Chapter 5 - Understanding Consumer and Buyer Behavior

__________ are such things as product, price, place, and promotion and are considered part of the environment that influences the buyer's black box. Buying attitudes Buyer characteristics Economic, technological, social, and cultural stimuli Marketing stimuli

Marketing stimuli

__________ are part of the environment that enter the consumer's black box and produce certain responses. The buyer's characteristics Economic, technological, social, and cultural stimuli Purchase behavior Buying attitudes and preferences

Economic, technological, social, and cultural stimuli

Decision Point: Choosing a Fish Tank Supplier Large tropical fish tanks are a significant investment for Caffè Gustoso's owners. The proposals ranged from $10,000 to $25,000 for the installation of the two large tanks. The budget for the fish tank installation was initially set at $20,000, but one of the partners feels that additional money could be found in the budget. The owners are quite concerned about the tanks leaking and thus are looking for a long warranty. The Naperville location is scheduled to open in 5 weeks. The primary evaluative criteria for this purchase are price, installation time, and warranty period. Given the three suppliers, which supplier do you recommend that Caffè Gustoso choose?

Exotic Fish Supplies You chose Exotic Fish Supplies. That was the best choice. It presented a proposal that was under budget, installed two weeks prior to the grand opening, with a reasonably long warranty.

Decision Point: Demand for Business-to-Business Products Your first job is to settle the dispute between the owners. To settle the dispute, you need to ensure that both owners understand the primary differences between consumer transactions and business transactions. As you work on your explanation, you reflect on the characteristics that make business transactions different than consumer transactions. How would you describe the demand for business products?

Inelastic: Demand for business goods tends to be me more inelastic than demand for consumer goods. You chose inelastic. That was the best choice. Demand for business goods tends to be more inelastic than demand for consumer products.

__________ is the changes in an individual's behavior arising from experience. Learning Attitude Belief Perception

Learning

Decision Point: Differences in Supplier Choice You explain that because business demand is more inelastic, demand for business goods is not strongly correlated with price. Therefore, business suppliers are often able to increase price without negatively affecting demand. Therefore, it is critically important that we address price during the contract negotiation. The owners are still not convinced. You decide to add to your argument by discussing the differences in supplier choice. Which of the following arguments would strengthen your case?

Less supplier choice: Business buyers tend to have far fewer choices in suppliers than the ultimate consumers do. You chose less supplier choice. That was the best choice. Business buyers have far fewer choices than consumers do.

Decision Point: Business Buying Process You decide to make one more argument to highlight the difference between consumer purchases and business purchases. How would you describe the business buying process as compared to the consumer buying process? Select two options from the choices below and click Submit.

Longer and slower: Business buying tends to be longer and slower than consumer buying. More formalized: Business buying tends to be more formalized than consumer buying. You chose longer and slower. That was one of the best choices. Business buying generally involves large transactions and complex decisions, which make the buying process longer and slower. You chose more formalized. That was one of the best choices. Business purchases often involve detailed product specifications and multiple approvals, which result in a formalized process.

__________ is a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea. Attitude Belief Learning Perception

Attitude

________ is a descriptive thought that a person holds about something. Attitude Belief Learning Perception

Belief

__________ are part of the buyer's black box and produce certain responses. Economic, technological, social, and cultural stimuli Buyer characteristics Marketing stimuli Buying attitudes and preferences

Buyer characteristics

__________ are a type of buyer response. Buying attitudes and preferences Marketing stimuli Economic, technological, social, and cultural stimuli Buyer characteristics

Buying attitudes and preferences

Decision Point: Choosing Your Slogan Your boss continues: "Now that you have identified what motivates our target market to purchase a Verdure health club membership, I need you to recommend a slogan for the postcard that we will mail to the Canton households that match our target demographic. Please review the three slogans that our creatives have submitted for consideration and choose the one that captures the self-actualization need."

Create your best self at Verdure Wellness Club. You chose "Create your best self at Verdure Wellness Club." This was the best choice. Self-actualization is characterized by the desire for self-fulfillment and peak experiences, which is captured by the "best self" concept.

Decision Point: Determining Members' Preferred Lifestyle To meet its financial projections, Verdure Wellness Club must sign up 500 new members in its first fiscal year. The Canton neighborhood has a population in excess of 11,000. To reach its goals, Verdure must focus its marketing efforts on the Canton residents who are most likely to join and remain members for a long time. Although demographics like age, gender, and income are often used to describe target markets, patterns of living referred to as consumer lifestyle provide marketers with deeper insight into consumer behavior. Activities, interests, and opinions (AIO) are used to profile a person's lifestyle. Which lifestyle profile would be the most attractive to Verdure for its club membership?

Peaceful living: Peaceful living consumers see working out as a way of balancing out their professional lives. These consumers prefer green energy and organic products. Free time is spent biking, hiking in national parks, reading, and meditating. You chose peaceful living. That was the best choice. This lifestyle values both working out and life balance, key benefits that Verdure Wellness Club delivers.

__________ is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Belief Attitude Learning Perception

Perception

__________ is the buyer's decision about which brand to select. Purchase decision Need recognition Alternative evaluation Information search

Purchase decision

Decision Point: Your Target Market's Motivation One of the psychological (also known as internal) factors that influences decision making is motivation. Given what you now know about your target market, which need from Maslow's hierarchy of needs is most likely the primary motivation behind purchasing a Verdure Wellness Club membership?

Self-actualization needs You chose self-actualization needs. This was the best choice. That is the most likely motivation for this target's decision to purchase a Verdure Wellness Club membership.

__________ is relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors. Subculture Social class Culture A group

Social class

Decision Point: Choosing Data to Analyze A few months after the grand opening of the Naperville store, Caffè Gustoso's owners want to determine whether the fish tanks were a good investment. In the final stage of the business buyer decision process, the owners review the supplier's performance, which includes the installation, maintenance, and warranty response of the fish tank vendor. Additionally, the owners want to determine the ROI for the fish tanks. What data do you recommend the owners collect for this analysis?

Spending: The owners should determine the average transaction per customer in the Naperville location as compared to average coffee shop transactions. You chose spending. That was the best choice. Ultimately, the coffee shop's goal is to turn a profit, and a key factor for driving profit is revenue.

In the adoption process, __________ is when the consumer becomes familiar with the new product but lacks information about it. trial awareness interest evaluation

awareness

In the __________ stage, the consumer seeks information about the new product. evaluation awareness interest trial

interest

The first step of the business buying process is __________. general need description product specification supplier search problem recognition

problem recognition

Need recognition is __________. the stage of the buyer decision process in which the consumer uses information to review different brands in the choice set the first stage of the buyer decision process, in which the consumer notices a problem the stage of the buyer decision process in which the consumer is motivated to locate more information the buyer's decision about which brand to purchase

the first stage of the buyer decision process, in which the consumer notices a problem

Perception is ________. a descriptive thought that a person holds about something the changes in an individual's behavior arising from experience a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea the process by which people select, organize, and interpret information to form a meaningful picture of the world

the process by which people select, organize, and interpret information to form a meaningful picture of the world

Culture is __________. relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors a group of people with shared value systems based on common life experiences and situations the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions two or more people who interact to accomplish individual or mutual goals

the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions

__________ is two or more people who interact to accomplish individual or mutual goals. Culture Social class A group Subculture

A group

__________ is the stage of the buyer decision process in which the consumer uses information to review different brands in the choice set. Information search Need recognition Purchase decision Alternative evaluation

Alternative evaluation

________ is the first stage of the buyer decision process, in which the consumer notices a problem. Alternative evaluation Information search Purchase decision Need recognition

Need recognition

Decision Point: Influential Advice Even singles do not make purchase decisions in isolation. During the buyer decision process, consumers will ask family, coworkers, friends, and neighbors for feedback on products and services. Consider Verdure's primary target market, Canton singles, and determine which source of word-of-mouth information would likely be the most influential during the purchase of a health club membership.

Neighbors/friends: Canton singles like to socialize and therefore rely on friends and neighbors for advice. You chose neighbors/friends. That was the best choice. As you learned in the focus group, Canton singles felt that peers were most influential at this life stage; 95% of the target sought peer advice prior to purchases. Additionally, neighbors are likely to be best informed about health club choices in Canton.

Decison Point: Purchasing Fish Tanks In your next meeting with the owners, you discuss the differences between the Downtown Loop and Naperville stores. The Naperville stores will have twice the square footage as the Chicago Loop stores. To take advantage of the additional square footage, Caffè Gustoso plans on creating relaxation lounges in the new Naperville locations. Unlike the small Chicago Loop stores, the Naperville relaxation lounges will be equipped with plush seating, a water wall, and large tropical fish tanks. The focal point of the relaxation room will be the fish tanks; therefore, this will be the first purchase for the new space. How would you recommend handling the purchase of the tropical fish tanks?

New buy You chose new buy. That was the best choice. The purchase of the fish tanks is a new task for Caffè Gustoso's owners because they have no previous experience purchasing tropical fish tanks.

Decision Point: Which P to Start With The VP believes that the best primary target for Verdure Wellness Club is the high-income single person living in Canton, but she does not want to give up on the Canton family market entirely because she feels that they would be a great secondary market to go after when the primary market is saturated. Your manager asks: "Which of the four Ps do we need to revise first to make Verdure Wellness Club more attractive to the Canton family market?"

Product: You recommend that Verdure should modify its product by adding childcare and kids' programs for the Canton family market. You recommended modifying the product. That was the best choice. The major issue Canton families would find with Verdure Wellness Clubs is the lack of childcare and kids' programs. Adding these services makes Verdure much more attractive to the Canton family market.

__________ is a group of people with shared value systems based on common life experiences and situations. Social class Subculture A group Culture

Subculture

Mentoring Moment: The Buyer Decision Process Now that you have identified Verdure Wellness Club's target market, you need to turn your attention to the buyer decision process for health club memberships. The buyer decision process begins with need recognition and ends with post-purchase behavior.

Need Recognition - Charlotte's gym membership expires this month and recently she has become dissatisfied with the yoga classes her gym offers. She wants to take vinyasa flow but does not want to add a separate yoga studio membership to her expenses. Information Speech - At happy hour on Thursday night, Charlotte asks her friends and neighbors who practice yoga and live a healthy lifestyle for health club recommendations. Evaluation of Alternatives - Charlotte visits the three health clubs that her friends recommended and gathers pricing and class information, which she uses to create a rubric to compare clubs. Purchase Decision - After receiving a mailer from one of her top choices offering a $0 initiation fee and 5 free personal training sessions, Charlotte stops by the club and signs a one-year contract. Post-purchase Behavior - Charlotte loves her new gym and the variety of classes offered exceeds her expectations. She does not regret leaving her old gym for one minute. Need Recognition That was correct. The lack of vinyasa flow classes at her gym stimulates a need for a new health club membership for Charlotte. Information Search That was correct. Asking friends and neighbors for health club recommendations is an example of information search from personal sources. Evaluation of Alternatives That was correct. Collecting relevant information and comparing attributes across bands happens in the evaluation of alternatives stage. Purchase Decision That was correct. Signing the contract for the club membership is the purchase decision. Post-purchase Behavior That was correct. When Charlotte evaluates her choice by comparing her expectations and experiences, she engages in post-purchase evaluation.

Decision Point: Purchasing the Coffee Beans Caffè Gustoso's owners finally agree that there is a significant difference between consumer and business transactions, and they decide to enlist your help for the new store purchases. Since the Naperville store will be offering the same high-quality coffee menu selections as offered in the downtown location, the owners plan on purchasing the beans from the same suppliers that they currently use. The owners feel strongly that they must offer a product that tastes the same regardless of the location where the consumer buys the coffee. Given the fact that the same coffee beans will be purchased from an existing supplier, how do you recommend treating this purchase?

Straight rebuy You chose straight rebuy. That was the best choice. Because the coffee beans will be purchased without modification, this purchase would be best classified as a straight rebuy.

In the __________ stage, the consumer considers whether trying the new product makes sense. trial evaluation interest awareness

evaluation

Mentoring Moment: AIO Dimensions One key to understanding consumer lifestyle is recognizing the difference between an activity, an interest, and an opinion. Together, these AIO dimensions reflect the consumer's pattern of living.

Activity - Raul enjoys playing soccer every weekend for his company's team. Interest - Megan loves following the latest fashion trends and watches celebrities for the latest and greatest. Opinion - Keith thinks smartphones are a waste of money and prefers his trusty flip phone. Activity That was correct. Soccer is a sport, which is an activity. Interest That was correct. Fashion is an interest. Opinion That was correct. Keith's belief about smartphones is an opinion.

Decision Point: Choosing Your Target Market Verdure Wellness Clubs offer more than the typical gym experience; therefore, memberships cost about 25% more than a "regular" gym would. Its members do not mind the higher price tag because they feel that the benefits far exceed the cost. It is not uncommon for members to spend 2 hours at the club every visit -- quite a bit more time than the typical 45-minute gym visit. VP of Marketing: "We have narrowed our Maryland expansion to three target markets defined geographically by neighborhood. Review the demographic summary below and choose the market that most closely matches our current customer profile and product offerings."

Canton You selected Canton as the target market. This was the best choice because Canton residents are the youngest, most affluent market of the three.

__________ is the stage of the buyer decision process in which the consumer is motivated to locate more information. Purchase decision Alternative evaluation Information search Need recognition

Information search

Depending on the complexity of the purchase, firms may use a buying center to complete a transaction. Buying centers vary in size and composition but generally cover six roles: initiator, user, gatekeeper, influencer, decider, and buyer.

Initiator - One of the owner's spouses recently visited an upscale coffee shop in San Francisco whose internal walls were created out of fish tanks. She wants to replicate the relaxing feeling in the Naperville location. User - Customers who come into Caffe Gustoso's Naperville location will benefit from the relaxing ambiance the fish tanks will create. Gatekeeper - Caffe Gustoso's secretary collects, sorts, and organizes all of the fish tank catalogs and bids submitted in response to the request for fish tank proposals. Influencer - Before the fish tank specifications were finalized, the owners talked to a tropical fish retailer to gain some information and inspiration about what fish to acquire for the tanks. Decider - The co-owners of Caffe Gustoso review the proposals submitted by the tropical fish companies and choose a finalist. Buyer - With the winning proposal identified, Caffe Gustoso's purchasing agent completes the transaction by placing the order and negotiating delivery and installation. Initiator That was correct. The owner's spouse is the initiator of the fish tank purchase. User That was correct. The Naperville coffee shop customers will be the users of the fish tanks. Gatekeeper That was correct. Caffè Gustoso's secretary is the gatekeeper of the buying center because she controls the flow of information. Influencer That was correct. The tropical fish retailer is an influencer in the purchase decision by sharing her tropical fish expertise. Decider That was correct. The co-owners of Caffè Gustoso are the deciders because they chose the winning proposal. Buyer That was correct. Caffè Gustoso's purchasing agent is the buyer whose responsibility is to execute the purchase decision.

Decision Point: Purchasing the Cups With the coffee bean purchase process finalized, you turn your attention to the coffee cups, both ceramic and paper. All Caffè Gustoso cups proudly display the Caffè Gustoso logo with "Chicago Loop" printed below the logo. The owners feel strongly that the Naperville location cups need to have a similar look, but with Naperville in place of Chicago Loop under the logo. Given the change to the cup design, how would you recommend handling this purchase?

Modified rebuy You chose modified rebuy. That was the best choice. Caffè Gustoso wants to change the logo for the cups, which requires a modification of the existing purchase specifications.

Decision Point: Family Influences Forty-five percent of the Canton market has a household size of more than one person. Husbands, wives, and children play different roles in the purchase of various products and services, including health club memberships. What outcome from family influences is most likely to occur in Verdure's target market during the health club membership buyer decision process?

The presence of children in the household makes buying a Verdure Wellness Club membership less likely. You predicted that the presence of children in the household would decrease the probability of buying a Verdure Wellness Club membership. That was the best choice. The presence of children in the home decreases the amount of free time for the adults in the family. Additionally, because Verdure does not have childcare or kids' programs, having the kids tag along is not an option.