Buying Behavior of Final Consumers and Organizational Customers

Buying Behavior of Final Consumers and Organizational Customers

Final Consumer Buying Behavior

* Refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption.

A Model of Buyer Behavior

* Marketing mixes (Psychological influences) + All other stimuli (Social influences) > Problem solving process (person solving process) > Person Does or Does Not Purchase (Response)

Psychological Influences

* Motivation: e.g. Maslow's Hierarchy of Needs (Physiological needs> Safety > Social> Self esteem> Self-actualization) Needs and wants motivate consumers

* Differences in perception: the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.

Selective Exposure: Consumer notices certain stimuli and ignores others

Selective Distortion: Consumer changes or distorts information that conflicts with feelings or beliefs

Selective Retention: Consumer remembers only that information that supports personal beliefs

**Perceive risk refers to the anxieties felt because consumer cannot anticipate the outcomes of a purchase but believes that there may be -ve conequences.

* Learning: refers to those behaviors that result from repeated experiences and reasoning

Behavioral learning: the process of developing automatic responses to a situation built up through repeated exposure to it. 1) Drives: a need that moves an individual to action e.g. hunger thirsty 2) Cues: a stimulus or symbol perceived by consumers. 3) Responses: the action taken by a consumer to satisfy the drive 4) Reinforcement: the reward.

**Being hungry(drive), a consumer sees a cue(billboard), takes action(buys a sandwich) and receive awards(it tastes great)

Cognitive learning: learn through thinking, reasoning and mental problem solving without direct experience. It involves making connection two or more ideas or simply observing the outcomes of others' behaviors and adjusting your own accordingly. For examples firms do repetitive advertising.

**Brand loyalty: a favorable attitude toward and consistent purchase of a single brand over time. It results from the positive reinforcement of previous actions.

* Attitude and Belief (BAB- belief- attitude- behavior) belief affect attitude, attitude affect behavior.

Belief: an organized pattern of knowledge that an individual holds as true about his or her world. It is consumers' subjective perception of how a product or brand performs on different attributes.

Attitude: a learned tendency to respond consistently toward a given object. It is shaped by our values and beliefs.

Values: personal values affect attitudes by influencing the importance assigned to specific product attributes such as thriftiness- when you purchase a car, you would consider the fuel economy - the product attributes.

* Personality/ Lifestyle: Lifestyle analysis is more useful to marketers, esp. providing ideas for advertising themes Self-concept: the way people use themselves and the ways they believe others see them. Actual self-concept: refers to how people actually see themselves. Ideal self-concept: describes how people would like to see themselves.

Lifestyle analysis: activities, interests, opinions

Lifestyles Dimensions

Activities; Examples: Vacation, hobbies, social events

Interests; Examples: Fashion, recreation, food

Opinions Examples: Politics, business, culture

Socio-cultural Influences(relationship with others)

* Personal influences:

1. Opinion leaders are considered to be knowledgeable about or users of particular products and services.

2. Word of month

3. Reference Group

Associative reference group (face to face association or relationship)

Aspirational reference group (whom the person wants to imitate or be like)..e.g. membership has its privileges

* Family influences:

1. Family Life Cycle **consumer socialization: the process by which people acquire skills, knowledge, and attitudes necessary to function as consumers.

e.g. Single, young couples, middle-aged married couples, empty nesters (Childerns left when they get older) The consumption patterns vary in different stages

2. Social Class: classified based on factors such as occupation, education, location of housing

Social Class Dimensions

* Culture and subculture:

1. Culture: The whole set of beliefs, attitudes and ways of doing things e.g. American culture, Japanese culture

a. Subculture: Groups of people with shared value systems based on common life experiences e.g. Immigrants from china, people from the philippines (their styles are different from the local culture)

Individuals are Affected by Purchase Situation

* Situational influences such as reason for buying, time, purchase task (reason for engaging in the decision in the first place), social surroundings (your friends e.g. You shop with friends) and physical surroundings (relaxing envrionment e.g. Starbucks) can affect consumer behavior

Problem-Solving Processes

1. Awareness: need/problem recognition

Marketing helps consumers recognize an imbalance between present status and preferred state by Internal Stimuli and External Stimuli

2. Recall and Information Gathering

Internal Information Search: Recall information in memory

External Information search: Seek information in outside environment e.g. Non-marketing controlled 1) personal sources: relative and friends 2) public sources: various product-rating organization such as consumer reports, government agencies or Marketing controlled 1) marketer-dominated sources: information from sellers