Chapter 06 Analyzing Consumer Markets

Front 1

Describe major factors influencing human behavior?

Back 1

-Cultural Factors
Culture is the fundamental determinant of a person's wants and behavior. The growing child acquires a set of values, perceptions, preferences, and behaviors through his or her family and other key institutions.

-Social Factors:
In addition to cultural factors, a consumer's behavior is influenced by such social factors as reference groups, family, and social roles and statuses.A person's reference groups consist of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior.

-The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group.9 We can distinguish
between two families in the buyer's life.

-A person participates in many groups—family, clubs, organizations.
The person's position in each group can be defined in terms of role and status. A role consists of the activities a person is expected to perform. Each role carries a status.

- Personal Factors (These include the buyer's age and stage in the life cycle; occupation and economic circumstances; personality and self-concept; and lifestyle and values.)
-AGE AND STAGE IN THE LIFE CYCLE People buy different goods and services over a lifetime.
Taste in food, clothes, furniture, and recreation is often age related.

-OCCUPATION AND ECONOMIC CIRCUMSTANCES Occupation also influences consumption
patterns. A blue-collar worker will buy work clothes, work shoes, and lunchboxes. A company president will buy dress suits, air travel, and country club memberships.

-PERSONALITY AND SELF-CONCEPT,By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental
stimuli.
(Stanford's Jennifer Aaker conducted research into brand personalities and identified the following five traits:24
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))

-LIFESTYLE AND VALUES People from the same subculture, social class, and occupation may lead quite different lifestyles. A lifestyle is a person's pattern of living in the world as expressed in activities, interests, and opinions.

Front 2

What influences consumer decisions?

Back 2

Core values.

(The belief systems that underlie consumer attitudes and behaviors. Core values go much deeper than behavior or attitude, and determine, at a basic level, people's choices and desires over the long term.)

Front 3

Review Maslow's Hierarchy of Needs concept.

Back 3

Please see page 185, Fig. 6.2 for a brief description.
((I believe all of us a familiar with the subject, since "Behavior in organizations" is mandatory class and it must be taken first.)

Front 4

Describe HERZBERG'S THEORY.

Back 4

The main cocepts of the theory deal with:

-SELECTIVE ATTENTION
(1. People are more likely to notice stimuli that relate to a current need.
2. People are more likely to notice stimuli that they anticipate.
3. People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli.)

-Selective distortion

-Selective retention

-Subliminal perception.

Front 5

Describe The Buying Decision Process: The Five-Stage Model

Back 5

-Problem Recognition.The buying process starts when the buyer recognizes a problem or need.

-Information Search.(An aroused consumer will be inclined to search for more information.)

-Evaluation of Alternatives.
(1.BELIEFS AND ATTITUDES Evaluations often reflect beliefs and attitudes.

2.The consumer arrives at attitudes (judgments, preferences) toward various brands through an attribute evaluation procedure.60 He or she develops a set of beliefs about where each brand stands on each attribute. The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs—the positives and negatives—according to importance.



-Purchase Decisions.(In the evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also form an intention to buy the most preferred brand.)


-Postpurchase Behavior.
(After the purchase, the consumer might experience dissonance that stems from noticing certain disquieting features or hearing favorable things about other brands, and will be alert to information that supports his or her decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer's choice and help him or her feel good about the brand.)

Front 6

Describe Other Theories of Consumer Decision Making.

Back 6

Level of Consumer Involvement
The expectancy-value model assumes a high level of involvement on the part of the consumer.
Consumer involvement can be defined in terms of the level of engagement and active processing undertaken by the consumer in responding to a marketing stimulus (e.g., from viewing an ad or evaluating a product or service).

- ELABORATION LIKELIHOOD MODEL
(describes how consumers make evaluations in both low- and high-involvement circumstances.)

-LOW-INVOLVEMENT MARKETING STRATEGIES (Many products are bought under conditions
of low involvement and the absence of significant brand differences. Consider salt. Consumers have little involvement in this product category. They go to the store and reach for the brand.)

-VARIETY-SEEKING BUYING BEHAVIOR (Some buying situations are characterized by low involvement but significant brand differences. Here consumers often do a lot of brand switching.)

Front 7

Describe Decision Heuristics and Biases?

Back 7

Consumers do not always process information or make decisions in a deliberate, rational manner. Behavioral decision theorists
have identified many different heuristics and biases in everyday consumer decision making. Heuristics are rules of thumb or mental shortcuts in the decision process.

1. The availability heuristic: Consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to mind.

2. The representativeness heuristic: Consumers base their predictions on how representative
or similar the outcome is to other examples.

3. The anchoring and adjustment heuristic: Consumers arrive at an initial judgment and then make adjustments of that first impression based on additional information.

Front 8

Describe Mental Accounting?

Back 8

Mental accounting refers to the manner by which consumers code, categorize, and evaluate financial outcomes of choices. Formally, it has been defined in terms of, "The tendency
to categorize funds or items of value even though there is no logical basis for the categorization,
e.g., individuals often segregate their savings into separate accounts to meet different goals even though funds from any of the accounts can be applied to any of the goals."

Front 9

What are the principles on which Mental Accounting is based?

Back 9

Mental accounting is based on a set of key core principles:
1. Consumers tend to segregate gains. When a seller has a product with more than one positive
dimension, it is desirable to have each dimension evaluated separately. Listing multiple
benefits of a large industrial product, for example, can make the sum of the parts seem greater than the whole.

2. Consumers tend to integrate losses. Marketers have a distinct advantage in selling something
if its cost can be added to another large purchase. House buyers are more inclined to view additional expenditures favorably given the high price of buying a house.

3. Consumers tend to integrate smaller losses with larger gains. The "cancellation" principle might explain why withholding taxes taken from monthly paychecks are less aversive than large, lump-sum tax payments—they are more likely to be absorbed by the larger pay amount.

4. Consumers tend to segregate small gains from large losses. The "silver lining" principle might explain the popularity of rebates on big-ticket purchases such as cars.

Front 10

Summurize how knowledge of psychology can aid marketing?

Back 10

1. Consumer behavior is influenced by three factors: cultural (culture,subculture, and social class); social (reference groups, family, and social roles and statuses); and personal (age, stage in the life cycle, occupation, economic
circumstances, lifestyle, personality, and self-concept). Research into all these factors can provide marketers with clues to reach and serve consumers more effectively.

2. Four main psychological processes affect consumer behavior: motivation, perception, learning, and memory.

3. To understand how consumers actually make buying decisions,marketers must identify who makes and has input into the buying decision; people can be initiators, influ-encers, deciders, buyers, or users. Different marketing campaigns might be targeted to each type of person.

4.The typical buying process consists of the following sequence of events: problem recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. The marketers' job is to understand the behavior at each stage. The attitudes of others, unanticipated situational factors, and perceived risk may all affect the decision to buy, as will consumers' levels of postpurchase satisfaction and postpurchase actions on the part of the company.