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MGMA01H3 (184)
Chapter 6

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Department
Management (MGM)
Course
MGMA01H3
Professor
Tarun Dewan
Semester
Summer

Description
Consumer Behavior - The study of human consumption which involves the acquisition, usage, and nature of goods, services and ideas. It focuses on the satisfaction of goals, desires and needs - It is important to study their behavior because to achieve organizational goals we need to determine the needs and wants of target customers and deliver the desired satisfaction effectively and efficiently than competitors Model of Consumer Behavior: The environment: Marketing stimuli (4P) and other stimuli (economic, technological, cultural) Black box / buying decision process Buyer responses (product choice, supplier choice, order quantities, delivery times, payment) Factors affecting consumer behavior CULTURAL Culture: set of basic values, perceptions, wants and behaviors learned by the people around us and other institutions while growing up. Marketers try to spot culture shifts to discover new products that may be wanted Subculture: group of people with shared value systems based on common life experiences and situations. They include nationalities, religions, etc. They also make up market segments and the 4 important groups in Canada are:  Regional subculture – Canada is a regional country so marketers may develop distinctive programs for the different regions (Atlantic Canada, BC). The geographic features and climate have shaped the regional character  Founding nations – The unique history & language behind the aboriginals, the English and the French have driven many of the cultural differences that result in different buying behavior  Ethnic consumers – 70% of the visible minority population were born out of Canada so it is important to be sensitive to their cultural values  Mature customers – different age units have distinct cultures. As mature customers increases companies are developing ways to attract aging big spenders Social Class: relatively permanent and ordered divisions in a society whose members share similar values, interests and behavior. SOCIAL Groups and social networks Reference group: any external influence that serve as direct or indirect points of comparison in forming a person’s attitudes or behavior Membership group: has a direct influence and to which a person belongs, Eg: family, friends Aspirational group: when one wishes to belong to a group. Eg: one that hopes to join the NHL hockey team Reference groups expose a person to new behaviors and lifestyles, influences the person’s attitudes Marketers try to identify opinion leaders and advertise their products to them with hopes that this person will spread the word about the product. They are using buzz marketing Family: this can strongly influence buyer behavior. It is always researched greatly and marketers are interested in the influence of the husband, wife, kids on the purchase of various goods Role and status: A person’s position in various groups can be defined in terms of role and status. People choose products appropriate to their role and status. Eg: a working mother has different roles in her office, her home and outside but she will buy the kind of clothing that reflects her role/status in her company PERSONAL FACTORS Age: people change the type of goods they buy over their lifetime as their tastes change when they get older. Life cycle stage is also used my marketers to develop appropriate products for each stage. The five life stage segments are: Youth (customers younger than 18); Getting started (ages 18-35 going through first experiences such as first house); Builders (35-50 as they build their family and careers and borrow more money); Accumulators (50 to 60 worrying about saving for retirement) and Preservers (over 60 that want to maximize their retired income) Occupation: a person’s job affects what goods and services they buy Economic situation: Marketers of income sensitive goods need to look into trends in personal income, savings and interest rates. Lifestyle: person’s pattern of living as expressed in terms of activities, interests and opinions (AIO dimensions). Consumers don’t just buy products they buy the lifestyle it represents. Eg: BMW Personality and self-concept: Personality is described in terms of traits such as self-confidence, dominance, aggressiveness, etc. Consumers are likely to choose brands with personalities that match their own. Brand personality: specific mix of human traits that may be attributed to a particular brand. The five are: 1) Sincerity (honest, cheerful) 2) Excitement (daring, imaginative) 3) Competence (intelligent, successful) 4) Sophistications (upper class and charming) 5) Ruggedness (outdoor, tough) Marketers use a concept related to personality – self-concept. The idea that people’s possessions contribute to and reflect their identities: “we are what we have” PSYCHOLOGICAL FACTORS Motivation Motive is a need that is sufficiently pressing to direct the person to seek satisfaction of the need. Two popular motivation theories are: Sigmund Freud: - People are unconscious about the real psychological forces shaping their behavior - The person grows up and represses many urges - Suggest that a person’s buying decision are affected by
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