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Strategic Marketing

Chapter 5

Consumer Markets and Buyer Behaviors

Lesson 1 Objective: Define the consumer market and construct a simple model of consumer buyer behavior.

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Consumer Markets & Buyer Behavior

Consumer buyer behavior is the buying behavior of final consumers—individuals and households that buy goods and services for personal consumption.

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Consumer Markets & Buyer Behavior

Consumer markets are made up of all the individuals and households that buy or acquire goods and services for personal consumption.

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LENOVO

Understanding Customers and Building Profitable Relationships

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Understanding Customers

• Founded as Legend in 1984 in Beijing, China by 11 members of the Computer Technology Research Institute

• To expand internationally, they changed their brand name in 2002 to Lenovo.

6 Source:

2021, 2018, 2016

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and

Profitable Relationships

Lenovo’s Story on Understanding Consumers

Building

Understanding Customers

• In 2005, they acquired IBM’s personal computer business, including the ThinkPad laptop and tablet lines.

• This acquisition accelerated access to foreign markets and made Lenovo the thirdlargest computer maker worldwide by volume.

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Understanding Customers

In 2018, Lenovo was the world’s largest personal computer vendor in terms of units shipped and beat out HP and Dell for the year overall.

It is also the world’s third largest smartphone company.

Products sold in

Operations in around 160 countries

More than 60 countries

8 Source:

Inc.

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What do you think contributes to Lenovo’s success?

Please share some of your thoughts.

A N A L Y S I S

How Lenovo Understands its Customers

The global success of Lenovo is rooted in its deep and sound understanding of customers and its ability to build profitable relationships.

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How Lenovo Understands its Customers

The business model is built on:

Then from the marketing perspective,

they focus on customers and their buying behavior: Who are they?

What do they think? How do they feel about the products?

•

Customer satisfaction

Innovation

Operation Efficiency

How Lenovo Understands its Customers

The company highly values the input of its customers and tracks it.

For example, when Lenovo released a new variant of its ThinkPad series in 2012 and 2013, customers complained on internet forums that two physical TrackPoint buttons had been removed from the touch-pad at the bottom of the keyboard. These buttons correspond to right and left on conventional mouse buttons.

How Lenovo Understands its Customers

In the end, they realized it was a big mistake and publicly admitted it/ Soon afterwards, they brought back the TrackPoint buttons.

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Take a moment and visit Lenovo’s site

What do you notice about the way it is structured?

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How Lenovo Understands its Customers

• Analyzes website behaviors: purchasers and non-purchasers on homepages and product pages to deliver the right message to the right user

• Using Google Surveys 360 for real team and data to incorporate into the development process. For example, when the design team had different icons to represent a specific functionality that it wanted to test. The Google Survey gave faster results than a regular research study.

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Consumer Buyer Behavior

As we see with Lenovo, the consumer buyer behavior refers to the buying behavior of final consumers – individuals and households that buy goods and services for personal consumption.

All of these final consumers combine to make up the consumer market.

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The American Consumer market consists of more than 328 million people who consume more than $13 trillion worth of goods and services each year, making it one of the most attractive consumer markets in the world.

Model of Consumer Behavior

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Figure 5.1 The Model of Buyer Behavior

Characteristics Affecting Consumer Behavior

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Figure 5.2 The Model of Buyer Behavior

Figure 5.2 The Model of Buyer Behavior

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Characteristics Affecting Consumer Behavior

Cultural Factors

Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions.

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Characteristics Affecting Consumer Behavior

Cultural Factors

Subcultures are groups of people within a culture with shared value systems based on common life experiences and situations.

Targeting Hispanic consumers: Nestle’s DiGiorno brand worked with Twitter’s U.S. Hispanics team and the NFL to create a football campaign with Spanish tweets.

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Characteristics Affecting Consumer Behavior

Cultural Factors

Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Measured as a combination of occupation, income, education, wealth, and other variables

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Characteristics Affecting Consumer Behavior

Groups and Social Networks

Reference groups

Opinion leaders

Word-of-mouth influence

Influencer marketing

Online social networks

Influencer marketing: CoverGirl’s “I Am What I Make Up” campaign uses a diverse team of influential brand ambassadors who explain authentically in their own words what the slogan means to them.

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•

Characteristics Affecting Consumer Behavior

Influencer marketing: CoverGirl’s

“I Am What I Make Up” campaign uses a diverse team of influential brand ambassadors who explain authentically in their own words what the slogan means to them.

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Characteristics Affecting Consumer Behavior

Social Factors

Family is the most important consumer-buying organization in society.

Role and status can be defined by a person’s position in a group.

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Characteristics Affecting Consumer Behavior

Harnessing the power of mom-tomom influence: Each year, Disney invites 175 to 200 moms and their families to its Disney Social Media Moms Celebration in Florida, an affair that’s a mix of public relations event, educational conference, and family vacation with plenty of Disney magic for these important mom influencers.

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Characteristics Affecting Consumer Behavior

Personal Factors

Occupation affects the goods and services bought by consumers.

Age and Life Stage affect tastes in food, clothes, furniture, ad recreation. Economic situations include trends in spending, personal income, savings, interest rates.

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Characteristics Affecting Consumer Behavior

Appealing to occupation segments: Medical apparel maker FIGS sells modern, comfortable, and functional scrubs direct to medical and health professionals.

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Characteristics Affecting Consumer Behavior

Personal Factors

Lifestyle is a person’s pattern of living as expressed in his or her psychographics.

Personality refers to the unique psychological characteristics that distinguish a person or group.

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Characteristics Affecting Consumer Behavior

Brand personality: MINI markets to personality segments of people who are “adventurous, individualistic, openminded, creative, tech-savvy, and young at heart”— anything but normal—just like the car.

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Characteristics Affecting Consumer Behavior

Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes

32 Source:

Education,

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Characteristics Affecting Consumer Behavior

This classic ad from the American Association of Advertising Agencies pokes fun at subliminal advertising. “So-called ‘subliminal advertising’ simply doesn’t exist,” says the ad. “Overactive imaginations, however, most certainly do.”

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Characteristics Affecting Consumer Behavior

Psychological Factors

A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction of the need.

Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations.

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Characteristics Affecting Consumer Behavior

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Figure 5.3 Maslow’s Hierarchy of Needs

Figure 5.3 Maslow’s Hierarchy of Needs (Expanded View)

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Characteristics Affecting Consumer Behavior

Psychological Factors

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

Perceptual Processes

Selective attention / Selective distortion / Selective retention

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Characteristics Affecting Consumer Behavior

Psychological Factors

Selective attention is the tendency for people to screen out most of the information to which they are exposed.

Selective distortion is the tendency for people to interpret information in a way that will support what they already believe.

Selective retention is the tendency to remember good points made about a brand they favor and forget good points made about competing brands.

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Characteristics Affecting Consumer Behavior

Psychological Factors

Learning is the change in an individual’s behavior arising from experience and occurs through the interplay of:

Drives Stimuli

Cues

Responses

Reinforcement

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Characteristics Affecting Consumer Behavior

Psychological Factors

A belief is a descriptive thought that a person has about something based on:

An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.

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knowledge opinion faith

S P A NX: Changing the Way Women Think about “Shapewear” S P A N

X changed the way women–and even men–think about both clothing and their body types

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“Sara

42 Source: Copyright © 2021, 2018, 2016 Pearson Education, Inc. All Rights Reserved and https://www.youtube.com/watch?v=BnvoO32JwP8 C. H A P T E R 5 S P A NX: Changing the Way Women Think about “Shapewear”

Blakely: How She Built SPANX from the Ground Up” (Short)

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https://www.youtube.com/watch?v=Bn

Types of Buying Decision Behavior

Lesson 3 Objective: List and define the major types of buying decision behavior and the stages in the buyer decision process.

CHAPTER 5

Types of Buying Decision Behavior

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

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Types of Buying Decision Behavior

Figure 5.4 Four Types of Buying Behavior

Source: Adapted from Henry Assael, Consumer Behavior and Marketing Action (Boston: Kent Publishing Company, 1987), p. 87. Used with permission of the author.

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The Buyer Decision Process

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The Buyer Decision Process

Need Recognition

Need recognition is the first stage of the buyer decision process, in which the consumer recognizes a problem or need triggered by:

Internal stimuli

External stimuli

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The Buyer Decision Process

Information Search Information search is the stage of the buyer decision process in which the consumer is motivated to search for more information.

Sources of information:

Personal sources

Commercial sources

Public sources

Experiential sources

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The Buyer Decision Process

Evaluation of Alternatives

Alternative evaluation is the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.

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The Buyer Decision Process

Purchase Decision

Purchase decision is the buyer’s decision about which brand to purchase.

The purchase intention may not be the purchase decision due to:

Attitudes of others

Unexpected situational factors

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The Buyer Decision Process

Postpurchase Behavior

Postpurchase behavior is the stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction.

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The Buyer Decision Process

Postpurchase Behavior

Cognitive dissonance is buyer discomfort caused by postpurchase conflict.

Postpurchase cognitive dissonance: Postpurchase customer satisfaction is a key to building profitable customer relationships.

Most marketers go beyond merely meeting the customer expectations— they aim to delight customers.

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Customer Journey

Customer journey: the sum of the ongoing experiences consumers have with a brand that affect their buying behavior, engagement, and brand advocacy over time.

The customer journey: By understanding the customer journey, marketers can work to create brand experiences that will result in positive purchase behavior, engagement, and brand advocacy over time.

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Thank you.

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If you have any questions, please feel free to email pnh5@nyu.edu.