6-3 Consumer Behaviour * relationship between stimulus and response
6-4
* cultural factors (6-5) * combination of values, beliefs, behavior * acquired through socialization processes * why are values and beliefs important to marketers? * Forms their needs, shapes their wants * Tells us about their preferences * Subcultures * Determined based on: * Nationalities * Religions * Racial groups * Geographic regions * French Canadians (subculture) – 22% of population * Immigrants * Aboriginals * Asian Canadians * Chinese Canadians * Have different consumption patterns * Social Classes (6-7) * Based not only on income but also occupation * Different media for different income groups * Upper income groups watch news or talk shows * Lower income watch sports related programs or drama shows * Viewing pattern and consumption pattern varies depending on their social class * Social Factors * Reference groups * People that consumers are influenced by * Primary and secondary ref groups: pressure to conform * People you spend time with put pressure on you to conform to their lifestyle * Aspirational groups * People whom you don’t belong to but want to be like them * Dissociative group: group that you don’t want to belong to * Opinion leader: person whose opinion influences the group -> person has been using the product or service for some time, has high social skills, is known for certain expertise. People seek opinions from opinion leaders before purchasing anything * Family * Spouses: a lot of purchase in household are done by women, few done by husbands * Now more men are doing grocery shopping due to change in family dynamics * The way families operate determines a lot in terms of consume rbehaviour * Social Roles/Statuses * How is status dependent on role? * Factory workers status is lower than factory manager’s status * Hierarchy of roles which determines status * Personal Factors * Age * Different needs for different age groups * Life Cycle Stage * Occupation * Different softwares, clothing * Personality (Jennifer Archer; 5 brand personality types) * Sincerity * Excitement (MTV) * Competence (reliable) (Toyota) * Sophistication * Ruggedness (MEC) * Self-concept * Consumers choose and use brands with a similar brand personality to their own * Lifestyle * Persons pattern of living in the world as expressed in activities, interests and opinions * Values * Underlie attitudes and behaviours
6-19
* Model of Consumer Behavior * Stimuli * Consumer Psychology * Motivation (6-20) * Freud’s Theory: behavior is guided by subconscious motivations * A lot of our behavior is determined at a subconscious level, things we aren’t aware of but we behave because of them * Deeper level reason to buy a certain brand * Maslow’s Hierarchy of needs * People who are hungry wouldn’t have any self-esteem, people without good medical care won’t have needs to become somebody important * Have to design products and services for the right levels * Herzbergs two-factor theory: * Dissatisfiers * Satisfiers * Certain things wont satisfy you, but the absence of them makes you dissatisfied * Perception * The way we collect, select, organize and interpret information * Affected by past experiences, beliefs, cultural norms * Selective perception: specific need, selectively collect information or that one product, consumers are likely to ignore what is going on around that * Selective distortion: hear things that we want to hear, see things that we want to see * Learning * Induces changes in out behavior arising from experience * Classical conditioning – when behavior follows a pattern * Differentiation – makes itself different from competition to sell to users * Emotions * Mostly used in advertisements * Associated with certain services or ads * Moves by certain ads because it had emotional appeal or impact * Memory * Short-term memory * Long-term memory * Consumer Characteristics * Buying decision process starts * Purchase decision
6-28 (fig 6.4. Five-Stage Model of the Consumer Buying Process) * Problem Recognition * when you have a need, you have a want * you don’t have the drive but it becomes your need -> impulse buying * problem can be recognized from within but also through external factors * Information Search * Buying a car: search for information online, consumer reviews, TV ads, talk to friends and family * Come up within the price range that you can afford, come up with a number of brands (considered as your choice set) * Evaluation of Alternatives: * Use different criteria * Product is a bundle of different benefits * Hotels: determined based on price, cleanliness, reputation
6-31 Consumer’s Brand Beliefs about Laptops * can rank each brand according to criteria and come to a purchase conclusion * can put different weightage on each criteria to determine best brand
6-33 Non-Compensatory Models of Choice * post-purchase satisfaction, actions, repurchase behavior etc. * your level of satisfaction determines whether you will purchase again or not

Segmentation
8-4 Segmenting Consuer Markets * usually a combination of: * geographic * demographic * psychographic * behavioral * put segments together using all 4 variables
8-7 PRIZM * has divided Canadian population into 4 categories
8-8 Demographic * Age and life cycle * Life stage * Gender * Female purchasers view of a car is different from male perception of a car * Income * Generation p.207 * Social Class * GLBT is new segment being used by marketers
8-13
* Canada divided into mainly 4 categories of demographic populations
8-14 Psychographic Segmentation
8-15 The VALS framework * innovators: people who are successful, sophisticated, active, take-charge with high self-esteem * Thinkers * Achievers * Experiencers
8-16 Behavioral Segmentation * occasions: during what period the sale of a product increases * Christmas time -> gift exchange culture * Price features * User Status – loyal user of the product? Used before? * Usage rate – how frequently do you buy it? * Buyer-readiness: how ready you are to buy (informed, interested, determined) which stage are you in? * Loyalty status – hardcore loyalty, split loyalty, switchers
8-24 Effective Segmentation Criteria * Measurable (need to know the size of the segment, big enough to drive a good revenue, growing?) * Substantial (has to be good enough, big enough to make sense to produce a product and undertake marketing efforts) * Accessible (where would you find your segment) * Differentiable (can one segment be differentiated from the other segment) * Actionable (chose segment, divise strategy, put it into action to satisfy segment)
8-25 Porter’s 5 Forces Model * Threat of Rivalry: * High number of competitors * State of competitors in this segment * Threat of New Entrants * Firm that is about to enter the industry * Can it really be entered? * Every industry has entry and exit barriers * Capital, technology, labour * Act as obstacles to enter industry * High exit barriers: things that prevent you from leaving the industry than to stay in * If you want to divest, it’s not easy, can be hard to withdraw investment. * Depends on whether entry and exit barriers are high or low * If both barriers are high: few players are in the market, high profit, high risk * If both barriers are low: profits are low, companies are selling undifferentiated products * Best situation is low entry and low exit barrier, stable low profit * High entry and high exit barriers: profits are high but risk is also high * Threat of Buyer Bargaining Power * Threat of Supplier Bargaining Power * Threat of Substitutes