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Principles of Marketing, Arab World Edition Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba

Presentation prepared by Annelie Moukaddem Baalbaki

CHAPTER FIVE
Consumer Behavior

Lecturer: Insert your name here

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Chapter Learning Outcomes

Topic Outline

5.1 Model of Consumer Behavior

5.2 Characteristics Affecting Consumer Behavior

5.3 Types of Buying Decision Behavior

5.4 The Buyer Decision Process

5.5 The Buyer Decision Process for New Products

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Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption.

Consumer market refers to all of the personal consumption of final consumers.

Consumer Behavior

Consumer Buyer Behavior and Consumer Market

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Note to Instructor

Discussion Question

What have you recently purchased that cost over $100? Write down all the reasons you purchased this particular item.

Because students are all consumers—it is interesting to start the class with a discussion of products they have recently purchased. When you ask them why they purchased a particular item or product, you can bring them through many topics in this chapter including the characteristics that affect consumer behavior (cultural, social, personal, and psychological). You can also try to determine the process they went through including how and where they searched for information and how they evaluated their alternatives. Finally, ask them how they feel about their purchase (postpurchase behavior). This discussion will lead nicely to the next slide which is the Model of Buyer Behavior.

Model of Consumer Behavior

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Characteristics Affecting Consumer Behavior

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Culture is the set of basic values, perceptions, wants, and behavior learned from family and other important institutions.

Subculture are groups of people within a culture with shared value systems based on common life experiences and situations.

Characteristics Affecting Consumer Behavior

Cultural Factors

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Note to Instructor

Real Marketing 5.1 discusses McDonald’s challenges in the Arab world. McDonald’s is currently operating in 14 Arab countries. A key element in McDonald’s strategy is to adapt its traditional American approach to local culture, food habits, and lifestyles.

For example, in some countries of the Arab world, McDonald’s outlets are divided along male and female lines in accordance with local custom. As well as adapting the restaurants themselves, McDonald’s tailors its menu to meet the food culture or preferences of different countries. The McDonald’s menu varies widely in different parts of the world. In the Arab world, for example, the company launched ‘McArabia,’ a product that McDonald’s intended to match regional tastes and preferences.

Prof. Hofstede defined five dimensions to analyze and compare cultures across the world. Using research conducted in Egypt, Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, and the UAE, he developed a measure of the Arab world. The 5 dimensions are:

Power Distance Index
Uncertainty Avoidance Index
Individualism
Masculinity
Long-Term Orientation.

Characteristics Affecting Consumer Behavior

Cultural Factors

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Note to Instructor

This weblink directs you to the homepage of professor Geert Hofstede’s Cultural Dimensions in the Arab World.

Hofstede identified a high Power Distance Index (PDI) ranking in the Arab world. This indicates high levels of inequality of power and wealth. People expect and accept that leaders will separate themselves from the majority.
Hofstede also identified a high Uncertainty Avoidance Index (UAI). This indicates that people are uncomfortable with uncertainty. Strict rules, laws, policies, and regulations are put in place to minimize or reduce this level of uncertainty.

Large PDI and UAI scores, 80 and 68 respectively, suggest that people in Arab world societies are likely to follow a hierarchical system in which there is little social mobility. According to Hofstede, the combination of these two dimensions produces a situation in which leaders have ultimate power and authority, and allows them to set laws and regulations

that reinforce their leadership and control.

The Masculinity Index (MAS) is the Arab world’s third highest dimension, though at 52 it is only slightly higher than the 50.2 world average. This score suggests that women in the Arab world have limited rights. However, it is not clear whether this is due to cultural or religious factors.
The lowest Hofstede dimension for the Arab world is for Individualism (IDV). With a score of 38, it is significantly below the world average of 64. This shows the existence of a Collectivist society rather than an Individualist culture. In a Collectivist culture, there is a close long-term commitment to the member ’group,’ in other words to the family, extended family,

or extended relationships. In this culture, loyalty is vital and overrides most other societal rules.

Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Measured by a combination of occupation, income, education, wealth, and other variables.

Characteristics Affecting Consumer Behavior

Cultural Factors

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Characteristics Affecting Consumer Behavior

An Arab Example : Social Classes in the UAE

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Nationals Al-Muwateneen	Foreign immigrants Al-Wafedeen
Ruling Sheikhly Families The Merchant Class New Middle Class Low Income Groups	Top Professionals and International Contractors Middle Range Professionals Low-paid, Semi-skilled and Unskilled workers

Characteristics Affecting Consumer Behavior

Social Factors

Groups and Social Networks

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Note to Instructor

Discussion Question

What groups are you a member of and what are your aspirational groups. How does this influence you as a consumers?

Characteristics Affecting Consumer Behavior

Opinion leaders are people within a reference group who exert social influence on others

Also called influentials or leading adopters

Marketers identify them to use as brand ambassadors

Social Factors

Word-of-mouth influence and buzz marketing

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Note to Instructor

It is a great idea to click through to the BuzzParadise Web site. It is an excellent example of Buzz marketing. Ask students if they tend to have a “go to” person when they want to purchase. Would they consider themselves opinion leaders? A great group to ask about is middle school aged kids. Who are the opinion leaders here? What qualities do they possess?

Characteristics Affecting Consumer Behavior

Online Social Networks are online communities where people socialize or exchange information and opinions:

Blogs
Social networking sites (facebook)
Virtual worlds (second life)

Social Factors

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Note to Instructor:

Discussion Question

How can marketers use these networks?

This slide should provide a lively discussion for students because they all are users of social networks. Ask students for examples they have seen or experienced. Then be sure to ask if they think the marketing efforts were effective for the marketer and why? P&G for example set up

Characteristics Affecting Consumer Behavior

Family is the most important consumer-buying organization in society.

Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status.

Social Factors

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Note to Instructor

Discussion Question

What brands do you purchase because it is what your parents used? Why do you think this occurs?

Characteristics Affecting Consumer Behavior

Age and life-cycle stage:

People change the goods and services they buy over their lifetimes
Tastes in food, clothes, furniture, and recreation are often age related
Buying is also shaped by the stage of the family life-cycle—the stages through which families might pass as they mature over time

Personal Factors

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Characteristics Affecting Consumer Behavior

Occupation affects the goods and services bought by consumers.

Economic situation includes trends in:

Personal Factors

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Characteristics Affecting Consumer Behavior

Lifestyle is a person’s pattern of living as expressed in his or her psychographics.

Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment.

Personal Factors

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Note to Instructor

Lifestyle: BlackBerry has achieved initial success by attracting consumers with an interest in a cool lifestyle and social networking.

Discussion Question

What categories of products seem to be targeted to consumer’s lifestyles?

They will realize many products in addition to cars including food, cosmetics, shampoo also appeal to a consumer’s lifestyles.

Characteristics Affecting Consumer Behavior

Personality and self-concept

Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment: Self-confidence, Sociability, Autonomy, Defensiveness, Adaptability, Aggressiveness.

Self-concept or self-image premise is that people’s possessions contribute to and reflect their identities—that is, ‘we are what we have’.

Personal Factors

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Characteristics Affecting Consumer Behavior

Brand Personalities

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Sincerity:	Down-to-earth, honest, wholesome, and cheerful
Excitement:	Daring, spirited, imaginative, and up-to-date
Competence:	Reliable, intelligent, and successful
Sophistication:	Upper class and charming
Ruggedness:	Outdoorsy and tough

Note to Instructor

It is interesting to talk about brand personalities and ask students the personality of several brands:

A brand personality is the specific mix of human traits that may be attributed to a particular brand.

One researcher identified five brand personality traits

1. Sincerity (down-to-earth, honest, wholesome, and cheerful)

2. Excitement (daring, spirited, imaginative, and up-to-date)

3. Competence (reliable, intelligent, and successful)

4. Sophistication (upper class and charming)

5. Ruggedness (outdoorsy and tough)

Characteristics Affecting Consumer Behavior

Psychological Factors

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Characteristics Affecting Consumer Behavior

Motivation

A motive is a need that is sufficiently pressing to direct the person to seek satisfaction.

Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations.

Psychological Factors

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Note to Instructor

An aging consumer who buys a sporty convertible might explain that he or she simply likes the feel of the wind in his or her thinning hair. At a deeper level, the person may be buying the car to feel young and independent again.

Characteristics Affecting Consumer Behavior

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Characteristics Affecting Consumer Behavior

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes.

Selective attention

Selective distortion

Selective retention

Psychological Factors

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Note to Instructor

Selective perception: It’s impossible for people to pay attention to the thousands of ads they’re exposed to every day, so they screen most of them out.

Discussion Question

If you watched television last night, what ads do you remember seeing?

Probe to find out why they remember certain ads—was it that they broke through the clutter, that they saw them many times, or that they are in the market for that certain product?

Characteristics Affecting Consumer Behavior

Selective attention is the tendency for people to screen out most of the information to which they are exposed.

Selective distortion is the tendency for people to interpret information in a way that will support what they already believe.

Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands.

Psychological Factors

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Characteristics Affecting Consumer Behavior

Learning is the change in an individual’s behavior arising from experience and occurs through interplay of:

Psychological Factors

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Characteristics Affecting Consumer Behavior

Beliefs and Attitudes

Belief is a descriptive thought that a person has about something based on:

Knowledge
Opinion
Faith

Psychological Factors

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Characteristics Affecting Consumer Behavior

Beliefs and Attitudes

Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.

Psychological Factors

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Types of Buying Decision Behavior

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Types of Buying Decision Behavior

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The Buyer Decision Process

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The Buyer Decision Process

Occurs when the buyer recognizes a problem or need triggered by:

Internal stimuli

External stimuli

Need Recognition

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Note to Instructor

This innovative ad from Clorox clothing detergent reminds parents that “This is how babies see the world. Keep it clean.”

The Buyer Decision Process

Sources of Information

Personal sources—family and friends

Commercial sources—advertising, Internet

Public sources—mass media, consumer organizations

Experiential sources—handling, examining, using the product

Information Search

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The Buyer Decision Process

How the consumer processes information to arrive at brand choices.

Depends on the individual consumer and the specific buying situation.

Evaluation of Alternatives

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Note to Instructor

This Web link brings you to PriceGrabber—an online comparison shopping site. What is interesting on this site is on the left hand side, you can search by features. These features help a consumer know how to evaluate a product. For instance, this example is laptop computers and one can search by processing speed, processor type, screen size, etc.

The Buyer Decision Process

The act by the consumer to buy the most preferred brand

The purchase decision can be affected by:

Attitudes of others

Unexpected situational factors.

Purchase Decision

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The Buyer Decision Process

The satisfaction or dissatisfaction that the consumer feels about the purchase.

Relationship between:

Consumer’s expectations

Product’s perceived performance

The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction.

Post-Purchase Decision

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The Buyer Decision Process

Cognitive dissonance is the discomfort caused by a post-purchase conflict.

Customer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime value.

Post-Purchase Decision

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The Buyer Decision Process for New Products

A New Product is a good, service, or idea that is perceived by some potential customers as new.

Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.

New Product and Adoption Process

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The Buyer Decision Process for New Products

Stages in the Adoption Process

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The Buyer Decision Process for New Products

Individual Differences in Innovativeness

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The Buyer Decision Process for New Products

Influence of Product Characteristics on Rate of Adoption

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