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IUB BUS-M 300 - Why People Buy: Consumer Behavior

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BUS-M 300 1nd Edition Lecture 2 Outline of Last Lecture I. What is Marketing?II. How Marketing Discovers and Satisfies Consumer Needs III. The Marketing Program: How Customer Relationships are Built IV. How Marketing Became so Important Outline of Current Lecture I. Consumer Purchase Decision Process and ExperienceII. Psychological Influences on Consumer BehaviorIII. Sociocultural Influences on Consumer Behavior Current LectureI. Consumer Purchase Decision Process and Experience - Consumer behavior: actions a person takes in purchasing and using products and services - Consumer purchase decision process: stages a buyer passes through in making choices about which products or services to buy - Five stages of purchase decision process—not always linear1. Problem recognition: perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision 2. Information search: searches for appropriate information to make a reasonable decision; includes internal and external searcho External search: when past knowledge isn’t enough- Personal sources - Public sources- Market dominated sources 3. Alternative evaluation: compare and contrasts different products and brandso Evaluative criteria—represent both the object attributes of a brand and the subjective ones used to compare different products and brandso Evoked set—brands actually considered during a choice process- Allows consumer to compare products - Helps them understand competitors o Consideration set—the group of brands that one would consider from among all the brands of which they are aware in the product class 4. Purchase decision: involves a simultaneous evaluation of product attributes and seller characteristics o From whom to buyo When to buy 5. Postpurchase behavior: consumer compares purchase with expectations and is either satisfied or not- Two types of involvement in purchases:o High involvement purchase characteristics - expensive- Serious personal consequences- Could reflect on one’s social imageo Low involvement purchase - Toothpaste - Soap - Extended problem solving: 5 stages of the consumer purchase decision process is used, high involvement purchases like cars, college, ouse- Limited problem solving: consumers typically seek some information orr rely on friends to help evaluate alternatives; examples: clothing, dinner - Routine problem solving: consumers recognize problem, make decision, spend little effort seeking external information and evaluating alternatives; examples: soda, candy- Three involvement marketing strategies1. Maintain product quality2. Avoid stockout situations3. Repetitive ads - Five situational influences on the purchase decision process:1. Purchase task: reason for engaging in decision2. Social surroundings: other people present when purchase decision is made3. Physical surroundings: décor, music, crowds4. Temporal effects: time of day, amount of time available to shop 5. Antecedent states: consumer’s mood, amount of cash on handII. Psychological Influences on Consumer Behavior- Motivation: energizing force that stimulates behavior to satisfy a need - Hierarchy of needs: o Self actualization needs—personal fulfillment; marketers aimo Personal needs—status, respect, prestige; what motivates us to buy products and/or serviceso Social needs: friendship, belongingo Safety needs: financial security, freedom from harmo Physiological needs: food, water, shelter- Self concept: way people see themselves and believe others see them - Perception: way person interprets information to create a meaningful picture of the world- Selective perception: filtering of exposure, comprehension and retention- Selective exposure: people pay attention to messages that are consistent with their attitudes and beliefs- Selective comprehension: involves interpreting information so that it is consistent with their attitudes and believes- Selective retention: consumers don’t remember all information they see, read, hear even right after hearing it- Five risks that concern the buyers1. Performance risk2. Financial risk3. Physical risk4. Social risk5. Time-loss risk- Perceived risk: anxiety felt when consumers cannot anticipate possible negative outcomes of a purchase- Strategies to reduce perceived risk1. Seals of approval2. Securing endorsements from influential people3. Free trials 4. Liberal return policies5. Guarantees- Brand loyalty: favorable attitude toward and consistent purchase of a single brand over time- Methods used to try and change consumers attitudes toward products 1. Change beliefs about brand attributes 2. Change perceived importance of attributes3. Add new attributes to product- Consumers inspired by1. Ideals2. Achievement3. Self expression - Ideals-motivated groups: guided by knowledge and principle oriented in nature o Thinkers—are mature and reflectiveo Believers—conservative, conventional- Achievement-motivated groups: look for products or services that demonstrate success; status oriented in natureo Achievers—busy, goal directed lifestyleo Strivers—trendy, fun loving- Self-expression-motivated groups: desire social and physical activity, risk and variety; action oriented natureo Experiencers—young, impulsive consumerso Makers—fewer resources, experience world by working on it - High and low resource groupso Innovators—tend to be higher educated and more influential consumers, successful, sophisticated, take charge o Survivors—tend to be less educated and less influential consumers, least resources of any segment, focus on meeting basic needsIII. Sociocultural Influences on Consumer Behavior- Opinion leaders: individuals who have social influence over otherso 18 million opinion leaders influence purchases of some 85 million consumers for DIY products- Word of mouth: people influence each other in person conversationso Buzz—popularity created by word of mouth- Reference groups: people to whom an individual looks as a basis for self appraisal or as a source of personal standards; can cause conformity- Membership group: one to which a person actually belongso Example: fraternity- Aspiration group: one that a person wishes to be a member of or wishes to identify witho Example: professional society- Dissociative group: one that a person wishes to maintain a distance from - Consumer socialization: process by which people acquire the skills, knowledge and attitudes


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