CH 5: Consumer Behavior

 Consumer Buying Behavior: refers to the buying behavior of final consumers

 Consumer Market: individuals & households that buy goods and services for personal
consumption

Model of Consumer Behavior

 Stimulus-response model of buyer behavior: Marketing & other stimuli enter the
consumer’s ‘black box’ and produce certain responses
 Marketers must figure out what is in the buyer’s black box

 Marketing Stimuli consists of the 4 P’s:

o Product
o Price
o Place
o Promotion
 Other Stimuli include major forces and event’s in the buyer’s environment
o Economic
o Technological
o Social
o Cultural
 The consumer’s Black Box has 2 parts:
o Buyer’s characteristics: they influence how he or she perceive and reacts to the
stimuli
o The Buyer’s decision process: Which affects the buyer’s behavior
Characteristics Affecting Consumer Behavior

Cultural Factors
The Marketer needs to understand the role played by the buyer’s:

 Culture :
o It is the most basic cause of a person’s wants and behavior
o Every group or society has a culture. And cultural influences on buying behavior
may vary greatly from country to country
o Hofstede’s 5 Dimensions to analyze & compare cultures across the world:
 Power Distance Index:
 levels of inequality of power & wealth
 If the PDI is high, people except and accept that leaders will
separate themselves from the majority
 Uncertainty Avoidance Index:
 If the people are uncomfortable with uncertainty
 In cultures with the high UAI, rules and policies are put in place to
minimize or reduce the level of uncertainty
 Also their ultimate goal will be to control everything, thus the
people do not readily accept change and are risk averse
 Individualism:
 Either an individualistic or a collectivist society
  Collectivist: close long-term commitment to the member “group”
such as family and the extended family…
 Individualistic: People look after themselves and their beloved
only
 Masculinity:
 Women will either have limited rights or not
 Long-term Orientation vs. Short-term Orientation
o Marketers are always trying to spot Cultural Shifts in order to discover new
products that might be wanted
 Subculture
o Each culture contains smaller subcultures or groups of people with shared value
systems based on common life experiences and situation
o Subcultures include
 Nationalities
 Religions
 Racial Groups
 Geographic Regions
o Many subcultures make up important market segments
 Social Class
o Almost every society has some form of social class structure
o Social Classes are society’s relatively permanent and ordered division whose
members share similar values, interests, and behaviors
o Social class is not determined by a single factor such as income, but measured
as a combination of occupation, income, education, wealth and other variables
o Marketers are interested in social class because people within a given social
class tend to exhibit similar buying behavior

Social Factors
 Groups & Social Networks
o Groups that have a direct influence & to which a person belongs are called
membership groups
o Reference Groups serve as direct & indirect points of comparison or reference
in forming a person’s attitudes or behavior
 o Aspirational Groups are groups that an individual wishes to belong to
o Word-of-Mouth influence & Buzz Marketing:
 Marketers of brands subjected to strong group influence must figure out
how to reach opinion leaders
 Opinion leaders: are people within a reference group who exert social
influence on others
 Opinion leaders also called influentials may influence others towards a
product
 Marketers use buzz marketing by enlisting or even creating opinion
leaders to serve as ‘brand ambassadors’ who spread the word about
their product

o Online Social Networks

 They are online communities where people socialize or exchange
information and opinions
 Marketers are working to harness the power of these new social
networks to promote their products and build closer customer
relationships
 They hope to use social networks to interact with consumers and
become part of their conversations & lives
 Family
o The Family is the most important consumer buying organization in society
 Roles & Status
o A person belongs to many groups—family , clubs, organization
o The person’s position in each group can be defined in terms of both role and
status
o A role consists of activities people are expected to perform according to the
persons around them
o Each role carries a status reflexing the general esteem given to it by society
o People usually choose products appropriate to their roles & status

Personal Factors
 Age & Life Cycle
o People change the goods and services they buy over their lifetimes
o Tastes in food, clothes, furniture, and recreation are often age related
o Buying is also shaped by the stage of the family life-cycle—the stages through
which families pass as they mature over time
 Occupation
 o Occupation affect the good & service bought
o Workers tend to buy more rugged work clothes, executives buy business suits
 Economic Situation
o A person’s economic situation will affect product choice
o Marketers of income-sensitive goods watch trends in personal income, savings
and interest rates
o If economic indicators points to a recession, marketers can take steps to
redesign, reposition and reprice their products
o Some marketers target consumers who have lots of money and resources,
charging prices to match
 Lifestyle
o It is a person’s pattern of living expresses in his or her psychographics
o It involve measuring consumer’s major AIO dimensions
 Activities (work, hobbies, shopping, sport)
 Interests (food, fashion, family, recreation)
 Opinions (about themselves, social issues, business, products)
o Lifestyle profiles a person’s whole pattern of acting and interacting in the world
 Personality & self-concept
o Each person’s distinct personality influences his or her buying behavior
o Personality refers to the unique psychological characteristics that lead to
relatively consistent and lasting responses to one’s own environment
o Personality is usually described in terms of traits (self-confidence, sociability…)
o The brand also have personalities, and the consumers are likely to choose
brands with personalities that match their own
o A brand personality is the specific mix of human traits that may attribute to a
particular brand
o There are 5 brand personality traits:
 Sincerity (down-to-earth, honest)
 Excitement (daring, spirited and imaginative)
 Competence (reliable, intelligent & successful)
 Sophistication (upper class and charming)
 Ruggedness (outdoorsy)
o Self-concept: people’s possession contribute to and reflect their identities (we
are what we have)

Psychological Factors
 Motivation
o It is a need that is sufficiently pressing to direct the person to seek satisfaction
 o Motivation research: qualitative research designed to probe consumer’s hidden,
subconscious motivations
o Interpretive consumer research: motivation research that probes to uncover
underlying emotions & attitudes towards brands & buying situations
o Abraham Maslow sought to explain why people are driven by particular needs
at particular times

o A person tries to satisfy the most important need first. When that need is
satisfied, it will stop being a motivator and the person will then try to satisfy the
next most important need

 Perception
o A motivated person is ready to act, but how he acts is influenced by his own
perception of the situation
o Perception is the process by which people select, organize, and interpret
information to form a meaningful picture of the world
o People can form different perception of the same stimulus because of 3
perceptual processes:
 Selective attention: the tendency for people to screen out most of the
information to which they are exposed
 Selective distortion: the tendency of people to interpret information in a
way that will support what they already believe
 Selective retention: the tendency to retain information that support
their attitudes & beliefs
 Learning
 o It is the change in an individual’s behavior arising from experience and occurs
through interplay of:
 Drives: it is a strong internal stimulus that calls for action
 Stimuli: The particular object
 Cues: minor stimuli that determine when, where, and how the person
responds
 Responses: the action or the decision of buying that the customer takes
 Reinforcement: when the customer is satisfied with the object, and tend
to use it more than once it then becomes reinforced
 Beliefs & attitudes
o Belief: it is a descriptive thought that a person has about something
o Attitude: Describes a person’s relatively consistent evaluation, feelings, and
tendencies toward an object or idea

Types of Buying Decision Behavior

Complex Buying Behavior

 Consumers undertake complex buying behavior when they are highly involved in a
purchase and perceive significant difference among brands
 Consumers may be highly involved when the product is expensive, risky, purchased
infrequently, and highly self-expressive

Dissonance-Reducing Buying Behavior

 Happens when consumers are highly involved with an expensive, infrequent or risky
purchase, but see little differences among brands
 Post purchase dissonance: when customers notice certain disadvantages of the
purchased object brand or hear favorable things about brands not purchased
 Example: Carpets
Habitual Buying Behavior
 Occurs under conditions of low consumer involvement & little significant brand
difference
 Ad repetition creates brand familiarity rather than brand conviction

Variety-seeking Buying Behavior

 Situation characterized by low consumer involvement but significant perceived brand
difference
 Ex: chewing gum

The Buyer Decision Process

 The buyer decision process consists of 5 stages:

Need Recognition
 Occurs when the buyer recognizes a problem or need triggered by:
 Internal stimuli: one of the person’s normal needs (hunger, thirst)
 External stimuli: such as ads or discussion with a friend

Information Search
 Sources of Information
o Personal sources—family and friends
o Commercial sources—advertising, Internet
o Public sources—mass media, consumer organizations
o Experiential sources—handling, examining, using the product
 The most effective sources are personal sources

Evaluation of Alternatives
 How the consumer processes information to arrive at brand choices.
 Depends on the individual consumer and the specific buying situation.
Purchase Decision
 The act by the consumer to buy the most preferred brand
 Two factors come between the purchase attention and the purchase decision:
o Attitudes of others
o Unexpected situational factors (economy turning for worse, competitor
dropping price, friend dissatisfied with product)

Postpurchase Behavior
 The satisfaction or dissatisfaction that the consumer feels about the purchase.
 Relationship between:
o Consumer’s expectations
o Product’s perceived performance
 The larger the gap between expectation and performance, the greater the consumer’s
dissatisfaction.
 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.

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.

Stages in the Adoption Process:

 Awareness: aware of the new product
 Interest: seek information about the new product
 Evaluation: consider whether trying the new product makes sense
 Trial: tries the new product
 Adoption: the consumer decides to make full & regular use of the new product

Individual Differences in Innovativeness

Influence of Product Characteristics on Rate of Adoption
 5 Characteristics are important in influencing an innovation’s rate of adoption
o Relative advantage: the degree to which the innovation appears superior to
existing products
o Compatibility: the degree to which innovation fits the values & experiences of
potential consumers
o Complexity: the degree to which the innovation is difficult to understand or use
o Divisibility: the degree to which the innovation may be tried on limited basis
o Communicability: the degree to which the results of using the innovation can
be observed or described to others