Customer markets

Principles of Marketing 5e, © Pearson Education 2008
Previewing concepts (1)
Define the consumer market and construct a simple model of consumer buyer behaviour
Tell how culture, subculture and social class influence consumer buying behaviour
Describe how consumers’ personal characteristics and primary psychological factors affect their buying decisions

Principles of Marketing 5e, © Pearson Education 2008
Previewing concepts (2)
List and understand the major types of buying decision behaviour and the stages in the buyer decision process
Discuss how consumer decision making varies with the type of buying decision

Principles of Marketing 5e, © Pearson Education 2008
Prelude case:
Harley-Davidson Motorfietsen

Principles of Marketing 5e, © Pearson Education 2008
Analysing consumer behaviour
What do consumers buy?
Where do they buy?
When do they buy?
Why do they buy?
How do they buy?
Who buys?

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.1 Stimulus-response
model of buyer behaviour
Marketing
and stimuli
Buyer’s
black box
Buyer
responses

Principles of Marketing 5e, © Pearson Education 2008
What is neuromarketing?
Neuromarketing is the use of neuro-technology to improve marketing decision making.

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.2 Factors influencing
consumer behaviour
Cultural
Social
Personal
Psycho-
logical
Buyer

Principles of Marketing 5e, © Pearson Education 2008
Cultural factors
Culture
Subculture
Social class

Principles of Marketing 5e, © Pearson Education 2008
What is culture?
Culture is the set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions.

Principles of Marketing 5e, © Pearson Education 2008
Subcultures
Nationalities
Religion
Racial groups
Geographic regions
HSBC is the first to
offer Islamic financial products.

Principles of Marketing 5e, © Pearson Education 2008
Social classes

Principles of Marketing 5e, © Pearson Education 2008
Social factors
Reference groups
Family
Roles and status

Principles of Marketing 5e, © Pearson Education 2008
Groups
Membership groups include primary and secondary groups
Reference groups serve as points of comparison in forming a person’s attitudes or behaviour

Principles of Marketing 5e, © Pearson Education 2008
What is an opinion leader?
Opinion leaders are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others.

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.3 Extent of group influence
on product and brand choice

Principles of Marketing 5e, © Pearson Education 2008
VW’s Helga relied
on social networking for branding

Principles of Marketing 5e, © Pearson Education 2008
Family influences
Family of orientation
Family of procreation

Principles of Marketing 5e, © Pearson Education 2008
Consumers’ buying roles
Initiator
Influencer
Decider
Buyer
User

Principles of Marketing 5e, © Pearson Education 2008
Personal factors
Buyer’s age
Lifecycle stage
Occupation
Economic situation
Lifestyle
Personality
Self-concept

Principles of Marketing 5e, © Pearson Education 2008
Family life-cycle stages
Young
Single
Married without children
Married with children
Divorced with children
Older
Older married
Older unmarried
Middle-aged
Single
Married without children
Married with children
Married without dependent children
Divorced without children
Divorced with children
Divorced without dependent children

Principles of Marketing 5e, © Pearson Education 2008
Lifestyle segmentation
Activities
Interests
Opinions
Demographics

Principles of Marketing 5e, © Pearson Education 2008
Lifestyle segmentation
Marketing Birmingham

Principles of Marketing 5e, © Pearson Education 2008
Lifestyle dimensions (1)
Activities
Work
Hobbies
Social events
Holidays
Entertainment
Club membership
Community
Shopping
Sports
Interests
Family
Home
Job
Community
Recreation
Fashion
Food
Media
Achievements

Principles of Marketing 5e, © Pearson Education 2008
Lifestyle dimensions (2)
Opinions
Themselves
Social issues
Politics
Business
Economics
Education
Products
Future
Culture
Demographics
Age
Education
Income
Occupation
Family size
Dwelling
Geography
City or town size
Stage in life cycle

Principles of Marketing 5e, © Pearson Education 2008
Lifestyle

Principles of Marketing 5e, © Pearson Education 2008
What is personality?
Personality is a person’s distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment.

Principles of Marketing 5e, © Pearson Education 2008
Brand personalities
Sincerity
Excitement
Competence
Sophistication
Ruggedness

Principles of Marketing 5e, © Pearson Education 2008
Psychological factors
Motivation
Perception
Learning
Beliefs and attitudes

Principles of Marketing 5e, © Pearson Education 2008
What is suggested by
Freud’s theory of motivation?
Freud suggested that a person’s buying decisions are affected by subconscious motives that even the buyer may not understand.

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.4
Maslow’s hierarchy of needs

Principles of Marketing 5e, © Pearson Education 2008
Perception
Perception is the process by which people select, organise and interpret information to form a meaningful picture of the world
Selective attention
Selective distortion
Selective retention

Principles of Marketing 5e, © Pearson Education 2008
What is the difference between attitudes and beliefs?
A belief is a descriptive thought a person has about something.
An attitude describes a person’s favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea.

Principles of Marketing 5e, © Pearson Education 2008
Consumer decision process
Consumer choice results from a complex interplay of cultural, social, personal, and psychological factors.

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.5 Four types of buying behaviour

Principles of Marketing 5e, © Pearson Education 2008
Endorsements from celebrities
increase sales

Principles of Marketing 5e, © Pearson Education 2008
What is dissonance-reducing
buying behaviour?
Dissonance-reducing buying behaviour is consumer behaviour in situations characterised by high involvement but few perceived differences among brands.

Principles of Marketing 5e, © Pearson Education 2008
Leveraging habitual buying
behaviour
Establish conditions of low consumer involvement and low brand difference
Create brand familiarity with ad repetition
Develop strong channel of distribution
Use price and sales promotion to stimulate trial

Principles of Marketing 5e, © Pearson Education 2008
Leveraging variety-seeking
buying behaviour
Establish situation of low consumer involvement and high perceived brand differences
Dominate shelf space
Avoid out-of-stock conditions
Run frequent reminder advertising
Offer lower prices, promotions, and free samples

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.6
The buyer decision process
Need
recognition
Information
search
Evaluation of
alternatives
Purchase
decision
Postpurchase
behaviour

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.7 Steps between evaluation of alternatives and purchase decision
Evaluation of
alternatives
Purchase
intention
Attitudes
of
others
Purchase
decision
Unexpected
Situational
factors

Principles of Marketing 5e, © Pearson Education 2008
Sources used during
information search
Personal sources
Commercial sources
Public sources
Experiential sources

Principles of Marketing 5e, © Pearson Education 2008
What do consumers do during
the alternative evaluation stage of the buying process?
Look for certain benefits that can be acquired by buying a product
Attach degrees of importance to each attribute
Develop brand beliefs about each brand
Use a utility function for each attribute
Arrive at attitudes toward each brand through an evaluation procedure

Principles of Marketing 5e, © Pearson Education 2008
Stages in adopting a new product
Awareness
Interest
Evaluation
Trial
Adoption

Principles of Marketing 5e, © Pearson Education 2008
Figure 5.8 Adopter categorisation
on basis of relative time of
adoption of innovations

Principles of Marketing 5e, © Pearson Education 2008
Characteristics affecting
rate of adoption
Relative advantage
Compatibility
Complexity
Divisibility
Communicability

Principles of Marketing 5e, © Pearson Education 2008
Using the rate of adoption characteristics, evaluate the likely
rate of adoption for HDTV

Principles of Marketing 5e, © Pearson Education 2008
Discussing the concepts (1)
Thinking about the purchase of a hi-fi system, indicate the extent to which cultural, social, personal, and psychological factors affect how a buyer evaluates hi-fi products and choose a brand.
Describe and contrast any differences in the buying behaviour of consumers for the following: a music download, a notebook computer, a pair of trainers, and a breakfast cereal.

Principles of Marketing 5e, © Pearson Education 2008
Discussing the concepts (2)
Why might a detailed understanding of the model of the consumer buying decision process help marketers develop more effective marketing strategies to capture and retain customers? How universal is the model?
In designing adverts for a soft drink, which would you find more helpful: information about demographics or lifestyles? Give examples.