Marketing Management Lesson 6

Porter's Five Forces
It is a model that
identifies and analyzes
five competitive forces
that shape every
industry, and helps
determine an industry's
weaknesses and
strengths.
Two Strategic Objectives
• Create effective links with

customers and suppliers
• Create barriers to new entrants

and substitute products
Two Key Questions
1. How structurally attractive is

the industry?
2. What is the company’s relative

position within the industry?
The intensity of rivalry is influenced by the following
industry characteristics:
• A larger number of firms

• Slow market growth
• High fixed costs
• High storage costs or highly perishable
products
• Low switching costs
• Low levels of product differentiation
• High exit barriers
• Industry Shakeout.
Entry Deterring Pricing
Firm individually or collectively keep

prices artificially low as a strategy to
prevent potential entrants from entering
the market.
Model of
Consumer
Behavior
Buyer’s Black Box

Marketing theory of consumer buying
behavior in which what goes on within
the human mind (the black box) is
ignored, in favor of discovering which
inputs (stimuli) produce the desired
output (buying response).
Factors influencing Consumer Behavior
5-7
Characteristics Affecting Consumer Behavior
Cultural Factors Social Factors

• Buyer’s culture • Reference groups
• Buyer’s subculture • Family
• Buyer’s social class • Roles and status
5-8
Personal Factors Psychological Factors
• Age and life-cycle stage • Motivation
• Occupation • Perception
• Economic situation • Learning
• Lifestyle • Beliefs and attitudes
• Personality and self-
concept
5-9
Culture is the learned values,

perceptions, wants, and
behavior from family and
other important institutions.
5-10
Subcultures are groups of people within a culture
with shared value systems based on common life
experiences and situations.
• Chinese
• Indians
5-11
• 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
5-12
The major social classes:
• Upper class
• Middle class
• Working class
• Lower class
5-13
Social Factors
Groups
• Membership groups have a direct influence and to which a

person belongs.
• Aspirational groups are groups to which an individual wishes
to belong.
• Reference groups are groups that form a comparison or
reference in forming attitudes or behavior.
5-14
Social Factors
Groups
• Opinion leaders are people within a reference group with
special skills, knowledge, personality, or other characteristics
that can exert social influence on others.
• Buzz marketing enlists opinion leaders to spread the word.
• Social networking is a new form of buzz marketing
• Facebook.com
• Instagram
• Snapchat
5-15
Social Factors
• Family is the most important consumer-buying
organization in society.
• Social roles and status are the groups, family, clubs, and
organizations to which a person belongs that can define
role and social status.
5-16
Personal Factors
• Personal characteristics
• Age and life-cycle stage
• Occupation
• Economic situation
• Lifestyle
• Personality and self-concept
5-17
Personal Factors
• Occupation affects the goods and services bought by
consumers.
• Economic situation includes trends in:
• Personal income
• Savings
• Interest rates
5-18
Personal Factors
• Lifestyle is a person’s pattern of living as expressed in his
or her psychographics.
• Measures a consumer’s AIOs (activities, interests, and
opinions) to capture information about a person’s
pattern of acting and interacting in the environment.
5-19
Personal Factors
Resources
• High resources
• Innovators exhibit all primary motivations.
• Low resources
• Survivors do not exhibit strong primary
motivation.
5-20
Personal Factors
Personality and Self-Concept

• Personality refers to the unique psychological
characteristics that lead to consistent and lasting
responses to the consumer’s environment.
5-21
Personal Factors

Brand personality refers to the specific mix of human traits that
may be attributed to a particular brand:
• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness
5-22
Personal Factors

• Self-concept refers to people’s
possessions that contribute to and
reflect their identities.
5-23
Psychological Factors
• Motivation
• Perception
• Learning
• Beliefs and attitudes
5-24
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.
5-25
Abraham Maslow’s Hierarchy of

Needs
• People are driven by particular
needs at particular times.
• Human needs are arranged in a
hierarchy from most
pressing to least pressing.
5-26
• 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
5-27
• 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 to forget
good points about competing brands.
5-28
• Learning is the changes in an individual’s behavior arising
from experience and occurs through interplay of:
• Drives
• Stimuli
• Cues
• Responses
• Reinforcement
5-29
Beliefs and Attitudes

• Belief is a descriptive thought that a person has about
something based on:
• Knowledge
• Opinion
• Faith
5-30
Beliefs and Attitudes

Attitudes describe a person’s relatively consistent
evaluations, feelings, and tendencies toward an object
or idea.
5-31
Four Types of Buying Decision Behavior
• Complex buying behavior
• Dissonance-reducing buying behavior
• Habitual buying behavior
• Variety-seeking buying behavior
5-32
Types of Buying Decision Behavior
Complex Buying Behavior
• Occurs when consumers are highly motivated in a purchase
and perceive significant differences among brands.
• Purchasers are highly motivated when:
• Product is expensive
• Product is risky
• Product is purchased infrequently
• Product is highly self-expressive
5-33
• Dissonance-reducing buying behavior occurs when
consumers are highly involved with an expensive,
infrequent, or risky purchase, but see little difference
among brands.
• Post-purchase dissonance occurs when the consumer
notices certain disadvantages of the product purchased or
hears favorable things about a product not purchased.
5-34
• Habitual buying behavior occurs when consumers have
low involvement and there is little significant brand
difference.
• Variety-seeking buying behavior occurs when
consumers have low involvement and there are
significant brand differences.
5-35
The Buyer Decision Process
Five stages in the buyer decision process
1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase behavior
5-36

Marketing Management Lesson 6

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Porter's Five Forces

• Create effective links with

• Create barriers to new entrants

1. How structurally attractive is

2. What is the company’s relative

• A larger number of firms

Firm individually or collectively keep

Buyer’s Black Box

Cultural Factors Social Factors

Culture is the learned values,

• Membership groups have a direct influence and to which a

Personality and Self-Concept

Personality and Self-Concept

Personality and Self-Concept

Abraham Maslow’s Hierarchy of

Beliefs and Attitudes

Beliefs and Attitudes

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