Principles of Marketing. by Jeff Tanner and Mary Anne Raymond

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1 Principles of Marketing by Jeff Tanner and Mary Anne Raymond

2 Chapter 3 Consumer Behavior How People Make Buying Decisions 2010 Flat World Knowledge, Inc.

3 do you buy the you buy? did you on what you bought? did you the things you bought? 2010 Flat World Knowledge, Inc. 3

4 Getting the Answers P r o v i d e d b y : w w w. t h e m e g a l l e r y. c o m Companies spend billions studying consumer behaviors! 2010 Flat World Knowledge, Inc. 4

5 Learning Objectives 1. Understand the six buying process stages 2. Distinguish between low and high involvement buying decisions 2010 Flat World Knowledge, Inc. 5

6 Consumer Decision Making Process Recognition Marketing tries to stimulate consumer needs A primary objective for promotion Search for Internal experience External visit Web sites Product Use to limit choices Marketing provides comparisons 2010 Flat World Knowledge, Inc. 6

7 Consumer Decision Making Process, cont d Choosing and Buying a Deciding on one Finding a place to get it Purchase and Evaluation Is it what you thought? Buyer s? of the Product Is this a green product? Was obsolescence planned? 2010 Flat World Knowledge, Inc. 7

8 Buying Decision Types Low involvement Routine purchase Inexpensive Low risk High involvement High price, high risk Extended problem solving Cognitive dissonance 2010 Flat World Knowledge, Inc. 8

9 Key Takeaways Distinct consumer buying phases 1. Realize a need 2. Search for information 3. Evaluate alternatives 4. Select a product and purchase 5. Assessing product performance 6. Disposing of the product Consumer level of involvement 1. Low involvement inexpensive, low risk 2. High involvement expensive, failure risk 2010 Flat World Knowledge, Inc. 9

10 Factors Affecting Consumer Buying Behavior Learning Objectives Describe situational factors affecting what and when consumers buy. Explain how marketing can make situational factors work to their advantage Flat World Knowledge, Inc. 10

11 Consumer Situational Factors Situation Situation Situation M d for Purchase 2010 Flat World Knowledge, Inc. 11

12 Physical Situation Some physical factors can be controlled by design, others must be accommodated. ATMOSPHERICS Store design and layout Store locations UNCONTROLLED Weather Crowding Ambiance 2010 Flat World Knowledge, Inc. 12

13 Consumer Social Situation Circumstances in which consumers may find themselves. Need to Impress Obligation Expected Behavior Compelled Purchase 2010 Flat World Knowledge, Inc. 13

14 Consumer Time Situation The right product Pressed for time? At the right time In the right place 2010 Flat World Knowledge, Inc. 14

15 Reason for Consumer s Purchase Why is this purchase being made? is it a gift? is it an emergency? is time a factor? 2010 Flat World Knowledge, Inc. 15

16 What Is the Consumer s Mood? Feeling good Enjoy shopping Entertainment Sour Looking for bargain Low on funds? Shopping is a necessity Changing life style Using loyalty card Retailers employ different measures to lure shoppers 2010 Flat World Knowledge, Inc. 16

17 Key Takeaways Situational influences have temporary effects on buyer behavior. Store layouts Store locations Music Aromas Companies make physical factors favorable, and use incentives such as discounts to encourage buyers. Consumer s situations for social and time factors as well as their reason for buying affect their buying behavior Flat World Knowledge, Inc. 17

18 Personal Factors that Affect Buying Behavior Learning Objectives 1. Explain how self-concept and ideal self affect purchasing decisions. 2. Describe how companies market products based on consumers -- gender -- life stage -- age 3. Explain lifestyles of consumers (VALS) Flat World Knowledge, Inc. 18

19 Consumer Personality Traits Openness Conscientiousness Extraversion Agreeableness Neuroticism The link between personalities and buying behavior is unclear! 2010 Flat World Knowledge, Inc. 19

20 Consumer Self Confidence A better link to buying behavior is how you see yourself. Your ideal self is how you would like to see yourself. PEOPLE BUY PRODUCTS TO ENHANCE HOW THEY FEEL ABOUT THEMSELVES 2010 Flat World Knowledge, Inc. 20

21 Consumer Gender Genders differ in buying behavior Women Men Buy female specific clothing Buy male specific clothing Shop til they drop Influence 2/3 of household purchases More likely to use online viewing tools See it, buy it Prefer sites with pictures Buy 3/4 of alcohol purchases 2010 Flat World Knowledge, Inc. 21

22 Consumer s Age and Life Stages Types of purchases by and for consumers change with age: chronological age cognitive age Adults Infant How old you feel Activities engaged in Changing interests Teens Cognitive age Chronological age 2010 Flat World Knowledge, Inc. 22

23 Consumer Life Styles Consumer lifestyles vary drastically! Companies are researching lifestyles: using questionnaires what products do they like where do they live how they spend their time where do they go after work what are their priorities what are their values Psychographics is the study of Demographics: age, education, sex, income, etc. + Personalities: attitudes, activities, values, lifestyles 2010 Flat World Knowledge, Inc. 23

24 Key Takeaways personality describes disposition people buy products that improve self image gender affects what and how you buy younger men and women shopping more alike cognitive age is how old you feel lifestyles are being watched more closely 2010 Flat World Knowledge, Inc. 24

25 Psychological Factors Affect Buying Behavior Learning Objectives Explain Maslow s hierarchy of needs Outline the psychological factors that affect consumer buying behavior 2010 Flat World Knowledge, Inc. 25

26 Maslow s Hierarchy of Needs Self actualization Esteem Social Safety Physiological 2010 Flat World Knowledge, Inc. 26

27 Perception Taste Smell This is how we interpret the world around us. Sight Touch Hearing 2010 Flat World Knowledge, Inc. 27

28 Perception and Retention Factors Selective perception filters out irrelevant information Selective retention forgetting information that contradicts beliefs Subliminal advertising stealthily embedded messages in media Shock advertising surprising stimuli that can increase retention Learning changing behavior after receiving more information or using a product Attitudes enduring feelings about products and their providers 2010 Flat World Knowledge, Inc. 28

29 Key Takeaways Maslow s needs lower level needs must be met before higher level needs Perception interpreting the world through using your brain and senses Advertising efforts to increase retention includes using shock and subliminal techniques Consumer attitudes mental positions tend to be enduring and difficult to change 2010 Flat World Knowledge, Inc. 29

30 Societal Factors Affecting Buying Behavior Learning Objectives Explain impact of culture and social class on buying behavior Describe reference groups and opinion leaders 2010 Flat World Knowledge, Inc. 30

Consumer Cultures Cultures are: shared beliefs customs

Note: Cultures that share the same values may not be

SUBCULTURES groups that share some interests, but can differ

31 Consumer Cultures Cultures are: shared beliefs customs behaviors attitudes a life style An Important Marketing Note: Cultures that share the same values may not be consistent in purchasing behavior across national borders. SUBCULTURES groups that share some interests, but can differ in important ways from a marketing perspective Flat World Knowledge, Inc. 31

32 Reference Groups and Opinion Leaders Reference Groups Opinion Leaders Consumer identifies with this group Experts Movie idols and professional athletes Trusted publicly known figures 2010 Flat World Knowledge, Inc. 32

33 Family Influence on Buying Behavior Family Big determinant in buying behavior Children follow their parents behavior Children Influence household purchases Nag their parents for certain products Risk In advertising to children May alienate parents 2010 Flat World Knowledge, Inc. 33

Consumer Audit Report

Consumer Audit Report Dan Hoff The brand/business that I am choosing to audit for this report is Express. They are a midto-high priced clothing store. They specialize in lavish clothes like dress shirts,