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Principles of Marketing

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Principles of Marketing ­ MGT301
VU
Lesson ­ 14
Lesson overview and learning objectives:
In last Lesson we discussed the Consumer Markets and consumer behavior and its importance and
applications for the marketing process. Today we will be continuing the same topic and will discuss
the Consumer buying model. Some factors that can influence the consumer decision regarding
purchases will also be discussed in today's Lesson.
So our today's topic is:
CONSUMER BUYING BEHAVIOR:
A. Model of consumer behavior
Consumers make many buying decisions every day. Most large companies research consumer
buying decisions in great detail to answer questions about what consumers buy, where they buy,
how and how much they buy, when they buy, and why they buy. Marketers can study actual
consumer purchases to find out what they buy, where, and how much. But learning about the whys
of consumer buying behavior is not so easy--the answers are often locked deep within the
consumer's head.
The central question for marketers is: How do consumers respond to various marketing efforts the
company might use? The company that really understands how consumers will respond to
different product features, prices, and advertising appeals has a great advantage over its
competitors. The starting point is the stimulus-response model of buyer behavior shown in Figure
. This figure shows that marketing and other stimuli enter the consumer's "black box" and produce
certain responses. Marketers must figure out what is in the buyer's black box.3
Model of consumer behavior
Marketing stimuli consist of the four Ps: product, price, place, and promotion. Other stimuli
include major forces and events in the buyer's environment: economic, technological, political, and
cultural. All these inputs enter the buyer's black box, where they are turned into a set of observable
buyer responses: product choice, brand choice, dealer choice, purchase timing, and purchase
amount.
The marketer wants to understand how the stimuli are changed into responses inside the
consumer's black box, which has two parts. First, the buyer's characteristics influence how he or
she perceives and reacts to the stimuli. Second, the buyer's decision process itself affects the
buyer's behavior. This chapter looks first at buyer characteristics as they affect buying behavior,
and then discusses the buyer decision process.
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Principles of Marketing ­ MGT301
VU
Consumer purchases are influenced strongly by cultural, social, personal, and psychological
characteristics, as shown in Figure For the most part, marketers cannot control such factors, but
they must take them into account.
B. Factors influencing consumer behavior
Markets have to be understood
before marketing strategies can be
developed.  People using consumer
markets
buy
goods
and
services
for
personal consumption.
Consumers vary tremendously in age,
income, education, tastes, and other factors.
Consumer behavior is influenced by the buyer's characteristics and by the buyer's decision process.
Buyer characteristics include four major factors: cultural, social, personal, and psychological. We
can say that following factors can influence the Buying decision of the buyer:
a.
Cultural
b.
Social
c.
Personal
d.
Psychological
a. Cultural Factors
Cultural factors exert the broadest and deepest influence on consumer behavior. The marketer
needs to understand the role played by the buyer's culture, subculture, and social class.
I. Culture
Culture is the most basic cause of a person's wants and behavior. Human behavior is largely
learned. Growing up in a society, a child learns basic values, perceptions, wants, and behaviors
from the family and other important institutions. A person normally learns or is exposed to the
following values: achievement and success, activity and involvement, efficiency and practicality,
progress, material comfort, individualism, freedom, humanitarianism, youthfulness, and fitness and
health.
Every group or society has a culture, and cultural influences on buying behavior may vary greatly
from country to country. Failure to adjust to these differences can result in ineffective marketing or
embarrassing mistakes. For example, business representatives of a U.S. community trying to
market itself in Taiwan found this out the hard way. Seeking more foreign trade, they arrived in
Taiwan bearing gifts of green baseball caps. It turned out that the trip was scheduled a month
before Taiwan elections, and that green was the color of the political opposition party. Worse yet,
the visitors learned after the fact that according to Taiwan culture, a man wears green to signify
that his wife has been unfaithful. The head of the community delegation later noted, "I don't know
whatever happened to those green hats, but the trip gave us an understanding of the extreme
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Principles of Marketing ­ MGT301
VU
differences in our cultures." International marketers must understand the culture in each
international market and adapt their marketing strategies accordingly.
II. Subculture
Each culture contains smaller subcultures or groups of people with shared value systems based on
common life experiences and situations. Subcultures include nationalities, religions, racial groups,
and geographic regions. Many subcultures make up important market segments, and marketers
often design products and marketing programs tailored to their needs. Here are examples of four
such important subculture groups.
III. Social Class
Almost every society has some form of social class structure. Social Classes are society's relatively
permanent and ordered divisions whose members share similar values, interests, and behaviors.
Social class is not determined by a single factor, such as income, but is measured as a combination
of occupation, income, education, wealth, and other variables. In some social systems, members of
different classes are reared for certain roles and cannot change their social positions. Marketers are
interested in social class because people 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, leisure activity, and automobiles.
b. Social Factors
A consumer's behavior also is influenced by social factors, such as the consumer's small groups,
family, and social roles and status.
I. Groups
Many small groups influence a person's behavior. Groups that have a direct influence and to which
a person belongs are called membership groups. In contrast, reference groups serve as direct (face-
to-face) or indirect points of comparison or reference in forming a person's attitudes or behavior.
Reference groups to which they do not belong often influence people. Marketers try to identify
the reference groups of their target markets. Reference groups expose a person to new behaviors
and lifestyles, influence the person's attitudes and self-concept, and create pressures to conform
that may affect the person's product and brand choices.
The importance of group influence varies across products and brands. It tends to be strongest
when the product is visible to others whom the buyer respects. Manufacturers of products and
brands subjected to strong group influence must figure out how to reach opinion leaders--people
within a reference group who, because of special skills, knowledge, personality, or other
characteristics, exert influence on others.
Many marketers try to identify opinion leaders for their products and direct marketing efforts
toward them. In other cases, advertisements can simulate opinion leadership, thereby reducing the
need for consumers to seek advice from others.
The importance of group influence varies across products and brands. It tends to be strongest
when the product is visible to others whom the buyer respects. Purchases of products that are
bought and used privately are not much affected by group influences because neither the product
nor the brand will be noticed by others.
II. Family
Family members can strongly influence buyer behavior. The family is the most important
consumer buying organization in society, and it has been researched extensively. Marketers are
interested in the roles and influence of the husband, wife, and children on the purchase of different
products and services.
Husband-wife involvement varies widely by product category and by stage in the buying process.
Buying roles change with evolving consumer lifestyles.
Such changes suggest that marketers who've typically sold their products to only women or only
men are now courting the opposite sex. For example, with research revealing that women now
account for nearly half of all hardware store purchases, home improvement retailers such as Home
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Principles of Marketing ­ MGT301
VU
Depot and Builders Square have turned what once were intimidating warehouses into female-
friendly retail outlets. The new Builders Square II outlets feature decorator design centers at the
front of the store. To attract more women, Builders Square runs ads targeting women in Home,
House Beautiful, Woman's Day, and Better Homes and Gardens. Home Depot even offers bridal
registries.
Similarly, after research indicated that women now make up 34 percent of the luxury car market,
Cadillac has started paying more attention to this important segment. Male car designers at Cadillac
are going about their work with paper clips on their fingers to simulate what it feels like to operate
buttons, knobs, and other interior features with longer fingernails. The Cadillac Catera features an
air-conditioned glove box to preserve such items as lipstick and film. Under the hood, yellow
markings highlight where fluid fills go.
Children may also have a strong influence on family buying decisions. For example, it ran ads to
woo these "back-seat consumers" in Sports Illustrated for Kids, which attracts mostly 8- to 14-
year-old boys. "We're kidding ourselves when we think kids aren't aware of brands," says Venture's
brand manager, adding that even she was surprised at how often parents told her that kids played a
tie-breaking role in deciding which car to buy.
In the case of expensive products and services, husbands and wives often make joint decisions.
III. Roles and Status
A person belongs to many groups--family, clubs, organizations. The person's position in each
group can be defined in terms of both role and status. A role consists of the activities people are
expected to perform according to the persons around them.
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Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Companyís Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five Mís of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE