Consumer Behavior Winter 2012 Student Version Consumer

Consumer Behavior Winter 2012 Student Version

Consumer Behavior • Consumer behavior is the study of when, why, how, and where people do or do not buy a product. • It blends elements from psychology, social anthropology and economics. • It attempts to understand the buyer decision making process, both individually and in groups. • It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. • It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. 2/14/2018 2

Consumer Behavior • Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. • Research has shown that consumer behavior is difficult to predict, even for experts in the field. • Relationship marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. • A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. • Social functions can be categorized into social choice and welfare functions. 2/14/2018 3

Internal Influences • Consumer behavior is influenced by: – demographics – psychographics (lifestyle) – personality – motivation – knowledge – attitudes – beliefs – feelings 2/14/2018 4

Influences on Consumer Behavior 2/14/2018 5

External Influences • Consumer behavior is influenced by: – – – – – 2/14/2018 culture sub-culture locality ethnicity family social class past experience reference groups lifestyle -market mix factors -psychological factors --motivation --perception, --attitude and belief -personal factors --income level --personality --age --occupation 6

Consumer Decision-Making Process Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior

Black Box Model Environmental Factors Marketing Stimuli Product Price Place Promotion Positioning 2/14/2018 Environmental Stimuli Economic Technological Political Cultural Demographic Natural Buyer’s Black Box Buyer Characteristics Attitudes Motivations Perceptions Personality Lifestyle Knowledge Buyer’s Response Decision Process Problem Recognition Information Search Alternative Evaluation Purchase Decision Post-Purchase Behavior Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount 8

Black Box Model • • The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses. It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within people). The black box model is related to the black box theory of behaviorism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and processed by the companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society. The buyers black box contains the buyer characteristics and the decision process, which determines the buyers response. The black box model considers the buyers response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer. 2/14/2018 9

Types of consumer involvement and decision making Routine Limited Extensive Involvement Short Low to moderate High Time Low Short to moderate Long Cost Short Low to moderate High Information Search Internal only Mostly internal Internal & external Number of alternatives one few many

Other “Models” of Consumer Behavior 2/14/2018 11

VALS Segmentation • • VALS ("Values, Attitudes and Lifestyles") is a proprietary research methodology used for psychographic market segmentation. Market segmentation is designed to guide companies in tailoring their products and services to appeal to the people most likely to purchase them. VALS was developed in 1978 by social scientist and consumer futurist Arnold Mitchell and his colleagues at SRI International. It was immediately embraced by advertising agencies, and is currently offered as a product of SRI's consulting services division. VALS draws heavily on the work of Harvard sociologist David Riesman and psychologist Abraham Maslow. Mitchell used statistics to identify attitudinal and demographic questions that helped categorize adult American consumers into one of nine lifestyle types: survivors (4%), sustainers (7%), belongers (35%), emulators (9%), achievers (22%), I -am-me (5%), experiential (7%), societally conscious (9%), and integrated (2%). The questions were weighted using data developed from a sample of 1, 635 Americans and their partners, who responded to an SRI International survey in 1980. 2/14/2018 12

The VALS Framework the 2/14/2018 13

The VALS Segments • Innovators – These consumers are on the leading edge of change, have the highest incomes, and such high self-esteem and abundant resources that they can induldge in any or all self-orientations. – They are located above the rectangle. Image is important to them as an expression of taste, independence, and character. – Their consumer choices are directed toward the "finer things in life. " • Thinkers – These consumers are the high-resource group of those who are motivated by ideals. – They are mature, responsible, well-educated professionals. – Their leisure activities center on their homes, but they are well informed about what goes on in the world and are open to new ideas and social change. – They have high incomes but are practical consumers and rational decision makers. 2/14/2018 14

The VALS Segments (cont. ) • Believers – These consumers are the low-resource group of those who are motivated by ideals. – They are conservative and predictable consumers who favor American products and established brands. – Their lives are centered on family, mosque, community, and the nation. – They have modest incomes. • Achievers – These consumers are the high-resource group of those who are motivated by achievement. – They are successful work-oriented people who get their satisfaction from their jobs and families. – They are politically conservative and respect authority and the status quo. – They favor established products and services that show off their success to their peers. 2/14/2018 15

The VALS Segments (cont. ) • Strivers – These consumers are the low-resource group of those who are motivated by achievements. – They have values very similar to achievers but have fewer economic, social, and psychological resources. – Style is extremely important to them as they strive to emulate people they admire. • Experiencers – These consumers are the high-resource group of those who are motivated by self-expression. – They are the youngest of all the segments, with a median age of 25. – They have a lot of energy, which they pour into physical exercise and social activities. – They are avid consumers, spending heavily on clothing, fast-foods, music, and other youthful favorites, with particular emphasis on new products and services. 2/14/2018 16

The VALS Segments (cont. ) • Makers – These consumers are the low-resource group of those who are motivated by self-expression. – They are practical people who value self-sufficiency. – They are focused on the familiar-family, work, and physical recreationand have little interest in the broader world. – As consumers, they appreciate practical and functional products. • Survivors – These consumers have the lowest incomes. – They have too few resources to be included in any consumer selforientation and are thus located below the rectangle. – They are the oldest of all the segments, with a median age of 61. – Within their limited means, they tend to be brand-loyal consumers. 2/14/2018 17

Consumers After the “Crisis” 2/14/2018 19

The Marketers Perspective 2/14/2018 20