Marketing Chapter 5

Personal Factors

A buyer's decisions also are influenced by personal characteristics such as the buyer's occupation, age and stage, economic situation, lifestyle, and personality and self-concept.

Social Factors

A consumer's behavior also is influenced by social factors, such as the consumer's small groups, social networks, family, and social roles and status.

Buyer Decision Process for New Product

A new product is a good, service, or idea that is perceived by some potential customers as new. It may have been around for a while, but our interest is in how consumers learn about products for the first time and make decisions on whether to adopt them. We define the adoption process as the mental process through which an individual passes from first learning about an in- novation to final adoption. Adoption is the decision by an individual to become a regular user of the product

Role and Status

A person belongs to many groups—family, clubs, organizations, online communities. The person's position in each group can be defined in terms of both role and status. A role consists of the activities people are expected to perform according to the people around them. Each role carries a status reflecting the general esteem given to it by society.

Motivation

A person has many needs at any given time. Some are biological, arising from states of tension such as hunger, thirst, or discomfort. Others are psychological, arising from the need for recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction. Psychologists have developed theories of human motivation. Two of the most popular—the theories of Sigmund Freud and Abraham Maslow Sigmund Freud assumed that people are largely unconscious about the real psychological forces shaping their behavior. His theory suggests that a person's buying decisions are affected by subconscious motives that even the buyer may not fully understand. Conduct motivation research interpretive consumer research, to dig deeper into consumer psyches and develop better marketing strategies.

Psychological Factors

A person's buying choices are further influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.

Economic Situation

A person's economic situation will affect his or her store and product choices. Marketers watch trends in spending, personal income, savings, and interest rates. In today's more value-conscious times, most companies have taken steps to create more customer value by redesigning, repositioning, and repricing their products and services.

Occupation

A person's occupation affects the goods and services bought. Blue-collar workers tend to buy more rugged work clothes, whereas executives buy more business suits.

Maslow's Hierarchy of Needs

Abraham Maslow sought to explain why people are driven by particular needs at particular times. Maslow's answer is that human needs are arranged in a hierarchy, as shown in from the most pressing at the bottom to the least pressing at the top. They include physiological needs (hunger, thirst), safety needs (security, protection), social needs (sense of belonging, love), esteem needs (self-esteem, recognition, status) and self-actualization needs (self-development and realization) A person tries to satisfy the most important need first. When that need is satisfied, it will stop being a motivator, and the person will then try to satisfy the next most important need. For example, starving people (physiological need) will not take an interest in the latest happenings in the art world (self-actualization needs) nor in how they are seen or esteemed by others (social or esteem needs) nor even in whether they are breathing clean air (safety needs)

Consumer Market

All of these final consumers combine to make up the ____

Asian American Consumers

Asian Americans are the most affluent U.S. demographic segment. A relatively well-educated segment, they now number more than 18.5 million (5 percent of the population), with annual buying power expected to approach $1 trillion by 2018. Asian Americans are the second-fastest-growing subsegment after Hispanic Americans. And like Hispanic Americans, they are a diverse group Asian speak different languages Asian consumers shop frequently and are the most brand-conscious of all the ethnic groups. They can be fiercely brand loyal, especially to brands that work to build relationships with them. As a result, many firms now target the Asian American market. For example, many retailers, especially luxury retailers such as Bloomingdale's, now feature themed events and promotions during the Chinese New Year

Stages in Adoption process

Awareness - The consumer becomes aware of the new product but lacks information about it. Interest -The consumer seeks information about the new product. Evaluation - The consumer considers whether trying the new product makes sense. Trial - The consumer tries the new product on a small scale to improve his or her estimate of its value. Adoption - The consumer decides to make full and regular use of the new product.

Four Factors that Influence Buying Behavior

Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics (marketers can't control these factors)

Subculture

Each culture contains smaller _______, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, reli- gions, racial groups, and geographic regions. Many subcultures make up important mar- ket segments, and marketers often design products and marketing programs tailored to their needs. Examples of three such important subculture groups are Hispanic American, African American, and Asian American consumers.

Family

Family members can strongly influence buyer behavior. The family is the most important consumer buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services. Husband-wife involvement varies widely by product category and by stage in the buying process. Marketers in industries that have traditionally sold their products to only women or only men—from groceries and personal care products to cars and consumer electronics—are now carefully targeting the opposite sex. Children also have a strong influence on family buying decisions

Hispanic American Consumers

Hispanics represent a large, fast-growing market. The nation's more than 55 million Hispanic consumers (almost one out of every six Americans) have total annual buying power of $1.7 trillion. The U.S. Hispanic popu- lation will surge to more than 130 million by 2030, close to one-third of the total U.S. population. Hispanics are a youthful segment—more than 52 percent of U.S. Hispanics are below age A company's product or message may be more relevant to one nationality over another, such as Mexicans, Costa Ricans, Argentineans, or Cubans. They tend to be deeply fam- ily oriented and make shopping a family affair—children have a big say in what brands they buy. Older, first-generation Hispanic consumers tend to be very brand loyal and to favor brands and sellers who show special interest in them. Younger Hispanics, however, have shown increasing price sensitivity in recent years and a willingness to switch to store brands. Befitting their youthfulness, Hispanics are more active on mobile and social networks than other segments, making digital media ideal for reaching this segment

Fact

The American consumer market consists of more than 323 million people who consume more than $11.9 trillion worth of goods and services each year, making it one of the most attractive consumer markets in the world

Fact

Many marketers are finding that insight gleaned from ethnic consumer segments can influ- ence their broader markets. For example, today's youth-oriented lifestyle is influenced heavily by Hispanic and African American entertainers. So it follows that consumers expect to see many differ- ent cultures and ethnicities represented in the ad- vertising and products they consume. For instance, McDonald's takes cues from African Americans, Hispanics, and Asians to develop menus and ad- vertising in hopes of encouraging mainstream con- sumers to buy smoothies, mocha drinks, and snack wraps as avidly as they consume hip-hop and rock 'n' roll. Or McDonald's might take an ad primarily geared toward African Americans and run it in general-market media.

Groups

Many small groups influence a person's behavior. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference groups serve as direct (face-to-face interactions) or indirect points of comparison or reference in forming a person's attitudes or behavior. People often are influenced by reference groups to which they do not belong. For example, an aspirational group is one to which the individual wishes to belong, as when a young basketball player hopes to someday emulate basketball star LeBron James and play in the NBA. Reference groups expose a person to new behaviors and lifestyles, influence the person's attitudes and self-concept, and create pressures to conform that may affect the person's product and brand choices. The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects.

Cultural Shifts

Marketers are always trying to spot​ ________ so as to discover new products that might be wanted by buyers. One of these is the growing concern among consumers about their health and​ fitness, which has created a great opportunity for flavored vitamin waters.

Opinion Leaders

Marketers of brands subjected to strong group influence must figure out how to reach opinion leaders—people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others. Some experts call this group the influentials or leading adopters. When these influentials talk, consumers listen. Marketers try to identify opinion leaders for their products and direct marketing efforts toward them.

Age and Life Style

People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furni- ture, and recreation are often age related. Buying is also shaped by the stage of the fam- ily life cycle—the stages through which families might pass as they mature over time. Life-stage changes usually result from demographics and life-changing events—mar- riage, having children, purchasing a home, divorce, children going to college, changes in personal income, moving out of the house, and retirement. Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage. PRIZM classifies every American household into one of 66 distinct life-stage segments, which are organized into 11 major life-stage groups based on affluence, age, and family characteristics.

Lifestyle

People coming from the same subculture, social class, and occupation may have quite dif- ferent lifestyles. Lifestyle is a person's pattern of living as expressed in his or her psychographics. It involves measuring consumers' major AIO dimensions—activities (work, hob- bies, shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues, business, products). Lifestyle captures something more than the person's social class or personality. It profiles a person's whole pattern of acting and interacting in the world.

Attitude

People have attitudes regarding religion, politics, clothes, music, food, and almost everything else. Attitude describes a person's relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them. Our camera buyer may hold attitudes such as "Buy the best," "The Japanese make the best camera products in the world," and "Creativity and self-expression are among the most important things in life." If so, the Nikon camera would fit well into the consumer's existing attitudes. Attitudes are difficult to change. A person's attitudes fit into a pattern; changing one attitude may require difficult adjustments in many others. Thus, a company should usually try to fit its products into existing attitude patterns rather than attempt to change attitudes.

Personality and Self Concept

Personality refers to the unique psychological characteristics that distinguish a person or group. Personality is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality can be useful in analyzing consumer behavior for certain product or brand choices. The idea is that brands also have personalities, and consumers are likely to choose brands with personalities that match their own.

African American Consumers

The U.S. African American population is growing in affluence and sophistication. The nation's more than 44 million black consumers wield almost $1.3 trillion in annual buying power. Although more price-conscious than other segments, blacks are also strongly motivated by quality and selection. Brands are important. African American consumers are heavy users of digital and social media, providing access through a rich variety of marketing channels Many companies develop special products, appeals, and marketing programs for African American consumers—from carmakers like Ford and Hyundai to consumer products companies like P&G to even not-for-profits and government agencies such as the U.S. Forest Service

Differences in Innovativeness

The five adopter groups have differing values. Innovators are venturesome—they try new ideas at some risk. Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully. Early mainstream adopters are deliberate—although they rarely are leaders, they adopt new ideas before the average person. Late mainstream adopters are skeptical—they adopt an innovation only after a majority of people have tried it. Finally, lagging adopters are tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.

Self Concept

The idea is that people's possessions contribute to and reflect their identities—that is, "we are what we consume."

Subliminal Advertising

although most marketers worry about whether their offers will be perceived at all, some consumers worry that they will be affected by marketing messages without even knowing it—through _____ Numerous studies by psychologists and consumer researchers have found little or no link between subliminal messages and consumer behavior.

Online Social Networks

are online communities where people socialize or exchange information and opinions. Social networking communities range from blogs (Consumerist, Engadget, Gizmodo) and message boards (Craigslist) to social media sites (Facebook, Twitter, YouTube, Instagram, Snapchat, LinkedIn) and even communal shopping sites (Amazon.com and Etsy). These online forms of consumer-to-consumer and business-to-consumer dialogue have big implications for marketers. word of web

Social Classes

are society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Social scientists have identified seven American social classes: upper upper class, lower upper class, upper middle class, middle class, working class, upper lower class, and lower lower class. but is measured as a combination of occupation, income, education, wealth, and other variables In the United States, however, the lines between social classes are not fixed and rigid; people can move to a higher social class or drop into a lower one. Marketers are interested in social class because people within a given social class tend to exhibit similar buying behavior.

Word of Mouth Influence

can have a powerful impact on consumer buying behavior- ior. The personal words and recommendations of trusted friends, family, associates, and other consumers tend to be more credible than those coming from commercial sources, such as advertisements or salespeople.

The Buyer Decision Process

consists of five stages: need recognition, information search, evaluation of alternatives, the purchase decision, and postpurchase behavior. need recognition—the buyer recognizes a problem or need. If not, the consumer may store the need in memory or undertake an information search related to the need. For example, once you've decided you need a new car, at the least, you will probably pay more attention to car ads, cars owned by friends, and car conversations (personal sources, commercial sources, public sources, experiential sources) Alternative evaluation - that is, how consumers process information to choose among alternative brands Purchase Decision - will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase deci- sion. The first factor is the attitudes of others. If someone important to you thinks that you should buy the lowest-priced car, then the chances of you buying a more expensive car are reduced. The second factor is unexpected situational factors. The consumer may form a purchase intention based on factors such as expected income, expected price, and expected product benefits. However, unexpected events may change the purchase intention. For example, the economy might take a turn for the worse Postpurchase behavior - After purchasing the product, the consumer will either be satisfied or dissatisfied and will engage in postpurchase behavior of interest to the marketer. What determines whether the buyer is satisfied or dissatisfied with a purchase? The answer lies in the relationship between the consumer's expectations and the product's perceived performance. If the product falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted.

Learning

describes changes in an individual's behavior arising from experience. Learning theorists say that most human behavior is learned. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement. A drive is a strong internal stimulus that calls for action. A drive becomes a motive when it is directed toward a particular stimulus object. For example, a person's drive for self-actualization might motivate him or her to look into buying a camera. The consumer's response to the idea of buying a camera is conditioned by the surrounding cues. Cues are minor stimuli that determine when, where, and how the person responds. The camera buyer might spot several camera brands in a shop window, hear of a special sale price, or discuss cameras with a friend. These are all cues that might influence a consumer's response to his or her interest in buying the product. If the experience is rewarding, the consumer will probably use the camera more and more, and his or her response will be reinforced. Then the next time he or she shops for a camera, or for binoculars or some similar product, the probability is greater that he or she will buy a Nikon product.

Selective Distortion

describes the tendency of people to interpret information in a way that will support what they already believe.

Cultural Factors

exert a broad and deep influence on consumer behavior. Marketers need to understand the role played by the buyer's culture, subculture, and social class.

Variety Seeking Buying Behavior

in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching. For example, when buying cookies, a consumer may hold some beliefs, choose a cookie brand without much evaluation, and then evaluate that brand during consumption. But the next time, the consumer might pick another brand out of boredom or simply to try something different. Brand switching occurs for the sake of variety rather than because of dissatisfaction.

Buzz Marketing

involves enlisting or even creating opinion leaders to serve as "brand ambassadors" who spread the word about a company's products. Consider Mercedes- Benz's award-winning "Take the Wheel" influencer campaign, Sometimes, everyday customers become a brand's best evangelists. For instance, Alan Klein loves the McDonald's McRib

Belief

is a descriptive thought that a person holds about something. Beliefs may be based on real knowledge, opinion, or faith and may or may not carry an emotional charge. Marketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect buying behavior. If some of the beliefs are wrong and prevent purchase, the marketer will want to launch a campaign to correct them.

Culture

is the most basic cause of a person's wants and behavior. Human behavior is largely learned. Growing up in a society, a child learns basic values, perceptions, wants, and behaviors from his or her family and other important institutions. Every group or society has a culture, and cultural influences on buying behavior may vary greatly from both county to county and country to country.

Perception

is the process by which people select, organize, and interpret information to form a meaningful picture of the world. All of us learn by the flow of information through our five senses: sight, hearing, smell, touch, and taste. However, each of us receives, organizes, and interprets this sensory information in an individual way People can form different perceptions of the same stimulus because of three per- perceptual processes: selective attention, selective distortion, and selective retention.

Brand Personality

is the specific mix of human traits that may be attrib- uted to a particular brand. One researcher identified five brand person- ality traits: sincerity (down-to-earth, honest, wholesome, and cheerful), excitement (daring, spirited, imaginative, and up-to-date), competence (reliable, intelligent, and successful), sophistication (glamorous, upper class, charming), and ruggedness (outdoorsy and tough)

Selective Retention

means that consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands.

Habituate Buying Behavior

occurs under conditions of low-consumer involvement and little significant brand difference. For example, take table salt. Consumers have little involvement in this product category—they simply go to the store and reach for a brand. If they keep reaching for the same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have low involvement with most low-cost, frequently purchased products. In such cases, consumer behavior does not pass through the usual belief-attitude-behavior sequence.

Dissonance-Reducing Buyer Behavior

occurs when consumers are highly involved with an expensive, infrequent, or risky purchase but see little difference among brands. For example, consumers buying carpeting may face a high-involvement decision because carpeting is expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the same. In this case, because perceived brand differences are not large, buyers may shop around to learn what is available but buy relatively quickly. They may respond primarily to a good price or purchase convenience. After the purchase, consumers might experience postpurchase dissonance (after-sale discomfort) when they notice certain disadvantages of the purchased carpet brand or hear favorable things about brands not purchased. To counter such dissonance, the marketer's after-sale communications should provide evidence and support to help consumers feel good about their brand choices.

Cognitive Dissonance

or discomfort caused by postpurchase conflict. So consumers feel uneasy about acquiring the drawbacks of the chosen brand and about losing the benefits of the brands not purchased. Thus, con- sumers feel at least some postpurchase dissonance for every purchase.

Consumer Buyer Behavior

refers to the buying behavior of final consumers—individuals and households that buy goods and services for personal consumption

Brand Personality Traits

sincerity, excitement, competence, sophistication, ruggedness

Total Market Strategy

the practice of integrating ethnic themes and cross-cultural perspectives within their mainstream marketing. An example is general-market commercials for Cheerios and Honey Maid that feature interracial and blended families and couples. A total market strategy appeals to consumer similarities across subcultural segments rather than differences

Selective Attention

the tendency for people to screen out most of the information to which they are exposed—means that marketers must work especially hard to attract the consumers attention

Complex Buying Behavior

when they are highly involved in a purchase and perceive significant differences among brands. Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive. Typically, the consumer has much to learn about the product category. For example, someone buying a new car might not know what models, attributes, and accessories to consider or what prices to expect. This buyer will pass through a learning process, first developing beliefs about the product, then attitudes, and then make a thoughtful purchase choice.