Topic # 5
Analyzing Consumer Markets and
Consumer Behaviors
Szabist- Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology
Consumer Behavior
Is the study of how individuals, groups, and
organizations select, buy, use and dispose of
goods, services, ideas or experiences to satisfy
their needs and wants
What Influences Consumer Behavior?
1. Cultural factors
2. Social factors
3. Personal factors
1. What is Culture?
Culture is the fundamental determinant of a person’s wants
and behaviors acquired through socialization processes with
family and other key institutions.
Subcultures
• Nationalities
• Religions
• Racial groups
• Geographic regions
Social Classes
• Upper uppers - The elite inherited wealth, gives charity
• Lower uppers - Those who have earned high income
• Upper middles - Professionals, independent business man they believe in education
• Middle - Average white collar, blue collar people
• Working – Those who lead a working class life style and depend on relatives for economic and emotional support
• Upper lowers – The working poor, poorly paid for unskilled work
• Lower lowers – Visibly poor, often jobless, depend on public assistance
Characteristics of Social Classes
• Within a class, people tend to behave alike
• Social class conveys perceptions of inferior or superior position
• Class may be indicated by a cluster of variables (occupation,
income, wealth)
• Class designation is mobile over time
2. Social Factors
• Opinion leaders / Reference groups
• Family
• Social roles and Status
Reference Groups
• Membership groups – direct Influence
• Primary groups – with whom person interacts continuously & informally, friends &
family
• Secondary groups – interaction is more formal, school, professionals & religious
• Aspirational groups – want to join but don’t belong to that group
• Dissociative groups – whose values or behaviors an individual rejects
Family Distinctions Affecting Buying Decisions
• Family of Orientation – consists of parents and siblings
• Family of Procreation – consists of persons spouse and children
3. Personal Factors
• Age – our taste in food, clothes, furniture and recreation is related to age
• Stage in the Life cycle – behavior changes with the passage of growth in life and is also
shaped by age, gender of household people.
• Life Events – marriage, childbirth, first job, career change and retirement
• Occupation and Economic situation /Wealth – according to disposable income, savings
and economic downturn
• Personality – specific mix of human traits that we can attribute to a particular brand
• Lifestyle and values – persons pattern of living vs others in the same social class and
occupation
Brand Personality
• Sincerity – down to earth, wholesome, cheerful
• Excitement – daring, spirited, imaginative & up-to-date
• Competence – reliable, intelligent and successful
• Sophistication – upper class and charming
• Ruggedness - tough
Consumer Psychology
Model of Consumer Behavior
Motivation
Perception
Learning
Memory
Marketing Stimuli Other Stimuli Buying Decision Process Purchase Decision
Problem recognition
Product Choice
Products & Services Economic Information search
Brand choice
Prices Technology Consumer Evaluation of
Dealer Choice
Distribution Political Characteristics alternatives
Purchase amount
Communications Cultural Purchase decision
Purchase timing
Post purchase
Cultural Payment method
Social behavior
Personal
Psychological Factors
• Motivation
• Perception
• Learning
• Beliefs and Attitudes / Emotions
Motivation
Self-
actualization
Is a need that is sufficiently pressing to Needs – (Self
direct a person to seek satisfaction Development &
realization)
Esteem Needs – (self
esteem, recognition,
status)
Social Needs – (Sense of Belonging,
love)
Safety Needs – (Security, Protection)
Physiological Needs - ( Water, food, Shelter)
Maslow’s Hierarchy of Needs
Perception
• Selective Attention – when we screen out something according to our interest
• Selective Distortion – A tendency to interpret information in a way that will support
what they already believe.
• Selective Retention – we retain information that supports our beliefs, we tend to remb
good points and forget the rest
• Subliminal Perception – in which the message is to weak to be perceived yet a person
is influenced by it.
Learning
Changes in an individual’s behavior arising form experience
Beliefs
Is a descriptive thought that a person has about something,
based on knowledge, opinion and faith
Attitude
Describes a person’s relatively consistent evaluations,
feelings, and tendencies toward an object or idea
Types of Buying Decision Behavior
High - Involvement Low - Involvement
Complex Buying Variety seeking buying
Significant – Behavior behavior
difference between
Expensive, risky purchased Tries different variety.
brands infrequently but high
difference in brands
Dissonance reducing Habitual buying
buying behavior behavior
Few – difference
between brands Expensive, risky, infrequent Low consumer involvement,
purchase but less difference in less difference in brands and
brands not expensive
The Buyer Decision Process
Need Information Evaluation of Purchase
Recognition search alternatives decision
Post purchase
behavior
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 the mental process through which an individual passes
from first learning about an innovation to final adoption.
• Adoption as the decision by an individual to become a regular user of the
product.
Stages in the Adoption Process
Five stages in the adoption process
1. Awareness – the consumer becomes aware of the new product, but lacks information
about it.
2. Interests – the consumer seeks information about the new product
3. Evaluation – the consumer considers whether trying the new product make sense
4. Trial – the consumer tries the new product on a small scale to improve his or her estimate
of its value
5. Adoption – the consumer decides to make full and regular use of the new product
Rate of adoption of Innovations
