Marketing principles k&a chapter 5 moghimi

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Information about Marketing principles k&a chapter 5 moghimi
Business & Mgmt

Published on March 13, 2013

Author: bmoghimi

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Marketing principles k&a chapter 5 MOGHIMI University of Georgia

Lecturer: Bahman Moghimi M.Sc. Of “Industrial Marketing & e-Commerce” Doctor of Business Administration Consumer Markets and Consumer Buyer Behavior University of Georgia B.Moghimi@yahoo.cB.Moghimi@yahoo.co.uk o.uk

B.Moghimi@yahoo.co.uk

Learning Goals1. Define the consumer market and construct a model of consumer buyer behavior2. Name the four factors that influence buyer behavior3. List and understand the types of buying decision behavior and stages in the process4. Describe the adoption and diffusion process for new products B.Moghimi@yahoo.co.uk

Case Study Harley Davidson Building Success Measuring Success• Understanding the • Currently 22% of all customers’ emotions U.S. bike sales and motivation • Demand above supply• Determining the • Sales doubled in the factors of loyalty past 5 years with• Translating this earnings tripled information to effective advertising 5-5 B.Moghimi@yahoo.co.uk

Learning Goals1. Define the consumer market and construct a model of consumer buyer behavior2. Name the four factors that influence buyer behavior3. List and understand the types of buying decision behavior and stages in the process4. Describe the adoption and diffusion process for new products B.Moghimi@yahoo.co.uk

Definitions• 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 final consumers combine to make up the consumer market B.Moghimi@yahoo.co.uk

Learning Goals1. Define the consumer market and construct a model of consumer buyer behavior2. Name the four factors that influence buyer behavior3. List and understand the types of buying decision behavior and stages in the process4. Describe the adoption and diffusion process for new products B.Moghimi@yahoo.co.uk

Model of Consumer Behavior Product Marketing and Economic Other Stimuli Price Technological Place PoliticalPromotion Cultural Buyer’s Characteristics Decision Buyer’s Black Box Affecting Process Consumer BehaviorProduct Choice PurchaseBrand Choice Buyer’s Response TimingDealer Choice Purchase Amount B.Moghimi@yahoo.co.uk

Model of Buyer Behavior Figure 5.1 5 - 10 B.Moghimi@yahoo.co.uk

Factors Influencing Consumer Behavior B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Culture Social Personal Psychological Buyer B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior – Culture Key Factors • Forms a person’s wants and behavior• Cultural – Subculture • Groups with shared value• Social systems• Personal – Social Class• Psychological • Society’s divisions who share values, interests and behaviors B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Sub-Culture• Hispanic consumers: one third of the US population• Hispanic consumers tend to buy more branded, higher quality products• African-American consumers: they are motivated by quality and selection. Brands are important B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Sub-Culture• Asian American: they are the second fastest growing population sub segment after the Hispanics.• More than 90% of the Asian American Go online regularly and are most comfortable with internet technology such as online banking B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Sub-Culture• Mature consumers: very attractive market. The entire U.S baby boom generation, the largest and the wealthiest demographic cohort in the country.• Mature consumers are not stuck in their ways B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior – Groups • Membership Key Factors • Reference – Aspiration• Cultural • Opinion leaders – Buzz marketing• Social• Personal – Family• Psychological • Many influencers – Roles and status B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Social Factor• In some social systems, members of different classes are reared for certain roles and cant change their social positions. In other country, however, the lines between social classes are not fixed and rigid, people can move to a higher social class or drop into a lower one. B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Social Factor• Marketers are interested in social class because within a given social class tend to exhibit similar buying behavior. Social classes show distinct product and brand preferences in areas such as clothing , home furnishings, and automobiles. B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Social Factor B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

This advertiser knows teens are strongly influenced by groups when purchasing fashion items B.Moghimi@yahoo.co.uk 5 - 24Marketing in Action

Groups and Social Networks  Online Social Networks are online communities where people socialize or exchange information and opinions  Include blogs, social networking sites (Facebook), virtual worlds (second life) B.Moghimi@yahoo.co.uk

Social Factors ( family ) Family is the most important consumer-buying organization in society Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services The wife traditionally has been the main purchasing agent for the family. B.Moghimi@yahoo.co.uk

Social Factors ( family ) Children may also have a strong influence on family buying decisions Studies found that kids influence family decisions about where they take vacations , what cars or cell phones they buy. As a result , marketers of cars , full service restaurants , cell phones are now placing ads on the children oriented TV networks B.Moghimi@yahoo.co.uk

Social Factors (roles and status) Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status A role consists of the activities that people expected to perform according to the persons around them B.Moghimi@yahoo.co.uk

Social Factors (roles and status) Each role carries a status reflecting the general esteem given to it by society. People usually choose products appropriate to their roles and status. Consider the roles a working mother plays B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior – Age & Lifestyle Key Factors •Activities, interests and opinions• Cultural •Lifestyle segmentation• Social – Occupation – Economic situation• Personal – Personality and self-concept• Psychological B.Moghimi@yahoo.co.uk

VALSFigure 5.4 5 - 31 B.Moghimi@yahoo.co.uk

Abundant Resources ActualizersPrinciple Oriented Status Oriented Action Oriented Fulfilleds Achievers Experiencers Believers Strivers Makers Strugglers Minimal Resources B.Moghimi@yahoo.co.uk

Brand Personality Dimensions• Sincerity • Excitement• Ruggedness • Competence • Sophistication B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

Characteristics Affecting Consumer Behavior Key Factors – Motivation – Perception• Cultural• Social – Learning• Personal – Beliefs and attitudes• Psychological B.Moghimi@yahoo.co.uk

Psychological FactorsMotivationPerceptionLearningBeliefs and attitudes B.Moghimi@yahoo.co.uk

Psychological Factors Motivation• A motive is a need that is sufficiently pressing to direct the person to seek satisfaction• Motivation research is based on Freud. Looks for hidden and subconscious motivation• Maslow ordered needs based on how pressing they are to the consumer B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

Maslow’s Hierarchy of Needs Figure 5.5 5 - 40 B.Moghimi@yahoo.co.uk

This ad demonstrates a product meeting physiological and social needs B.Moghimi@yahoo.co.uk 5 - 41Marketing in Action

DiscussionWhat consumerproducts mightfulfill multiple levels of the Hierarchy of Needs? B.Moghimi@yahoo.co.uk 5 - 42

Psychological Factors Perception• Perception is the process by which people select, organize, and interpret information.• Perception Includes: – Selective attention • Consumers screen out information – Selective distortion • People interpret to support beliefs – Selective retention • People retain points to support attitudes B.Moghimi@yahoo.co.uk

Discussion Question Perception1. How many ads were you exposed to today?2. Which ones do you remember? Why? B.Moghimi@yahoo.co.uk 5 - 44

Psychological Factors Learning• Learning describes changes in an individual’s behavior arising from experience• Learning occurs through – Drives • Internal stimulus that calls for action – Stimuli • Objects that move drive to motive – Cues • Minor stimuli that affect response – Reinforcement • Feedback on action B.Moghimi@yahoo.co.uk

Psychological Factors Beliefs and Attitudes• Belief – a descriptive thought about a brand or service – may be based on real knowledge, opinion, or faith• Attitude – describes a person’s evaluations, feelings and tendencies toward an object or idea – They are difficult to change B.Moghimi@yahoo.co.uk

Learning Goals1. Define the consumer market and construct a model of consumer buyer behavior2. Name the four factors that influence buyer behavior3. List and understand the types of buying decision behavior and stages in the process4. Describe the adoption and diffusion process for new products B.Moghimi@yahoo.co.uk

Types of Buying Decision Behavior Figure 5.6 5 - 48 B.Moghimi@yahoo.co.uk

The Buyer Decision Process Figure 5.7 5 - 49 B.Moghimi@yahoo.co.uk

The Buyer Decision ProcessProcess Stages • Needs can be triggered by: – Internal stimuli • Need recognition • Normal needs become • Information search strong enough to drive • Evaluation of behavior alternatives – External stimuli • Purchase decision • Advertisements • Postpurchase • Friends of friends behavior B.Moghimi@yahoo.co.uk

The Buyer Decision Process Step 1. Need Recognition Need Recognition Difference between an actual state and a desired stateInternal Stimuli External Stimuli• Hunger • TV advertising• Thirst • Magazine ad• A person’s normal • Radio slogan needs •Stimuli in the environment B.Moghimi@yahoo.co.uk

The Buyer Decision ProcessProcess Stages • Consumers exhibit heightened attention or • Need recognition actively search for information • Information search • Sources of information: • Evaluation of alternatives – Personal • Purchase decision – Commercial • Postpurchase – Public behavior – Experiential – Word-of-mouth B.Moghimi@yahoo.co.uk

The Buyer Decision Process Step 2. Information Search Personal Sources •Family, friends, neighbors •Most influential source of informationCommercial Sources •Advertising, salespeople •Receives most information from these sources Public Sources •Mass Media •Consumer-rating groups •Handling the productExperiential Sources •Examining the product •Using the product B.Moghimi@yahoo.co.uk

The Buyer Decision ProcessProcess Stages • Evaluation procedure depends on the consumer and • Need recognition the buying situation. • Information search • Most buyers evaluate multiple • Evaluation of attributes, each of which is alternatives weighted differently. • Purchase decision • At the end of the evaluation stage, purchase intentions are • Postpurchase formed. behavior B.Moghimi@yahoo.co.uk

The Buyer Decision Process Step 3. Evaluation of Alternatives Product AttributesEvaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes. B.Moghimi@yahoo.co.uk

The Buyer Decision ProcessProcess Stages • Two factors intercede between purchase • Need recognition intentions and the actual • Information search decision: • Evaluation of – Attitudes of others alternatives – Unexpected situational • Purchase decision factors • Postpurchase behavior B.Moghimi@yahoo.co.uk

The Buyer Decision Process Step 4. Purchase Decision Purchase IntentionDesire to buy the most preferred brand Unexpected Attitudes situational of others factors Purchase Decision B.Moghimi@yahoo.co.uk

The Buyer Decision ProcessProcess Stages • Satisfaction is important: – Delighted consumers • Need recognition engage in positive word- • Information search of-mouth. • Evaluation of – Unhappy customers tell on average 11 other alternatives people. • Purchase decision • Cognitive dissonance is • Postpurchase common behavior B.Moghimi@yahoo.co.uk

The Buyer Decision Process Step 5. Post-purchase Behavior Consumer’s Expectations of Product’s Performance Product’s Perceived Performance Satisfied DissatisfiedCustomer! Customer Cognitive Dissonance B.Moghimi@yahoo.co.uk

Discussion QuestionHow is “Consumer Reports” used in the decision-making process?

Learning Goals1. Define the consumer market and construct a model of consumer buyer behavior2. Name the four factors that influence buyer behavior3. List and understand the types of buying decision behavior and stages in the process4. Describe the adoption and diffusion process for new products B.Moghimi@yahoo.co.uk

Buyer Decision Process for New Products• Stages in the Adoption Process – Marketers should help consumers move through these stages.• New Products – Good, service or idea that is perceived by customers as new. B.Moghimi@yahoo.co.uk

Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption B.Moghimi@yahoo.co.uk

Buyer Decision Process for New Products• Individual Differences in Innovativeness – Consumers can be classified into five adopter categories, each of which behaves differently toward new products.• Product Characteristics and Adoption – Five product characteristics influence the adoption rate. B.Moghimi@yahoo.co.uk

Adoption ProcessIndividual Differences in Innovativeness Figure 5.8 5 - 65 B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

Communicability Relative Advantage Can results be easily Is the innovation observed or described superior to existing to others? products? Product Divisibility Characteristics CompatibilityCan the innovation Does the innovation be used on a fit the values and trial basis? experience of the target market? Complexity Is the innovation difficult to understand or use? B.Moghimi@yahoo.co.uk

Discussion Question • Why might the adoption process be slow for a home robot? 5 - 68Marketing in Action Source: Business Week B.Moghimi@yahoo.co.uk Source: Business Week

Buyer Decision Process for New Products• International Consumer Behavior – Values, attitudes and behaviors differ greatly in other countries. – Physical differences exist which require changes in the marketing mix. – Customs vary from country to country. – Marketers must decide the degree to which they will adapt their marketing efforts. B.Moghimi@yahoo.co.uk

B.Moghimi@yahoo.co.uk

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