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CONSUMER MARKETS AND CONSUMER

BUYING BEHAVIOR

Consumer Buyer Behavior The buying
behavior of final consumers individuals and
household who buys goods and services for
personal consumption.
Consumer Market all the individuals and
household who buy or acquire goods and
services for personal consumption.

MODEL OF A CONSUMER BEHAVIOR
Marketers are always interested on
understanding how the stimuli changed into
responses into the consumers black box.
Buyers characteristics influence on how they
perceive and react to the stimuli
Buyers decision process that affects the buyers
behavior


CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR

CULTURAL FACTORS
Culture the set of basic values, perceptions,
wants and behaviors learned by a member of
society from family and other important
institutions.
Cultural Shifts e.g. greater concern over health and fitness, informality and
the environment. These are mostly what marketers are trying to spot in
order to discover and create new products.
Subculture a group of people with shared value systems based on common
life experiences and situations. Each culture in the world contains smaller
subcultures.


Social Class relatively permanent and
ordered divisions in a society whose members
share similar values, interests and behaviors.
They are measured by a combination of occupation, income,
education, wealth and other variables.
In some cultures members from different class have to stay on
certain roles and cannot change their social positions. People
within this class have similar buying behaviors

CULTURAL FACTORS
CULTURAL FACTORS
CHARACTERISTICS OF 7 MAJOR SOCIAL CLASSES

Upper Uppers
Social elites who lived on inherited wealth and have well-established family
backgrounds. They give large sums to charity, own more than one home, and
sent their children to fine schools. They are accustomed to wealth.
Lower Uppers
Earned income and wealth through exceptional ability in their profession or
business. They usually began from middle class.

Upper Middles
They possess neither family status nor unusual wealth but have attained
positions as professionals, businesspersons and corporate managers. They
believed in education and want their children to develop professionally or
administratively.

Middle Class
Average white/blue collar workers who probably lived in a better side of town
and try to do proper things. They mostly buy products that are popular.

Working Class
They are people who lead a working-class lifestyle. Whatever their income,
school background or job, they depend heavily on relatives for economic and
emotional support, advice and assistance.

Upper Lowers
Are working (but not on welfare). Their living standard may be near poverty
but they strive towards higher classes. They often lack education and perform
unskilled work for poor pay.
Lower Lowers
Visibly poor. Poorly educated and work as unskilled laborers. They are often
out of work and depend on public assistance.
SOCIAL FACTORS
Group two or more people who interact to
accomplish individual or mutual goals.
Membership Groups groups that have direct influence and a person belongs.
Reference Groups direct face to face or indirect points of comparison or
reference in forming a persons attitudes and behavior. People are always
influenced by reference groups even though they dont belong here.
Aspirational Group a group where an individual wishes to belong.
But marketing is more interested on Reference Groups because they can expose
a person to new behaviors and lifestyles, influence a persons attitude and self-
concept and create pressures to conform that may affect the persons product
and brand choices.
Opinion Leader person within a reference group who, because of special skills,
knowledge, personality, or other characteristics, exert influence on others.

Membership Groups
Reference Groups
Aspirational Groups
Opinion Leaders
Family
They strongly influence buyer behavior
Most important consumer buying organization
in society and it has been researched
intensively.
Roles within family; husband, wife and
children.

SOCIAL FACTORS
Roles and Status
A person may belong to more than one group
family, clubs, organizations, etc.
The persons position in each group can be
defined in terms of both role and status.
Role activities people are expected to perform
according to the people around them.
Status reflecting on general self-esteem given
to it by society.

SOCIAL FACTORS
PERSONAL FACTORS
Age and Life Cycle Stage
People change the goods and services they buy over
time.
Taste in food, clothes, furniture and recreation are
often age related.
The same thing are with families (family life cycle)
Marketers defined their market in terms of life-cycle
stage and develops appropriate products and
marketing plans for each stage.

Other Singles
Singles
Unmarried Couples
Married Couples
Extended Families
Childless Couples
Single Parents
Same Sex Couples
Occupation
Occupation affects the goods and services
bought.
Work clothes and business suits
Marketers are interested on occupations who
has above interest in their products and services.
A company can specialized in marking products
needed from a given occupational group
PERSONAL FACTORS
Brand Managers
Doctors
Accountants
Lawyers
Engineers
Economic Situation
This will affect the product choice.
Marketers from income-sensitive goods
watch trends in personal income, savings and
interest rates. During recession, marketers
can take steps to redesign, reposition and
reprice.

PERSONAL FACTORS
Lifestyle a persons pattern of living as expressed
in their activities, interest and opinions.
Activities work, hobbies, shopping, sports, social
events
Interest food, fashion, family, recreation
Opinions themselves, social issues, business,
products
Lifestyle captures more than a social class and
personality. It profiles a persons whole pattern of
acting and interacting in the world.

PERSONAL FACTORS
VALS
Some research firms developed their own lifestyle classifications. The
most widely used is SRI Consulting Values and Lifestyles (VALS) typology. It
is divided into two groups: self-orientation and resources
Self Orientation
Principle Oriented consumers who buy based on their views of the world
Status Oriented buyers who base their purchases on the actions and
opinions of others
Action Oriented driven by desire for activity, variety and risk taking

Resources
Abundant Resources
Minimal Resources
This will affect depending on high/low levels of income, education, health,
self-confidence, energy and other factors
http://www.strategicbusinessinsights.com/vals/presurvey.shtml
Technographics
Lifestyle segmentation can be understood through internet
behavior. Technographics suggests consumers according to
motivation, desire and ability to invest in technology.

Fast Forwards the biggest spenders on computer technology (both home
and work)
New Age Nurturers big spenders but focused on technology for home
(family PC)
Mouse Potatoes consumers dedicated to interactive entertainment and
willing to spend for the latest in technoentertainment.
Techno-Savers older consumers, who dont touch computers and leave it
to the younger assistants.

PERSONAL FACTORS
Personality and Self Concept
Personality refers to the unique psychological
characteristics that lead to relatively consistent and lasting
responses to ones own environment. It is usually described
in terms of traits such as self-confidence, dominance,
sociability, autonomy, defensiveness, adaptability and
aggressively. It is useful in analyzing consumer behavior in
terms of product or brand choices.
Self-concept (self-image) a concept related to
personality. e.g. basic self-concept premise is that peoples
possessions contribute to and reflect their identities.

PERSONAL FACTORS
PSYCHOLOGICAL FACTORS
Motive a need that is sufficiently pressing to
direct the person to seek satisfaction of the need.
Sigmund Freud assumed people are unconscious
about their real psychological forces shaping their
behavior. It is due to the urges. These are never
eliminated or under perfect control, they usually
emerge on dreams, in slips of the tongues, neurotic
and obsessive behavior or in psychosis. But it is all
about a deeper level of motives that need to be
uncovered.

Abraham Maslows Hierarchy of Needs

PSYCHOLOGICAL FACTORS
Perception a process by which people select, organize,
and interpret information to form a meaningful picture
of the world. (It is simply just what you view as part of
your reality).
Selective attention tendency for most people to screen out most
of the information they are exposed which means the marketers
have to work hard to get their attention.
Selective distortion describes the tendency of people to interpret
information in a way that will support what they already believe.
Selective retention tendency to retain information that supports
their attitudes and beliefs.
Sublimal advertising affected by marketing messages without
even knowing it.

PSYCHOLOGICAL FACTORS
Learning changes from an individuals
behavior arising from experience
Drive is a strong internal stimulus that calls for action
Stimuli the object whose drive turned into motive
Cues minor stimuli that determine when, where and
how the person responds.
Response the interest in buying
Reinforced if the experience is rewarding, they
probably use more of the product and the probability of
buying that product again is high

PSYCHOLOGICAL FACTORS
Beliefs and Attitudes
Belief a descriptive thought that a person holds about
something
Attitude a persons consistently favorable or
unfavorable evaluations, feelings and tendencies towards
an object or an idea. They fit into a pattern and difficult
to change. Changing another persons attitude may
require difficult adjustments, etc. Many companies try to
fit attitude with their products and services instead of
attempting to change attitudes. But if the change of
attitude is positive, it can be very rewarding.
PSYCHOLOGICAL FACTORS
BUYERS DECISION PROCESS
Need for Recognition
The buyer recognizes the problem or need
Need can be triggered by internal stimuli when one of the
persons needs hunger, thirst, sex rises to a level high
enough to become a drive
At this stage, the marketers should research consumers by
finding out what their need is, what brought them and how to
lead a consumer to this particular product.
Information Search
Personal sources
Commercial sources
Public sources
Experiential sources
Commercial sources can inform the buyer but
personal sources legitimize and evaluate the
products for the buyer
BUYERS DECISION PROCESS
Evaluation of Alternatives
How the consumer arrive at those brand
choices.
This will depend on the consumer and they
are not the same. We use different ways to
evaluate alternatives
BUYERS DECISION PROCESS
Purchase Decision
Ranking of brands and purchase intentions
Attitudes of Others
Unexpected situational factors
BUYERS DECISION PROCESS
Post-purchase Behavior
The answer lies on consumers expectations
and perceived performance
Cognitive dissonance buyer discomfort
caused by post purchase conflict.

BUYERS DECISION PROCESS
BUYER DECISION PROCESS FOR NEW
PRODUCTS
New product a good, service or idea that is
perceived by some potential customers as
new
Adoption process a mental process through
which an individual passes from first hearing
about an innovation to final adoption.

STAGES IN THE ADOPTION PROCESS
Awareness the consumer becomes aware of
the new product, but lacks information about it
Interest the consumer seeks information about
a 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 their estimate of its value
Adoption the consumer decides to make full
and regular use of the new product.
INDIVIDUAL DIFFERENCE IN
INNOVATIVENESS
Innovators are venturesome they try new ideas at
some risk
Early Adopters guided by respect. They are often
opinion leaders so they try new ideas early but
carefully.
Early Majorities they adopt new ideas before the
average person
Late Majorities skeptical, they adopt new ideas only
after a majority of people have tried it.
Laggards tradition bound, they are suspicious of
changes and adopt the innovations only when it has
become something of a tradition itself.

INFLUENCE OF PRODUCT
CHARACTERISTICS ON RATE OF ADOPTION
Relative Advantage a degree to which innovation
appears superior to existing products e.g. HDTV
Compatibility a degree to which the innovation fits
the values and experiences of potential consumers.
Complexity the degree to which the innovation is
difficult to understand or use.
Divisibility the degree to which innovations are tried
on a limited basis.
Communicability the degree to which the results of
using the innovation can be observed or described to
others.

BUSINESS MARKETS AND BUSINESS
BUYER BEHAVIOR
Business Buyer Behavior buying behavior of
organizations that buy goods and services for the
use of production of other products and services
that are sold, rented or supplied to others

Business Markets
Huge it involves more money than the
consumer markets
Can be both business and consumer purchases

DIFFERENCE OF BUSINESS BUYERS
Market Structure and Demand
The business market consists of far fewer but far larger
buyers
More geographically concentrated
Derived Demand business demand that ultimately
comes from (derived from) the demand for consumer
goods

Nature of the Buying Unit
More decision participants
More professional purchasing efforts

Types of Decisions and the Decision Process
More complex buying decisions
More formalized buying process
More dependent on each other

DIFFERENCE OF BUSINESS BUYERS
BUSINESS BUYER DECISIONS
Within the buying center, it consists of two parts: all the people involved in
the buying decision and the buying decision process. In the model, it shows
that the buying center and the decision process are influenced by internal
organization, interpersonal and individual factors as well as external
environmental factors.

MAJOR TYPES OF BUYING SITUATIONS
Straight Rebuy a business buying situation in which
the buyer routinely reorders something without any
modifications.
Modified Rebuy a business buying situation where
the buyer wants to modify the product specifications,
prices, terms or suppliers.
New Task a business buying situation where the
buyer purchases a product or service for the first time.
Systems Selling buying a packaged solution to a
problem from a single seller, thus avoiding all the
separate decisions involved in a complex buying
situations.

MAJOR INFLUENCES ON BUSINESS
BUYER
THE BUSINESS BUYING PROCESS
THE BUSINESS BUYING PROCESS
Value Analysis an approach to cost
reduction in which components are studied
carefully to determine if they can be
redesigned, standardized, or made by less
costly methods of production
Blanket Contract creates long term
relationship in which the supplier promises to
resupply the buyer as needed at agreed prices
for a set period.
POINTERS
CHAPTER ONE CHAPTER TWO
Definition of Marketing
Core Marketing Concept
Marketing Management
Demand Management
Demarketing
Marketing Management Concepts
Strategic Planning & its Process
Growth Share Matrix
Product/Market Expansion Grid
Value Chain
The Market Process
Market Segmentation
Marketing Mix
CHAPTER THREE CHAPTER FOUR
Intranet, Extranet, Internet
Click only, Brick & Click, Brick & Mortar
E-Marketing Influence
Sources of E-Commerce Revenue
Microenvironment
Macroenvironment
Environmental Management
Perspective
POINTERS
CHAPTER FIVE CHAPTER SIX
Developing Marketing Information
Secondary Data
Primary Data
Research Approach
Contact Methods
Sampling Plan
Research Instruments
Model Of A Consumer Behavior
Characteristics Affecting Consumer Behavior
The Buying Decision Process
Stages in the Adoption Process
Individual Difference in Innovativeness
Major Types of Buying Situations
Major Influences on Business Buyers
The Business Buying Process
ITEMS DESCRIPTION
30 True or False
10 Enumeration
15 Identification
20 Matching Type
15 Discussion (3/5)
90
TOTAL
100
POSSIBLE POINTS
DISCUSSION QUESTIONS
Core Marketing Concepts
Difference between Selling &
Marketing Concept
Consumer Buying Decision
Setting Objectives and Goals
8 Major Consumer Themes