CONSUMER MARKETS BUYING BEHAVIOR Kotler P

CONSUMER MARKETS & BUYING BEHAVIOR Kotler, P. & armstrong, g. , 2006, principles of Marketing, new Jersey: Pearson education, inc. , ch. 5 9/12/2011 Session 2 1

DEFINITIONS Consumer buying behavior refers to the buying behavior of final consumers. Final consumers are individuals and households who buy goods and services for personal consumption. Consumer markets are all the individuals and households who buy or acquire goods and services for personal consumption. Business markets are businesses, government bodies, and institutions who buy or acquire goods and services for incorporation (e. g. ingredient materials or components), consumption (e. g. office supplies, consulting services), use (installations or equipment), or resale. 9/12/2011 Session 2 2

BUYER BEHAVIOR MODEL 9/12/2011 Session 2 3

Factors Influencing Consumer Behavior Cultural Social Culture Reference groups Subculture Family Social class Roles and status 9/12/2011 Personal Age and life-cycle Occupation Economic situation Lifestyle Personality and self-concept Session 2 Psychological Motivation Perception Learning Beliefs and attitudes Buyer 4

CULTURAL FACTORS v. Culture is the set of basic values, perceptions, wants and behaviors learned by a member of society from family & other important institutions. v. Subculture is group of people with shared value systems based on common life experiences. v. Social Class is society’s relatively permanent & ordered divisions whose members share similar values, interests, and behaviors as measured by: occupation, income, education, wealth and other variables. 9/12/2011 Session 2 5

SOCIAL FACTORS Groups • Membership • Reference Family (most important) • Husband, wife, kids • Influencer, buyer, user Social Factors Roles and Status 9/12/2011 Session 2 6

SOCIAL FACTORS Group consists of two or more people who interest to accomplish individual or mutual goals. Opinion leader is person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts influence on others. Role consists of the activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given to it by society. 9/12/2011 Session 2 7

PERSONAL FACTORS q Age and Life-cycle Stage q Occupation q Economic situation q Lifestyle is a person’s pattern of living as expressed in his or her activities, interests, and opinions. q Personality & self-concept v Personality is the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. v The basic self-concept premise is that people’s possessions contribute to and reflect their identities – “we are what we have. ” 9/12/2011 Session 2 8

VALS – Life Style Classifications Actualizers High Resources Principle Oriented Status Oriented High innovation Action Oriented Fulfillers 9/12/2011 Experiencers Believers Low Resources Achievers Strivers Makers Struggles Session 2 Low innovation 9

VALUE & LIFE-STYLES (VALS) SURVIVORS – elderly, passive people who are concerned about change. Loyal to their favorite brands. INNOVATORS – successful, sophisticated, active people with high self-esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and services. EXPERIENCERS – young, enthusiastic, impulsive people who seek variety and excitement. Spend a comparatively high proportion of income on fashion, entertainment, and socializing. MAKERS – practical, down-to-earth, self-sufficient people who like to work with their hands. Favor product with a practical or functional purpose.

VALUE & LIFE-STYLES (VALS) ACHIEVERS – successful goal-oriented people who focus on career and family. Favor premium products that demonstrate success to their peers. STRIVERS – trendy and fun-loving people who are resource-constrained. Favor stylish products that emulate the purchase of those with greater material wealth. THINKERS – mature, satisfied, and reflective people who are motivated by ideals and value order, knowledge, and responsibility. Favor durability, functionality, and value in products. BELIEVERS – conservative, conventional, and traditional people with concrete beliefs. Favor familiar products and are loyal to established brands.

INDONESIAN CONSUMER MARKET SEGMENTS: 1. 2. 3. 4. 5. 6. 7. 8. ESTABLISHED CONFIDENT (“ORANG ALIM”) THE OPTIMISTIC FAMILY PERSON (IBU “PKK”) THE CHANGE-EXPECTING LAD (‘ANAK NONGKRONG”) CHEERFUL HUMANIST (“LEMBUT HATI”) INTROVERT WALLFLOWER (“PASRAH”) THE SAVVY CONQUEROR/CITY SLICKERS (“MAIN UNTUK MENANG”) THE NETWORKING PLEASURE SEEKER (“GAULGLAM”) THE SPONTANEOUS FUN-LOVING (“BINTANG PANGGUNG”) (SUMBER: LOWE INDONESIA) 12

FAMILY LIFE CYCLE TRADITIONAL FAMILY FLOW BACHELORHOOD - YOUNG SINGLE HONEYMOONERS - YOUNG MARRIED WITHOUT CHILDREN PARENTHOOD - YOUNG MARRIED WITH CHILDREN POSTPARENTHOOD - MIDDLE-AGED WITHOUT DEPENDENT CHILDREN DISSOLUTION - OLDER MARRIED (one surviving spouse) & UNMARRIED (Schiffman, L. G. & Kanuk, L. L. , 2007, Consumer Behavior, New Jersey: Pearson Education, Inc. , pp. 334 & 338) 9/12/2011 Session 2 13

PSYCHOLOGICAL FACTORS Motivation. A psychological process resulting in goaldirected behavior that satisfies human needs. * Perception. The process by which people select, organize, and interpret information to form a meaningful picture of the world. Learning. Changes in an individual’s behavior arising from experience. Belief. A descriptive thought that a person holds about something. Attitude. A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea. * Cullen, J. B. & Parboteeah, K. P. , 2005, Multinational Management: A Strategic Approach, United States: South-Western (International Student Edition), p. 537. 9/12/2011 Session 2 14

Maslow’s Hierarchy of needs Selfactualization needs (self-development and realization) Esteen needs (self-esteen, recognition, status) Social needs (sense of belonging, love) Safety needs (security, protection) Physiological Needs (hunger, thirst) 9/12/2011 Session 2 15

Buyer Decision Process Purchase Decision Evaluation of Alternatives Postpurchase Behavior Information Search Need Recognition 9/12/2011 Session 2 16

Buyer Decision Process Step 1. Need Recognition State Where the Buyer’s Needs are Fulfilled and the Buyer is Satisfied. 9/12/2011 Buyer Recognizes a problem or a Need Session 2 Needs Arising From: Internal Stimuli – Hunger External Stimuli. Friends 17

The Buyer Decision Process Step 2. Information Search Personal Sources Commercial Sources Public Sources Experiential Sources 9/12/2011 • Family, friends, neighbors • Most effective source of information • Advertising, salespeople • Receives most information from these sources • Mass Media • Consumer-rating groups • Handling the product • Examining the product • Using the product Session 2 18

The Buyer Decision Process Step 4. Evaluation of Alternatives Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own. Consumers May Make Buying Decisions Only After Consulting Others. Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives 9/12/2011 Session 2 19

The Buyer Decision Process Step 5. Purchase Decision Purchase Intention Desire to buy the most preferred brand Attitudes of Others Unexpected Situational Factors Purchase Decision 9/12/2011 Session 2 20

The Buyer Decision Process Step 6. Postpurchase Behavior Consumer’s Expectations of Product’s Performance. Product’s Perceived Performance. Cognitive Dissonance Satisfied Customer! Dissatisfied Customer 9/12/2011 Session 2 21

Types of Buying Decision Behavior High Involvement Low Involvement Significant differences between brands Complex Buying Behavior Variety. Seeking Behavior Few differences between brands Dissonance. Reducing Buying Behavior Habitual Buying Behavior 9/12/2011 Session 2 22