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• Consumer behavior

• The actions a person takes in purchasing and using products and services,
  including the mental and social processes that precede and follow these actions.
  The behavioral sciences help answer questions such as :
  Why people choose one product or brand over another,
  How they make these choices, and
  How companies use this knowledge to provide value to consumers

• I. CONSUMER PURCHASE DECISION PROCESS

  Behind the visible act of making a purchase lies a decision process that must be investigated. The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. :

  Five Stages of Consumer Behavior problem recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior.

  A. Problem Recognition: Perceiving a Need

  Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision. Can be as simple as noticing an empty milk carton or it can be activated by marketing efforts.

  B. Information Search: Seeking Value

  The information search stage clarifies the options open to the consumer and may involve

  two steps of information search Internal search Scanning one’s memory to recall previous experiences with products or brands. Often sufficient for frequently purchased products. External search When past experience or knowledge is insufficient The risk of making a wrong purchase decision is high The cost of gathering information is low. The primary sources of external information are: Personal sources, such as friends and family. Public sources, including various product-rating organizations such as Consumer Reports. Marketer-dominated sources, such as advertising, company websites, and salespeople

  External Search

  C. Alternative Evaluation: Assessing Value

  The information search clarifies the problem for the consumer by

  (1) Suggesting criteria to use for the purchase.

  (2) Yielding brand names that might meet the criteria.

  (3) Developing consumer value perception.

  A consumer's evaluative criteria represent both the objective attributes of a brand (such as locate speed on a portable CD player) the subjective factors (such as prestige). These criteria establish a consumer's evoked set the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware

  D. Purchase Decision: Buying Value

  Three possibilities From whom to buy which depends on such considerations Terms of sale Past experience buying from the seller Return policy. When to buy which can be influenced by store atmosphere time pressure a sale pleasantness of the shopping experience. Do not buy

  E. Postpurchase Behavior: Value in Consumption or Use

  After buying a product, the consumer compares it with expectations and is either satisfied or dissatisfied. Satisfaction or dissatisfaction affects consumer value perceptions consumer communications repeat-purchase behavior. Many firms work to produce positive postpurchase communications among consumers and contribute to relationship building between sellers and buyers. Cognitive Dissonance. The feelings of postpurchase psychological tension or anxiety a consumer often experiences Firms often use ads or follow-up calls from salespeople in this postpurchase stage to try to convince buyers that they made the right decision.

  F. Involvement and Problem-Solving Variations

  Consumers may skip or minimize one or more steps in the purchase decision process depending on the level of involvement the personal, social, and economic significance of the purchase Three characteristics of high-involvement purchase is expensive, can have serious personal consequences, or could reflect on one’s social image.

  Three general problem-solving variations exist in the consumer purchase decision process:

  Routine Problem Solving Virtually a habit involves little effort seeking external information and evaluating alternatives. Typically used for low-priced, frequently purchased products. Limited Problem Solving Involves the use of moderate information-seeking efforts. Often used when the buyer has little time or effort to spend. Extended Problem Solving Each stage of the consumer purchase decision process is used Considerable time and effort on external information search and in identifying  evaluating alternatives. Used in high-involvement purchase situations. Involvement and Marketing Strategy Low and high consumer involvement has important implications for marketing strategy, which differs for products that are market leaders from their challengers.

  G. Situational Influences

  Five situational influences The purchase task The reason for engaging in the decision. Social surroundings Including others present when a purchase decision is made. Physical surroundings Such as decor, music, and crowding in retail stores. Temporal effects Such as time of day or the amount of time available. Antecedent states Which include the consumer’s mood or amount of cash on hand

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• II. PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR

  Concepts such as motivation and personality; perception; learning; values, beliefs and attitudes; and lifestyle are useful for interpreting buying processes and directing marketing efforts.

  A. Motivation and Personality

  1. Motivation

  is the energizing force that causes behavior that satisfies a need. Needs are hierarchical Once basic physiological needs are met, people seek to satisfy learned needs.

  From lowest to highest, the hierarchy is: Physiological needs basic to survival. Safety needs self-preservation physical well-being. Social needs love friendship. achievement status prestige self-respect. Self-actualization needs personal fulfillment.

  2. Personality

  A person's consistent behavior or responses to recurring situations. Research suggests that key traits affect brand and product-type preferences.

  Cross-cultural analysis also suggests that residents of different countries have a national character, or a distinct set of personality characteristics common among people of a country or society.

  Personality characteristics are often revealed in a person’s self-concept, which is the way people see themselves and the way they believe others see them.

  B. Perception

  The process by which an individual uses information to create a meaningful picture of the world by selecting, organizing interpreting Perception is important because people selectively perceive what they want and it affects how people see risks in a purchase.

  1. Selective Perception

  Selective perception Filtering exposure, comprehension, and retention in the human brain’s attempt to organize and interpret information. Selective exposure Consumers can pay attention to messages that are consistent with their own attitudes and beliefs Consumers can  ignore messages that are inconsistent. Selective comprehension Involves interpreting (distorting?) information so that it is consistent with a person's attitudes and beliefs. Selective retention Consumers do not remember all the information they see, read, or hear. Subliminal perception Consumers see or hear messages without being aware of them. This is a hotly debated issue with more popular appeal than scientific support. Research suggests that such messages have limited effects on behavior

  2. Perceived Risk

  Anxieties felt Consumes  cannot anticipate the outcomes of a purchase Believe that there may be negative consequences. Marketers try to reduce a consumer's perceived risk and encourage purchases by strategies such as providing Free trial of a product Securing endorsements from influential people Providing warranties and guarantees.

  C. Learning

  Those behaviors that result from Repeated experience Thinking.

  1. Behavioral Learning

  The process of developing automatic responses to a situation built up through repeated exposure to it.

  Four variables central to how consumers learn from repeated experience are: drive A need that moves an individual to action cue A stimulus or symbol perceived by consumers response The action taken by a consumer to satisfy the drive. reinforcement The reward.

  Marketers use two concepts from behavioral learning theory: Stimulus generalization Occurs when a response elicited by one stimulus (cue) is generalized to another. Using the same brand name for different products is an application of this concept Stimulus discrimination Refers to a person's ability to perceive differences in stimuli. The advertising for Bud Light beer is an example of this concept.

  2. Cognitive learning

  Involves making connections between two or more ideas or simply observing the outcomes of others’ behaviors and adjusting one's accordingly.

  3. Brand loyalty

  Is a favorable attitude and consistent purchase of a single brand over time. Brand loyalty differs across countries

  D. Values, Beliefs, and Attitudes

  1. Attitude Formation

  Attitude A learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. Shaped by our values and beliefs, which are learned. Values personally or socially preferable modes of conduct or states of existence that are enduring. Beliefs consumer's subjective perception of how well a product or brand performs on different attributes.

  2. Attitude Change

  Approaches to try to change consumer attitudes Changing beliefs about the extent to which a brand has certain attributes. Changing the perceived importance of attributes. Adding new attributes to the product.

  E. Lifestyle

  Lifestyle is a mode of living that is identified by activities How a person spends time and resources interests What a person considers important in the environment opinions what a person thinks of self and the world

  Psychographics The analysis of consumer lifestyle helps to segment and target consumers for new and existing products.

  Values and Lifestyles (VALS) Program Developed by SRI International Identified eight interconnected categories of adult lifestyles based on a person’s self-orientation and resources. Self-orientation Resources Three patterns of attitudes and activities that help people reinforce their social self-image. The three patterns are oriented toward principles, status, action. income education self-confidence health eagerness to buy intelligence energy level.

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• III. SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR

  Sociocultural influences evolve from a formal and informal relationships with other people. Influences Include Personal influence Reference groups The family Social class Culture Subculture.

  A. Personal Influence

  Aspects of personal influence important to marketing Opinion leaders individuals who exert direct or indirect social influence over others Word of mouth People influencing each other during face-to-face conversations. Power of word of mouth has been magnified by the Internet and e-mail

  B. Reference Groups

  Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards. Reference groups have an important influence on the purchase of luxury products but not of necessities. :

  Three groups have clear marketing implications Membership group one to which a person actually belongs   Aspiration group one with which a person wishes to be identified.   Dissociative group one from which a person wants to maintain a distance because of differences in values or behaviors

  C. Family Influence

  Family influences on consumer behavior result from three sources: consumer socialization passage through the family life cycle decision making within the family.

  Consumer Socialization Consumer socialization is the process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers Family Life Cycle The distinct phases that a family progresses through from formation to retirement Each phase bringing with it identifiable purchasing behaviors. young singles Young marrieds without children Young marrieds with children The older married older unmarried Family Decision Making Two decision-making styles exist: spouse-dominant (either wife or husband is responsible) joint decision making (most decisions are made by both husband and wife). Increasingly, preteens and teenagers are assuming these roles for the family, given the prevalence of working parents and single-parent households. Five roles of individual family members in the purchase process exist information gatherer influencer decision maker purchaser user

  D. Social Class

  The relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior are grouped. Determinants of social class include occupation, source of income (not level of income) education.

  Social class is a basis for identifying and reaching particularly good prospects for products and services. Upper classes are targeted by companies for items such as financial investments, expensive cars, and evening wear. Middle classes represent a target market for home improvement centers and automobile parts stores. Lower classes are targeted for products such as sports and scandal magazines.

  E. Culture and Subculture

  Culture refers to the set of values, ideas and attitudes that are accepted by a homogeneous group of people and transmitted to the next generation.

  Subcultures - groups within the larger, or national, culture with unique values, ideas, and attitudes. three largest racial/ethnic subcultures in the U.S Hispanics, African-Americans Asians  . Each of these groups exhibits sophisticated social and cultural behaviors that affect their buying patterns.

  1. African-American Buying Patterns

  African-Americans have the largest spending power of the three subcultures While price conscious, they are motivated by product quality and choice. Respond to products and advertising that appeal to their African-American pride and heritage as well as address their ethnic features and needs.

  2. Hispanic Buying Patterns

  Hispanics represent the largest subculture About 50% are immigrants The majority are under the age of 25. Marketing to Hispanics has proven to be a challenge because The diversity of this subculture The language barrier. Sensitivity to the unique needs of Hispanics by firms has paid huge dividends.

  3. Asian Buying Patterns

  The Asian is the fastest growing subculture. About 70% of Asians are immigrants Most are under the age of 30. Asians represent a diverse subculture, including Chinese, Japanese, Filipinos, Koreans, Asian-Indians, people from Southeast Asia, and Pacific Islanders. Two groups of Asian-Americans have been identified: Assimilated Asians are conversant in English highly educated exhibit buying patterns very much like "typical" American consumers. Nonassimilated Asians recent immigrants who cling to their native languages and customs.