Consumer Behaviour

Chapter 6

Harley-Davidson Devoted Consumers

Building Success Offers good bikes, upgraded showrooms and sales tactics. Research has helped to understand customers emotions and motivation. Consumer emotions, motivations, and lifestyle have been translated into effective advertising.

Case Study

Measuring Success Currently has 23% of all U.S. bike sales and 50% of heavyweight segment. Demand above supply with waiting lists up to 2 years. Sales doubled in the past six years while earnings have tripled. 2005: 19th straight year of record sales and income.

Model of Buyer Behaviour

Marketing and other stimuli

Product Price Place Promotion

Economic Technological Political Buyers responses Cultural

Buyers black box

Buyer characteristics Buyer decision process

Product choice Brand choice Dealer choice Purchase timing Purchase amount

Consumer Behaviour

Chapter 6

Selective perception filters

Messages

Selective exposure Selective comprehension Selective retention

Consumer Behaviour Influences

p.205 fig 6.1

Cultural

Social Reference groups Family Roles and status

Personal Age and life-cycle Occupation Economic situation Lifestyle Personality and self-concept Psychological Motivation Perception Learning Beliefs, Attitudes, opinions

Culture Subculture Social class

Buyer

Consumer Behaviour Influences Psychological Factors

Perception Learning Opinions, Attitudes & Beliefs (O.A.B.) Motivation

Perception

Perception the way an individual experiences the universe. It is a function of

Physical sensation known as the event Interpretation

Mood Past experiences & age Expectations Mental set Role (working for a cigarette firm) Physical setting (structural factors) Cultural group Factors Selectivity (cognitive dissonance) Constancy (stereotyping events in the same way, even though items have changed) Social status

Things that affect perception

Perception

Situational Influences

Purchase task (gift vs. for your own use) Social surroundings Physical surroundings Temporal effects (time of day or amount of time available) Antecedent state (mood or cash on hand)

Consumer Behaviour Influences Psychological Factors

Opinions
Short term, flexible, superficial thoughts.

Attitudes
A persons consistently favourable or unfavourable evaluations, feelings, and tendencies toward an object or idea.

Beliefs

A descriptive thought that a person holds about something (Political systems, religion, abortion, etc).

Consumer Behaviour Influences Psychological Factors

Learning

Changes in individual behaviour Arising from experience Most human behaviour is learned

Drives Stimuli Cues Responses Reinforcement

Learning

Typical problem solving Howard/Sheth Model Routinized response behaviour customer is knowledgeable, low risk, low involvement, frequently purchased, inexpensive. (straight re-buy) Limited problem solving new brand is unknown to client. (modified re-buy) Extensive problem solving customer doesnt know brand or even product category. Hi involvement / risk / price infrequently purchased. (new task)
Purchasing may involve several people in the buying process (initiator influencer decider purchaser user gate keeper).

Consumer Buying Roles

Initiator Influencer Decider Buyer User Gate keeper

The Buyer Decision Process

(cognitive dissonance)
p 234

Post-purchase behaviour Purchase decision Evaluation of alternatives Information search

Need recognition

Types of Buying Decision Behaviour

Degree of involvement:

How much the consumer cares about the purchase decision Higher levels for products that are expensive, risky, purchased infrequently, and highly self-expressive Figure 6.4 p.230

Degree of perceived differences between brands

The type of decision will influence the promotional strategy most likely to be effective

Motivation

Motivation = energizing forces from within. Motivated behaviour is

Sustained Goal directed (attainment of) Results from internalized needs of individual. vary in intensity may be hidden or subconscious are triggered or stopped by our conditioned environment.

Motives

Risk

Risk leads to

Uncertainty Consequences

Risk can be avoided by not buying.

Types of Risk

Functional is concerned with performance Psychosocial is concerned with enhancing ones self or well being Financial Time Physical

Maslows Hierarchy of Needs

(fig.6.3 p 226)

Self-actualization needs Esteem needs Social needs Safety needs Physiological needs

Motivation to Purchase

Maslows Model Needs are physiological (food, shelter, sex, drink) Wants are learned from our culture.

Physiological needs are positive/supply motives. Safety needs are negative/avoidance motives. Belonginess & love needs affection, group acceptance. Esteem Needs prestige, status, self respect. Self Actualization self fulfillment, need to know and understand.

Personal factors
Consumer needs change over their lifetimes in (somewhat) predictable ways

Family life cycle: combines age with marital status and presence of
children to classify consumers into groups Young families make different housing, food, and transportation choices than mature couples with grown children gone (or back!)

Figure 7.2

Marketers need to consider current social trends such an nontraditional living arrangements, delayed marriage, divorce rates, single parents

Personal Factors (continued)

Occupation:

The type of work performed may necessitate different consumption patterns, such as blue collar versus white collar Will also indirectly affect how much income is available

Economic situation:

How much income (or ability to borrow) is available for consumption

Economic indicators such as employment, inflation, interest rates, and consumer debt levels are used to predict changes in buying power

Figure 7.2

Personal Factors (continued)

Lifestyle:

A persons pattern of living as expressed by their activities, interests, and opinions (AIOs)

Number of different lifestyle or psychographic classification systems VALS2 uses self-orientation and access to resources to produce eight different groups

Figure 6.2

p.221

Personal Factors (continued)

Personality and self-concept:

Ie sincerity; excitement; competence; sophistication; ruggedness; etc

(p.224)

A persons distinguishing psychological characteristics That lead to relatively consistent and lasting responses To his/her own environment see Jo-Hari window example.

Brand personality:

The specific mix of human traits that may be attributed to a particular brand

Match brand personality to the consumers personality Also known as positioning; see Chapter 8

Figure 6.1

p.205

Personality & Self-Concept

A self-image theory is a basic purchase and patronage motive held by consumers in support of the self image.

Self-image
You as you see yourself

Ideal self
You as you would like to be

Real self
You as you are

Apparent self
You as you think others see you (looking-glass self)

Jo-Hari Window

Family Decision Making Process

Autonomous each member makes decisions independently (most prevalent for items such as booze, garden tools, mens clothing.) Wife Dominant wifes clothing, kitchen ware, food, kids clothing. Husband Dominant electronics, insurance. Syncratic joint decisions (school, vacations, housing, entertainment, living-room furniture.)
Remember we have initiators, influencers, users, deciders, purchasers & gatekeepers in the buying process.

Consumer Behaviour Influences Social Factors

Groups

Membership - primary and secondary Reference and aspirational Opinion leaders- Discuss buzz Marketing

(p. 214)

Family

Most important consumer influence changing family roles and evolving lifestyles children may influence strongly Q: what implications are created by people staying single longer & having less kids?
(p. 216)

Negative Characteristics of Groups

Xenophobia - fear/hostility towards other groups Ethnocentrism - your ethnic group is the best.

Functions of Reference Groups

Normative - standards to guide behaviour Comparative - basis for self evaluation Supportive - helps to build up ego and self worthiness

Consumer Behaviour Influences Cultural Factors

Subculture

Group of people With shared value systems Based on common life experiences And situations

Consumer Behaviour Influences Canadian Subcultures

Native Canadians Ethnic communities based on national origin Internet users- face bookers Grey market (ie aging baby boomers)

Cultural Factors (continued)

Canadian subcultures:

2001 census: english language roots 59%, french 23%, remainder a mixture of many cultures of immigration Multilingual society: more than 100 languages reported in 2001 census, Chinese being the third most spoken language

Ethnic groups: fastest growing markets in Canada; share values of both cultures French Canadian: values and behaviour are different

Figure 7.2

Consumer Behaviour Influences Social Class

Relatively permanent Ordered divisions in a society Whose members share similar

Values Interests Behaviours

NOTE it is NOT based strictly on income!

Social Class

Relatively homogeneous divisions in society, sharing common values, life styles, interests, and types of behaviour. Earliest studies began in 1940s by American sociologists W.L. Warner and Paul Lunt Social Class in America. U.U. + L.U. + U.M. = Class Market (.5 +2 +12%) M.M. + L.M. + U.L. + L.L. = Mass market. (32+38+9+7%) U.U. old wealth of at least 2 generations L.U. nouveau riche flaunt their wealth to buy acceptance U.M. successful professionals & business people/owners. Highest educational group. Life revolves around career. L.M. white collar home centred, seek respect, price sensitive. U.L. Blue collar skilled labourer. Live for today. Impulsive in purchases. L.L. unskilled labourers. High credit card abusers. Buy mainly essentials.

Social Class

Intra-generational class mobility - moving within your lifetime between classes. Inter-generational class mobility - moving over a period of generations.

Factors in Class Positioning

Income Occupation Education (a good vehicle towards upward mobility) Ethnic / family background Marriage Ambition (networking)

Consumer Behaviour

Chapter 6

Adoption/ Diffusion Process

Diffusion process: the speed of a new idea from source (sender) to receiver (audience). Adoption process: a mental process within an individual (A.I.D.A.)
(p.237)

Buyer Decision Process For New Products

Adoption Process Stages

Awareness Interest Evaluation Trial Adoption

Audience Response Models

We have 3 stages:

Cognitive (A.I.D.A. model) Affective Behaviour

Adoption Process

Nature of the product Nature of the communicator Needs of the individual.

Nature of the Product

(p.238)

Nature of the product (characteristics):

Product's relative advantage (Price $) Product's compatibility with our beliefs and lifestyles (Blue Ray DVD vs. DVD) Product's complexity (more complex = slower process) (Excel vs. Lotus 1-2-3) Product's divisibility (accessories or bulk purchases required. (Can be tried on a limited basis). (NutraSweet packets.) Product's communicability of its advantages (Degrees to which results are observable) (Am Ex & Cadillac)

Credibility of the Communicator

Expertness (qualifications) Trustworthiness (objectivity + neutrality) Likeability (how attractive source is to audience)
Provide examples for the above; ie Oprah Winfrey, Lady Diana

Need of the Individual

Level of self-esteem (Low self-esteem = easier to

persuade.)

Adopter Categorization Relative Time of Adoption

(fig 6.6 p. 238)

2.5% Innovators

13.5% Early adopters

34% 34% Early Late majority majority

16% Laggards

Time of adoption of innovations

Roger's Model of Diffusion of Innovation

Innovators (3%)

dominant value = 'venturesome' young & upwardly mobile rely on 'respectable' and impersonal sources of information

Early adopters (15%)

dominant value = 'respect' high in social status - opinion leaders great contact and interaction with reps and mass media sources they are 'venturesome' but use discretion.

Roger's Model of Diffusion of Innovation

(continued) Early majority (33%)

dominant value = 'deliberateness' average social status long time between trial and adoption may elapse.

Late majority (33%)

dominant value = 'scepticism' lower income + social status group rely on group pressure

Non-adopters (16%)

dominant value = 'tradition bound' lowest income + social status who rely on other non adopters.