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INTRODUCTION

You likely have heard of GoPro, the small but fast-growing company that makes tiny, wearable HD video cameras.

Few brands can match the avid enthusiasm and intense loyalty that GoPro has created in the hearts and minds of its customers, many of whom are extreme sports hobbyists.

Its customers are among the most loyal and engaged of any brand. Intense customer engagement and excitement has made GoPro the fastest-growing camera company in the world.

GoPro knows that deep down, it offers customers much more than just durable little video cameras. It gives them a way to share action-charged moments and emotions with friends.

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Photo: GoPro

Ø Opening Vignette Questions

1. How does GoPro successfully differentiate itself from its competitors in today’s crowded electronics marketplace?

2. What does GoPro mean when they encourage their customers to “be a hero”?

3. How has GoPro successfully used social media channels to promote its products?

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PPT 5-5

PPT 5-6

Define the consumer market and construct a simple model of consumer buyer behavior.

Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption.

All of these consumers combine to make up the consumer market.

The American consumer market consists of more than 316 million people.

Learning Objective 1

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Key Terms: Consumer Buyer Behavior, Consumer Market

Ø Assignments, Resources

Use Critical Thinking Exercise 5-6 here

Use Small Group Assignment 1 here

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PPT 5-7

Model of Consumer Behavior

The central question for marketers is: How do consumers respond to various marketing efforts the company might use?

The starting point is the stimulusresponse model of buyer behavior shown in Figure 5.1.

Marketing stimuli consist of the four Ps: product, price, place, promotion.

Other stimuli include major forces and events in the buyer’s environment: economic, technological, social, and cultural.

The marketer wants to understand how the stimuli are changed into responses inside the consumer’s “black box,” which has two parts.

1. The buyer’s characteristics influence how he or she perceives and reacts to the stimuli.

2. The buyer’s decision process itself affects the buyer’s behavior.

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Figure 5.1: Model of Buyer Behavior

PPT 5-8

Review Learning Objective 1: Define the consumer market and construct a simple model of consumer buyer behavior.

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Name the four major factors that influence consumer buyer behavior.

Characteristics Affecting Consumer Behavior

Cultural Factors

Culture is the most basic cause of a person’s wants and behavior.

Marketers are always trying to spot cultural shifts.

Subcultures are groups of people with shared value systems based on common life experiences and situations.

The U.S. Hispanic market consists of more than 55 million consumers.

By 2013, the nation’s more than 42 million African-American consumers will have a buying power of more than $1 trillion. 

Asian Americans are the most affluent U.S. demographic segment.

Many marketers now embrace cross-cultural marketing—the practice of including ethnic themes and cross-cultural perspectives within their mainstream marketing.

Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Social class is not determined by a single factor, but is measured as a combination of occupation, income, education, wealth, and other variables.

Major American Social Classes:

· Upper Class

· Middle Class

· Working Class

· Lower Class

Social classes show distinct product and brand preferences in areas such as clothing, home furnishings, travel and leisure activity, financial services, and automobiles.

Learning Objective 2

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Figure 5.2: Factors Influencing Consumer Behavior

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Key Term: Culture,

Subculture

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Ad: Chrysler

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Ad: AT&T

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Key Terms: Cross-Cultural Marketing, Social Class

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Figure 5.3

Major American Social Classes

Ø Assignments, Resources

Use Discussion Question 5-1 here

Use Additional Project 1 and 2 here

Use Think-Pair-Share 1 to 3 here

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PPT 5-16

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PPT 5-17

Social Factors

Groups and Social Networks. A person’s behavior is influenced by many small groups, including membership groups, aspirational groups, and reference groups.

Marketers use word-of-mouth influence and buzz marketing to spread the word about their brands.

Opinion leaders are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others.

This small percentage of Americans is referred to as the influentials or leading adopters.

Online social networks are online communities where people socialize or exchange information and opinions.

Family is the most important consumer buying organization in society.

· Of men ages 18 to 64, 52 percent identify themselves as primary grocery shoppers in their households, and 39 percent handle most of their household’s laundry.

· Women account for 60 percent of all technology purchases and influence two-thirds of all new car purchases.

· The nation’s 36 million kids age 9 to 13 control an estimated $43 billion in disposable income

Roles and Status. A role consists of the activities people are expected to perform. Each role carries a status reflecting the general esteem given to it by society.

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Key Term: Group

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Key Term:  Word-of-Mouth Influence, Opinion Leader

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Ad: Philips

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Key Term: Online Social Network

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Ad: Timberland

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Photo: Go-Gurt

Ø Assignments, Resources

Use Real Marketing 5.1 here

Use Additional Project 3 here

Use Think-Pair-Share 4 here

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PPT 5-30

Personal Factors

Age and Life-Cycle Stage. People change the goods and services they buy over their lifetimes.

Tastes in food, clothes, furniture, and recreation are often age-related. Buying is also shaped by the stage of the family life cycle.

Marketers often define their targets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage.

Consumer information giant Nielsen’s PRIZM Lifestage Groups system places U.S. households into one of 66 consumer segments and 11 life stage groups. For example:
The Young Achievers” group includes subsegments like “Young Digerati,” “Bohemian Mix,” and “Young Influentials.” This group consists of hip, single twenty-somethings who rent apartments in or close to metropolitan neighborhoods.

Occupation. A person’s occupation affects the goods and services they purchase.

Economic Situation. A person’s economic situation will affect store and product choice.  The situation includes trends in spending, personal income, savings, and interest rates.

Lifestyle is a person’s pattern of living as expressed in his or her psychographics.

This involves measuring major AIO dimensions such as activities (work, hobbies, shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues, business, products).

Personality and Self-Concept

Personality refers to the unique psychological characteristics that distinguish a person or group.

A brand personality is the specific mix of human traits that may be attributed to a particular brand. One researcher identified five 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)

5. Ruggedness (outdoorsy and tough)

The basic self-concept premise is that people’s possessions contribute to and reflect their identities; that is, “we are what we have.”

Psychological Factors

Motivation

A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction.

Psychoanalyst Sigmund Freud suggested that a person’s buying decisions are affected by subconscious motives that even the buyer may not fully understand.

Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations.

Abraham Maslow sought to explain why people are driven by particular needs at particular times. He determined that human needs are arranged in a hierarchal fashion.

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

Selective attention is the tendency for people to screen out most of the information to which they are exposed.

Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe.

Selective retention is the retaining of information that supports their attitudes and beliefs.

Subliminal advertising refers to marketing messages received without consumers knowing it. Studies have established no link between subliminal messages and consumer behavior.

Learning describes changes in an individual’s behavior arising from experience.

A drive is a strong internal stimulus that calls for action.

A drive becomes a motive when it is directed toward a particular stimulus object.

Cues are minor stimuli that determine when, where, and how the person responds.

Beliefs and Attitudes 

A belief is a descriptive thought that a person has about something.

Attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes are difficult to change.

Review Learning Objective 2: Name the four major factors that influence consumer buyer behavior.

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Photo: Nielsen’s PRIZM

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Key Term: Lifestyle

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Ad: KitchenAid

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Key Term: Personality

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Ad: JetBlue

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Key Term:

Motive (Drive)

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Figure 5.4: Maslow’s Hierarchy of Needs

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Key Term:

Perception

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Ad: American Association of Advertising Agencies

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Key Term: Learning

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Key Terms:

Belief, Attitude

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Ad: Vidalia Onion Committee

Ø Assignments, Resources

Use Real Marketing 5.2 here

Use Marketing Ethics here

Use Discussion Question 5-2 here

Use Video Case here

Use Outside Example 1 here

PPT 5-31

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PPT 5-33

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

Types of Buying Decision Behavior

Figure 5.5 shows types of consumer buying behavior based on the degree of buyer involvement and the degree of differences among brands.

Complex Buying Behavior

Consumers undertake complex buying behavior when they are highly involved in a purchase and perceive significant differences among brands.

Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive.

Typically, the consumer has much to learn about the product category.

Marketers of high-involvement products must understand the information-gathering and evaluation behavior of high-involvement consumers.

Dissonance-Reducing Buying Behavior

Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands.

After the purchase, consumers might experience postpurchase 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.

Habitual Buying Behavior

Habitual buying behavior occurs under conditions of low consumer involvement and little significant brand difference.

Consumer behavior does not pass through the usual belief-attitude-behavior sequence.

Consumers do not search extensively for information about the brands, evaluate brand characteristics, and make weighty decisions about which brands to buy.

They passively receive information as they watch television or read magazines.

Because buyers are not highly committed to any brands, marketers of low-involvement products with few brand differences often use price and sales promotions to stimulate buying.

Variety-Seeking Buying Behavior

Consumers undertake variety-seeking buying behavior in situations characterized by low consumer involvement but significant perceived brand differences.

In such cases, consumers often do a lot of brand switching.

Learning Objective 3

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Figure 5.5: Four Types of Buying Behavior

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Key Term: Complex Buying Behavior

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Key Terms: Dissonance-Reducing Buying Behavior, Habitual Buying Behavior

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Ad: Cheerios

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Key Term: Variety-Seeking Buying Behavior

Ø Assignments, Resources

Use Critical Thinking Exercise 5-5 and 5-7 here

Use Individual Assignment 1 here

Ø Troubleshooting Tip

By and large, students have not been exposed to the consumer behavior concepts in this chapter before. If they have taken a sociology or human behavior course, chances are very high that the concepts were not presented in a way that allowed the students to understand them as they apply to business in general and marketing in particular. After presenting the concepts of consumer behavior, have the students discuss the concepts in terms of their own buying habits, their backgrounds, and how they differ from others in the class.

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The Buyer Decision Process

The buyer decision process consists of five stages:

1. Need recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision

5. Postpurchase behavior

Need Recognition

The buyer recognizes a problem or need triggered by either an:

· Internal stimuli, or

· External stimuli

Information Search

Information search may or may not occur.

Consumers can obtain information from any of several sources.

· Personal sources (family, friends, neighbors, acquaintances)

· Commercial sources (advertising, salespeople, Web sites dealers, packaging, displays)

· Public sources (mass media, consumerrating organizations, Internet searches)

· Experiential sources (handling, examining, using the product)

Commercial sources inform the buyer.

Personal sources legitimize or evaluate products for the buyer.

Evaluation of Alternatives

Alternative evaluation is how the consumer processes information to arrive at brand choices.

How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation.

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.

Purchase Decision

Generally, the consumer’s purchase decision will be to buy the most preferred brand.

Two factors can come between the purchase intention and the purchase decision.

1. Attitudes of others

2. Unexpected situational factors

Postpurchase Behavior

The difference between the consumer’s expectations and the perceived performance of the good purchased determines how satisfied the consumer is.

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 said to be delighted.

Cognitive dissonance, or discomfort caused by postpurchase conflict, occurs in most major purchases.

Review Learning Objective 3: List and define the major types of buying decision behavior and the stages in the buyer decision process.

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Figure 5.6: Buyer Decision Process

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Key Term: Need Recognition

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Ad: National Geographic Kids

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Key Term: Information Search

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Key Term: Alternative Evaluation

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Key Term: Purchase Decision

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Key Terms: Postpurchase Behavior, Cognitive Dissonance

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Photo: Shopping

Ø Assignments, Resources

Use Online, Mobile, and Social Media Marketing here

Use Marketing by the Numbers here

Use Outside Example 2 here

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PPT 5-46

PPT 5-47

Describe the adoption and diffusion process for new products.

The Buyer Decision Process for New Products

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

The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product.

Stages in the Adoption Process

Consumers go through five 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.

Individual Differences in Innovativeness

People differ greatly in their readiness to try new products.

People can be classified into the adopter categories shown in Figure 5.7.

The five adopter groups have differing values.

1. Innovators are venturesome—they try new ideas at some risk.

2. Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully.

3. The early mainstream are deliberate—while rarely leaders, they adopt new ideas before average persons.

4. The late mainstream are skeptical—they adopt an innovation only after a majority of people have tried it.

5. Lagging adopters are tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.

Influence of Product Characteristics on Rate of Adoption

Five characteristics are important in influencing an innovation’s rate of adoption.

1. Relative advantage: The degree to which the innovation appears superior to existing products.

2. Compatibility: The degree to which the innovation fits the values and experiences of potential consumers.

3. Complexity: The degree to which the innovation is difficult to understand or use.

4. Divisibility: The degree to which the innovation may be tried on a limited basis.

5. Communicability: The degree to which the results of using the innovation can be observed or described to others.

Review Learning Objective 4: Describe the adoption and diffusion process for new products.

Learning Objective 4

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Key Terms: New Product, Adoption Process

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Ad: SodaStream

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Figure 5.7: Adopter Categories Based on Relative Time of Adoption of Innovations

Ø Assignments, Resources

Use Discussion Question 5-3 and 5-4 here

Use Company Case here

Use Small Group Assignment 2 here

Use Individual Assignment 2 here

Ø Troubleshooting Tip

Explaining that consumer behavior is usually offered as a course unto itself can actually relieve some of the students’ anxiety. Also helpful is continually reminding them of how they can apply this material to more fully appreciating their own motivations for their purchases. This can then lead them to recognize how a marketer could approach understanding consumers’ motives in general.