Why People Purchase Goods And Services Marketing Essay

The study of how and why people purchase goods and services is termedconsumer buying behaviour . The term covers the decision-making processes from those that precede the purchase of goods or services to the final experience of using the product or service. Models of consumer buying behaviour draw together the various influences on, and the process of, the buying decision. They attempt to understand the proverbial ‘blackbox’ of what happens within the consumer between his or her exposure to marketing stimuli and the actual decision to purchase.

In the next reading, Kotler et al. (2004) briefly explain the ‘black box’ model; however Figure 4.1 shows the content and process involved much clearer.

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Figure 4.1 Black box model of consumer buying behaviour

Figure 4.1 Black box model of consumer buying behaviour 

Source: Keegan et al. (1992, p. 193)

The essence of the model is that it suggests consumers will respond in particular ways to different stimuli after they have ‘processed’ those stimuli in their minds. In more detail, the model suggests that factors external to the consumer will act as a stimulus for behaviour, but that the consumer’s personal characteristics and decision-making process will interact with the stimulus before a particular behavioural response is generated.

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It is called the ‘black box’ model because we still know so little about how the human mind works. We cannot see what goes on in the mind and we don’t really know much about what goes on in there, so it’s like a black box. As far as consumer behaviour goes, we know enough to be able to identify major internal influences and the major steps in the decision-making process which consumers use, but we don’t really know how consumers transform all these data, together with the stimuli, to generate particular responses.

Turn now to the following reading to begin looking at your text’s introduction to buyer behaviour.

4.2.1 Psychological Influences

Kotler et al. (2004) elaborate on several psychological variables influencing consumer buying behaviour:

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perception

motivation

learning

beliefs and attitudes

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personality and self concept.

If you look back to Figure 4.1 you will note that Keegan et al. (1992) refer to these as being included in the buyer’s mind or internal factors.

Although your text covers the remaining psychological variables well, it is worth mentioning the importance of attitudes. An attitude is a learned, relatively enduring feeling of being favourable or unfavourable towards something, whether that might be, say a particular outlet, product or brand. As attitudes are learned, they are difficult to change and they lead people to act fairly consistently towards similar objects. As marketers, therefore, it is much more appropriate that we should try to match our products to people’s attitudes rather than try to change those attitudes. This is particularly relevant for international marketing, so please keep it in mind when you study the following reading on an international aspect of consumer behaviour.

Also discussed by your text is why marketers use psychographics, including examples ofhow psychographic data are classified via the Values and Life Style (VALS) 2 model. You may wish to try the VALS questionnaire yourself by accessing the Web site athttp://www.sric-bi.com/VALS/presurvey.shtml .

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4.2.2 Cultural And Social Influences

Your text suggest that there are a number of social and cultural influences:

culture and sub-culture

social class

household types

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reference groups

roles and status.

Marketers understand family purchasing behaviour in terms of the family life-cycle as well as the role of individual family members. Table 4.1 presents the traditional family life-cycle in terms of the opportunities each stage provides for marketing. However, demographic changes are altering the traditional family life-cycle.

Table 4.1 The traditional family life-cycle

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Stage in cycle

Characteristics

Opportunities for marketing

Bachelor, male or female

Independent; young; early stage of career; low earnings, low discretionary income

Clothing; automobile; stereo; travel; restaurants; entertainment; appeal to status

Newly married

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Two incomes; relative independence; present- and future-oriented

Apartment furnishings; travel; clothing; durables; appeal to enjoyment and togetherness

Full nest I

Youngest child under 6; one to one-and-a-half incomes; limited independence; future-oriented

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Goods and services geared to child; home; family-use items; practicality of items; durability; safety; pharmaceuticals; appeal to economy; child care

Full nest II

Youngest child over 6, but dependent; one-and-a-half to two incomes; at least one spouse established in career; future-oriented

Savings; home; education; family vacations; child-oriented products; some interest in luxuries; appeal to comfort and long-range enjoyment

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Full nest III

Youngest child living at home, but independent; highest income level; thoughts of future retirement

Education; expensive durables for children; replacement and improvement of parents’ durables; appeal to comfort and luxury

Empty nest I

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No children at home; independent; good income; thoughts of self and retirement

Vacation home; travel; clothing; entertainment; luxuries; appeal to self-gratification

Empty nest II

Retirement; less income and expenses; present-oriented

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Travel; recreation; living in new home; pharmaceuticals and health items; little interest in luxuries; appeal to comfort at a low price

Sole survivor I

Only one spouse alive; actively employed; present -oriented; good income

Immersion in job and friends leading to interest in travel, clothing, health and recreation areas; appeal to productive citizen

Sole survivor II

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Only one spouse alive; retired; some feeling of futility; less income

Travel; recreation; pharmaceuticals; security; appeal to economy and social activity

Source: Evans and Berman (1992, p. 146)

4.2.3 The Decision-Making Process

Thus far we have discussed the influences that affect what products a consumer decides to purchase. However, the consumer is yet to make an actual decision! Let us look now at what is involved in actually making those decisions. Kotler et al. (2004) outline four major types of decision-making behaviour that a consumer uses. They are:

complex buying behaviour

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dissonance-reducing buying behaviour

habitual buying behaviour

variety seeking buying behaviour.

Your next reading defines the above decision-making behaviours and introduces you to the five-step decision-making process consumers go through when accepting or rejecting a new product. The reading is also useful because it discusses the decision process for purchasing new products.

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Introduction

A well-developed and tested model of buyer behaviour is known as the stimulus-response model, which is summarised in the diagram below:

http://tutor2u.net/business/images/stimulus_response.gif

In the above model, marketing and other stimuli enter the customers “black box” and produce certain responses.

Marketing management must try to work out what goes on the in the mind of the customer – the “black box”.

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The Buyer’s characteristics influence how he or she perceives the stimuli; the decision-making process determines what buying behaviour is undertaken.

Characteristics that affect customer behaviour

The first stage of understanding buyer behaviour is to focus on the factors that determine he “buyer characteristics” in the “black box”. These can be summarised as follows:

http://tutor2u.net/business/images/buying_customer_factors.gif

Each of these factors is discussed in more detail in our other revision notes on buyer behaviour.

 

Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by:

Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation.

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Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.

High involvement purchases–Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk:

Personal risk

Social risk

Economic risk

The four type of consumer buying behavior are:

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Routine Response/Programmed Behavior–buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc.

Limited Decision Making–buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes–know product class but not the brand.

Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding.

Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process.

Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next.

For example:

Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making.

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Categories that Effect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors:

Personal

Psychological

Social

The marketer must be aware of these factors in order to develop an appropriate MM for its target market.

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Personal

Unique to a particular person. Demographic Factors. Sex, Race, Age etc.

Who in the family is responsible for the decision making.

Young people purchase things for different reasons than older people.

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Handout…From choices to checkout…

Highlights the differences between male and female shoppers in the supermarket.

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Psychological factors

Psychological factors include:

Motives–

A motive is an internal energizing force that orients a person’s activities toward satisfying a need or achieving a goal.

Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix.

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MASLOW hierarchy of needs!!

Physiological

Safety

Love and Belonging

Esteem

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Self Actualization

Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases.

Handout…Nutrament Debunked…

Nutrament, a product marketed by Bristol-Myers Squibb originally was targeted at consumers that needed to receive additional energy from their drinks after exercise etc., a fitness drink. It was therefore targeted at consumers whose needs were for either love and Belonging or esteem. The product was not selling well, and was almost terminated. Upon extensive research it was determined that the product did sell well in inner-city convenience stores. It was determined that the consumers for the product were actually drug addicts who couldn’t not digest a regular meal. They would purchase Nutrament as a substitute for a meal. Their motivation to purchase was completely different to the motivation that B-MS had originally thought. These consumers were at the Physiologicallevel of the hierarchy. BM-S therefore had to redesign its MM to better meet the needs of this target market.

Motives often operate at a subconscious level therefore are difficult to measure.

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Perception–

What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it.

Information inputs are the sensations received through sight, taste, hearing, smell and touch.

Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies current needs, intensity of input changes (sharp price drop).

Selective Distortion-Changing/twisting current received information, inconsistent with beliefs.

Advertisers that use comparative advertisements (pitching one product against another), have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A current example…MCI and AT&T…do you ever get confused?

Selective Retention-Remember inputs that support beliefs, forgets those that don’t.

Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can’t be expected to be aware of all these inputs, and certainly will not retain many.

Interpreting information is based on what is already familiar, on knowledge that is stored in the memory.

Handout…South Africa wine….

Problems marketing wine from South Africa. Consumers have strong perceptions of the country, and hence its products.

Ability and Knowledge–

Need to understand individuals capacity to learn. Learning, changes in a person’s behavior caused by information and experience. Therefore to change consumers’ behavior about your product, need to give them new information re: product…free sample etc.

South Africa…open bottle of wine and pour it!! Also educate american consumers about changes in SA. Need to sell a whole new country.

When making buying decisions, buyers must process information.

Knowledge is the familiarity with the product and expertise.

Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product.

Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality.

Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior.

Attitudes–

Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non- living…..Drive perceptions

Individual learns attitudes through experience and interaction with other people.

Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm’s marketing strategy.

Handout…Oldsmobile…..

Oldsmobile vs. Lexus, due to consumers attitudes toward Oldsmobile (as discovered by class exercise) need to disassociate Aurora from the Oldsmobile name.

Exxon Valdez-nearly 20,000 credit cards were returned or cut-up after the tragic oil spill.

Honda “You meet the nicest people on a Honda”, dispel the unsavory image of a motorbike rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning to hard core. To change this they have a new slogan “Come ride with us”.

Attitudes and attitude change are influenced by consumers personality and lifestyle.

Consumers screen information that conflicts with their attitudes. Distort information to make it consistent and selectively retain information that reinforces our attitudes. IE brand loyalty.

There is a difference between attitude and intention to buy (ability to buy).

Personality–

all the internal traits and behaviors that make a person unique, uniqueness arrives from a person’s heredity and personal experience. Examples include:

Workaholism

Compulsiveness

Self confidence

Friendliness

Adaptability

Ambitiousness

Dogmatism

Authoritarianism

Introversion

Extroversion

Aggressiveness

Competitiveness.

Traits effect the way people behave. Marketers try to match the store image to the perceived image of their customers.

There is a weak association between personality and Buying Behavior, this may be due to unreliable measures. Nike ads. Consumers buy products that are consistent with their self concept.

Lifestyles–

Recent US trends in lifestyles are a shift towards personal independence and individualism and a preference for a healthy, natural lifestyle.

Lifestyles are the consistent patterns people follow in their lives.

EXAMPLE healthy foods for a healthy lifestyle. Sun tan not considered fashionable in US until 1920’s. Now an assault by the American Academy of Dermatology.

Handout…Here Comes the Sun to Confound Health Savvy Lotion Makers..

Extra credit assignment from the news group, to access Value and Lifestyles (VALS) Program, complete the survey and Email [email protected] the results. This is a survey tool that marketers can use to better understand their target market(s).

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Social Factors

Consumer wants, learning, motives etc. are influenced by opinion leaders, person’s family, reference groups, social class and culture.

Opinion leaders–

Spokespeople etc. Marketers try to attract opinion leaders…they actually use (pay) spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)

Can be risky…Michael Jackson…OJ Simpson…Chevy Chase

Roles and Family Influences–

Role…things you should do based on the expectations of you from your position within a group.

People have many roles.

Husband, father, employer/ee. Individuals role are continuing to change therefore marketers must continue to update information.

Family is the most basic group a person belongs to. Marketers must understand:

that many family decisions are made by the family unit

consumer behavior starts in the family unit

family roles and preferences are the model for children’s future family (can reject/alter/etc)

family buying decisions are a mixture of family interactions and individual decision making

family acts an interpreter of social and cultural values for the individual.

The Family life cycle: families go through stages, each stage creates different consumer demands:

bachelor stage…most of BUAD301

newly married, young, no children…me

full nest I, youngest child under 6

full nest II, youngest child 6 or over

full nest III, older married couples with dependant children

empty nest I, older married couples with no children living with them, head in labor force

empty nest II, older married couples, no children living at home, head retired

solitary survivor, in labor force

solitary survivor, retired

Modernized life cycle includes divorced and no children.

Handout…Two Income Marriages Are Now the Norm

Because 2 income families are becoming more common, the decision maker within the family unit is changing…also, family has less time for children, and therefore tends to let them influence purchase decisions in order to alleviate some of the guilt. (Children influence about $130 billion of goods in a year) Children also have more money to spend themselves.

Reference Groups–

Individual identifies with the group to the extent that he takes on many of the values, attitudes or behaviors of the group members.

Families, friends, sororities, civic and professional organizations.

Any group that has a positive or negative influence on a persons attitude and behavior.

Membership groups (belong to)

Affinity marketing is focused on the desires of consumers that belong to reference groups. Marketers get the groups to approve the product and communicate that approval to its members. Credit Cards etc.!!

Aspiration groups (want to belong to)

Disassociate groups (do not want to belong to)

Honda, tries to disassociate from the “biker” group.

The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group.

Social Class–

an open group of individuals who have similar social rank. US is not a classless society. US criteria; occupation, education, income, wealth, race, ethnic groups and possessions.

Social class influences many aspects of our lives. IE upper middle class Americans prefer luxury cars Mercedes.

Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names.

Lower-upper class, 1.2%, newer social elite, from current professionals and corporate elite

Upper-middle class, 12.5%, college graduates, managers and professionals

Middle Americans-middle class, 32%, average pay white collar workers and blue collar friends

Working class, 38%, average pay blue collar workers

Lower Americans-lower class, 9%, working, not on welfare

Lower-lower class, 7%, on welfare

Social class determines to some extent, the types, quality, quantity of products that a person buys or uses.

Lower class people tend to stay close to home when shopping, do not engage in much prepurchase information gathering.

Stores project definite class images.

Family, reference groups and social classes are all social influences on consumer behavior. All operate within a larger culture.

Culture and Sub-culture–

Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation.

Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom. In american culture time scarcity is a growing problem. IE change in meals. Big impact on international marketing.

Handout…Will British warm up to iced tea?

No…but that is my opinion!!…Tea is a part of the British culture, hot with milk.

Different society, different levels of needs, different cultural values.

Culture can be divided into subcultures:

geographic regions

human characteristics such as age and ethnic background.

IE West Coast, teenage and Asian American.

Culture effects what people buy, how they buy and when they buy.

Understanding Consumer Buying Behavior offers consumers greater satisfaction (Utility). We must assume that the company has adopted the Marketing Concept and are consumer oriented.

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