Buyer Behaviorin Health Care

Marketing

How are decisions made and what

influences impact the process?

Who and What Are Consumers?

• People and/or organizations that buy products

• People and/or organizations that use products

Perception

• The process by which an individual receives, selects, organizes and interprets information to create a meaningful picture of the world.

• Individualized process where information is filtered and screened for interpretation

Decision Making Model

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Informationsearc h

A lternativeeva luation

P urc hasedec is ion

P os tpurc haseeva luation

Problem Recognition

• Consumer perceives a difference between a desired or ideal state and the actual state– Motivated to close the gap

– Ex: you do not have insurance coverage and feel that this is NOT an ideal state

Information Search

• Internal– Initial information search may utilize

internal memory stores initially. Ex: product experience, previous WOM

• External– Based on information and involvement

may choose to seek additional information from external sources such as the Internet, phone book, friends, etc.

Alternative Evaluation

• If the decision is not classified as habitual, the consumer may feel the need to evaluate competing alternatives in the marketplace

• Elaboration Likelihood helps us determine level of processing to occur

• Fishbein Model is extremely helpful in evaluating choices and forming attitudes

Elaboration Likelihood Model

• model that allows marketers to predict routes to persuasion

• route to persuasion based on two moderating variables:– motivation (involvement)– ability to comprehend

• central and peripheral routes are the ends of an elaboration continuum

ELM• Elaboration

– amount of issue relevant thinking done by the consumer

• Involvement– personal motivation

to “think”– reflects risk and how

close the issue ties to the ego

ELM• Most decision utilize the peripheral

route to persuasion

• Low involvement or simply lack of ability to process detailed information

Peripheral Route

• Affective Route - Zajonc

• reflects lower levels of involvement or lack of ability to process

• outcome is attitude toward the ad

• attitudes less resistant or persistent than those formed centrally

• relies on cues such as sex, celebrities, music color, visuals to persuade

Peripheral Route

• Most effective forms of advertising will be:– tv– radio– celebrity endorsers– mood oriented print

ads– sex

Attitudes

• learned predisposition to think in a certain way about a person, product, service or idea

• based on:– personal factors -social class

– cultural factors -race

– educational factors

– familial roots

– religious factors

Central Route

• high levels of involvement• higher levels of ability to process• may reflect a natural desire to be

cognitive• cognitive route to persuasion• outcome is an attitude toward the brand• attitudes formed centrally are more

resistant and persistent

Central Route

• reflected by the Fishbein Model of Attitude Formation

• best forms of advertising– print– cognitive– product

information provided

Fishbein Model Attitude Changes

• Change a belief– Very difficult to change an initial

negative impression

• Change the Importance of the Evaluative Criteria

• Add a new BiEi Combination– BEST! Improves your position and

hurts everyone else!

Purchase Decision

• Consumer determines how to resolve differences between actual and desire state (through product purchase, etc. ) and then must also make a patronage decision

• Patronage decision is “where” to acquire the product or service

Post Purchase Evaluation

• Consumer must determine level of satisfaction with the decision, the product/service, and provider.

• Determination of expectations and if they were met primary

• Cognitive Dissonance– Mental anxiety when unsure about alternative

chosen – Providers can assuage concerns and reaffirm

decision

Psychological Influences

• Maslow– Motivation

• Attitudes

• Lifestyle– VALS

• Learning

Maslow’s Hierarchy of Needs

•Motivation - internal force that stimulates the person to act in a certain manner.

•Needs- the basis of motivated behavior

Maslow’s Hierarchy

•Self-Actualization - Fulfillment•Ego Needs - success, achievement•Social Needs - affection, friendship•Safety and Security Needs -

protection, order, stabilization•Physiological Needs - food, water,

shelter, sex

Major Influences on Consumers

•External Influences–Culture–Social Class –Reference

Groups–Family

• Personal Influences– Age– Sex– Family Status– Occupation

• Psychological Influences– Attitudes– Perception– Needs

Culture• Complex of

tangible items such as art, literature, clothing, music and intangibles such as law, values, customs that define a group of people and their way of life.

Social Class

• Position that you and you family occupy within society

• Determined by:– income– occupation– wealth– family prestige– value of home

Reference Groups• Collection of

people that you use as a guide for behavior in specific situations.

• 3 Functions– provide information– means of

comparison– furnish guidance

Family• 2 or more people living in a house

related by blood, marriage, or adoption

• Provides economic, financial and emotional support

• Determines Lifestyle

Industrial Buying Behavior

• Organizational Behavior background critical– Decisions tend to be made in a group– More rational in orientation– Reflects derived demand concerns

(demand for HMO impacted by consumer needs)

– Larger quantities purchased – Many individuals affected by decisions

Marketing Strategies

•Undifferentiated Marketing–Mass Marketing

•Differentiated Marketing•Focused (Concentrated Marketing)

Marketing Segmentation

• Identifying groups of people with shared characteristics within the broad markets for consumer or business products

•aggregating these groups into larger segments according to their mutual interest in the product’s utility

Segmentation Variables

• Demographics*– age, income, sex,

family size• Geodemographics

– regions, climate, density

• Psychographics• Behaviorgraphic

– benefits sought, usage rates, purchase occasion

*increasingly hard to measure but more predictive

Behaviorgraphics and Psychographics

• Behaviorgraphics– Targeting based on the way

people behave– Best data to have, but not always

available• Psychographics

– Targeting based on lifestyle and attitudes•Values, motivations, and lifestyles as

they relate to buying behavior

Cohort Segmentation

• Cohort is a group of people bound together in history by a set of events– Wars– Technological changes– The Depression– Generation Xers

• Match Expectations with cohorts to best serve!

Demographics/Geodemos

• Monitoring demo shifts can assist with– identifying segments– forecasting of sales – assisting with media planning

• Minimizing wasted coverage

• Geographic Dispersion– Population relocating to South and West from

Northeast and Midwest– 70% growth to come in these regions

Criteria For Usable Segments

• Sufficient Size– Large enough to

profit?

• Measurability– Identify the group

with characteristics such as demos

• Accessibility• Responsiveness• Durability

Segmenting Business Markets

• Demographics– Size of company– Industry type– Customer location

• Operating variables– Technology– Product use

• Purchasing Approaches– Procedures and criteria