4 -1 Chapter 4 Consumer Markets and

4 -1

Chapter 4 Consumer Markets and Buying Behavior 4 -2 Mc. Graw-Hill/Irwin Copyright © 2004 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Chapter Goals • • Factors used to explain consumer behavior Consumer demographic changes Consumers decision-making Influences affecting consumers’ decisions 4 -3 Mc. Graw-Hill/Irwin Copyright © 2004 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

The Consumer Market ULTIMATE CONSUMERS Buy goods and services for their own personal or household use 4 -4

Geographic Distribution 4 -5

Geographic Distribution Rural 25% of the Population Urban 75% of the Population Metropolitan Areas: MSA PMSA CMSA Suburban Population 4 -6 Growing Deconcentration Real Growth Economic, Racial, Ethnic Implications

Consumer Demographics Age Much Income and financial assets held by older group Family Life Cycle Education, Income Majority are well-educated and prosperous while 12% live below poverty Race, Ethnicity 4 -7 Family form over time is a major determinant of consumer behavior African Americans, Hispanics, Asians

Family Life Cycle Stages Bachelor Young Married Nine stages with different buying behavior Full Nest I Single Parents Divorced and Alone Middle-aged Married Full Nest II Empty Nest Older Single 4 -8

Consumer Buying-Decision Process 4 -9

Consumer Buying-Decision Process Loyalty Involvement Impulse Buying 4 -10

Consumer Buying-Decision Process Need recognition Identification of alternatives Evaluation of alternatives Purchase and related decisions Postpurchase behavior 4 -11

Information and Purchase Decisions Information Commercial sources Social sources 4 -12

Social Influences Culture Subcultures Social class Reference groups Families and Households 4 -13

Psychological Influences Motivation Perception Learning Personality Attitude 4 -14

Maslow’s Hierarchy of Needs 4 -15

Perception Process of receiving, organizing, and assigning meaning to information or stimuli detected by our five senses Selective Perception Selective Distortion 4 -16 Selective Attention Selective Retention

Personality An individual’s pattern of traits that influence behavioral responses Psychoanalytic Theory Hidden buying motives Dreams, hopes, fantasies, fears Self-concept Actual Ideal 4 -17

Attitudes Learned predisposition to respond to an object in a consistently favorable or unfavorable way Characteristics Learned Object Direction Intensity Stable Generalizable 4 -18

Situational Factors When consumers buy Where consumers buy Why consumers buy Conditions under which consumers buy 4 -19

Situational Influences Surroundings Time Consumer Moods and Motives 4 -20 Terms

Key Terms and Concepts • Ultimate consumer • Metropolitan Statistical Area (MSA) • Primary Metropolitan Statistical Area (PMSA) • Consolidated Metropolitan Statistical Area (CMSA) • Demographics • Family life-cycle stage • Consumer buying decision process • Level of Involvement • Loyalty 4 -21 Mc. Graw-Hill/Irwin • Impulse buying • Patronage buying motives • Postpurchase cognitive dissonance • Commercial information environment • Social information environment • Culture • Subculture • Social class • Reference groups Copyright © 2004 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Key Terms and Concepts • • Family Household Motive Maslow’s need hierarchy Perception Selective perception Learning 4 -22 Mc. Graw-Hill/Irwin • • • Stimulus-response theory Personality Psychoanalytic theory Self-concept Attitude Situational influence Copyright © 2004 by The Mc. Graw-Hill Companies, Inc. All rights reserved.