consumers

14. Discussion Question In recent years, many companies have “provided” televisions with limited programming access for use in K-12 classrooms. Do these companies have a moral obligation to avoid overt marketing to their captive audiences, or is this a valid tool for introducing offerings to future consumers? What should the responsibilities of the educators be in these situations?

15. Table 7.2: Stages in the Family Life Cycle (p. 191) • See text for complete table

16. Influencing Buyer Behavior Family Life Cycle (Wells and Gubar) • Young single people • Young married couples with no children • Young married couples with dependent children a) full nest I (under 6 yrs.) b) full nest II (6 yrs. and over) • Older married couples - dependent children (full nest III) • Older married couples - no dependent children a) empty nest I (head in labor force) b) empty nest II (head retired) • Older single people a) in labor force b) retired Marital Roles: Joint versus autonomic decision making

17. Figure 7.2: The VALS segmentation system: An 8-part typology (updated from p. 192) • Groups with High Resources • Innovators (Actualizers) • Thinkers (Fulfilleds) • Achievers • Experiencers • Groups with Lower Resources • Believers • Strivers • Makers • Survivors (Strugglers) http://www.sric-bi.com/VALS/types.shtml

18. Influencing Buyer Behavior • Personality and Self-Concept • Personality (human psychological traits) • Brand personality • Sincerity • Excitement • Competence • Sophistication • Ruggedness • Self-concept • Person’s actual self-concept • Ideal self-concept • Others’ self-concept

19. Influencing Buyer Behavior • Psychological Factors • Motivation (Freud; Dichter; Maslow; Herzberg; Petty and Cacioppo’s ELM) • Motive: a need that is sufficiently pressing to drive a person to act. • Freud’s Theory • Laddering • Projective techniques

20. Influencing Buyer Behavior • Maslow’s Theory (p. 196) Figure 7.3: Maslow’s Hierarchy of Needs

21. Influencing Buyer Behavior • Herzberg’s Two-Factor Theory • Dissatisfiers: factors causing dissatisfaction • Satisfiers: factors causing satisfaction • Examples in a major purchase?

22. Petty and Cacioppo’s Elaboration Likelihood Model Message-Argument Processing Cognitive and Emotional Responses toward Arguments Central Route EL= High Attitude-Formation Processes Enduring Attitude Change • Exposure to Message: • Message Arguments • Peripheral Cues Receiver Motivation, Ability, and Opportunity to Process Message EL= Moderate AB Attitude-Formation Processes Temporary Attitude Change EL= Low Cognitive and Emotional Responses toward Peripheral Cues Peripheral Route Peripheral-Cue Processing

23. Influencing Buyer Behavior

24. Influencing Buyer Behavior Search Process • Opinion leaders: those individuals from whom others seek advice. • Adoption process: a mental process through which an individual passes from first hearing about an innovation to final adoption. • Diffusion of innovations: the spread of a new idea through society from its source of invention to its ultimate users or adopters.

25. Influencing Buyer Behavior:Search Processes, cont. Adoption Process • Awareness • Interest • Evaluation • Trial • Adoption

26. Influencing Buyer Behavior Search Process, cont. Two-Step Flow of Communication Media  Opinion Leaders  All Others

27. Ch. 7: Analyzing Consumer Markets and Buyer Behavior Search: Information Processing Steps (EKB Model, William McGuire) • Exposure • Attention • Comprehension (limited under low involvement (LI)) • Yielding/ Acceptance (after behavior under LI) • Retention (limited under LI)

28. Influencing Buyer Behavior • Perception • Selective attention • People are more likely to notice stimuli than relate to a current need • People are more likely to notice stimuli than they anticipate • People are more likely to notice stimuli that are distinctive • Selective distortion • Selective retention • Memory Models: multiple store; levels of processing; spreading activation

29. Influencing Buyer Behavior

30. Influencing Buyer Behavior Alternative Evaluation, cont. • Learning: a change in a person’s thought processes due to experience • Drive • Cues • Discrimination • Beliefs and Attitudes • Belief (descriptive thought linking attributes with objectives) • Spreading activation model • Attitude ( a sometimes enduring positive or negative evaluation, feeling, or tendency toward an object or idea.

31. Table 7.3: Four Types of Buying Behavior (p. 201) (see “Hierarchy of Effects Model”)

32. Influencing Buyer Behavior Alternative Evaluation Decision Processes • Affect referral (under low involvement) • Compensatory heuristics (under high involvement; e.g., Fishbein’s attitude model: personal beliefs -> consequence x eval. conseq.) • Noncompensatory heuristics a) conjunctive (“and”) b) disjunctive (“or” c) lexicographic

33. Using Compensatory HeuristicsTable 7.4: A Consumer’s Brand Beliefs about Computers (p. 206) Importance weight x belief Computer A: .4(10) + .3(8) + .2(6) + .1(4) = 8.0 (See also Fishbein TORA model)

34. The Buying Decision Process Figure 7.6: Steps Between Evaluation of Alternatives and a purchase decision (p. 206) • Purchase Decision

35. The Purchase Decision (p. 207) • Attitudes of Others • Informediaries: Consumer Reports, Zagats • Unanticipated situational factors • Perceived risk • Brand decision • Vendor decision • Quantity decision • Timing decision • Payment-method decision

36. The Buying Decision Process • Buying Roles • Initiator • Influencer • Decider • Buyer • User • Example?

37. Postpurchase Behavior • Postpurchase Behavior (cognitive dissonance?? What increases it? What does it lead to?) • Postpurchase Satisfaction (expectations versus performance) • Disappointed • Satisfied • Delighted

38. Figure 7.7: How Customers Dispose of Products (p. 209)

39. The Buying Decision Process • Other Models of the Buying Decision Process • Health Belief Model (social marketing) • Stages of Change Model (DiClemente and Prochaska) • Precontemplation • Contemplation • Preparation • Action • Maintenance