Chapter Five

Consumer Markets and Consumer

Buyer Behavior
 Consumer Behavior
Consumer Buying Behavior refers to the buying
behavior of final consumers- individuals &
households who buy goods and services for
Consumer
Consumer
personal consumption. All of these consumers
combine to make up the consumer markets.
Behavior
Behavior
Example: the American consumer markets (313 million
people) consume around $11.9 trillion worth of goods and
services annually).

The central question for marketers is:

“How do consumers respond to various marketing

efforts the company might use?
 Model of Buyer Behavior
Marketing and Buyer’s Black Box Buyer Responses
Other Stimuli
Buying attitudes and
Marketing Buyer Characteristics preferences
Product
Buyer Decision Purchase behavior:
Price What the buyer buys,
Process
Place when, where and how
Promotion much
Other
Economic Brand engagement and
Technological relationships
Political
Cultural
Identify and understand characteristics
affecting consumer
buying decisions
 Factors Influencing
Buying Decisions
Cultural
Social
Personal
Psycho-
Culture Reference Age and logical
Culture groups life-cycle
Occupation
Motivation Buyer
Perception Consumer
Sub-
Sub- Family Economic Decision Making
culture situation Learning
culture
Lifestyle Beliefs and
Roles Personality attitudes
Social
Social and and BUY
BUY/ /
class status self-concept DON’T
class DON’TBUY
BUY

5
A. Culture Factors

The set of basic values, perceptions,

Culture
Culture wants and behaviors learned by a
member of society from family and
other important institutions.
Components of Culture
Values
Values
Language
Language
Myths
Myths
Customs
Customs
Rituals
Rituals
Laws
Laws

Material
Material artifacts
artifacts
 Value

Value
Value
Enduring belief that a specific
mode of conduct is personally or
socially preferable to another
mode of conduct.
Example: Core American Values

Success
Success
Materialism
Materialism
Freedom
Freedom
Progress
Progress
Youth
Youth
Capitalism
Capitalism
Fitness
Fitness and
and Health
Health
 Subculture

Subculture A homogeneous group of people who

Subculture
share value systems based on common
life experiences and situations.

•Hispanic American consumers (55 million)

•African American consumers (44 million)
•Asian American consumers (18.5 million)
 Social Class

Society’s relatively permanent and

Social
Social Class
Class ordered divisions whose members
share similar values, interests and
behaviors.

Example: American social class (upper upper

class, lower upper class, upper middle class.
Middle class, working class, upper lower class,
lower class)
Social Class Measurements
Income
Income

Occupation
Occupation

Education
Education

Wealth
Wealth

Other
Other Variables
Variables
Social Class and Education
The Impact of Social Class on
Marketing

• Indicates which medium to use

for communication

• Helps determine the best

distribution for products since
social classes show district
product and brand preferences
in areas such as clothing, home
furnishings, travel and leisure
activity
 Social Influences on
Consumer Buying Decisions

Identify and understand the

social factors that affect consumer buying
decisions
B. Social Influences
Reference
Reference
Groups
Groups

Opinion
Opinion
Leaders
Leaders

Family
Family
Members
Members
 Reference Group
A group in society that directly or indirectly
Reference
ReferenceGroup
Group influences an individual’s attitudes or
purchasing behavior.

Primary
Direct
Secondary
Reference
Groups
Aspirational
Indirect
Nonaspirational
Influences of Reference Groups

 They serve as information sources and

influence perceptions.

 They affect an individual’s aspiration levels.

 Their norms either constrain or stimulate

consumer behavior.

 Word-of-mouth influence
(49% consumers said that they trust or believe advertisement,
72% trust family and friends and 72% trust online reviews).
 Opinion Leaders
An individual who, because of special
skills, knowledge, personality, exerts
Opinion
OpinionLeaders
Leaders social influences on others.
Buzz Marketing…Opinion leaders as
brand ambassadors

Marketers are looking to Web logs, or

blogs, to find opinion leaders
 Teenagers

 Movie stars

 Sports figures

 Celebrities
 Family

Purchase Process Roles and influences in the Family

 Initiators • Family member who initiates thinking about

buying products; initiates information
gathering
• Family member whose opinion is sought
 Influencers about purchases; provides information
about brands and evaluative criteria
• Family member that makes purchase
 Decision Makers decision
• Family member who actually makes the
purchase
 Purchasers • Family member(s) who actually uses the
product
 Consumers
Relationships among Purchasers and
Consumers in the Family
 Social Factors – Re-cap

Constrain or
Reference Affect aspiration stimulate
Information sources
Groups levels consumer behavior

Opinion
People You Know Celebrities
Leaders

Socialization Process
Family Initiators Decision Makers Consumers
Influencers Purchasers
 Personal Influences on
Consumer Buying Decisions

Identify and understand the Personal

factors that affect consumer buying
decisions
 C. Personal Influences

Occupation
Occupation
Personality
Personality
Economic Gender,
Gender, Age
Age Self-Concept
Self-Concept
Economic
Situation and
and Life
Life Stage
Stage Lifestyle
Lifestyle (AIO
(AIO
Situation dimensions)
dimensions)
 Psychological Influences on
Consumer Buying Decisions

Identify and understand the psychological

factors that affect consumer buying
decisions
C. Psychological Influences

Perception
Perception

Motivation
Motivation

Learning
Learning

Beliefs
Beliefs &
& Attitudes
Attitudes
 Perception

The process by which people select,

organize, and interpret stimuli into a
meaningful and coherent picture of the
world.

Consumer
Consumer notices
notices certain
certain stimuli
stimuli
Selective
Selective and
and ignores
ignores others
others information
information toto which
which
attention
attention they
they are
are exposed
exposed
Consumer
Consumer changes
changes or or distorts
distorts
Selective
Selective information
information that that conflicts
conflicts
Distortion
Distortion with
with their
their feelings
feelings or
or beliefs…support
beliefs…support what
what
they
they already
already believe
believe
Consumer
Consumer remembers
remembers onlyonly
Selective
Selective that
that information
information that
that
Retention
Retention supports
supports personal
personal beliefs
beliefs
 Marketing Implications
of Perception

 Important attributes
 Price
 Brand names
 Quality and reliability
 Threshold level of perception
 Product or repositioning changes
 Foreign consumer perception

 Subliminal marketing (some consumers may be

affected by marketing messages without knowing it)
 Motivation

A motive is a need that is sufficiently pressing to direct the

Maslow’s
Maslow’s person to seek satisfaction.
Hierarchy
Hierarchy
of A method of classifying human needs and motivations into five
ofNeeds
Needs
categories in ascending order of importance.
 Learning

Learning
Learning describes
describeschanges
changesin
inan
anindividual
individual
behavior
behaviorarising
arisingfrom
fromexperience
experience

Experiential
Experiential An
An experience
experience changes
changes behavior
behavior

Not
Not learned
learned through
through direct
direct
Conceptual
Conceptual experience
experience
 Beliefs and Attitudes

A descriptive thought that a person holds

about something. Beliefs may based on real
Belief
Belief knowledge, opinion, or faith, and may or may
not carry emotional charges.

A person’s consistently favorable or

unfavorable evaluations, feelings, and
tendencies toward a given object.
Attitude
Attitude “The Japanese make the best camera
products in the world.” It is difficult to change
attitudes. Repositioning may help to change
attitudes.
 Psychological Factors – Re-
cap

Selective Exposure
Perception
Selective Retention Selective Exposure

Needs
Motivation
Psychological Safety Social Esteem Esteem

Learning Experiential Conceptual

Changing Changing
Beliefs & Adding
Beliefs about Importance of
Attitudes New Beliefs
Attributes Beliefs
Consumer Decision-Making Process

A five-step process used by consumers

when buying goods or services.

Need
Need Recognition
Recognition

Information
Information Search
Search
Cultural,
Cultural, social,
social,
personal
personal and
and
psychological
Evaluation
Evaluation
psychological of
factors
factors of Alternatives
Alternatives
affect
affect
all
all steps
steps Purchase
Purchase

Postpurchase
Postpurchase
Behavior
Behavior
 1. Need Recognition
The
Thefirst
firststage
stageof
ofbuying
buyingdecision
decisionprocess,
process,
in
inwhich
whichthe
theconsumer
consumerrecognizes
recognizesaaproblem
problemor
orneed.
need.

Sti
mu Inte
li ( rna
fiv
es l
en
s es
)

Preferred
Preferred
Present
Present State
State
) Status
Status
n t
al eme
n
r tis
t e Marketing helps consumers
Ex dver
i (a recognize an imbalance between
u l
im present status and preferred state.
St
Recognition of Unfulfilled
Wants
 When a current product
isn’t performing properly
 When the consumer is
running out of a product
 When another product seems
superior to the one currently used
2. Information Search
Internal Information Search

 Recall information in memory

 Experiential sources (examining and
using the product)

External Information search

 Seek information in outside environment

 Personal sources (friends)

 Commercial sources (sales person)
 Public sources (mass media)
External Information
Searches
Need Less Need More
Information Information

Less Risk More Risk

More knowledge Less knowledge
More product experience Less product experience
Low level of interest High level of interest
Confidence in decision Lack of confidence
 3. Evaluation of
Alternatives
and
4. Purchase Analyze
Analyzeproduct
product
Choice Set Attributes
Attributes
(Evaluation
(Evaluationof
ofQuality,
Quality,Price,
Price,&&Features)
Features)

Use
Usecutoff
cutoffcriteria
criteria

Rank
Rankattributes
attributesby
by
importance
importance

Determines which attributes are

most important in influencing a
consumer’s choice
Purchase (intention or
decision!)
 5. Post-purchase Behavior

Cognitive
Cognitive Inner tension that a consumer
Dissonance
Dissonance experiences after recognizing an
inconsistency between behavior and
values or opinions.

Consumer satisfaction is a function of consumer

expectations and perceived product performance.
?
Did I make a good decision?
•Performance < Expectations ----- Disappointment Did I buy the right product?
•Performance = Expectations ----- Satisfaction Did I get a good value?
•Performance > Expectations ----- Delight Am I satisfied?
 5. Post-purchase
Behavior
How can consumers reduce dissonance?
 Seeking information that reinforces positive ideas about
the purchase
 Avoiding information that contradicts the purchase
decision
 Revoking the original decision by returning the product

How can marketers reduce dissonance?

Marketing can minimize through:

Effective Communication
Follow-up
Guarantees
Warranties
Consumer Buying Decisions
and Consumer Involvement

Identify the types of consumer buying

decisions and discuss the significance
a of consumer involvement
 Types of Buying Decision
Behavior
1. Complex
– Highly involved, significant brand differences
– Example – computer
2. Dissonance-reducing
– Highly involved, little brand differences
– Example – carpeting
3. Habitual
– Low involvement, little brand differences
– Example – salt
4. Variety-seeking
– Low involvement, significant perceived brand differences
– Example – cookies
Marketing Implications
of Involvement

High-involvement
High-involvement Extensive
Extensiveand
andinformative
informative
purchases
purchases require:
require: promotion
promotionto
totarget
targetmarket
market

In-store
In-storepromotion,
promotion,
eye-catching
eye-catchingpackage
package
Low-involvement
Low-involvement design,
design,and
andgood
gooddisplays.
displays.
purchases
purchases require:
require: Coupons,
Coupons,cents-off,
cents-off,
2-for-1
2-for-1offers
offers
 Stages in the Adoption
Process
Adoption process is the mental process through which an
individual passes from first hearing about an innovation to final
adoption.
•Awareness: The consumer becomes aware of the new product
but lacks information about it.
•Interest: The consumer seeks information about the new product.
•Evaluation: The consumer considers whether trying the new
product makes sense.
•Trial: The consumer tries the new product on a small scale to
improve his or her estimate of its value.
•Adoption: The consumer decides to make full and regular use of
the new product.
 Stages in the Adoption
Process

34% 34%
Early Late
2.5% Majority Majority
13.5%
Innovators 16%
Early
Adopters Laggards

Time of adoption of innovations

Suspicious of change
Try new ideas at some risk. Before the average person

Opinion Leaders – adopt new Only after majority has tried it

ideas early but carefully
 Product Adopter Categories
• Innovators: venturesome, try new ideas at some
risk.
• Early adopters: opinion leaders who adopt new
ideas early, but carefully.
• Early majority: deliberate adopters, who adopt
before the average person.
• Late majority: skeptical, adopt only after the
majority of people have tried a product.
• Laggards: last to adopt, tradition bound, and
skeptical of change.
Influence of Product
Characteristics on Rate of
Adoption
• Relative Advantage: Is the
innovation superior to existing Picture quality & ease of viewing
products?
• Compatibility: Does the Programming & broadcasting
innovation fit the values and systems are not very compatible
experience of the target market?
• Complexity: Is the innovation
difficult to understand or use? HDTV is not complex
• Divisibility: Can the innovation be HDTVs are expensive, but leasing
used on a limited basis? extends the adoption
• Communicability: Can results be
easily observed or described to Lends itself to demonstration
others?