Consumer Behaviour

1 Rob warmenhoven

• Guestlecturer vHall-larenstein, from the Netherlands

• Lecturer in marketing and international business, undergraduate level Consumer Behaviour Program “structure of the lecture” • models of consumer buyer behaviour • Examine factors influencing behaviour • Understand the buyer decision process\ of eco labeled products

3 Eco-Consumer behaviour • Concern (not always rational and different per product) • Willingness to pay more • Willingness to get less • Actual behaviour

4 It is difficult to classify consumers…

• The stereotypes don’t work anymore • People are not acting their age • People are not acting their class • People are not acting their sex • Traditional households don’t exist ‘People want to be different things at different times’ (Szmigin, 2011)

5 Consumer Trends 2013 source: trendwatching.com

1. Presumers/Custowners 1. DIY Health 2. Mobile Moments 2. Dealer-Chic 3. New Life Inside 3. Eco-cycology 4. Appscriptions 4. Cash-Less 5. Celebration Nation 5. Flawsome 6. Data Myning 6. Screen culture 7. Again Made here 7. Point & know 8. Full Frontal 9. Demanding Brands

Presumers/Custowners

• “Consumers will embrace even more ways to participate in the funding and (pre-)launch of new products and brands.” Mobile Moments

• Lifestyle multi-if-not-hyper-tasking: why micro- convenience, mini-experiences and digital snacks will rule in 2013.” New Life Inside

• “It's time for products that give back.” Appscriptions/DIY Health

• Digital technologies are the new medicine.” Celebration Nation

• Flaunting the new ‘it’ cultures.” Data Myning

• “Why consumers want ‘good’ data not ‘big’ data.” Again made here

• “Local manufacturing is the new Service Economy.” Full Frontal

• “Not just transparent, but naked and proud ;-)” Demanding Brands

• Vitoria FC give blood to restore the shirt Dealer-Chic or More for Less Eco-Cycology Cash-Less Flawsome Screen Culture Point & Know Discussion, top 3 in Iceland

Model of Buyer Behaviour adopted for the buyers of fish in the Netherlands Marketing and other stimuli Economic Product Technological Price Political Place Cultural Buyer’s responses Promotion Ecological

Product choice Brand choice Buyer’s black box Dealer choice Purchase timing Buyer Buyer Purchase amount characteristics decision process

23 current green marketing mix

• niche strategies (5-10% of the market) • sustainable corporate reputation (green products, conventional marketing)

24 Eco-labelling

• Eco labels (generic claims) • Environmental performance labels (energy class) • Environmental brands

25 The Buyer Decision Process

Post-purchase behaviour Purchase decision Evaluation of alternatives Information search Need recognition 26 The Buyer Decision Process

• Problem situation

27 Buyer Decision Process: Information Search

. Personal sources . Commercial sources . Public sources

28 Evaluation of alternatives

29 30 [i]

Problems with Labeling

• Consumers are interested in being more ethical & sustainable in their purchase decisions, but the explosion of labels and certifications make it difficult for consumers to rely upon them

Mintel: Labels consumers recognize and/or understand

Label % % % More Likely to Buy Recognized Understood With Label

Recycled 91 65 55

Energy Star 89 52 67

FSC 72 39 33

Fair Trade 39 13 16

Green E-Logo 24 6 8

Cruelty Free 11 4 4 31 32 Buyer Decision Process-4

Purchase Decision

Intention

Unexpected Attitudes situational of others factors

Decision

33 Buyer Decision Process-5

Post-purchase Behaviour • Consumer’s expectations • Perceived performance • Cognitive Dissonance

34 Model of Buyer Behaviour adopted for the buyers of fish in the Netherlands Marketing and other stimuli Economic Product Technological Price Political Place Cultural Buyer’s responses Promotion Ecological

Product choice Brand choice Buyer’s black box Dealer choice Purchase timing Buyer Buyer Purchase amount characteristics decision process

35 Buyer characteristics

36 Consumer Behaviour Influences

Personal Social Age and Psycho- Cultural Reference life-cycle Culture logical groups Occupation Motivation Sub- Family Economic Perception culture situation

Roles Lifestyle Social and Beliefs and Class Status Personality Attitudes and self-concept 4 1 2 3

Buyer

37 Consumer Behaviour Influences: 1) Cultural Factors

. Culture and subcultures Set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions

38 Social

SocialClass Class is Determined by a Complex Set of Variables, Including: Income, Family Background, and Occupation. Social Class Influences:

How Much Money Will Be Spent

How Money Will Be Spent

Access to Resources Such as Education, Housing, and Consumer Goods

Taste and Lifestyles

39 Consumer Behaviour Influences: 2) Social Factors

. Family – Most important consumer influence – changing family roles and evolving lifestyles – children may influence strongly

40 Consumer Behaviour Influences: 3) Personal Factors

. Age . Life-cycle stage . Occupation . Economic situation . Lifestyle . Personality . Self-image

43 Personal Factors

• Age

44 My generation/ The Gen-Xers

• Aimless Dependents

• Thrill-Seeking Materialists

• New Aquarians

45 Generation Y

• Environmental messaging has a major impact on customer loyalty in this key demographic, with 50% of respondents saying it influences their shopping behavior. • About 46% of respondents say they'd shop at a retailer more if it were environmentally friendly. • And 47% say they're willing to pay more for environmentally friendly services, products or brands.

46 Personal Factors

• Life-cycle stage

47 Personal Factors . Occupation – May determine goods or services purchased – Identify occupations with product need – Specialized professional products

48 Personal Factors . Lifestyle – A person’s pattern of living – Lifestyle = mode of living identified by: . Activities (work, hobbies etc.) . Interests (what kind of parties?) . Opinions (political, social, etc.)

49 Important note about lifestyle • Lifestyle trends change… • Marketers need to keep track of lifestyle trends… – Because product needs are closely related to lifestyles

Reflection 3

• Life-cycle stage • What are the • Occupation influences of all these influences on the • Lifestyle buying behaviour when buying a fresh fish/canned fish

52 Consumer Behaviour Influences: 4) Psychological Factors

1. Motivation 2. Perception 3. Learning 4. Beliefs + Attitudes

53 Consumer Behaviour Influences: 4) Psychological Factors

. 1) Motivation – Biological needs – Psychological needs

. Motive – Need sufficiently pressing – To drive a person to seek satisfaction

54 Maslow’s Hierarchy of Needs

Self-Actualisation (Self-fulfillment)

Ego Needs

(Prestige, status, self esteem)

Social Needs (affection, friendship, belonging)

Safety and Security Needs

(Protection, order, stability)

Physiological Needs (Food, water, air, shelter, sex) 56 2) Perception

– Process by which people: – Select, organize and interpret information in order to form a meaningful picture of the world – People form different perceptions of the same information or stimuli due to 3 processes . Selective attention . Selective distortion . Selective retention

57 A Sax Player or a Woman’s Face?

58 Behavioral Learning

Behavioral LearningTheories Theories Assume that Learning Takes Place as the Result of Responses to External Events.

Consumer Stimulus Response

Consumer’s Black Box

60 The Process of Shaping in Purchase Behaviour

63 4) Beliefs

– Belief: descriptive thought that a person holds about something

64 5) Attitudes . A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea

65 Model of Buyer Behaviour

Marketing and other stimuli Product Economic Price Technological Place Political Buyer’s responses Promotion Cultural

Product choice Brand choice Buyer’s black box Dealer choice Purchase timing Buyer Buyer Purchase amount characteristics decision process

66 The end!