Thursday, December 9, 2010

Consumer Buying Behavior

Consumer Buying Behavior
Consumer behavior may be defined as that behavior exhibited by people in planning, purchasing, and using economic goods and services. The smart advertiser will make every effort to learn the psychological (individual), sociological (group), and cultural makeup of the market.

Individual factors that influence customer buying behavior are: Motives, learning, attitudes, and perception.

MOTIVES:

A motive is a need or desire that causes a person to act. People have different levels of need that are in the following order:

Hierarchy of needs:
Physiological (hunger, sex, thirst,)
Safety (security, protection,)
Belonging (need for family and friends, prestige, success, status,)
Self-actualization (self-fulfillment.)


Each and every product should be sold for the primary motivation that implies to it. For example:
People do not usually buy a burglar-alarm system for prestige purposes. It would be unwise to sell a security system as a prestige item.

Motives help explain how consumers act, but where do they learn about their needs or desires? learning is gained through behaviorist approach or cognitive approach. 

LEARNING:
Successful advertising is a two way learning process: You learn about the consumer and the consumer learns about your product/service.
Consumers will learn about your product through either your behaviorist approach or your cognitive approach.
In the behaviorist approach you would use the stimulus-response (trial and error,) such as offering coupons, cash rebates or free samples. All are means to induce trial.
What if consumers use a product, similar to your product, for years. How can you tell them that your brand is as good or even better? You will have to devise a positive stimulus that will result in a positive response.
Experience causes learning, and if this experience is positive over time, the end result is a habit that is hard to break. Your consumers will develop a habit of using your product/service if you ensure that their experience with your firm is always positive and rewarding.


ATTITUDES:

A learned tendency to respond in a given manner to a particular situation is known as an attitude. This attitude may be positive, negative or neutral. What advertisers must realize is that most consumers will have a particular feeling about a situation. The advertiser must make every effort to ascertain what the attitudes of the target market are towards the product being promoted. If they are positive, the attitudes should be enforced. If they are negative or neutral, attitudes need to be changed or at least modified.

If consumer attitudes are understood, then the advertiser is on the way to understanding the target market, which in turn, should result in the development of a stronger advertising effort.

Attitudes are better understood in terms of the functions they serve for an individual. These functions are Adjustment, Ego defense, Value expression and Knowledge.

Adjustment:
Attitudes allow the customer to adapt to positive stimuli while rejecting negative situations. An ad for a vehicle "sells" the consumer on the idea that the car is a smart investment while rejecting the idea that the car costs too much. The resulting positive attitude adjustment will encourage the consumer to purchase the product.
Ego Defense:
"If I buy a particular brand of jeans, will I look right?" Anxiety, doubt, inferiority, and fear can all be overcome with the purchase of the right product. Advertisements should emphasize the benefits of product usage and/or the dangers of non usage.

Value expression:
An individual's attitude will reflect that person's values and self-image. Advertisers can use this aspect of attitudes to help position a product in the minds of the target market. Ads for a new target market should reflect the values, beliefs, and behavior traits of its target. Ads should show the correct surroundings that are pre-perceived by its target.

Knowledge:
Attitudes permit consumers to organize their thinking about any product or service. Ads should create positive attitude towards the product, thereby allowing the consumer to store this positive information for future use.

What can the advertiser learn from the functions of attitudes?
Four consumers may all have favorable attitudes towards a product but for four different reasons.
One may like a product because of peer pressure (Adjustment); another because it helps to fulfill his/her self-image (Value expression). Still another may like the product because it makes the person feel secure (Ego defense). Finally, the fourth person may favor the product because he/she has studied the situation and knows the product is a good purchase (Knowledge.)

The various functions of attitudes should be considered whenever advertisements are developed. If attitudes are understood, then the advertiser is on the way to understanding the target market, which, in turn, should result in the development of a stronger advertising effort.

The advertiser may not wish to change attitudes, but only use them. What consumers believe can have a major impact on how a product, service, or idea will be received. The smart advertiser will study such attitudes carefully and then use this information wisely.

PERCEPTION:

How does the consumer perceive the product. Is a car a means of transportation or a status symbol?
Perception, or how one interprets a situation as a result of various stimuli, is difficult to analyze because each individual is unique. A funny ad may appeal to one but may be vulgar to someone else.
The advertiser should ascertain how the consumer perceives the media that will be used to carry the advertising message. How one perceives the media is just as important as how one perceives the message.
In a study conducted by Dr. C. J. Wallace 400 respondents were asked to note down the corresponding words for the initials IAMILWY. 84% associated the initials to a familiar phrase; I AM I L W Y and answered: I Am In Love With You, thus missing the initial M ( I Am In Love With You = IAILWY and not IAMILWY.)

Only 2% of respondents were correct in answering: I Am Madly In Love With You and I Am Mentally In Love With You. The remaining 14% answered a variety of phrases ranging from: "In America Most Indians Live Without Yarns" to "Italian And Maltese Introduced Lemon Whipped Yoghurt" to "International Aid Must Include Learning Within Years." Dr. Wallace concluded that people interpret what they perceive through stored knowledge and not necessarily by observing what is presented to them.

Perception is influenced by Reference Groups, Opinion Leaders, Family and Cultural Behavior.

Preference Groups:
Groups with whom consumers identify, respect, or want to join, are commonly referred to as reference groups. These groups will, in effect, establish norms of behavior for a person.
If a group is considered undesirable by the person and that group rides motorcycles, that fact alone may destroy any interest that the person might have in owning a motorcycle.
What the advertiser may want to do is to depict a favorable reference group in the advertisement for a product.
A status product, like perfume for example, should be shown in surroundings to which the typical purchaser may aspire, such as what appears to be an exclusive country club. It is important to note that someone else may view the country club in a negative way.

Opinion Leaders:
Certain people exert a tremendous influence over the way people behave in the marketplace. Lawyers, ministers, celebrities, and others who have obtained some unusual distinction in consumers' minds are known as opinion leaders. If a specific market group can identify with a particular opinion leader, and the opinion leader endorses a certain product, then many in that market group will probably desire to have the product. Opinion leaders may be loaned or given a product because of their role, these people will be featured in ads for the product. The idea behind this approach is to get the product into the hands of the opinion leaders so that they will be seen using the product. If the advertiser is able to determine who these opinion leaders are, the task of selling the product to the mass market is made easier.

Family:
The family unit may be considered to be a reference group containing one or more opinion leaders within that family unit. One important fact the advertiser needs to know is who is the decision maker.

Cultural Behavior:
The cultural behavior of consumers is affected by the position of the target market in terms of the social structure as well as by the various subcultures that may be influencing the consumer group. Social class and subcultures are important to cultural behavior.

Social Class: Social classes are relatively permanent and homogeneous divisions in a society into which individuals or families sharing similar values, life-styles, interests, and behavior can be categorized. The following is the most widely accepted breakdown of such classes:

Upper upper - old, established, socially prominent families
Lower upper - new rich
Upper middle - professional people
Lower middle - white collar, salaried workers
Upper lower - wage earners and skilled workers
Lower lower - unskilled labor

Of what interest are social classes to advertisers?
For example: Consumption patterns operate as prestige symbols to define class membership. This is thought to be a more significant determinant of economic behavior than mere income.
Economic behavior can be demonstrated in the following contrasts between a member of the middle class and one of the lower status:

MIDDLE CLASSLOWER STATUS
1. Pointed to the future
2. His viewpoint embraces a long expanse of time
3. More urban identification
4. Stresses rationality
5. Has a well structured sense of the universe
6. Horizons vastly extended or not limited
7. Greater sense of choice making
8. Self-confident, willing to take risks
9. Immaterial and abstract in his thinking
10. Sees himself tied to national happenings
1. Pointed to the present and past
2. Lives and thinks in a short expanse of time
3. More rural identification
4. Non-rational essentially
5. Vague and unclear structuring of the world
6. Horizons sharply defined and limited
7. Limited sense of choice making
8. Very much concerned with security and insecurity
9. Concrete and perceptive in his thinking
10. World revolves around his family and body

From findings such as these it is obvious, for example, that a person with middle class values is more apt to buy life insurance or furniture that is built to last, whereas a lower status individual may pay a significant sum for a bodybuilding course or other form of self indulgence. However, it must be noted that a change in income may not alter a person's position in the class structure.

To advertise far above or far below the social class of one's target market may scare off a particular group of customers. The advertiser must make a conscientious effort to determine where the target market falls within the social system.

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