Consumer markets and consumer

behavior
We learn….
• Buying behavior is never simple, understanding it, is
the an essential task of marketing management and
there are many different factors affect consumer
buying behavior.
• b. Consumer buying behavior refers to the buying
behavior of final consumers-individuals and
households who buy goods and services for personal
consumption.
• c. The consumer market is all the individuals and
households who buy or acquire goods and services for
personal consumption.
Model of Consumer Behavior
a. Consumers make many buying decisions every day.
b. A model of consumer behavior helps managers answer
questions about what consumers buy, where they buy, how
and how much they buy, when they buy, and why they buy.
• Learning about the what, where, when, and how much is
fairly easy.
• Learning about the “why” is much more difficult.
c. The central question is: How do consumers respond to
various marketing efforts the company might use?
a.The stimulus-response model of buyer behavior shows
that marketing (made up of the four P’s—product,
price, place, and promotion) and other stimuli (such as
the economic, technological, political, and cultural
environments) center on the consumer’s “black
box” and produce certain responses.
b.Marketer’s has to figure out what is “in” the
consumer’s “black box.”
f. The “black box” has two parts
• The buyer’s characteristics influence how he or she
perceive and react to stimuli.
• The buyer’s decision process itself affects the buyer’s
behavior.
1). Culture is the most basic cause of a person’s wants and
behavior.
2). A child in many countries is exposed to the following
values:
a). Achievement and success.
b). Activity and involvement.
c). Efficiency and practicality.
d). Progress.
e). Material comfort.
f). Individualism.
g). Freedom.
h). Humanitarianism.
i). Youthfulness.
j). Fitness and health
 Characteristics Affecting Consumer Behavior
a. Consumer purchases are strongly influenced by
cultural, social, personal, and psychological
characteristics. The marketer cannot control them, but
they must be taken into account.

Cultural Factors
b. Cultural factors exert the broadest and deepest
influence on consumer behavior.
• The marketer needs to understand the role played by
the buyer’s culture, sub-culture, and social class.
c. Culture is the set of basic values, perceptions, wants,
and behaviors learned by a member of society from
family and other important institutions.
1). Culture is the most basic cause of a person’s wants and
behavior.
2). A child in many countries is exposed to the following
values:
a). Achievement and success.
b). Activity and involvement.
c). Efficiency and practicality.
d). Progress.
e). Material comfort.
f). Individualism.
g). Freedom.
h). Humanitarianism.
i). Youthfulness.
j). Fitness and health
3). Marketers are always trying to spot cultural shifts in
order to imagine new products that might be wanted
• Each culture contains smaller subcultures. Subculture
is a group of people with shared value systems based
on common life experiences and situations.
• Subcultures might be nationality groups, religious
groups, racial groups, or geographic area groups.
Many of these subcultures make up important market
segments and many times products are designed for
them.
Examples of important sub cultural groups include:
1). Hispanic consumers. There are 35 million
consumers in this group,
• they spend approx. $425 billion on goods and
services.
• The group is very brand loyal and favor companies
who show interest in them. Sears, for example, targets
Hispanic consumers
2). African American consumers. This group has a
tremendous purchasing power. This group has a buying
power of $527 billion and, if they were a separate
nation, would rank among the top 15 in the world and
this group is growing in affluence and sophistication.
• Some companies have developed special products,
packaging, and appeals for this group. They are very
price conscious, are motivated by quality and
selection, and emphasize brand name and loyalty.
Hallmark Cards specifically targets these groups with
a special line of cards.
3). Asian American consumers. This group is the fastest-
growing and most affluent U.S. demographic segment
and now number more than 10 million with disposable
income of $229 billion annually. Language and cultural
tradition appear to be the largest barrier to effectively
marketing to this group. And because of its rapid
growth, this group has and will receive increased
attention from marketers.
4). Mature consumers. This group is another very
attractive market considering the fact that the U. S.
population is aging. Currently at 75 million, the
“seniors” market will continue to grow. Seniors are
better off financially, and they average higher
disposable income than consumers in the younger age
groups.
• As the seniors segment grows in size and buying
power, more marketers will develop aggressive
policies for attracting this market. This Market is
expected to receive increased attention as our society
ages.
4). Mature consumers. This group is another very
attractive market considering the fact that the U. S.
population is aging. Currently at 75 million, the
“seniors” market will continue to grow. Seniors are
better off financially, and they average higher
disposable income than consumers in the younger age
groups.
• As the seniors segment grows in size and buying
power, more marketers will develop aggressive
policies for attracting this market. This Market is
expected to receive increased attention as our society
ages.
• Almost every society has some form of social class
structure. Social class is the relatively permanent and
ordered divisions in a society whose members share
similar values, interests, and behaviors.
1). Social class is not determined by a single factor
such as income but is measured as a combination of
occupation, income, education, wealth, and other
variables.
• Social scientists have identified a few social classes
• Upper Uppers ( 1%), Lower Uppers (2%), Upper
Middles (12 %), Middle Class (32%), Working Class
(38 %), Upper Lowers (9 %), Lower Lowers (7 %).
• 3). Marketers are interested in social class because
people within a given social class tend to exhibit
similar behavior, including buying behavior. This is
most evident in the selection of clothing, home
furnishings, leisure activity, and automobiles.
• Social factors
• A consumer’s behavior is influenced by social factors.
These include small groups, family, and social roles
and status.
• A person’s behavior is influenced by many small
groups. There are several specialized group formations
within the larger configuration:
1). Membership groups are groups that have a direct
influence on a person’s behavior; they are groups to
which a person belongs.
• Social factors
• A consumer’s behavior is influenced by social factors.
These include small groups, family, and social roles
and status.
• A person’s behavior is influenced by many small
groups. There are several specialized group formations
within the larger configuration:
1). Membership groups are groups that have a direct
influence on a person’s behavior; they are groups to
which a person belongs.
• Reference groups are groups that that have a direct
(face-to-face) or indirect influence on the person’s
attitudes or behavior. People are often influenced by
reference groups to which they do not belong.
a). An aspirational group is a group to which an
individual wishes to belong.
b). Reference groups expose a person to new behaviors
and lifestyles.
c). Influence the person’s attitudes and self-concept.
d). They also create pressures to conform that may
affect the person’s product and brand choices.
• An opinion leader is a person within a reference group
who, because of special skills, knowledge, personality,
or other characteristics, exert influence on others.
Marketers try to identify opinion leaders and direct
products and communications toward them.
• A consumer’s purchases are also influenced by family
members. The influence can be very strong because
the family is the most important consumer-buying
organization in society. It has been extensively
researched.
• Marketers are interested in the roles and influence of
the husband, wife, and children in the purchase of
different products and services. Buying roles change
with evolving lifestyles (such as more females
working outside the home) and marketers try to
identify the influencer role in a family unit (such as
children).
• A person belongs to many groups and the person’s
position within each group can be defined in terms of
both role and status. A role is the activities a person is
expected to perform according to the people around
him or her. Status is the general esteem given to a role
by society. People often choose products that show
their status in society.
 Personal Factors
• A buyer’s decisions are also influenced by personal
characteristics such the buyer’s age and life-cycle
stage, occupation, economic situation, lifestyle,
personality and self-concept.
• People change the goods and services that they buy
over their lifetimes. Part of these changes are shaped
by the family life cycle (stages throughout which
families might pass as they mature over time). The
traditional life cycle stages are being modified as
people form new lifestyles (such single parenting).
• A person’s occupation affects the goods and services
bought
• The economic situation of the buyer is very important
in purchase consideration.
• If a person fears losing their job, their purchasing
habits generally change. If the person perceives that
their economic situation is going to improve, they
might consider making a major purchase.
• People from the same social strata can have very
different lifestyles. A lifestyle is a person’s pattern of
living as expressed in his or her psychographics (such
as activities, interests, and opinions).
• Lifestyle profiles a person’s whole pattern of acting
and interacting in the world. It is more than the
person’s social class or personality.
• For example… Activities (work, hobbies, shopping,
etc.), Interests (food, fashion, recreation, etc.),
Opinions (about themselves, social issues, business,
etc.)
• The most widely used lifestyle classification is the SRI
Values and Lifestyles (VALS) typology. VALS
classifies people according to their consumption
tendencies by how they spend their time and money. A
person could change positions over time. It is felt that
a person’s lifestyle does affect their purchase
behavior.
• Groups are further subdivided based on self-
orientation and resources.
• Self-orientation groups include:
1]. Principle-oriented consumers who buy based on
their views of the world.
2]. Status-oriented consumers who base their purchases
on the actions and opinions of others.
3]. Action-oriented buyers who are driven by their
desire for activity, variety, and risk taking.
• Resources can be either abundant or minimal
depending on whether the buyer has high or low levels
of income, education, health, self- confidence, energy,
and other factors.
• Each person’s personality and self-concept will
influence their buying behavior.
• Personality is a person’s unique psychological
characteristics that lead to relatively consistent and
lasting responses to his or her own environment. It is
usually described in terms of traits (such as self-
confidence, dominance, sociability, etc.). Personality
can be useful for analyzing consumer behavior for
certain brand or product choices.
1). A brand personality is the specific mix of human
traits that may be attributed to a particular brand.
2). Five brand personalities might be:
a). Sincerity, b). Excitement, c). Competence
d). Sophistication, e). Ruggedness
• Psychological Factors
• A buyer’s choices are influenced by four major
psychological factors (motivation, perception,
learning, and beliefs and attitudes):
1). A motive (drive) is a need that is sufficiently
pressing to direct the person to seek satisfaction. A
person has many needs at any given time and they can
be biological or psychological. Several theories of
motivation include:
a). Freud’s theory of motivation assumed that people
are largely unconscious about the real psychological
forces shaping their behavior. A person does not fully
understand his or her motivation according to Freud
b). Maslow’s theory of motivation sought to explain
why people are driven by particular needs at particular
times. He believed that needs were arranged in a
hierarchy (beginning with physiological needs and then
continuing with safety, social, esteem, and self-
actualization needs). Where a person would try to
satisfy the most important needs first. The needs
include:
1]. Physiological needs 2]. Safety needs
3]. Social needs 4]. Esteem needs
5]. Self-actualization needs
 2). Perception is the process by which people select,
organize, and interpret information to form a meaningful
picture of the world. The marketer must remember that two
people with the same motivation and in the same situation
may act differently because they perceive the situation
differently. And these differences in perception can be
accounted for by three perceptual processes:
a). Selective attention is the tendency of people to screen
out most of the information to which they are exposed.
b). Selective distortion is the tendency of people to
interpret information in a way that will support what they
already believe.
c). Selective retention is the tendency of people to retain
only part of the information to which they are exposed
with information that supports their attitudes and
beliefs
3). Learning is described as changes in an individual’s
behavior arising from experience. Learning occurs
through the interplay of:
a). A drive (a strong internal stimulus that calls for
action).
b). A drive becoming a motive when it is directed
toward a particular stimulus object.
c). Cues are minor stimuli that determine when, where,
and how the person responds.
d). Cues can influence a buyer’s response to an
e). If the experience is rewarding, then the response is
reinforced.
f). The practical significance of learning theory for
marketers is that they can build up demand for a
product by associating it with strong drives, using
motivation cues, and providing positive reinforcement
• 4). A person’s beliefs and attitudes are acquired
through acting and learning.
• A belief is a descriptive thought that a person holds
about something.
• A belief may be based on real knowledge, opinion, or
faith.
• Beliefs may or may not carry an emotional charge.
• Because beliefs make up product and brand images,
they are important to marketers. People tend to act on
their beliefs.
5). An attitude is a person’s consistently favorable or
unfavorable evaluations, feelings, and tendencies
toward an object or idea.
a). Attitudes put people into a frame of mind of liking or
disliking things, moving toward or away from them.
b). Attitudes are difficult to change.
c). A person’s attitudes fit into a pattern and changing
one attitude may require changing others and
d). A company should try to fit its products into
existing attitudes rather than try to change them
• Perceptual mapping
• Perceptual mapping is a graphic display explaining the
perceptions of customers with relation to
product characteristics.
• Perceptual mapping is a diagrammatic technique used
by marketers in an attempt to visually display the
perceptions of customers or potential customers.
Typically the position of a product, product
line, brand, or company is displayed relative to their
competition. Some perceptual maps use different size
circles to indicate the sales volume or market share of
the various competing products.
• Perceptual maps help marketers understand where
the consumer ranks their company in terms of
characteristics and in comparison to competing
companies.
• Perceptual maps can display consumers’ ideal points that
reflect their ideal combinations of product characteristics.
• When creating a new product, a company should look for
a space that is currently unoccupied by competitors and
that has a high concentration of consumer desire (ideal
points).
• Positioning bases
• By using customer research and perceptual mapping, a
marketer can create a positioning statement using one of
the three main bases.
• When a company presents a product or service in a way
that is differentiating from the competition, they are said
to be "positioning" it. Positioning relates to a process used
by marketers to create an image in the minds of a
target market. While positioning used to focus on
consumer positioning, it now focuses more on competitive
positioning.
• The Positioning Concepts
• There are three basic concepts for positioning:
• Functional Positions deal with solving a problem,
providing benefits and getting a favorable perception
from investors, stockholders and consumers.
• Symbolic Positions deal with self-image
enhancement, ego identification, belongingness, social
meaningfulness and affective fulfillment.
• Experiential Positions deal with providing sensory or
cognitive stimulation.
• Positioning is facilitated by perceptual mapping to
determine the ideal points of consumers. This helps to
determine if positioning should
be functional, symbolic, or experiential.
• Strong positioning will enable a single product to
appeal to different customers for different reasons. For
example, two people are interested in buying a new
car; one wants a car that is powerful and stylish while
the other buyer is looking for a car that is reliable and
safe and yet they buy the same exact car. One purchase
solved a problem and exemplifies functional
positioning while the other purchase is an example of
symbolic and/or experiential positioning.
• The Positioning Statement and Strategy
• By using customer research and perceptual mapping,
a marketer can create a positioning statement using
one of the three main bases.
• A positioning statement explains the target market for
the product, the benefit of the product, and how the
product is different than the competitors.
• When creating a positioning statement, it is important
to determine a pain point of the customer. Customers
often buy on a want, rather than a need, impulse.
• By talking to a customer's pain point, it is often
possible to address the need impulse and the want
impulse at the same time. If both of these issues can be
addressed then it is easier to overcome objections
• The Positioning Statement and Strategy
• By using customer research and perceptual mapping,
a marketer can create a positioning statement using
one of the three main bases.
• A positioning statement explains the target market for
the product, the benefit of the product, and how the
product is different than the competitors.
• When creating a positioning statement, it is important
to determine a pain point of the customer. Customers
often buy on a want, rather than a need, impulse.
• By talking to a customer's pain point, it is often
possible to address the need impulse and the want
impulse at the same time. If both of these issues can be
addressed then it is easier to overcome objections
• A company can create brand positioning strategies or
product positioning strategies. It is important to
understand the strengths and weaknesses of both the
organization and the competition when creating a
positioning strategy.
Consumer Decision Making Process
• A company can create brand positioning strategies or
product positioning strategies. It is important to
understand the strengths and weaknesses of both the
organization and the competition when creating a
positioning strategy.
• CONSUMER DECISION PROCESS
• Need recognition occurs when a consumer identifies a
need and thinks of a product that might meet this need
• This is the first stage of the Consumer Decision
Process in which the consumer is able to recognize
what the problem or need is and subsequently, what
product or kind of product would be able to meet this
need.
• It is often recognized as the first and most crucial step
in the process because if consumers do not perceive a
problem or need, they generally will not move forward
with considering a product purchase.
• A need can be trigerred by internal or external
stimuli. Internal stimuli refers to a personal
perception experienced by the consumer, such as
hunger, thirst, and so on. For example, an elderly,
single woman may feel lonely so she decides that she
wants to purchase a cat. External stimuli include
outside influences such as advertising or word-of-
mouth.
• For example, a consumer who just moved to any cold
country, may not realize he needs a heavy winter coat
until he sees a store advertising for it, which triggers
the need in his mind.
• Information search
• Information Search is a stage in the Consumer
Decision Process during which a consumer searches
for internal or external information
• is considered the second of five stages that comprise
the Consumer Decision Process. During this stage, a
consumer who recognizes a specific problem or need
will then likely be persuaded to search for information,
whether it be internally or externally. This is also when
the customer aims to seek the value in a prospective
product or service. During this time, the options
available to the consumer are identified or further
clarified
• Information search can be categorized
as internal or external research:
• Internal research refers to a consumer's memory or
recollection of a product, oftentimes triggered or
guided by personal experience. This is when a person
tries to search their memory to see whether they recall
past experiences with a product, brand, or service. If
the product is considered a staple or something that is
frequently purchased, internal information search may
be enough to trigger a purchase.
• External research is conducted when a person has no
prior knowledge about a product, which then leads
them to seek information from personal sources (e.g.
word of mouth from friends/family and/or public
sources (e.g. online forums, consumer reports) or
marketer dominated sources (e.g. sales persons,
advertising) especially when a person's previous
experience is limited or deemed inefficient
• Personal sources that are not marketer dominated
include advice from friends and family.
• Television advertising and company websites are
examples of non-personal sources that are marketer
dominated
• Online forums are non-personal sources that are non-
• Evaluation of alternatives
• During the evaluation of alternatives stage, the
consumer evaluates all the products available on a
scale of particular attributes
• The third stage in the Consumer Buying Decision
process. During this stage, consumers evaluate all of
their product and brand options on a scale of attributes
which have the ability to deliver the benefit that the
customer is seeking
• The brands and products that consumers compare -
their evoked set - represent the alternatives being
considered by consumers during the problem-solving
process.
• Sometimes known as a consideration set, the evoked
set tends to be small relative to the total number of
options available. When a consumer commits
significant time to the comparative process and
reviews price, warranties terms and condition of sale
and other features it is said that they are involved in
extended problem solving.
• Unlike routine problem solving, extended or extensive
problem solving comprises external research and
the evaluation of alternatives
• Whereas, routine problem solving is low-
involvement, inexpensive, and has limited risk if
• purchased, extended problem solving justifies the
additional effort with a high-priced or scarce
product, service, or benefit (e.g., the purchase of a
car). Likewise, consumers use extensive problem
solving for infrequently purchased, expensive, high-
risk, or new goods or services.
• In order for a marketing organization to increase the
likelihood that their brand is part of the evoked set for
many consumers, they need to understand what
benefits consumers are seeking and specifically, which
attributes will be most influential to their decision-
making process. It is important to note that consumers
evaluate alternatives in terms of the functional and
psychological benefits that they offer. The company
• During this stage, consumers can be significantly
influenced by their attitude as well as the degree of
involvement that they may have with the product,
brand, or overall category.
• For example, if the customer involvement is high,
then he or she will evaluate several brands, whereas if
it's low, he or she may look at only one brand. In low
involvement buying, the activity is usually frequent,
habitual to a certain extent and there is generally little
difference between the brands. No strong attachment
exists between the buyer and the brand.
• Promotions are simple and repetitive. Conversely, high
involvement buying involves products with many
differences. The behavior is more complex and the
research is more detail oriented.
• Ultimately, consumers must be able to effectively
assess the value of all the products or brands in their
evoked set before they can move on to the next step of
the decision process.
• Purchase
• During the purchase decision stage, the consumer may
form an intention to buy the most preferred brand or
product
• The purchase decision is the fourth stage in the
consumer decision process and when the purchase
actually takes place. During this time, the consumer
may form an intention to buy the most preferred brand
because he has evaluated all the alternatives and
identified the value that it will bring him.
• According to Philip Kotler, Keller, Koshy and Jha
(2009), the final purchase decision, can be disrupted
by two factors:
• Negative feedback of others and our level of
motivation to comply or accept the feedback. For
example, after going through the need recognition,
information search, and alternative evaluation stages,
one might choose to buy a Nikon D80 DSLR camera,
but a close photographer friend might share negative
feedback, which could drastically influence personal
preference.
• The decision may be disrupted due to a situation that
one did not anticipate, such as losing a job or a retail
store closing down.
• During this stage, the consumer must decide the
following:
• From whom they should buy, which is influenced by
price point, terms of sale, and previous experience
with or awareness of the seller and the return policy.
• When to buy, which can be influenced by the store
atmosphere or environment, time pressures and
constraints, the presence of a sale, and the shopping
experience.
• This is also a time during the which the consumer
might decide against making the purchase decision.
Alternatively, they may also decide that they want to
make the purchase at some point in the near or far
future perhaps because the price point is above their
• Post purchase
• Post-purchase behavior is when the customer assesses
whether he is satisfied or dissatisfied with a purchase
• Post-purchase behavior is the final stage in
the consumer decision process when the customer
assesses whether he is satisfied or dissatisfied with a
purchase. How the customer feels about a purchase
will significantly influence whether he will purchase
the product again or consider other products within the
brand repertoire. A customer will also be able to
influence the purchase decision of others because he
will likely feel compelled to share his feelings about
the purchase.
• Cognitive dissonance, another form of buyer's
remorse, is common at this stage.
• This is when the customer may experience feelings of
post-purchase psychological tension or anxiety. For
example, the customer might feel compelled to
question whether he has made the right decision. They
may also be exposed to advertising for a competitive
product or brand which could put into question the
product that they have chosen. A customer may also
have a change of heart and decide that he no longer
has a need for this particular product.
• Some companies now opt to engage their consumers
with post-purchase communications in an effort to
influence their feelings about their purchase and
future purchases. Offering money back guarantees
also serve to extend and enrich post-purchase
communications between the company and its
consumers. Other examples include VIP invitations to
become part of a club or special and select group of
consumers who buy a particular product. Another
example is when customers are asked for their
contact information at the point of purchase so they
can be targeted later with a follow-up call that surveys
the product's performance and consumer satisfaction.
• This approach could help influence or alleviate
feelings of cognitive dissonance or "buyer's remorse"
following a product purchase.
• Implementation and control: Kotler on
marketing
• There is a constant debate about whether strategy or
execution is more important. Peter Drucker observed
that “a plan is nothing unless it degenerates into
work.” Yet a poor plan with great implementation is
no better than a good plan with poor implementation.
The truth is that both are necessary for success.
• Implementation confusions are limitless.
• For example, Kodak’s ads for a new camera drew
people into stores only to find that the cameras
hadn’t arrived. A major bank announced a new
savings plan in the newspapers but hadn’t explained
the plan to its branch managers.
• An engineering firm made a decision to sell its services in the
Middle East but could not find any capable person who spoke
Arabic and would be willing to transfer there. A hotel decided
to make service its major value proposition but let service be
run by a weak manager with a small budget and an insufficient
staff.
• Good implementation needs buy-in from those who are to
carry out the plan. The best way to get their buy-in is to have
them participate in the plan’s development. Thus sales
people are more likely to accept the marketing plan if a sales
representative participated in its development and if the target
volumes and prices are plausible,
 So the planner’s first need is to sell the plan inside, not
outside.
• Control is the way that we catch failures in
implementation or strategy. The company may have
implemented poorly, set the wrong marketing mix
aimed at the wrong target market, or done poor initial
research. Control is not a singular thing but a host of
tools for making sure that the company is on track.
• The tools fall under four types of control shown as
follows..
• Types of marketing control