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In addition to basic principles of consumer behavior, marketers also need to study the decisions and actions of real people. 1. Until recently, the study of consumer behavior was focused on generalized consumer decisions. a. However, this did not address the behavior of individual consumers. b. These companies were making marketing decisions without knowing specific details about their customers. 2. Today marketers can collect and analyze data about consumer behavior, one person at a time; this is the relationship approach to marketing. 3. New technology allows marketers to track the specific purchase and usage behavior of their customers. a. Information is gathered and stored in an internal database. b. Marketers can explore what each customer wants and tailor the marketing processes to meet those needs. 1. Consumer behavior changes over time as people and situations change. 2. To maintain their relationships with customers, marketers have to be alert to changes and adjust their activities accordingly. 3. In addition to individual variations in consumer behavior, marketers need to scan for broad-based changes in consumer behavior. 4. After a product hits the market marketers have to analyze consumer response. 5. A marketer may need to adjust marketing strategy to build more profitable relationships with customers. A. Understanding how customers buy helps marketers develop an appropriate marketing strategy. 1. The consumer purchase-decision process consists of five stages. 2. Marketers need to provide what consumers require at every stage. 1. Need recognition occurs when a consumer realizes that his or her actual state is not what he or she would like it to be. 2. This recognition is triggered by some stimulus. 3. If the difference between the desired state and the actual state is large enough, the consumer will start the decision-making process. 4. Marketing can trigger need recognition through advertising, product labeling, and demonstrations. 1. During the second stage, the customer looks for information about ways of satisfying the recognized need. a. First, the consumer will use an internal search to recall experiences with products that might satisfy the need. b. If the need occurs regularly, the internal search will be all that's needed. 2. If more information is needed, the consumer can begin an external search, looking to other sources for ways to satisfy the need. a. The consumer may talk to friends, check magazines, read ads, or ask a salesperson. b. Consumers may be prompted to search for more information because of perceived risk, the chance that the wrong choice might result in negative consequences. c. Perceived risks can be financial, functional, safety, social, and psychological. 1. In this stage consumers consider the perceived risks and benefits of each option. 2. They establish evaluation criteria, specific dimensions used to compare alternatives. 3. Not every criterion receives the same weight during evaluation. 4. By applying these criteria, the consumer comes up with a consideration set of alternatives, the options that he or she considers before deciding on a purchase. 1. Next, the consumer chooses among the alternatives and decides where and when to make the purchase. 2. Retail marketers use in-store marketing techniques such as product displays to influence behavior at this stage. F. The Postpurchase Evaluation Stage 1. The final stage of the consumer purchase-decision process is postpurchase evaluation. 2. The consumer decides whether the product and purchase experience meet or exceed expectations. 3. Postpurchase dissonance is feelings of anxiety or doubt about the wisdom of the purchase decision. a. The marketer wants to do everything possible to satisfy customers as a way of encouraging a long-term relationship. b. You also want to reassure customers that they've made the right decision. 4. Many marketers try to minimize postpurchase dissonance by guaranteeing satisfaction. G. Involvement and the Purchase-Decision Process 1. Not every consumer purchase decision follows the full five-stage process. a. The purchase decision varies with the level of involvement. b. Involvement is the level of importance or interest that a consumer attaches to a certain product or purchase. 2. Involvement tends to be high when the decision: a. Carries significant perceived risks. b. Has considerable personal or emotional meaning. c. Enhances a long-standing interest. 3. The level of consumer involvement determines the complexity of the purchase-decision process. (1) Extended problem solving is an approach in which the consumer consciously searches for information, carefully evaluates alternatives, and analyzes the results. (2) Consumers who perceive significant differences between brands are likely to use this approach. (1) Using limited problem solving, the customer chooses among a number of unfamiliar alternatives in a familiar purchase situation. (2) Searching out alternatives and making a decision takes less time than with extended problem solving. () In routine problem solving the consumer makes a quick choice, taking little time to consider the alternatives. () This mode occurs when people habitually buy the same product or brand with little conscious thought. 4. External and internal influences also affect consumer behavior. III. EXTERNAL INFLUENCES ON CONSUMER BEHAVIOR 1. Consumer socialization is the process by which children learn the skills, knowledge, and attitudes they use when they function as consumers making purchase decisions. 2. Family also influences consumer behavior through the family life cycle. a. At each stage, the family has needs that drive purchasing decisions. b. Today's family life cycle does not necessarily follow the traditional path. c. Only 70% of U.S. households are family households, residential units with a married couple or a parent and children. d. Nonfamily households, households of unrelated people who live together, now make up about 30% of households. 3. Family decision making influences behavior. a. Individual family members may play a role in any stage of the purchase-decision process. b. Marketers try to get more than one family member on their side for a purchase. B. Opinion Leaders and Word of Mouth 1. Consumers often seek advice from people who are knowledgeable about the product. 2. Opinion leaders are people who can influence the attitudes or behaviors of others. a. They are frequently among the first to try new goods or services. b. Opinion leaders are seen as objective and as specialists in a certain product or category. c. Some marketers develop marketing programs especially for opinion leaders. 3. Word-of-mouth communication is the transmission of information informally from person to person. a. It is believable because it comes from opinion leaders, family members, and other sources not connected with marketers. b. Word-of-mouth communications can also deal a marketer a powerful blow when it is negative. 1. Reference groups are groups that influence the behavior of members, people wanting to be members, and people who do not want to be members. 2. Consumers can be influenced by reference groups in three ways: a. In their search for information before a purchase. b. In their attitudes toward a product. c. In the way they buy or use a product. 3. Some marketers try to influence behavior by using images of reference groups to which consumers don't want to belong. 1. Consumer behavior is subtly influenced by social class, groupings of people who share similar lifestyles, values, interests, behaviors, and status. 2. People in the U.S. tend to fall into one of seven social classes. 3. The distinctions between classes are not firm. 4. Social class has much to do with the way people buy and use products. 5. In other countries, rising incomes and aspirations of middle-class consumers are fueling sales of a variety of products. E. Culture, Subculture, and Core Values 1. Culture is the set of values, beliefs, and attitudes that is shared by a group and passed down from one generation to the next. a. Over time the core values--basic, enduring values that pervade the culture--change slowly. b. A subculture is a group that preserves its unique values and lifestyle within a dominant culture. a. Ethnic and religious subcultures exist within the U.S. culture, set apart by their unique traditions and beliefs. b. The three major U.S. subcultures are African American, Hispanic Americans, and Asian Americans. c. Major religious subcultures include Catholics, Protestants, Jews, and Muslims. d. Marketers study and respond to these groups' buying behavior. e. Not all members of a subculture have identical buying behaviors; each consumer is different. f. Also, the power of these influences may change over time as subculture members adapt to the broader environment. a. Every consumer is a part of a cohort subculture, people of similar ages who have undergone similar experiences. b. The values, attitudes, and beliefs of cohort subcultures are shaped by common memories. c. These shared bonds shape the way people in each age cohort buy and use products. d. Marketers appeal to cohorts through nostalgia that links a product to vivid memories of the past. a. Regional subculture--the culture of a particular region within a country--also affects consumer behavior. b. Climate influences regional subculture. c. Regional subcultures can be defined by differences in food preferences and other buying patterns. 1. Situational influences are elements of time and place that can affect consumer behavior. 2. Physical surroundings: The physical conditions, such as weather or store decor, under which the transaction occurs can affect consumer behavior. 3. Social surroundings: Other people present can influence what, when, and how consumers buy. 4. Time: Consumer behavior is influenced by the amount of time available for gathering information, making the decision, and buying and using the product. 5. Purpose of the purchase: The reason for the purchase will have an impact on behavior. 6. Antecedent states: Both momentary conditions and moods before and during the purchase can affect consumer behavior. IV. INTERNAL INFLUENCES ON CONSUMER BEHAVIOR A. Internal influences such as perception, motivation, attitudes, learning, personality, self-concept, and lifestyle affect buying behavior. 1. Consumers make sense of the outside world through their perception of what surrounds them. 2. Perception is the process of determining meaning by selecting, organizing, and interpreting stimuli in the environment. a. The consumer is exposed to a stimulus, such as an advertising message, through the senses. b. The consumer actively attends to a selected stimulus. c. The third stage is interpreting what the senses have detected. d. The final stage is storing the meaning in memory to facilitate the use of the information during the purchase-decision process. 4. Because the environment is filled with stimuli, consumers choose to focus on only a few: selective perception. 5. Marketing techniques can help your product or marketing communication stand out. 1. Much of what influences decisions occurs inside the individual. a. A need is the feeling of deprivation over the absence of some necessity for basic survival. b. When people feel a need, they are driven to act by their motives, the internal factors that propel individuals to take actions that satisfy their needs. 2. Psychologist Abraham Maslow identified a hierarchy of human needs. a. Maslow believed that people are initially motivated to satisfy their basic needs for survival. b. Then they are able to concentrate on satisfying higher level needs. c. Maslow's hierarchy describes in simple terms how needs and motives operate, but it doesn't completely explain consumer behavior. 1. Attitudes are enduring positive or negative responses to people, products, or information. a. A consumer's attitudes toward any brand or type of product are formed over time through experience, information gathering, and interaction with other people. b. People with positive attitudes are more likely to buy what you're marketing. 2. Attitudes consist of three components, any of which can be molded or changed through marketing strategy. a. The cognitive component is the set of beliefs or knowledge a consumer has of the product. b. The affective component represents the consumer's feelings about or emotional reaction to the product. (1) Extremely powerful emotions such as fear and love can be generated by a company's ads. (2) Marketers can reinforce the positive feelings that consumers have about their products. c. The behavioral component is the consumer's tendency to act in a certain way. 1. Learning, the process of applying experience or knowledge to consumer behavior, is another influence that marketers must consider. a. Learning can affect the way people recognize needs, collect and assess product information, make buying decisions, and evaluate the results. b. Changes in consumer behavior can come about because of behavioral and cognitive learning. 2. Behavioral learning occurs when a person behaves in a certain way in response to the experience of an external stimulus. a. Behavioral learning can happen both automatically and consciously. b. Marketers can apply behavioral learning concepts: (1) Stimulus generalization means that people who have learned to respond to one stimulus learn to respond in the same way to another, similar stimulus. (2) Stimulus discrimination occurs when people detect differences between similar stimuli and learn not to respond in the same way to all such stimuli. 3. Cognitive learning occurs when people change their behavior as a result of thinking about their situations. a. By putting ideas together in their minds, consumers can learn behavior that will satisfy their needs. b. Marketers build on cognitive learning through use of modeling, encouraging people to learn new behaviors by imitating what others do. 4. Brand Loyalty and Relationship Marketing a. Both behavioral and cognitive learning can lead to buying by habit. b. When consumers learn that a particular brand meets their needs, they tend to purchase it more consistently. c. Soon they develop brand loyalty, a favorable attitude toward a brand that prompts consistent purchasing over time. d. To build up purchasing habits that lead to brand loyalty, marketers have created programs that reward consumers for sticking with certain brands. e. Relationship marketing programs discourage brand switching. (1) Studies show that consumers are usually loyal to brands only in certain product categories. (2) When consumers don't perceive a difference in quality among brands, lower prices can break brand loyalty. F. Personality, Self-Concept, and Lifestyle 1. Personality is the unique set of behavior patterns an individual exhibits in response to recurring situations. 2. Some marketers group consumers according to certain personality traits, and develop marketing approaches to fit each group. 3. A few personality traits, such as innovativeness, seem to predict who will purchase certain products. 4. Research shows that consumer behavior is clearly influenced by self-concept, the way a person feels and thinks about himself or herself. a. The way people see themselves is not necessarily the way they really are. b. People buy and use products that shape, support, or express their inner selves. 5. Lifestyle is an individual pattern of living as exhibited in a person's activities, interests, and opinions. a. Marketers analyze consumer lifestyles by looking at a range of characteristics (known as psychographic variables). b. Lifestyle shifts can open new marketing activities. Bibliography: Word Count: 2581
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