chapter 5 350

Social Class:

-They are society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. o Are measured by: • Occupation • Education • Income • Wealth • NOT Number of Children in the Family o Social classes show distinct product preferences in clothing and automobiles.

Purchase Decision

-Two factors can come between the purchase intention and the purchase decision: 1. Attitude of Others 2. Unexpected Situational Factors

Participants in the buying process

-buying center: varies based on product and service -influences: environmental, organizational, interpersonal, individual

4 Major Psychological Factors that Influence a Person's Buying Choices:

1.Motivation 2.Perception 3.Learning 4.Beliefs/Attitudes

The Buyer Decision Process

1.Need recognition 2.Information Search 3.Evaluation of Alternatives 4.Purchase Decision 5.Post Purchase Behavior

Personal Factors:

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

African American

Although more price-conscious than other segments, African American consumers tend to be strongly motivated by quality and selection. Brands are important. They enjoy shopping and are more fashion conscious than other ethnic groups.

Opinion Leaders

People within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. -Example: Rashmi Singh always knows about the trendiest fashions. She actively shares her knowledge with a wide group of friends and colleagues about where to shop for cutting-edge fashion at great deals, and her advice is often followed. Rashmi is an example of an opinion leader.

Age and Life-Cycle Stage:

People change the goods and services they buy over time because of the two changing factors: age and life-cycle stage.

Personality and Self-Concept

Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment. It is usually described in traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness.

straight rebuy:

a business buying situation in which the buyer routinely reorders something without any modifications

new task:

buyer purchases a product or service for the first time

modified rebuy:

buyer wants to modify product specifications, prices, terms, or suppliers

systems selling:

buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

extranet links

can create procurement accounts with suppliers, through which company buyers can purchase equipment, materials, and supplies directly

product value analysis:

carefully analyzing a products or services components to determine if they can be redesigned and made more effectively and efficiently to provide greater value

company buying sites

companies can conduct e-procurement through this

trading exchanges

companies work collectively to facilitate the trading process

buying center

composed of all the people involved In the buying decision

stages of business buying behavior

problem recognition→general need description→ product specification→ supplier search→proposal solicitation→supplier selection→order-routine selection→performance review

E-procurement:

purchasing through electronic connections between buyers and sellers-usually online

reverse auctions

put their purchasing requests online and invite suppliers to bid for the business

Beliefs/Attitudes

-A belief is a descriptive thought that a person has about something. -An attitude is a person's relatively consistent evaluations, feelings, and tendencies toward an object or idea. -A person's attitudes fit into a pattern, and to change one attitude may require difficult adjustments in many others. Thus, a company should usually try to fit its products into existing attitudes rather than attempt to change attitudes.

Lifestlye

-A person's pattern of living as expressed in his or her psychographics, including his or her activities, interests, and opinions. -The following make up a person's lifestyle: • AIO Dimensions • Activities, Interests Opinions • Interests • Opinions • Work • NOT Dissonance-Reducing Buying Behavior -Example: There is a trend in the United States toward rediscovering the flavor of regional cooking and the use of locally grown ingredients. People are choosing to spend hours in the kitchen using only the freshest ingredients to recreate local culinary traditions. This change in the lifestyle is one of the reasons the number of farmers markets in the United States has increased by 70 percent in the last eight years.

Roles and Status

-A role consists of the activities people are expected to perform according to the persons around them.

Cultural Factors:

-Culture is the most basic cause of a person's wants and behaviors. -Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted. -Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations.

Learning

-Learning describes changes in an individual's behavior arising from experience. -Learning occurs through the interplay of: -Drives -Stimuli -Cues: -Subtle stimuli that determine where, when, and how a person responds to an idea. -Reinforcement: -If a consumer's experience is rewarding, that consumer will probably use the product more and more. The consumer's response to the product will be reinforced. -NOT Dissonance Behavior -Applying learning theory, marketers can affect demand for a product by associating it with strong drives, using motivational cues, and providing positive reinforcement.

Consumer Market:

-Made up of: 1. Individuals who acquire goods or services for personal consumption. 2. Households that purchase goods or services for personal consumption

Brand Evangelists:

-Many companies, such as Jetblue and Sony, enlist everyday consumers who are enthusiastic about their brands to become brand evangelists, brand ambassadors who share their passion for a company's product with large circles of friends and acquaintances in return for insider knowledge and rewards. -Companies who use brand ambassadors are participating in buzz marketing.

Model of Consumer Behavior:

-Marketing stimuli include major forces and events in the buyer's environment: • Economic • Technological • Social • Cultural • Most large companies research consumer buying decisions to find out what they buy, where they buy, how and why they buy, when they buy, and why they buy. • The starting point of understanding a consumer's response to various marketing efforts is in the stimulus-response model of a buyer's behavior. • The marketers want to understand how the stimuli are changed into responses inside the consumer's black box, which has two parts. First, the buyer's characteristics influence how he or she perceives and reacts to the stimuli. Second, the buyer's decision process itself affects the buyer's behavior.

Motivation

-Motive is a need that is sufficiently pressing to direct a person to seek satisfaction. -Motivational Research: Designed to probe consumers' hidden, subconscious motivations. -Maslow's theory is that human needs can be arranged in a hierarchy. • Physiological Needs • Safety Needs • Social Needs • Esteem Needs • Self-Actualization Needs • This need is the LEAST pressing

Online Social Networks:

-Myspace.com and Youtube. -Marketers now participate in established online social networks because consumers are more likely to view peer-to-peer communication as credible.

Post purchase Behavior

-Perceived Performance: The relationship between the consumer's expectations and the product's perceived performance determines whether the buyer is satisfied or dissatisfied with a purchase. -Cognitive Dissonance: Discomfort caused by postpurchase conflict, which occurs with almost all major purchases.

Brand Personality:

-Researchers found that a number of well-known brands tended to be strongly associated with one particular trait, such as Jeep with "ruggedness." -Traits that are attributed to a brand: o Sincerity o Excitement o Competence o Sophistication o NOT Emotion

Information Search

-Sources that customers obtain information from: -Personal -Commercial -Public (most effective) • Experiential • NOT Attitude

Perception

-The process by which people select, organize, and interpret information to form a meaningful picture of the world. -Selective Attention: People cannot focus on all of the stimuli that surround them each day. A person's tendency to screen out most of the information to which he or she is exposed is called selective attention. -Example: Juna looked at her September issue of O magazine and di not see anything of interest. After her mother was diagnosed with bipolar disorder, she found the issue extremely interesting because it offered advice on how to help people who are suffering from this problem. The issue became quite interesting to Juana due to selective attention. -Selective Distortion: People tend to interpret new information in a way that will support what they already believe. -Example: Mark has long supported the actions and decisions of his city's mayor. However, many recent news stories have raised questions about the ethics of the mayor's programs and initiatives. Mark doubts that they mayor, in whom he has such faith, could behave unethically, and Mark tends to distrust the information in the media. Mark continues to support the mayor. Mark is engaged in selective distortion. -Selective Retention: People forget much that they learn. They tend to retain information that supports their attitudes and beliefs. -Subliminal Advertising: Some consumers worry that they will be affected by marketing messages without even knowing it. They are concerned about subliminal advertising.

Adoption Process:

-The process where consumers learn about new products for the first time and make the decision to buy them. -Stages of Adoption Process: • Awareness • Interest • Evaluation • Trial • Adoption -Influence of Product Characteristics on Rate of Adoption: -Five Characteristics: 1. Relative Advantage 2. Compatibility 3. Complexity 4. Divisibility 5. Communicability

Family

Family is the most important consumer buying organization in society; the roles and influences of different members have been researched extensively.

Aspirational Groups:

Groups to which an individual wishes to belong, as when a teenaged basketball player hopes to play someday for the Los Angeles Lakers.

Consumer Buying Behavior:

It is never simple; yet understanding it is the essential task of marketing management.

Self-Concept:

Many marketers use the self-concept premise that people's possessions contribute to and reflect their identities; that is, "we are what we have." Under this premise, consumers buy products to support their self-images.

Hispanic American

This group of consumers tends to buy more branded, higher-quality products, and to make shopping a family event, with children having a big say in the purchase decision. In general, they are very brand loyal and they favor companies who show special interest in them. • They are the fastest growing U.S. demographic segment, now number more than 45 million.

Need Recognition

This is where the buyer recognizes a problem.

Mature Customers

• Becoming a very attractive market: they are the ideal market for travel, restaurants, high-tech home entertainment products, and convenient services. • The best strategy is to appeal to their active, multidimensional lives. • They are an ideal market for "do-it-for-me" services. • High-tech home entertainment products appeal to them. • They are a good market for cosmetics and personal care products. • NOT place more importance on brand names and NOT more brand loyal than members of other age groups. o NOT opinion leaders

Asian American

• The most affluent American demographic subculture, now have more than $450 billion in annual spending power.