Consumer Behavior - Chapter 1

Buyer Behavior

(1960s-70s) the interaction between consumers and producers at the time of purchase

3 Stages of the Consumption Process

1. Pre-Purchase Issue 2. Purchase Issues 3. Post-Purchase Issues

Hierarchy of Needs - Maslow

1. Self-Actualization (upper-level needs) - self-fulfillment, enriching experiences (hobbies, travel education) 2. Ego Needs - prestige, status, accomplishment (cars, furniture, credit cards) 3. Belongingness - love, friendship, acceptance by others (clothing, grooming products, clubs) 4. Safety - security, shelter, protection (insurance, retirement, investments) 5. Physiological (lower-level needs) - water, sleep, food (medicines, staple items, generics)

80/20 Rules

20% of users account for 80% of sales

Post-Purchase Issues

A. Consumer's Perspective: Does the product provide pleasure or perform its intended function? How is the product eventually disposed of, and what are the environmental consequences of this act? B. Marketer's Perspective: What determines whether a consumer will be satisfied with a product and whether they will buy it again? Does this person tell others about their experiences with the product and influence their purchase decisions?

Pre-Purchase Issues

A. Consumer's Perspective: How does a consumer decide that they need a product? What are the best sources of information to learn about alternative choices? B. Marketer's Perspective: How are consumer attitudes toward products formed and/or changed? What cues do consumers use to infer which products are superior to others?

Purchase Issues

A. Consumer's Perspective: Is acquiring a product a stressful or pleasant experience? What does the purchase say about the consumer? B. Marketer's Perspective: How do situational factors, such as time pressure or store displays, affect the consumer's purchase decision?

Race and Ethnicity

As our society becomes increasingly multicultural, new opportunities develop to deliver specialized products to racial and ethnic groups and to introduce other groups to these offerings

Geography

National marketer tailor their offerings to appeal to consumers who live in different parts of the country

Age

People who belong in the same age group may differ in many ways, but they tend to share a set of values and common cultural experiences that they carry throughout life; Marketers initially develop a product to attract one age group and then expand it later on

Social Class and Income

People who belong to the same social class are approximately equal in terms of income and social standing in the community; Similar tastes and occupations, socialize with one another, share ideas and values; Determines which groups have the greatest buying power and market potential

Describe Motivation By:

Strength - the pull it exerts on the consumer Direction - the particular way the consumer attempts to reduce it

Lifestyles

The way we feel about ourselves, the things we value, the things we like to do in our spare time

Family Structure

This has a huge effect on consumers' spending priorities

Gender

We start to make gender distinctions at a very early age

Utilitarian

a desire to achieve some functional or practical benefit; we emphasize the objective, tangible attributes of products

Heavy Users

a name companies use to identify their customers who consume their products in large volumes

Positivism

a research perspective that relies on principles of the "scientific method" and assumes that a single reality exists; events in the world can be objectively measured; and the causes of behavior can be identified, manipulated, and predicted

Paradigm

a set of beliefs that guide our understanding of the world; paradigm shift - when a competing paradigm challenges the dominant set of assumptions

Exchange

a transaction in which two or more organizations or people give and receive something of value

Hedonic

an experiential need, involving emotional responses or fantasies; needs are subjective and experiential

Social Media

are the online means of communication, conveyance, collaboration, and cultivation among interconnected and interdependent networks of people, communities, and organizations enhanced by technological capabilities and mobility

Interpretivism

as opposed to the dominant positivist perspective on consumer behavior, instead stresses the importance of symbolic, subjective experience and the idea that meaning is in the mind of the person rather than existing "out there" in the objective world

Demographics

descriptive characteristics of a population; categorizing consumers in terms of age, gender, income, occupation, etc.

Drive Theory

focuses on the biological needs that produce unpleasant states of arousal - the arousal this tension causes motivates us to reduce it

Horizontal Revolution

information flows across people -- today each of us can communicate with huge numbers of people by a click on a keypad

Relationship Marketing

interact with consumers on a regular basis and give them solid reasons to maintain a bond with the company over time (key to success); important during poor economic times

Consumer

is a person who identifies a need or desire, makes a purchase, and then disposes of the product during the three stages of the consumption process

Want

is a specific manifestation of a need that personal and cultural factors determine

Consumer Behavior

it is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires

Market Segmentation Strategies

means an organization targets its product, service, or idea only to a specific group of consumers rather than to everybody - even if it means that other consumers who don't belong to this target market aren't attracted to it

Productivity Orientation

refers to a continual striving to use time constructively - trying new things is a way to check them off our "bucket list" of experiences we want to achieve before we move on to others

Motivation

refers to the processes that lead people to behave as they do; it occurs when a need is aroused that the consumer wishes to satisfy; the need creates a state of tension that drives the consumer to attempt to reduce or eliminate it

Role Theory

sociological perspective takes the view that much of consumer behavior resembles actions in a play; different roles alter their consumption decisions;

Expectancy Theory

suggests that expectations of achieving desirable outcomes - positive incentives - rather than being pushed from within motivate our behavior

Big Data

the collection and analysis of extremely large datasets

Popular Culture

the music, movies, sports, celebrities, and other forms of entertainment that the mass market produces and consumes -- is both a product of and an inspiration for marketers

Love

the product elicits emotional bonds of warmth, passion, or other strong emotion

Self-Concept Attachment

the product helps to establish the user's identity

Interdependence

the product is a part of the user's daily routine

Nostalgic Attachment

the product serves as a link with a past self

Asynchronous Interactions

those that don't require all participants to respond immediately (i.e. like when you text a friend and get an answer the next day)

Synchronous Interactions

those that occur in real time (i.e. when you text back and forth with a friend)

Need for Uniqueness

to assert one's individual identity (Cachet perfume claims to be "as individual as you are")

Need for Affiliation

to be in the company of other people (ex. vineyard vines)

Need for Power

to control one's environment (ex. Luxury resorts that promise to respond to every whim of their pampered guests)

Database Marketing

tracks specific consumers' buying habits very closely and crafts product and messages tailored precisely to people's wants and needs based on this information

Consumption Communities

web groups where members share views and product recommendations and opinions online

Digital Native

young people who have grown up with computers and mobile technology; multitaskers with cell phones, music downloads, and instant messaging on the internet; people who are comfortable communicating online and by text and IM rather than by voice