4 Question each question response should consist of at least 150 words.

Directions 

· Your answers should show familiarity with the text and topics being covered in the unit.

· Each question response should consist of at least 150 words.

· Responses should be free of typographical, spelling, and grammar errors

· Explain how Maslow’s hierarchy of needs works.

· Distinguish between low-involvement and high-involvement buying decisions.

· Describe factors that influence customers to purchase products/services

· Outline the stages in the B2B buying process.

· Explain e-commerce’s effect on buying firms, the companies they do business with, where they are located, and the prices they charge.

Questions

1. You are opening a new, high end restaurant in a large city, explain how you would utilize Maslow’s Hierarchy of needs to appeal to the needs of your targeted market.

2. Explain the relationship between extensive, limited, and routine decision making relative to high- and low-involvement decisions. Identify examples of extensive, limited, and routine decision making based on your personal consumption behavior

3. Consider a company where marketing and sales are two different departments. Their customers are other businesses. Using both the buying center and buying process, describe what the marketing department actually does. What do salespeople actually do?

4. Locate three different types of websites that cater to markets discussed in this chapter. How do these differ from sites like eBay or Overstock.com? How are they similar? B2C models like Groupon and LivingSocial are being adopted by B2B companies. Examples include Bizy Deal; take a look at their site and identify the types of offerings that seem prevalent. What characteristics of the product or service would make such a model right for a B2B company?

5. By week six, you will complete a brief, marketing plan that follows the marketing plan rubric on the 

Assignments and Grading Page

. Review this rubric and the 

marketing plan template

 in the files area (This template is for a much more extensive plan than the one you will write), and describe the factors that would influence customers to purchase the products/services in your marketing plan.

CHAPTER 3

Consumer Behavior: How People Make Buying Decisions

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CONSUMER BEHAVIOR

CONSIDERS THE MANY REASONS—
PERSONAL, SITUATIONAL, PSYCHOLOGICAL, AND SOCIAL—
WHY PEOPLE SHOP FOR PRODUCTS, BUY AND USE THEM, SOMETIMES BECOMING LOYAL CUSTOMERS, AND THEN DISPOSE OF THEM.

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GETTING THE ANSWERS
Companies spend billions studying consumer behaviors.
Data is collected in many ways:
Web visits
Blogs
Social networks
Psychological profiles
Surveys

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LEARNING OBJECTIVES
Describe the personal and psychological factors that may influence what consumers buy and when they buy it.
Explain what marketing professionals can do to influence consumers’ behavior.
Explain how looking at lifestyle information helps firms understand what consumers want to purchase.
Explain how Maslow’s hierarchy of needs works.
Explain how cultures, subcultures, social classes, families, and reference groups affect consumers’ buying behavior.

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SITUATIONAL FACTORS

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Store Location

Physical Factors

Crowding

Social Situation

Time

Reason for Purchase

Mood

PHYSICAL FACTORS
Some physical factors can be controlled by design, others must be accommodated.
Atmospherics: store layout, music played, lighting, temperature, smell.
Uncontrolled: weather

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SOCIAL SITUATION

Factors such as an obligation, expected behavior, or a need to impress may compel purchases.

CIRCUMSTANCES IN WHICH CONSUMERS MAY FIND THEMSELVES

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TIME

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THE RIGHT PRODUCT

IN THE RIGHT PLACE

AT THE RIGHT TIME

REASONS FOR THE PURCHASE
Is it an emergency purchase?
Is it a gift or for a special occasion?
Is it going to help complete a task?
Is it needed quickly?

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MOOD
People’s moods temporarily affect their spending patterns.
Some people enjoy shopping. Other’s less so.
A sour mood can spoil a consumer’s desire to shop.

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ECONOMIC SITUATION
People’s economic situation affects what and how much they buy.
People reduce spending during economic downturns.
Stores with lower prices (like Walmart) fare better during economic downturns than high-end stores.

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PERSONALITY
It describes a person’s disposition.
It helps show why people are different.
It encompasses a person’s unique traits

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PERSONALITY TRAITS

The link between personalities and buying behavior is unclear.

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Openness

Conscientiousness

Extraversion

Agreeableness

Neuroticism

SELF-CONCEPT
Marketers have had better luck linking people’s self-concepts to their buying behavior.
Your self-concept is how you see yourself—be it positive or negative.
Your ideal self is how you would like to see yourself.
People buy products to enhance how they feel about themselves.

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GENDER

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AGE
A consumer’s age influences their purchase decisions:
Chronological age: A person’s age in years.
Cognitive age: The age a buyer perceives himself or herself to be.

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LIFESTYLE
Companies research on consumers’ lifestyles by asking them:
What products do they like
Where do they live
How they spend their time
What are their priorities
Where do they go other than work
Who do they talk to
What do they talk about
Psychographics combines:
Lifestyle traits of consumers and their personality styles.
Their attitudes, activities, and values.

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MOTIVATION
It is the inward drive people have to get what they need.
In the mid-1900s, Abraham Maslow developed the hierarchy of needs.

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MASLOW’S HIERARCHY OF NEEDS

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PERCEPTION
This is how people interpret the world around them.
It involves five external senses:
Taste
Sight
Hearing
Touch
Smell

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PERCEPTION AND RETENTION FACTORS
Selective attention: filtering out irrelevant information
Selective retention: forgetting information that contradicts your beliefs
Selective distortion: misinterpreting the intended message
Shock advertising: surprising stimuli that can increase retention
Subliminal advertising: stealthily embedded messages in media

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LEARNING
It is the process by which consumers change their behavior after they gain information or experience.
Operant (learning) conditioning: A type of behavior that’s repeated when it’s rewarded.
Classical conditioning: A learning process where consumers associated a response with a condition that was previously not associated with the response.

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ATTITUDE
Attitudes are:
Mental positions or emotional feelings
Favorable or unfavorable evaluations
Action tendencies people have about products, services, companies, ideas, issues, or institutions
They tend to be enduring and hard to change because they are based on people’s values and beliefs.

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SOCIETAL FACTORS

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culture

subculture

Social class

Reference groups and opinion leaders

family

CONSUMER CULTURES
Culture: a group of people with shared beliefs, customs, behaviors, and attitudes.
Subculture: a group of people within a culture who are different from the dominant culture but have something in common with one another such as:
Common interests
Vocations or jobs
Religions
Ethnic backgrounds
Geographic locations
Cultures that share the same values may not be consistent in purchasing behavior across national borders.

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SOCIAL CLASS
It is a group of people who have the same social, economic, or educational status in society.
While income helps define social class, the primary variable determining social class is occupation.

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REFERENCE GROUPS AND OPINION LEADERS

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FAMILY
Big determinant in buying behavior
Children:
Follow their parents’ behavior
Influence household purchases
Nag their parents for certain products
Risk in advertising to children:
May alienate parents

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KEY TAKEAWAYS
Situational influences are temporary conditions that affect how buyers behave.
They include physical factors such as a store’s buying locations, layout, music, lighting, and even scent.
Companies try to make the physical factors in which consumers shop as favorable as possible.
If they can’t, they utilize other tactics such as discounts.
The consumer’s social situation, time factors, the reason for their purchases, and their moods also affect their buying behavior.

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KEY TAKEAWAYS
Your personality describes your disposition as other people see it.
Market researchers believe people buy products to enhance how they feel about themselves.
Your gender also affects what you buy and how you shop. Women shop differently than men.
However, there’s some evidence that this is changing. Younger men and women are beginning to shop more alike.
People buy different things based on their ages and life stages. A person’s cognitive age is how old one “feels” oneself to be.
To further understand consumers and connect with them, companies have begun looking more closely at their lifestyles (what they do, how they spend their time, what their priorities and values are, and how they see the world).

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KEY TAKEAWAYS
Psychologist Abraham Maslow theorized that people have to fulfill their basic needs—like the need for food, water, and sleep—before they can begin fulfilling higher-level needs.
Perception is how you interpret the world around you and make sense of it in your brain.
To be sure their advertising messages get through to you, companies often resort to repetition.
Shocking advertising and product placement are two other methods.
Learning is the process by which consumers change their behavior after they gain information about or experience with a product.
Consumers’ attitudes are the “mental positions” people take based on their values and beliefs. Attitudes tend to be enduring and are often difficult for companies to change.

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KEY TAKEAWAYS
Culture prescribes the way in which you should live and affects the things you purchase.
A subculture is a group of people within a culture who are different from the dominant culture but have something in common with one another—common interests, vocations or jobs, religions, ethnic backgrounds, sexual orientations, and so forth.
To some degree, consumers in the same social class exhibit similar purchasing behavior. Most market researchers consider a person’s family to be one of the biggest determinants of buying behavior.
Reference groups are groups that a consumer identifies with and wants to join. Companies often hire celebrities to endorse their products to appeal to people’s reference groups.
Opinion leaders are people with expertise in certain areas. Consumers respect these people and often ask their opinions before they buy goods and services.

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LEARNING OBJECTIVES
Distinguish between low-involvement and high-involvement buying decisions.
Understand what the stages of the buying process are and what happens in each stage.

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INVOLVEMENT IN BUYING DECISIONS

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INVOLVEMENT IN BUYING DECISIONS
Routine response behavior: When consumers make low-involvement decisions, they make automatic purchase decisions based on limited information or information they have gathered in the past.
Some low involvement purchases are made with no planning or previous thought. These buying decisions are called impulse buying.

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INVOLVEMENT IN BUYING DECISIONS
Limited problem solving: Consumers engage in this when they already have some information about a good or service but continue to search for a little more information.
It falls somewhere between low involvement and high involvement.

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STAGES IN THE CONSUMER’S PURCHASING PROCESS

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KEY TAKEAWAYS
Consumer behavior looks at the many reasons why people buy things and later dispose of them. Consumers go through distinct buying phases when they purchase products:
realizing the need or wanting something,
searching for information about the item,
evaluating different products,
choosing a product and purchasing it,
using and evaluating the product after the purchase,
disposing of the product.
A consumer’s level of involvement is how interested he or she is in buying and consuming a product. Low-involvement products are usually inexpensive and pose a low risk to the buyer if he or she makes a mistake by purchasing them. High-involvement products carry a high risk to the buyer if they fail, are complex, or have high price tags. Limited-involvement products fall somewhere in between.

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KEY TAKEAWAYS
Instead of a process, marketers have begun to rethink a buyer’s purchase decision as a journey – that is, the customer’s journey. More companies are going so far as to develop customer “maps” to find out where the journey gets hard or breaks down for customers, and how to move them from merely being aware of a product to being a loyal customer.

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