Marketing: Ch. 5

Define new product

A good, service, or idea that is perceived by some potential customers as new.

Define Subculture

A smaller group within a culture, of people with shared value systems based on common life experiences and situations

Define dissonance-reducing buying behaviour

Occur when consumers are highly involved with an expensive, infrequent, or risky purchase but see little difference among brands. After the purchase, consumers might experience post purchase dissonance (after-sale discomfort) when they notice certain disadvantages of the purchased 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.

What is consumer markets and consumer buyer behavior about?

The American consumer market consists of more than 313 million people who consume over $14 trillion worth of goods and services each year, making it one of the most attractive consumer markets in the world. Consumers vary greatly in terms of cultural, social, personal, and psychological makeup. Understanding how these differences affect consumer buying behavior is one of the biggest challenges marketers face.

Define purchase decision

The buyer's decision about which brand to purchase. Generally the consumer's purchase decision will be to buy the most preferred brand, but 2 factors can come between the purchase intention and the purchase decision. 1. attitudes of others 2. unexpected situation factors

Define the consumer market and construct a simple model of consumer buyer behavior (p. 158-159)

The consumer markets consists of all the individuals and households that buy or acquire goods and services for personal consumption. The simplest model of consumer buyer behaviour is the stimulus-response model. According to this model, marketing stimuli (the 4Ps) and other major forces (economic, technological, political, cultural) enter the consumer's "black box" and produce certain responses. Once in the black box, these inputs produce observable buyer responses, such as product choice, brand choice, purchase timing, and purchase amount.

Define Consumer market

The final consumers combined

Why study consumer behaviour?

The goal of marketing is to affect how customers think about and behave toward the organization and its market offerings. But to affect the whats, whens and hows of buying behavior, marketers must first understand the whys.

Define adoption process

The mental process through which an individual passes from first hearing about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product. 5 stages in the process of adopting a new product: 1. Awareness: The consumer becomes aware of the new product but lacks information about it 2. Interest: The consumer seeks information about the new product 3. Evaluation: The consumer considers whether trying the new product makes sense. 4. Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value. 5. Adoption: The consumer decides to make full and regular use of the new product.

Define Culture

The most basic cause of a person's wants and behavior

Define word of mouth influence

can have powerful impact on consumer buying behavior. Most happen naturally. But rather than leaving it to chance, marketers can help to create positive conversations about their brands.

Define online social networks

online communities where people socialise or exchange information and opinions.

Define motive

or drive, is a need that is sufficiently pressing to direct a person to seek satisfaction.

Define opinion leader

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.

Define Consumer buyer behaviour

refers to the buying behaviour of final consumers - individuals and households that buy goods and services for personal consumption.

Define 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. The idea is that brands also have personalities, and consumers are likely to choose brands with personalities that match their own. A brand personality is the specific mix of human traits that may be attributed to a particular brand. One researcher identified 5 brand personality traits: 1. sincerity (down to earth, honest, wholesome, and cheerful); 2. excitement (daring, spirited, imaginative, and up to date); 3. competence (reliable, intelligent and successful); 4. sophistication (upper class and charming); 4. ruggedness (outdoorsy and tough). "Your personality determines what you consume, what TV shows you watch, what products you buy and most other decision you make. Many marketers use a concept related to personality - a person's self-concept (also called self image). Thus, to understand consumer behavior, marketers must first understand the relationship between consumer self-concept and possessions.

Define attitude

Describes a person's relatively consistent evaluations, feelings, and tendencies toward an object or idea. A company should usually try to fit its products into existing attitudes rather than attempt to change attitudes.

Define information search

An interested consumer may or may not reach for more information. If the consumer's drive is strong and a satisfying product is near at hand, he or she is likely to buy it then. If not, the consumer may store the need in memory or undertake an information search related to the need. Consumers can obtain information from any of several sources. These include: 1. personal sources: family, friends, neighbors, acquaintances 2. commercial sources: advertising, sales people, dealerWebsites, packaging, displays 3. public sources: mass media, consumer-rating organizations, online searches and peer reviews 4. experiential sources: handling, examining, using the product Traditionally, consumers have received the most information about a product from commercial sources - those by the marketer. The most effective sources, however, tend to be personal. Commercial sources normally inform the buyer, but personal sources legitimize or evaluate products for the buyer.

Define cognitive dissonance

Buyer discomfort caused by post-purchase conflict.

List and define the major types of buying decision behaviour and the stages in the buyer decision process.

Buying behavior may vary greatly across different types of products and buying decisions. Consumers undertake complex buying behavior when they are highly involved in a purchase and perceive significant differences among brands. Dissonance reducing behavior occurs when consumers are highly involved but see little differene among brands. Habitual buying behavior occurs under conditions of low involvement and little significant brand difference. In situations characterized by low involvement but significant perceived brand differences, consumers engage in variety-seeking buying behavior. When making a purchase, the buyer goes through a decision process consisting of need recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. The marketer's job is to understand the buyer's behavior at each stage and the influences that are operating. During need recognition, the consumer recognizes a problem or need that could be satisfied by a product or service in the market. Once the need is recognized, the consumer is aroused to seek more information and moves into the information search stage. With information in hand, the consumer proceeds to alternative evaluation, during which the information is used to evaluate brands in the choice set. From there, the consumer makes a purchase decision and actually buys the product. In the final stage of the buyer decision process, postpurchase behavior, the consumer takes action based on satisfaction or dissatisfaction.

Define need recognition

Buying process starts with this. The buyer recognizes a problem or need. The need can be triggered by internal stimuli. It rises to a level high enough to become a drive. A need can also be triggered by external stimuli. At this stage, the marketer should research consumers to find out what kinds of needs or problems arise, what brought them about, and how they led the consumer to this particular product.

Name the 4 major factors that influence consumer buyer behavior (p. 159-174)

Consumer buyer behaviour is influenced by 4 key sets of buyer characteristics: cultural, social, personal and psychological. Although many of these factors cannot be influenced by the marketer, they can be useful in identifying interested buyers and shaping products and appeals to serve consumer needs better. Culture is the most basic determinant of a person's wants and behavior. Subcultures are "cultures within cultures" that have distinct values and lifestyles and can be based on anything from age to ethnicity. Many companies focus their marketing programs on the special needs of certain cultural and subcultural segments. Social factors also influence a buyer's behavior. A person's reference groups - family, friends, social networks, professional associations - strongly affect product and brand choices. The buyer's age, life -cycle stage, occupation, economic circumstances, personality and other personal characteristics influence his or her buying decisions. Consumer lifestyles - the whole pattern of acting and interacting in the world - are also an important influence on purchase decision. Finally, consumer buying behavior is influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes. Each of these factors provides a different perspective for understanding the workings of the buyers black box.

Define variety-seeking buying behaviour

Consumers undertake this in situations characterised by low consumer involvement but significant percieved 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.

Define complex buying behaviour

Consumers undertake this when they are highly involved in a purchase and perceive significant differences among brands. This buyer will pass through a learning process, first developing beliefs abut the product, then attitudes, and then making a thoughtful purchase choice. Marketers of high involvement products must understand that information-gathering and evaluation behavior of high-involvement consumers. They need to help buyers learn about product-class attributes and their relative importance.

Define habitual buying behaviour

Occurs under conditions of low-consumer involvement and little significant brand differences. (eg. buying salt, instinct, you just reach for it) Consumer behavior does not pass through the usual belief-attitude-behavior sequence The market leader will try to encourage habitual buying behavior by dominating shelf space, keeping shelves fully stocked and running frequent reminder advertising.

Consumer Buyer Behaviour

Refers to the buying behaviour of final consumers - individuals and households who buy goods and services for personal consumption

Define perception

The process by which people select, organise, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus because of 3 perceptual processes: 1. selective attention - the tendency for people to screen out most of the information to which they are exposed - 2. selective distortion: describes the tendency of people to interpret information in a way that will support what they already believe. 3.selective retention: where consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands. Because of selective attention, distortion, and retention, marketers must work hard to get their messages through.

Describe the adoption and diffusion process for new products.

The product adoption process is made up of 5 stages: awareness, interest, evaluation, trial and adoption. New-product marketers must think about how to help consumers move through these stages. With regard to the diffusion process for new products, consumers respond at different rates, depending on consumer and product characteristics. Consumers may be innovators, early adopters, early majority, late majority, or laggards. Each group may require different marketing approaches. Marketers often try to bring their new products to the attention of potential early adopters, especially those who are opionion leaders. Finally, several characteristics influence the rate of adoption: relative advantage, compatability, complexity, divisibility, and communicability.

Define post purchase behaviour

The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction. The marketer's job does not end when the product is bought. 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 products' percieved 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. This suggests that sellers should promise only what their brands can deliver so that buyers are satisfied.

Define alternative evaluation

The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. How consumers process information to choose among alternative brands. In some cases, consumers use careful calculations and logical thinking. At other times, the same consumers do little or no evaluating. Instead they buy on impulse and rely on intuition. If marketers know what evaluative processes go on, they can take steps to influence the buyer's decision.

Define Group

These affect a person's behavior. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference groups form a person's attitudes or behavior. People often are influenced by reference groups to which they do not belong.

Define belief

a descriptive thought that a person has about something. Beliefs may be based on real knowledge, opinion, or faith and may or may not carry an emotional charge

Define lifestyle

a person's pattern of living as expressed in his or her psychographics. It involves measuring consumers' major AIO dimensions - activities (work, hobbies, shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues, business, products). Consumers don't just buy products; they buy values and lifestyles those products represent.

Define learning

describes the changes in an individual's behaviour arising from experience. Occurs through the interplay of drives, stimuli, cues, responses and reinforcements drive is a strong internal stimulus that calls for action. A drive becomes a motive when it is directed toward a particular stimulus object. The consumer's response to the idea of buying is conditioned by the surrounding cues. Cues are minor stimuli that determine when, where, and how the person responds. Cues might influence a consumer's response to his or her interest in buying a product. If the experience is rewarding, this same response will be reinforced.

Define social class

society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. 7 social classes 1. Upper uppers 2. lower uppers 3.upper middles 4. middle class 5. working class 6. upper lowers 7. lower lowers. Not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth and other variables. People within a given social class tend to exhibit similar buying behavior. Social classes show distinct product and brand preferences in areas such as clothing, home furnishings, travel land leisure activity, financial services and automobiles.