Consumer Behavior Model: Understanding Decision-Making and Influencing Factors - Prof. Kim, Study notes of Principles of Marketing

Download Consumer Behavior Model: Understanding Decision-Making and Influencing Factors - Prof. Kim and more Study notes Principles of Marketing in PDF only on Docsity! Consumer Decision Making, Segmenting and Targeting Markets Chapters 6 and 8 MARK 3000 © Emmelhainz and Grantham Consumer Behavior Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use. MARK 3000 © Emmelhainz and Grantham Determining the needs/wants of consumers and satisfying those needs through the use of the 4P’s to create an exchange of value and a long term relationship. Environment Marketing MARK 3000 © Emmelhainz and Grantham Consumer Behavior Model Marketing stimuli (4 P’s) Buyer’s thought process Buyer’s actions MARK 3000 © Emmelhainz and Grantham Marketer’s want to predict and influence Buyer’s actions •Buy or not buy •Specific product •Specific brand •Specific dealer Details of the model MARK 3000 © Emmelhainz and Grantham Marketing stimuli Product, price, promotion, place Managers can control MARK 3000 © Emmelhainz and Grantham For high involvement purchases, the consumer decision making process is used A five-step process used by consumers when buying goods or services. MARK 3000 © Emmelhainz and Grantham Consumer Decision-Making Process Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition MARK 3000 © Emmelhainz and Grantham 1. Need Recognition Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State InternalStimuli Ext ern al Sti mu li Consumer Decision Making Process MARK 3000 © Emmelhainz and Grantham Consumer Decision Making Process 2. Information search  Collecting data to help make a reasonable decision  Internal information search  External information search  Results in Evoked Set MARK 3000 © Emmelhainz and Grantham Consumer Decision Making Process 3. Evaluation of alternatives • Narrowing down and rating possible choices  Evaluative criteria 4. Purchase  Based upon information received and the buyer’s decision rules, a final decision is made (to buy or not to buy. . . ) MARK 3000 © Emmelhainz and Grantham Evaluation of Alternatives and Purchase Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria MARK 3000 © Emmelhainz and Grantham Consumer Decision Making Process 5. Postpurchase behavior  Comparing outcomes to expected results  “Was my choice wise?”  Cognitive Dissonance  Ways it is reduced by buyer  Ways it is reduced by seller MARK 3000 © Emmelhainz and Grantham Consumer Decision-Making Process Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition MARK 3000 © Emmelhainz and Grantham Influences on Consumer Decision Making Process  Why do people make the choices they make – given that we all go through the same process? Culture Myths Language Values Customs Rituals Laws Material artifacts The essential character of a society that distinguishes it from other societies. MARK 3000 © Emmelhainz and Grantham Culture includes subcultures and social class Subculture Share elements of culture, but have some unique cultural characteristics of their own. Social Class A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms. MARK 3000 © Emmelhainz and Grantham Social Factors – influence decision making  Social factors  Reference groups  Opinion leaders  Family  Reference groups  Membership  Aspirational  Disassociative MARK 3000 © Emmelhainz and Grantham Social Factors  Family  Responsible for the socialization process  Varied roles in family decision-making  Initiators  Influencers  Decision Makers  Purchasers  Consumers MARK 3000 © Emmelhainz and Grantham Individual factors influence decision making  Demographics  Age, education, income, household size, family structure, gender, ethnic group, occupation, stage in family life cycle  Personality, Self-concept, and Lifestyle  Who you are  Normal reactions  Mode of living MARK 3000 © Emmelhainz and Grantham Modern family life cycle Young single Middle-aged divorced without childrenMiddle-aged married without children Young divorced with children Young married without children Young married with children Middle-aged divorced with children Middle-aged divorced without dependent children Middle-aged married with children Middle-aged married without dependent children Older married Older unmarried Young divorced without children MARK 3000 © Emmelhainz and Grantham Psychological Factors Influence Decision Making  Perception  Motivation  Learning  Beliefs and Attitudes MARK 3000 © Emmelhainz and Grantham Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Perception Psychological Influences on CB Perception drives CB MARK 3000 © Emmelhainz and Grantham Perceptual Screens  Selective exposure  What we notice and ignore  Selective attention  What we cue in on  Selective distortion  Change info that conflicts with beliefs  Selective retention  What we remember MARK 3000 © Emmelhainz and Grantham Changing Attitudes  Change beliefs about the brand’s attributes  Change the relative importance of these beliefs  Add new beliefs MARK 3000 © Emmelhainz and Grantham Review Psychological Factors Learning Experiential Conceptual Selective Exposure Perception Selective Retention Selective Exposure Needs Motivation Physiological EsteemSafety Social Self actualization Beliefs & Attitudes Changing Beliefs about Attributes Changing Importance of Beliefs Adding New Beliefs MARK 3000 © Emmelhainz and Grantham  These factors or characteristics of consumers are often used to develop market segments.  When used in this way, they are referred to as segmentation bases. Segmentation bases  Demographic segmentation  Razors, happy meals, senior apartments  Psychographics segmentation  Combination of demographics and lifestyles  May include geographic factors (geodemographics)  Using location to segment consumers MARK 3000 © Emmelhainz and Grantham Psychographic questions How time is spent  Importance of things around them Beliefs VALS (Values and Lifestyles) VALS survey.html MARK 3000 © Emmelhainz and Grantham Benefit Segmentation The process of grouping customers into market segments according to the benefits they seek from the product. Benefit Segmentation MARK 3000 © Emmelhainz and Grantham Usage Rate Segmentation Usage-Rate Segmentation Dividing a market by the amount of product bought or consumed. 80/20 Principle A principle holding that 20 percent of all customers generate 80 percent of the demand. MARK 3000 © Emmelhainz and Grantham Review Segmentation Bases Geography Demographics Psychographics Benefits Usage Rate • Region • Market size • Market density • Climate • Age • Gender • Income • Race/ethnicity • Family life cycle • Personality • Motives • Lifestyle • Geodemo- graphics • Benefits sought • Former • Potential • 1st time • Light or irregular • Medium • Heavy MARK 3000 © Emmelhainz and Grantham Sample Prizm Segments - Magazines  Bohemian Mix - 30313  City; less than 35, singles and couples, professional / white-collar, college grad, $50,000; liberal, progressive, check out latest movies and nightclubs; read Vanity Fair, drive cars like an Audi A4/S4, shop at Banana Republic, watch Friends in syndication  God’s Country - 30331  Suburban, 35-64, college education, $80,000, career oriented, sophisticated lifestyle, balance between high-power job and laid back leisure, read Airline magazines, drive a car like a Porsche, trade stocks on Internet, listen to Wall Street journal radio  Claritas Prizm MARK 3000 © Emmelhainz and Grantham Strategy for reaching Target Market  Concentrated/niche marketing  Multiple segments exist  Firm chooses to serve only one C C C C CC C C C C CC C C C C CC C C C C CC Mix 1 MARK 3000 © Emmelhainz and Grantham Strategy for reaching Target Market  One-to-One marketing  Each individual is viewed as a separate segment  Products/services tailored to individual needs C Mix 1 C Mix 2 C Mix 4 C Mix 5 C Mix 8C Mix 3 C Mix 7 C Mix 6 MARK 3000 © Emmelhainz and Grantham One-to-One Marketing Information-Intensive Long-Term One-to-One Marketing is... Individualized Cost Reduction Has a Goal of… Customer Loyalty Increased Revenue Personalized Customer Retention MARK 3000 © Emmelhainz and Grantham One-to-One Marketing MARK 3000 © Emmelhainz and Grantham Positioning Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization relative to the competition MARK 3000 © Emmelhainz and Grantham Effective Positioning Assess the positions occupied by competing products Determine the dimensions underlying these positions Choose a market position where marketing efforts will have the greatest impact MARK 3000 © Emmelhainz and Grantham Product Differentiation A positioning strategy that some firms use to distinguish their products from those of competitors. Distinctions can be real or perceived. MARK 3000 © Emmelhainz and Grantham A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds. Perceptual Mapping MARK 3000 © Emmelhainz and Grantham Positioning and Product Differentiation