Chapter Three

Analyzing Consumer Markets and

Buyer Behavior

1
Introduction
 The aim of marketing is to meet and satisfy target customers’
needs and wants.
 The field of consumer behavior studies:
 How individuals, groups, and organizations select, buy, use, and

dispose of goods, services, ideas, or experiences to satisfy their

needs and desires.
 Understanding consumer behavior is never simple, because:
 Customers may say one thing but do another.

 They may not be in touch with their deeper motivations, and

 They may respond to influences and change their minds at the last

minute.
2
 Introduction
 Therefore, all marketers can gain profit
from understanding how and why
consumers buy.
 For example, Whirlpool’s staff anthropologists go
into people’s homes, observe how they use
appliances, and talk with household members.
Whirlpool has found that in busy families, women
are not the only ones doing the laundry. Knowing
this, the company’s engineers developed color-
coded washer and dryer controls to make it easier
for kids and men to pitch in.
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 Introduction
 In fact, not understanding your customer’s
motivations, needs, and preferences can
lead to major mistakes.
 This is what happened when Kodak introduced its
Advanta camera—a costly bust. The company proudly
touted it as a high-tech product, but the marketplace
was dominated by middle-aged baby-boomers. In
midlife, fancy new technology generally loses its
appeal, and simplicity begins to edge out complexity
in consumer preferences, so Advanta sales did not
skyrocket.
4
Introduction
 Therefore, successful marketers use both rigorous scientific
procedures and more intuitive methods to study
customers and uncover clues for developing new products,
product features, prices, channels, messages, and other
marketing mix elements.

5
How and Why Consumers Buy
 The starting point for understanding consumer buying behavior is the
stimulus response model shown in Figure below.
 As this model shows, both marketing and environmental stimuli enter
the buyer’s consciousness.
 In turn, the buyer’s characteristics and decision process lead to
certain purchase decisions.
 The marketer’s task is to understand what happens in the buyer’s
consciousness between the arrival of outside stimuli and the
buyer’s purchase decisions.
 As this model indicates, a consumer’s buying behavior is influenced
by cultural, social, personal, and psychological factors.
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7
Cultural Factors Influencing Buyer Behavior
 Culture, subculture, and social class are particularly important influences
on consumer buying behavior.
 Culture. Culture is the most fundamental determinant of a person’s wants and
behavior.
 Subculture. Each culture consists of smaller subcultures that provide more specific
identification and socialization for their members. Subcultures include nationalities,
religions, racial groups, and geographic regions.
 Social class. Social classes are relatively homogeneous and enduring divisions in a
society. They are hierarchically ordered and their members share similar values,
interests, and behavior.
 Social classes reflect income as well as occupation, education, and other

indicators.

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Social Factors Influencing Buyer Behavior
 Social factors includes reference groups, family, and social roles and
statuses.
 Reference Groups
 Reference groups consist of all of the groups that have a direct (face-to-face) or
indirect influence on a person’s attitudes or behavior.
 Groups that have a direct influence on a person are called membership groups.
 Some primary membership groups are family, friends, neighbors, and co-workers,
with whom individuals interact fairly continuously and informally.
 Secondary groups, such as professional and trade-union groups, tend to be more
formal and require less continuous interaction.
 Reference groups expose people to new behaviors and lifestyles, influence attitudes
and self-concept, and create pressures for conformity that may affect product and
brand choices.

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Social Factors Influencing Buyer Behavior
 Family
 The family is the most important consumer-buying organization in
society.
 The family of orientation consists of one’s parents and siblings.
 From parents, a person acquires an orientation toward religion,
politics, and economics as well as a sense of personal ambition, self-
worth, and love.
 A more direct influence on the everyday buying behavior of adults is
the family of procreation—namely, one’s spouse and children.

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Social Factors Influencing Buyer Behavior
 Roles and Statuses
 A person participates in many groups, such as family, clubs, or organizations. The
person’s position in each group can be defined in terms of role and status.
 A role consists of the activities that a person is expected to perform. Each role
carries a status.
 A Supreme Court justice has more status than a sales manager, and a sales manager
has more status than an administrative assistant.
 In general, people choose products that communicate their role and
status in society.
 Thus, company presidents often drive Mercedes, wear expensive suits, and

drink Chivas Regal scotch.

 Savvy marketers are aware of the status symbol potential of products
and brands.
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Personal Factors Influencing Buyer Behavior
 The third factor is personal characteristics, including the buyer’s age,
stage in the life cycle, occupation, economic circumstances, lifestyle,
personality, and self-concept.
 Age and Stage in the Life Cycle
 People buy different goods and services over a lifetime. They eat

baby food in the early years, most foods in the growing and mature
years, and special diets in the later years. Taste in clothes, furniture,
and recreation is also age-related, which is why smart marketers are
attentive to the influence of age.

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Personal Factors Influencing Buyer Behavior
 Similarly, consumption is shaped by the family life cycle. The traditional
family life cycle covers stages in adult lives, starting with independence from
parents and continuing into marriage, child-rearing, empty-nest years,
retirement, and later life.
 Marketers often choose a specific group from this traditional life-cycle as
their target market. Yet target households are not always family based:
There are also single households, gay households, and cohabitor
households.
 Some recent research has identified psychological life-cycle stages.
Adults experience certain “passages” or “transformations” as they go
through life.
 Leading marketers pay close attention to changing life circumstances—
divorce, widowhood, remarriage—and their effect on consumption behavior.
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Personal Factors Influencing Buyer Behavior
 Occupation and Economic Circumstances
 Occupation also influences a person’s consumption pattern.
 A blue-collar worker will buy work clothes and lunchboxes,
while a company president will buy expensive suits and a
country club membership.
 For this reason, marketers should identify the occupational
groups that are more interested in their products and services,
and consider specializing their products for certain occupations.
 Software manufacturers, for example, have developed special programs
for lawyers, physicians, and other occupational groups.

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Personal Factors Influencing Buyer Behavior
 In addition, product choice is greatly affected by a consumer’s
economic circumstances:
 Spendable income (level, stability, and time pattern),

 Savings and assets (including the percentage that is liquid),

 Debts,

 Borrowing power, and

 Attitude toward spending versus saving.

 Thus, marketers of income-sensitive goods must track trends in personal

income, savings, and interest rates. If a recession is likely, marketers
can redesign, reposition, and reprice their products to offer more value
to target customers.
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Personal Factors Influencing Buyer Behavior
 Lifestyle
 People from the same subculture, social class, and

occupation may actually lead quite different lifestyles.

 A lifestyle is the person’s pattern of living in the world as

expressed in activities, interests, and opinions. Lifestyle

portrays the “whole person” interacting with his or her
environment.
 Successful marketers search for relationships between their

products and lifestyle groups.

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Personal Factors Influencing Buyer Behavior
 Personality and Self-Concept
 Each person has a distinct personality that influences
buying behavior.
 Personality refers to the distinguishing psychological
characteristics that lead to relatively consistent and
enduring responses to environment.
 Personality is usually described in terms of such traits as
self-confidence, dominance, autonomy, deference,
sociability, defensiveness, and adaptability.
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Personal Factors Influencing Buyer Behavior
 Personality can be useful in analyzing consumer behavior,
provided that personality types can be classified
accurately and that strong correlations exist between
certain personality types and product or brand
choices.
 For example, a computer company might discover that

many prospects show high self-confidence, dominance,

and autonomy, suggesting that computer ads should
appeal to these traits.
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Personal Factors Influencing Buyer Behavior
 Self-concept (or self-image) is related to personality.
 Marketers often try to develop brand images that match the target
market’s self-image.
 Yet it is possible that a person’s actual self-concept (how she
views herself) differs from her ideal self-concept (how she
would like to view herself) and from her others-self-concept
(how she thinks others see her).
 Which self will she try to satisfy in making a purchase?
 Because it is difficult to answer this question, self-concept theory has

had a mixed record of success in predicting consumer responses to

brand images.
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Psychological Factors Influencing Buyer Behavior
 Psychological factors are the fourth major influence on
consumer buying behavior (in addition to cultural, social, and
personal factors).
 In general, a person’s buying choices are influenced by the
psychological factors of:
 Motivation,
 Perception,
 Learning,
 Beliefs, and
 Attitudes.
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Psychological Factors Influencing Buyer Behavior
 Motivation
 A person has many needs at any given time. Some needs
are:
 Biogenic; they arise from physiological states of tension such as
hunger, thirst, discomfort.
 Psychogenic; they arise from psychological states of tension
such as the need for recognition, esteem, or belonging.
 A need becomes a motive when it is aroused to a sufficient
level of intensity. A motive is a need that is sufficiently
pressing to drive the person to act.
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Psychological Factors Influencing Buyer Behavior
 Psychologists have developed theories of human
motivation.
 Three of the best known—the theories of
 Sigmund Freud,
 Abraham Maslow, and
 Frederick Herzberg—carry quite different implications for
consumer analysis and marketing strategy.

22
Psychological Factors Influencing Buyer Behavior
 Freud’s theory:
 Sigmund Freud assumed that the psychological forces shaping people’s behavior
are largely unconscious, and that a person cannot fully understand his or her own
motivations.
 A technique called laddering can be used to trace a person’s motivations from the
stated instrumental ones to the more terminal ones.
 Then the marketer can decide at what level to develop the message and appeal.
 In line with Freud’s theory, consumers react not only to the stated capabilities of
specific brands, but also to other, less conscious cues.
 Successful marketers are therefore mindful that shape, size, weight,
material, color, and brand name can all trigger certain associations and
emotions.

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Psychological Factors Influencing Buyer Behavior
 Maslow’s theory:
 Abraham Maslow sought to explain why people are driven by

particular needs at particular times. His theory is that human needs

are arranged in a hierarchy, from the most to the least pressing.
 In order of importance, these five categories are physiological,

safety, social, esteem, and self-actualization needs.

 A consumer will try to satisfy the most important need first; when

that need is satisfied, the person will try to satisfy the next-most-
pressing need.
 Maslow’s theory helps marketers understand how various

products fit into the plans, goals, and lives of consumers.

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Psychological Factors Influencing Buyer Behavior
 Herzberg’s theory:
 Frederick Herzberg developed a two-factor theory that distinguishes dissatisfiers

(factors that cause dissatisfaction) from satisfiers (factors that cause satisfaction).
 The absence of dissatisfiers is not enough; satisfiers must be actively present to

motivate a purchase.
 For example, a computer that comes without a warranty would be a dissatisfier.

Yet the presence of a product warranty would not act as a satisfier or motivator of
a purchase, because it is not a source of intrinsic satisfaction with the computer.
Ease of use would, however, be a satisfier for a computer buyer.
 In line with this theory, marketers should avoid dissatisfiers that might

unsell their products. They should also identify and supply the major
satisfiers or motivators of purchase, because these satisfiers determine
which brand consumers will buy.

25
Psychological Factors Influencing Buyer Behavior
 Perception
 A motivated person is ready to act, yet how that person actually acts is
influenced by his or her perception of the situation.
 Perception is the process by which an individual selects, organizes, and
interprets information inputs to create a meaningful picture of the world.
 Perception depends not only on physical stimuli, but also on the stimuli’s
relation to the surrounding field and on conditions within the
individual.
 The key word is individual. Individuals can have different perceptions of
the same object because of three perceptual processes: selective
attention, selective distortion, and selective retention.
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Psychological Factors Influencing Buyer Behavior
 Selective attention. People are exposed to many daily stimuli such as ads; most of
these stimuli are screened out—a process called selective attention.
 Selective distortion. Even noticed stimuli do not always come across the way that
marketers intend. Selective distortion is the tendency to twist information into personal
meanings and interpret information in a way that fits our preconceptions.
Unfortunately, marketers can do little about selective distortion.
 Selective retention. People forget much that they learn but tend to retain
information that supports their attitudes and beliefs. Because of selective retention, we
are likely to remember good points mentioned about a product we like and forget good
points mentioned about competing products.
 Selective retention explains why marketers use drama and repetition in messages to
target audiences.

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Psychological Factors Influencing Buyer Behavior
 Learning
 Learning involves changes in an individual’s behavior that arise from experience.
 Theorists believe that learning is produced through the interplay of drives, stimuli, cues,
responses, and reinforcement.
 A drive is a strong internal stimulus that impels action. Cues are minor stimuli that
determine when, where, and how a person responds.
 Suppose you buy an IBM computer. If your experience is rewarding, your response to
computers and IBM will be positively reinforced. Later, when you want to buy a printer, you
may assume that because IBM makes good computers, it also makes good printers. You
have now generalized your response to similar stimuli.
 A countertendency to generalization is discrimination, in which the person learns to recognize
differences in sets of similar stimuli and adjust responses accordingly.
 Applying learning theory, marketers can build up demand for a product by
associating it with strong drives, using motivating cues, and providing positive
reinforcement.
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Psychological Factors Influencing Buyer Behavior
 Beliefs and Attitudes
 Through doing and learning, people acquire beliefs and attitudes

that, in turn, influence buying behavior.

 A belief is a descriptive thought that a person holds about something.

 Beliefs may be based on knowledge, opinion, or faith, and they may or

may not carry an emotional charge.

 Of course, manufacturers are very interested in the beliefs that people

have about their products and services. These beliefs make up product
and brand images, and people act on their images.
 If some beliefs are wrong and inhibit purchase, the manufacturer will

want to launch a campaign to correct these beliefs.

29
Psychological Factors Influencing Buyer Behavior
 Attitudes are just as important as beliefs for influencing buying behavior.
 An attitude is a person’s enduring favorable or unfavorable evaluations,
emotional feelings, and action tendencies toward some object or idea.
 People have attitudes toward almost everything: religion, politics,
clothes, music, food.
 Attitudes put them into a frame of mind of liking or disliking an object,
moving toward or away from it.
 Attitudes lead people to behave in a fairly consistent way toward similar
objects. Because attitudes economize on energy and thought, they are
very difficult to change; to change a single attitude may require major
adjustments in other attitudes.
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The Consumer Buying Decision Process
 Marketers have to go beyond the various influences on buyers
and develop an in-depth understanding of how consumers
actually make their buying decisions.
 Specifically, marketers must identify:
 Who makes the buying decision,

 The types of buying decisions, and

 The stages in the buying process.

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The Consumer Buying Decision Process
 Buying Roles
 Marketers can identify the buyer for many products easily.

 In the United States, men normally choose their shaving equipment, and
women choose their pantyhose.
 We can distinguish five roles that people might play in a buying
decision.
 An initiator first suggests the idea of buying the product or service.
 An influencer is the person whose view or advice influences the decision.
 A decider actually decides whether to buy, what to buy, how to buy, or where to buy.
 A buyer makes the actual purchase,
 A user consumes or uses the product or service.

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The Consumer Buying Decision Process
 Buying Behavior
 Marketers also need to be aware that consumer decision making

varies with the type of buying decision.

 The decisions to buy toothpaste, a tennis racket, a personal

computer, and a new car are all very different.

 In general, complex and expensive purchases are likely to involve

more buyer deliberation and more participants.

 As shown in Table below, Assael distinguished four types of

consumer buying behavior, based on the degree of buyer

involvement and the degree of differences among brands:

33
Four Types of Consumer Buying
Behavior

34
The Stages of the Buying Decision Process
 Five-stage model of the typical buying process.
 Starting with problem recognition, information search, evaluation of
alternatives, purchase decision, and post purchase behavior.
 As this model demonstrates, the consumer buying process starts long
before the actual purchase and has consequences long afterward.
 Although the model implies that consumers pass sequentially through all
five stages in buying a product, consumers sometimes skip or reverse
some stages.
 However, we use this model because it captures the full range of
considerations that arise when a consumer faces a highly involving new
purchase.

35
The Stages of the Buying Decision Process
Stage 1: Problem Recognition
 The buying process starts when the buyer recognizes a problem or

need.
 This need can be triggered by internal stimuli (such as feeling hunger or

thirst) or external stimuli (such as seeing an ad) that then becomes a

drive.
 By gathering information from a number of consumers, marketers can

identify the most frequent stimuli that spark interest in a product

category.
 They can then develop marketing strategies that trigger consumer

interest and lead to the second stage in the buying process.

36
 The Stages of the Buying Decision Process
Stage 2: Information Search
 An aroused consumer who recognizes a problem will be inclined to search for more
information.
 We can distinguish between two levels of arousal.
 At the milder search state of heightened attention, a person simply becomes more receptive to information
about a product.
 At the active information search level, a person surfs the Internet, talks with friends, and visits stores to
learn more about the product.
 Consumer information sources include:
 Personal sources (family, friends, neighbors, acquaintances),
 Commercial sources (advertising, web sites, salespersons, dealers, packaging, displays),
 Public sources (mass media, consumer-rating organizations), and
 Experiential sources (handling, examining, using the product).
 The consumer usually receives the most information from commercial (marketer-
dominated) sources, although the most influential information comes from personal
sources. 37
The Stages of the Buying Decision Process
Stage 3: Evaluation of Alternatives
 Once the consumer has conducted an information

search, how does he or she process competitive brand

information and make a final judgment?
 There are several evaluation processes; the most

current models view the process as being cognitively

oriented, meaning that consumers form judgments
largely on a conscious and rational basis.
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The Stages of the Buying Decision Process
 Some basic concepts underlie consumer evaluation processes.
 As noted earlier, the consumer is trying to satisfy a need. In seeking certain benefits
from the product solution, the consumer sees each product as a bundle of attributes
with varying abilities of delivering the benefits to satisfy this need. However, the
attributes of interest to buyers vary by product.
 For example, the attributes sought in a camera might be picture sharpness, camera size, and
price.
 In addition, consumers vary as to which product attributes they see as most
relevant and the importance they attach to each attribute.
 Knowing that consumers pay the most attention to attributes that deliver the benefits
they seek, many successful marketers segment their markets according to the
attributes that are salient to different consumer groups.

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The Stages of the Buying Decision Process
 In the course of evaluating alternatives, the consumer
develops a set of brand beliefs about where each
brand stands on each attribute.
 The set of beliefs about a particular brand, which
make up the brand image, will vary with the
consumer’s experiences as filtered by the effects of
selective perception, selective distortion, and selective
retention.
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The Stages of the Buying Decision Process
Stage 4: Purchase Decision
 In the evaluation stage, the consumer forms preferences among the brands in the
choice set and may also form an intention to buy the most preferred brand.
 However, two factors can intervene between the purchase intention and the purchase
decision.
 The first factor is the attitudes of others. The extent to which another person’s
attitude reduces one’s preferred alternative depends on two things:
 (1) the intensity of the other person’s negative attitude toward the consumer’s

preferred alternative, and

 (2) the consumer’s motivation to comply with the other person’s wishes .

 The second factor is unanticipated situational factors that may erupt to change the
purchase intention. A consumer could lose his job, some other purchase might become
more urgent, or a store salesperson may turn him or her off, which is why preferences
and even purchase intentions are not completely reliable predictors of purchase
behavior. 41
The Stages of the Buying Decision Process
 Just as important, a consumer’s decision to modify, postpone, or avoid a
purchase decision is heavily influenced by perceived risk.
 The amount of perceived risk varies with the amount of money at stake,
the amount of attribute uncertainty, and the amount of consumer self-
confidence.
 Consumers develop routines for reducing risk, such as decision
avoidance, information gathering from friends, and preference for
national brand names and warranties.
 Smart marketers study the factors that provoke a feeling of risk
in consumers and then provide information and support to
reduce the perceived risk.
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The Stages of the Buying Decision Process
Stage 5: Postpurchase Behavior
 After purchasing the product, the consumer moves into the final stage

of the consumer buying process, in which he or she will experience

some level of satisfaction or dissatisfaction.
 This is why the marketer’s job does not end when the product is bought.

 In particular, marketers must monitor postpurchase satisfaction,

postpurchase actions, and postpurchase product uses.

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The Stages of the Buying Decision Process
 Postpurchase Satisfaction The buyer’s satisfaction with a purchase is a function of
the closeness between the buyer’s expectations and the product’s perceived
performance.
 If performance falls short of expectations, the customer is disappointed; if it meets
expectations, the customer is satisfied; if it exceeds expectations, the customer is
delighted.
 These feelings of satisfaction influence whether the customer buys the product again
and talks favorably or unfavorably about the product to others.
 The importance of postpurchase satisfaction suggests that product claims must
truthfully represent the product’s likely performance. Some sellers might even
understate performance levels so that consumers experience higher-than-expected
satisfaction with the product.

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The Stages of the Buying Decision Process
 Postpurchase Actions The consumer’s satisfaction or dissatisfaction
with the product after purchase will influence subsequent behavior.
 Satisfied consumers will be more likely to purchase the product again.
 Dissatisfied consumers, on the other hand, may abandon or return the
product; seek information that confirms its high value; take public action
by complaining to the company, going to a lawyer, or complaining to
government agencies and other groups; or take private actions such as
not buying the product or warning friends. In these cases, the seller has
done a poor job of satisfying the customer.
 Marketers can use postpurchase communications to buyers as a way to
reduce product returns and order cancellations.
45
The Stages of the Buying Decision Process
 Postpurchase Use and Disposal Marketers should
also monitor how buyers use and dispose of the
product after purchase.

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How Consumers Use or Dispose of Products

47