CONSUMER BUYING BEHAVIOR

§ refers to the buying behavior of ultimate consumers—those who purchase products for personal use and not for business
purposes.

5 Stages of the Consumer Buying Decision Process

1. Problem Recognition
§ occurs when a buyer becomes aware of a difference between a desired state and an actual condition
§ Individual may never become aware of the problem or need
2. Information Search
§ After the consumer becomes aware of the problem or need, he or she searches for information about
products that will help resolve the problem or satisfy the need.
3. Evaluation of Alternatives
4. Purchase
o Purchase selection is based on the outcome of the evaluation stage and other dimensions
o Product availability, seller choice, and terms of sale may influence the final product selection
o The buyer may choose to terminate the buying decision process, in which case no purchase will be made.
5. Post-purchase Evaluation
§ After purchase, the buyer begins to evaluate the product to ascertain if the actual performance meets
expected levels.

PRODUCT

A “product” is a good, a service, or an idea or any combination of the three.

§ Good – tangible physical entity

§ Service – is an intangible result of the application of human and mechanical efforts to people or objects
§ Idea – is a concept, philosophy, image, or issue

Classifying Products

Products fall into two general categories:

a. Consumer Products
§ purchased to satisfy personal and family needs; they are categorized according to how buyers generally behave
when purchasing a specific item.

1. Convenience Products
o are relatively inexpensive, frequently purchased items for which buyers exert only minimal
purchasing effort
o because sellers experience high inventory turnover, per-unit gross margins can be relatively low
2. Shopping Products
o items for which buyers are willing to expend considerable effort in planning and making the
purchase.
o buyers allocate considerable time comparing stores and brands on prices, product features,
qualities, services, and perhaps warranties.
o require fewer retail outlets than convenience products
o Because they are purchased less frequently, causing lower inventory turnover, marketing
channel members expect to receive higher gross margins
3. Specialty Products
o have one or more unique characteristics, and buyers are willing to expend considerable effort to
obtain them
o buyers know exactly what they want and will not accept a substitute
o distributed through a limited number of retail outlets
o purchased infrequently, causing lower inventory turnover; thus gross margins must be relatively
high
4. Unsought Products
o products purchased to solve a sudden problem, products of which customers are unaware, and
products people do not necessarily think about buying
b. Business Products
§ purchased to use in a firm’s operations, to resell, or to use in the manufacture of other products

Product Line and Product Mix

1. A product line is a group of closely related product items considered a unit because of marketing, technical, or end-use
considerations.
2. A product mix is the composite group of products an organization makes available to customers.
§ The width of product mix is the number of product lines a company offers
§ The depth of product mix is the average number of different products offered in each product line
4 Stages of the Product Life Cycle:

1. Introduction
§ begins at a product’s first appearance
§ negative profits, low revenue, high promotion and distribution costs
§ potential buyers must be made aware of new product features, uses and advantages
2. Growth
§ sales rise rapidly
§ profits reach a peak and start to decline
§ more competitors enter the market
3. Maturity
§ sales curve peaks and starts to decline
§ profits continue to fall
§ characterized by intense competition as many brands are now in the market
4. Decline
§ sales fall rapidly

The Product Adoption Process

§ include the stages the buyers go through in accepting a product
§ entering the adoption process does not mean the person will eventually adopt the product—rejection can occur at
any stage

5 Stages of the Product Adoption Process

1. Awareness – buyer becomes aware of the product’s existence
2. Interest – buyer seeks information and is receptive to learning about the product
3. Evaluation – buyer considers the product’s benefits and decides whether to try it
4. Trial – buyer examines, tests, or tries the product to determine if it meets his or her needs
5. Adoption – buyer purchases the product and can be expected to use it again whenever the need for this general type of
product arises

People do not begin the adoption process at the same time:

1. Innovators are the first adopters of new products. They enjoy trying new things and tend to be venturesome.
2. Early adopters are the careful choosers of new products.
3. Early majority are those people adopting new products just before the average person. They are deliberate and cautious in
trying new products.
4. Late majority includes skeptics who adopt new products when they feel it is necessary.
5. Laggards are the last adopters. They distrust new products, and when they finally adopt the innovation, it may have been
replaced by a new product.

Products fail for a variety of reasons:

1. Failure to match product offerings to customer needs.
2. Ineffective or inconsistent branding
3. Poor timing, technical or design problems, overestimation of market size, ineffective promotion, or insufficient
distribution

Line Extensions
§ development of a product closely related to one or more products in the existing product line but designed
specifically to meet somewhat different customer needs
§ more common than new products because they are a less expensive, lower-risk alternative for increasing sales
introduced each year are actually line extensions.
§ a risk is that if the line extension is unsuccessful, it will result in a negative evaluation of the core product

Product Modifications
§ changing one or more characteristics of a product
§ less risky than new-product development.

Developing New Products

Product Development Process:

1. Idea Generation – organizations seek product ideas to achieve organizational objectives

2. Screening – the ideas with the greatest potential are selected for further review
3. Concept Testing – a sample of potential buyers is presented with a product idea to determine attitudes and initial buying
intentions regarding the product
4. Business Analysis – the product idea is evaluated to determine its potential contribution to the organization’s sales, costs,
and profits
5. Product Development – the organization determines if it is technically feasible to produce the product and if it can be
produced at costs low enough to make the final price reasonable
6. Test Marketing – limited introduction of the product in geographic areas chosen to represent the intended market to gauge
the extent to which potential customers buy
7. Commercialization – planning for full-scale manufacturing and marketing as well as preparing finalized budgets
 Product differentiation – the process of creating and designing products so customers perceive them as different from
competing products

1. Product Quality
§ refers to the overall characteristics of a product that allow it to perform as expected in satisfying
customer needs
a) Level of quality is the amount of quality a product possesses.
b) Consistency of quality is the degree to which a product quality is the same over
time.
2. Product Design and Features
§ refers to how a product is conceived, planned, and produced; it involves the total sum of a product’s
physical characteristics
§ for a brand to have a sustainable competitive advantage, marketers must determine the
product designs and features that customers desire
3. Product Support Services
§ customer services include any human or mechanical efforts or activities a company provides which add
product value
§ good customer service may be the only way an organization can differentiate its products when all
products in a market have essentially the same quality, design, and features

Product Positioning – decisions and activities intended to create and maintain a certain concept of a product in the customers’ minds

Repositioning
§ evaluating the positions of existing products is important because a brand’s market share and profitability may be
strengthened by product repositioning
§ can be accomplished by physically changing the product, its price, promotion, or aiming at a different target market

Product Deletion
§ process of eliminating a product from the product mix, usually when it no longer satisfies a sufficient number of customers
INTEGRATED MARKETING COMMUNICATIONS
§ coordination of promotion and other marketing efforts to ensure the maximum informational and persuasive impact on
customers
§ goal is to send a consistent message to customers.

Promotion and the Communication Process

Communication
§ sharing of meaning
§ communication begins with a source, which is a person, group, or organization that has a meaning it attempts to share with
an audience
§ receiver is an individual, group, or organization that decodes a coded message; an audience is two or more receivers
§ to transmit meaning, a source must convert the meaning into a series of signs or symbols representing ideas or concepts;
this is called the coding process or “encoding.”
§ to share meaning, the source should use signs or symbols familiar to the receiver or audience
§ to share an encoded message with a receiver or audience, a source selects and uses a communication channel, which is the
means of carrying the coded message
§ in the decoding process, signs or symbols are converted by the receiver into concepts and ideas
§ the receiver’s response to a message is feedback to the source

Promotion
§ is communication that builds and maintains favorable relationships by informing and persuading one or more audiences to
view an organization more positively and to accept its products
§ role of promotion is to stimulate product demand and to build and enhance relationships with current and potential
customers

Objectives of Promotion:
1. Create Awareness
2. Stimulate Demand
3. Encourage Product Trial
4. Identify Prospects
5. Retain Loyal Customers
6. Facilitate Reseller Support
7. Combat Competitive Promotional Efforts
8. Reduce Sales Fluctuations

The Promotion Mix

4 possible elements of a promotion mix:
§ advertising
§ personal selling
§ public relations
§ sales promotion

An effective promotion mix requires the right combination of advertising, personal selling, public relations, and sales promotion.

Advertising
§ paid, non-personal communication about an organization and its products transmitted to a target audience through mass
media, such as television, radio, the Internet, newspapers, magazines, direct mail, outdoor displays, and signs on mass
transit vehicles

Personal Selling
§ paid, personal communication that seeks to inform customers and persuade them to purchase products in an exchange
situation

Public Relations
§ broad set of communication efforts used to create and maintain favorable relationships between an organization and its
stakeholders

Sales Promotion
§ activity or material that acts as a direct inducement offering added value or incentive for the product to resellers,
salespeople, or customers; examples include free samples, games, rebates, sweepstakes, contests, premiums, and coupons.