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LEARNING OUTCOMES
1 Explain why marketing managers should understand consumer behavior
An understanding of consumer behavior reduces marketing managers’ uncertainty when they are defining a target market and designing a marketing mix.
2 Analyze the components of the consumer decision-making process
The consumer decision-making process begins with need recognition, when stimuli trigger awareness of an unfulfilled want. If additional information is required to make a purchase decision, the consumer may engage in an internal or external information search. The consumer then evaluates the additional information and establishes purchase guidelines. Finally, a purchase decision is made.
3 Explain the consumer’s postpurchase evaluation process
Consumer postpurchase evaluation is influenced by prepurchase expectations, the prepurchase information search, and the consumer’s general level of selfconfidence. When a purchase creates cognitive dissonance, consumers tend to react by seeking positive reinforcement for the purchase decision, avoiding negative information about the purchase decision, or revoking the purchase decision by returning the product.
4 Identify the types of consumer buying decisions and discuss the significance of
consumer involvement Consumer decision making falls into three broad categories: routine response behavior, limited decision making, and extensive decision making. High-involvement decisions usually include an extensive information search and a thorough evaluation of alternatives. In contrast, low-involvement decisions are characterized by brand loyalty and a lack of personal identification with the product. The main factors affecting the level of consumer involvement are previous experience, interest, perceived risk of negative consequences (financial, social, and psychological), and social visibility.
5 Identify and understand the cultural factors that affect consumer buying decisions
Cultural influences on consumer buying decisions include culture and values, subculture, and social class. Culture is the essential character of a society that distinguishes it from other cultural groups. The underlying elements of every culture are the values, language, myths, customs, rituals, laws, and the artifacts, or products, that are transmitted from one generation to the next. The most defining element of a culture is its values. A culture can be divided into subcultures on the basis of demographic characteristics, geographic regions, national and ethnic background, political beliefs, and religious beliefs.
6 Identify and understand the social factors that affect consumer buying decisions
Social factors include such external influences as reference groups, opinion leaders, and family. Consumers seek out others’ opinions for guidance on new products or services and products with image-related attributes or because attribute information is lacking or uninformative. Consumers may use products or brands to identify with or become a member of a reference group, or to follow an opinion leader. Family members also influence purchase decisions; children tend to shop in similar patterns as their parents.
7 Identify and understand the individual factors that affect consumer buying decisions
Individual factors that affect consumer buying decisions include gender; age and family life cycle stage; and personality, self-concept, and lifestyle. Beyond obvious physiological differences, men and women differ in their social and economic roles, and that affects consumer buying decisions. A consumer’s age generally indicates what products he or she may be interested in purchasing. Marketers often define their target markets in terms of consumers’ life cycle stage, following changes in consumers’ attitudes and behavioral tendencies as they mature. Finally, certain products and brands reflect consumers’ personality, self-concept, and lifestyle.ADVANCE \u
8 Identify and understand the psychological factors that affect consumer buying
decisions Psychological factors include perception, motivation, learning, values, beliefs, and attitudes. These factors allow consumers to interact with the world around them, recognize their feelings, gather and analyze information, formulate thoughts and opinions, and take action. Perception allows consumers to recognize their consumption problems. Motivation is what drives consumers to take action to satisfy specific consumption needs. Almost all consumer behavior results from learning, which is the process that creates changes in behavior through experience. Consumers with similar beliefs and attitudes tend to react alike to marketing-related inducements.
Learning Outcomes and Topics PowerPoint Slides Explain why marketing managers should understand consumer behavior 1.1 The Importance of Understanding Consumer Behavior
1: Consumer Decision Making 2: Learning Outcomes 3: Learning Outcomes 4: The Importance of Understanding Consumer Behavior 5: Understanding Consumer Behavior
Analyze the components of the consumer decision-making process 2.1 The Consumer Decision- Making Process
6: Consumer Decision-Making Process 7: Consumer Decision-Making Process 8: Exh 6.1: Consumer Decision-Making Process 9: Need Recognition 10 Consumers scale back 11:Need Recognition 12:Stimulus 13:Recognition of Unfulfilled Wants 14:Information Search 15:External Information Searches 16:Evoked Set 17:Evaluation of Alternatives 18:Purchase
Explain the consumer’s postpurchase evaluation process 3.1 Postpurchase Behavior
19:Postpurchase Behavior 20:Cognitive Dissonance 21:Postpurchase Behavior
Identify the types of consumer buying decisions and discuss the significance of consumer involvement 4.1 Types of Consumer Buying Decisions and Consumer Involvement
22:Types of Consumer Buying Decisions and Consumer Involvement 23:Consumer Buying Decisions and Consumer Involvement 24:Involvement 25:Exh 6.2: Continuum of Consumer Buying Decisions 26:Routine Response Behavior 27:Limited Decision Making 28:Extensive Decision Making 29:Factors Determining Level of Involvement 30:Marketing Implications of Involvement
35:Value 36:Subculture 37:Social Class 38:Exh 6.4: U.S. Social Classes 39:Social Class Measurements 40:The Impact of Social Class on Marketing
LO5-LO8 Factors Influencing Consumer Buying Decisions Identify and understand the social factors that affect consumer buying decisions 6.1 Social Influences on Consumer Buying Decisions
41: Social Influences on Consumer Buying Decisions 42:Social Influences 43:Exh 6.5: Types of Reference Groups 44 Influences of Reference Groups 45:Opinion Leaders 46:Family
Identify and understand the individual factors that affect consumer buying decisions 7.1 Individual Influences on Consumer Buying Decisions
47:Individual Influences on Consumer Buying Decisions 48:Individual Influences 49 Age and Family Life Cycle Stage 50 Personality, Self-Concept, and Lifestyle
Identify and understand the psychological factors that affect consumer buying decisions 8.1 Psychological Influences on Consumer Buying Decisions
51:Psychological Influences on Consumer Buying Decisions 52:Psychological Influences 53:Perception 54:Marketing Implications of Perception 55:Motivation 56:Exh 6.6: Maslow’s Hierarchy of Needs 57:Types of Learning 58:Beliefs and Attitudes 59:Changing Attitudes 60:Company Clips—Scholfield Honda
REVIEW QUESTIONS
The type of decision making a consumer uses for a product does not necessarily remain constant. Why? Support your answer with an example from your own experience.
Students’ answers should address some of the following points. Once a consumer has had experience in purchasing a particular product, extensive decision making may no longer be necessary. For example, if a consumer has owned a Nikon camera and been satisfied with its performance, he or she may opt to buy another Nikon without seeking further information about alternatives. Thus, buying behavior changes from extensive to routine. Moreover, if a routinely purchased product is not available or no longer satisfies, a consumer may engage in limited or extensive decision making to explore other alternatives.
Describe the three categories of consumer decision-making behavior. Name typical products for which each type of consumer behavior is used.
Although students’ answers will vary, they should address some of the following points. Consumers engage in routine response behavior when making inexpensive, habitual purchases of familiar brands. Items in this category include shampoo, cigarettes, catsup, margarine, and bread. Limited decision making is used for occasional purchases such as compact discs, clothing, and minor household appliances. Limited decision making is also employed for evaluating unfamiliar brands in familiar product categories. Consumers engage in extensive decision making when making infrequent, expensive, or unfamiliar purchases. Such purchases might include stereo components, personal computers, and major household appliances.
Describe the level of involvement and the involvement factors likely to be associated with buying a new computer. Do you think Apple’s Web site at http://www.apple.com simplifies or complicates the process for the average consumer? Explain.
Answers may vary according to students’ characterizations of the average consumer and personal experience. Generally, consumers making infrequent, expensive, or unfamiliar purchases, such as a computer, engage in extensive decision making.
How do beliefs and attitudes influence consumer behavior? How can negative attitudes toward a product be changed? How can marketers alter beliefs about a product? Give some examples of how marketers have changed negative attitudes about a product or added or altered beliefs about a product.
Beliefs are organized patterns of knowledge that an individual holds as true about his or her world. Consumers tend to develop a set of beliefs about a product’s attributes and then, through those beliefs, form a brand image—a set of beliefs about a particular brand.
An attitude is a learned tendency to respond consistently toward a given object. Beliefs help form the basis for attitudes, as do values. Often, the marketer’s goal is to change attitudes toward a brand. This goal might be accomplished in three ways: changing beliefs about the brand’s attributes, changing the relative importance of those beliefs, and adding new beliefs. For example, Harley Davidson, through strict quality control, has changed the belief about the quality of their product. And by limiting production they have added a new belief that it is an exclusive and sought-after product.
From Evans & Berman:
OVERVIEW
A. The consumer is the central focus of marketing.
B. To devise good marketing plans, it is essential to study consumer attributes and needs, lifestyles, and purchase processes, and then make proper marketing-mix decisions.
C. Consumer analysis includes the study of who buys, what they buy, why they buy, how they make decisions to buy, when they buy, where they buy, and how often they buy.
D. An open-minded, consumer-oriented approach is imperative in today’s diverse global marketplace so a firm can identify and serve its target market, minimize dissatisfaction, and stay ahead of competitors. See Figure 8-1.
F. Organizational consumers buy goods and services for further production, usage in operating the organization, or resale to other consumers.
DEMOGRAPHICS DEFINED AND ENUMERATED
A. Consumer demographics are objective and quantifiable population characteristics. They are easy to identify, collect, measure, and analyze.
B. In combination, demographics can be used to develop consumer demographic profiles that can pinpoint opportunities and potential problems. See Figure 8-2.
C. Several secondary sources offer data on consumer demographics:
- U.S. Bureau of the Census—provides considerable national, state, and local data via printed reports, computer tapes, microfiche, CDs, and online data bases. Census of Population data are gathered every ten years and must be supplemented by Bureau of the Census estimates.
- American Demographics —specialized publication dealing mostly with U.S. trends.
- Survey of Buying Power —current U.S. data and future projections by metropolitan area and states. Other U.S. sources— Editor & Publisher Market Guide, Rand McNally Commercial Atlas & Marketing Guide, Standard Rate & Data Service, local newspapers, and regional planning boards. International demographics—United Nations, Euromonitor, and the Organization for Economic Cooperation and Development.
POPULATION SIZE, GENDER, AND AGE
A. The world population is expected to go from 6.15 billion people in 2001 to 6.9 billion in 2010, an annual rise of 1.2 percent.
B. The U.S. population is expected to rise from 285 million people to 309 million people, an annual rise of less than 1 percent.
C. Figure 8-3 shows the world’s population by region for 2001 and 2010.
D. In industrialized countries, newborns are less than 2 percent of the population (1. percent in the United States)—compared with up to 4 percent or more in nations such as Afghanistan, the Congo, and Saudi Arabia. For the industrialized countries, a large proportion of the births are firstborns.
E. Worldwide, males and females comprise equal percentages of the population. Yet, in many industrialized nations, females are over one-half of the population—mostly due to differences in life expectancy.
F. The populations in industrialized nations are older than in less-developed and developing nations.
LOCATION, HOUSING, AND MOBILITY
A. Over the last century, there has been a major move of the world population to large urban areas and their surrounding suburbs. However, the level of urbanization varies greatly by country.
B. In many parts of the world, the majority of people own the homes in which they reside.
C. Worldwide, population mobility is high.
- Annually, millions of people emigrate from one nation to another.
- Hundreds of millions move within their nations.
D. Among U.S. residents, 15 to 20 percent of all people move annually. Mobility includes local, statewide, regional, and foreign forms.
E. Recently, the greatest U.S. population growth has been taking place in Mountain, Pacific, South Atlantic, and Southwest areas.
INCOME AND EXPENDITURES
A. Consumer income and expenditure patterns are valuable demographic factors. When studying them, however, the following should be kept in mind:
- Personal income is often stated as GDP per capita, which does not report what people really earn. It inflates per-capita income if a small percentage of the population is affluent.
- Personal income can be expressed as family, household, and per capita. Since families are larger than households and per-capita income is on an individual basis, these units are not directly comparable.
- Because prices differ by country, a comparison of average incomes that does not take purchasing power into effect will be inaccurate.
- Economic growth is cyclical.
- The term “poverty” varies greatly by nation.
B. In 2003, the U.S. median household income was between $43,000 and $44,000. The mean income for the top one-fifth of households was $145,000. The bottom one-fifth accounted for only 3.5 percent of all household income. And 12 percent of U.S. households were at the poverty level.
C. In terms of purchasing power, U.S. median household income has risen only slightly over the last 30 years.
D. The slow growth in real U.S. income has occurred because people’s income increases have been virtually offset by price increases.
MARITAL STATUS
A. About 2.3 million U.S. couples get married each year. Currently, only 52 percent of U.S. households contain married couples.
B. The median U.S. age at first marriage is 27 years for males and 25 years for females.
C. The average U.S. family size is now 3.1.
D. A family is a group of two or more persons residing together who are related by blood, marriage, or adoption.
E. A household is a person or group of persons occupying a housing unit, whether related or unrelated. In many nations, average household size has been dropping. (The U.S. average today is 2.6.) Of the 110 million U.S. households, 26 percent are one-person units, while family households represent 68 percent of all households.
ETHNICITY/RACE
A. Ethnicity/race should be studied to determine the existence of diversity among and within nations in terms of language and country of origin or race.
B. Worldwide, there are more than 200 different languages spoken by at least 1 million people each.
C. Even within nations, there may be diversity as to the languages spoken.
D. One of the issues facing the European Community in its expansion is the multiplicity of languages spoken.
E. Most nations consist of people representing different ethnic and racial backgrounds. Sometimes, the people in various groups continue to speak the languages of their countries of origin, even though they may have resided in their current nations for one or two generations.
F. In the United States, the population is comprised of people from virtually every ethnic and racial group in the world. The Bureau of the Census uses “Black or African- American,” “White,” “Asian,” “Native Hawaiian and Other Pacific Islander,” and “American Indian and Alaska Native” to delineate racial groups. “Hispanic” is an ethnic term, denoting people of any race.
G. The U.S. population is 75 percent White, 13 percent Black/African-American, 4. percent Asian/Native Hawaiian/Other Pacific Islander, and 0.9 percent American Indian/Alaska Native, with 4.2 percent defined as “Other Race” and 2.4 percent as “Multiracial.” Hispanics are 13.3 percent of the population.
H. In the future, the United States will become even more diverse. See Figure 8-5.
USES OF DEMOGRAPHIC DATA
A. After studying individual demographics, a firm can form demographic profiles to better focus its marketing efforts.
B. Three examples are provided as follows: The single-person U.S. household is changing. a. Most people living alone have been women, but men are catching up. b. Most women living alone are 55 or older, compared with 34 percent of men that age. c. Ten percent of single men and 5 percent of single women have an income of $50,000 or more. d. More than half of single-person householders own a home and nearly 40 percent live in central cities. e. In the future, living alone may be more of a lifestyle choice or a transitory situation.
The demographic profile of 21-year-olds is interesting. a. In the United States, 1 million people turn 21 each year. b. More than 40 percent live at home, 70 percent have a job, and 93 percent have a credit card. c. They spend an average of three hours daily surfing the Web, downloading music, and E-mailing friends. d. They will spend an average of $210,000 over their adult lives on cars.
- The profiles of Australia and Turkey are contrasted.
LIMITATIONS OF DEMOGRAPHICS
A. Information may be old.
B. Data may be limited in some nations, especially less-developed and developing ones.
C. Summary data may be too broad and hide opportunities and risks in small markets or specialized product categories.
D. Demographic data do not consider psychological or social factors affecting consumers.
E. The decision process used in purchasing is not explained.
F. Demographics do not explain why consumers make particular decisions.
G. Demographic data are unable to answer these questions:
- Why do consumers act as they do?
- Why do consumers with similar demographic characteristics act differently?
- To whom do consumers look for advice prior to purchasing?
- Under what situations do families (households) use joint decision making?
- Why does status play a large role in the purchase of some products and a small role in others?
- How do different motives affect consumer decisions?
- How does risk affect consumer decisions?
- Why do some consumers act as innovators and buy products before others?
H. The household life cycle incorporates the life stages of both family and nonfamily households. There is a growing number of people who do not follow the traditional family pattern. Table 8-3 shows the current status of U.S. family and nonfamily households.
I. Time expenditures refer to the activities in which a person participates and the time allocated to them.
PSYCHOLOGICAL CHARACTERISTICS OF CONSUMERS
A. The final consumer’s psychological profile is shown in Figure 8-7.
B. A personality is the sum total of an individual’s enduring internal psychological traits that make the person unique. Self-confidence, dominance, autonomy, sociability, defensiveness, adaptability, and emotional stability are selected personality traits.
C. Attitudes or opinions are an individual’s positive, neutral, or negative feelings about goods, services, firms, people, issues, and/or institutions. Success cannot normally be attained without positive consumer attitudes.
D. Class consciousness is the extent to which a person seeks social status. Inner- directed people want to please themselves. Outer-directed people want to please others. These people are attracted by products with social visibility, well-known brands, and uniqueness.
E. Motivation involves the positive or negative needs, goals, and desires that impel a person toward or away from certain actions. By appealing to motives (reasons for behavior), a marketer can produce positive motivation.
F. Each person has distinct motives for purchases; these change by situation and over time. Consumers often combine economic and emotional motives.
G. Perceived risk is the level of uncertainty a consumer believes exists as to the outcome of a purchase. Although perceptions may not be correct, marketers must work to reduce the risk consumers believe exists. Perceived risk can be divided into six major types:
- Functional.
- Physical.
- Financial.
- Social.
- Psychological.
- Time.
H. Innovativeness is exhibited by a consumer who tries a new good or service that others perceive as risky.
I. The importance of a purchase affects the time, effort, and money a consumer will spend shopping for a product.
SELECTED CONSUMER LIFESTYLES
The marketing implications of distinct lifestyle categories are shown in Table 8-4.
The family values lifestyle emphasizes marriage, children, and home life.
C. Voluntary simplicity is a lifestyle in which people have an ecological awareness, seek product durability, strive for self-reliance, and buy technologically simple products. People with this lifestyle are more concerned with product toughness than appearance and believe in conservation of scarce resources.
D. Getting by is a frugal lifestyle pursued by people due to economic circumstances. They seek product durability, self-reliance, and simple products. They follow this lifestyle because they must. They are attracted to well-known brands, do not try new products, rarely go out, and take few vacations.
E. The “me” generation stresses being good to oneself, self-fulfillment, and self- expression. Consumers with this lifestyle stress nutrition, exercise, and grooming. They are more concerned with product appearance than durability.
F. Since many women work, more men are assuming the once-traditional roles of their wives, and vice versa. This is known as blurring gender roles. See Figure 8-8.
G. The poverty-of-time concept states that for some consumers, the quest for financial secutiry means less free time. This leads to greater use of time-saving goods and services such as the following:
- Convenience foods.
- Quick-oil-change services.
- Microwave ovens.
- Fast-food restaurants.
- Mail-order retailers.
- One-hour film processing.
- Professional lawn and household care.
H. Component lifestyles are those in which consumers’ attitudes and behaviors depend on particular situations rather than an overall lifestyle philosophy. Grasping component lifestyles can be quite challenging for firms.
LIMITATIONS OF LIFESTYLE ANALYSIS
A. The following is true of lifestyle factors:
- They are difficult to measure.
- They are somewhat subjective.
- They are usually based on self-reports of consumers.
- They are sometimes hidden from view.
- They are of questionable reliability.
THE FINAL CONSUMER’S DECISION PROCESS
D. Once an information search is completed, it must be determined whether the shortage or unfulfilled desire can be satisfied by any alternative.
E. The Web has become a major source for consumer shopping information. Six useful sources are provided.
EVALUATION OF ALTERNATIVES
A. The alternatives are evaluated on the basis of the consumer’s criteria and the relative importance of these criteria.
B. They are then ranked and a choice made.
C. Decision criteria are the features a person deems relevant, such as price, style, quality, safety, durability, status, and warranty.
D. In situations where no alternative is satisfactory, a decision to delay or not make a purchase is made.
PURCHASE
A. The purchase act involves an exchange of money, a promise to pay, or support in return for ownership of a specific good, the performance of a specific service, and so on.
B. Purchase decisions remaining at this stage center on the following:
- The place of purchase.
- Purchase terms.
- Availability.
C. If the above elements are acceptable, a consumer will make a purchase. See Figure 8-10.
POST-PURCHASE BEHAVIOR
A. Frequently, the consumer engages in post-purchase behavior.
- Buying one item may lead to the purchase of another.
- Reevaluation of the purchase occurs when the consumer rates the alternative selected against performance standards.
B. Cognitive dissonance, doubt that a correct purchase decision has been made, can be reduced by follow-up calls, extended warranties, and post-purchase advertisements.
FACTORS AFFECTING THE FINAL CONSUMER’S DECISION PROCESS
A. Demographic, social, and psychological factors affect consumer decision making.
B. By knowing how these factors influence decisions, a firm can fine-tune its marketing strategies to cater to the target market and its purchase behavior.
TYPES OF DECISION PROCESSES
A. Each time a person buys a good or service, donates to a charity, and so on, he or she uses the decision process, often subconsciously.
B. There are three ways in which the decision process may be used. See Figure 8-11.
- Extended decision making occurs when a person fully uses the process. It is used for expensive, complex items with which a person has little or no experience. Perceived risk is high and time pressure is low.
- Limited decision making occurs when a person uses every step in the purchase process but does not spend a great deal of time on some of them. The consumer has some experience. The thoroughness with which the process is used depends on the amount of prior experience, the importance of the purchase, and the time pressure facing the consumer.
- Routine decision making involves habitual behavior and skips steps in the process. Regularly purchased items are bought in this manner. Information search, evaluation, and post-purchase behavior are normally omitted.
C. Nine differences between consumers in industrialized nations and those in less- developed and developing ones are cited in the text.
D. With low-involvement purchasing, a consumer minimizes decision making for those goods and services he or she views as unimportant. Table 8-5 compares the traditional high-involvement view of consumer behavior with the newer low- involvement view.
E. Brand loyalty is the consistent repurchase of and preference toward a brand. It enables a consumer to reduce time, thought, and risk.
F. The text explains how Gateway generates and sustains customer loyalty.
MARKETING IMPLICATIONS OF THE FINAL CONSUMER’S DECISION PROCESS
A. There have been many studies on the marketing implications of the final consumer’s decision process.
- U.S. consumers are twice as likely to shop on Saturday and Sunday than at any other time. They also spend more on their weekend shopping trips. Twenty percent of online shopping is between 9:00 P.M. and 9:00 A.M. when most traditional retailers are closed. Two-thirds of North American consumers like to shop around before making purchases. Consumers in India like to bargain and “extract” a right price from the retailer. For several reasons, “substantial time often elapses between the time people recognize the need for a product and the time they actually purchase it.” These may be the reasons for this: a. They don’t think they have enough time to devote to the decision. They may feel shopping is unpleasant.
