Consumer Markets

and
Consumer Buyer Behavior
The chihuahua and the leopard
(creative thinking)
A lady takes her pet dog with her on a safari
holiday. Wandering too far one day the dog gets
lost in the bush, and soon encounters a very
hungry looking leopard. The dog realises he's in
trouble, but, noticing some fresh bones on the
ground, he settles down to chew on them, with his
back to the big cat. As the leopard is about to leap,
the dog smacks his lips and exclaims loudly, "Boy,
that was one delicious leopard. I wonder if there
are any more around here."
The leopard stops mid-stride, and slinks away into
the trees.
"Phew," says the leopard, "that was close - that
evil little dog nearly had me."
A monkey nearby sees everything and thinks he'll win
a favour by putting the stupid leopard straight. The dog
sees the monkey go after the leopard, and guesses he
might be up to no good.
When the leopard hears the monkey's story he feels
angry at being made a fool, and offers the monkey a
ride back to see him exact his revenge.
The little dog sees them approaching and fears the
worse.
Thinking quickly, the little dog turns his back, pretends
not to notice them, and when the pair is within earshot
says aloud, "Now where's that monkey got to? I sent
him ages ago to bring me another leopard...."
 Consumer
Consumer Buying
Buying Behavior
Behavior
Consumer Buying Behavior refers to
the buying behavior of final consumers
(individuals & households) who buy
goods and services for personal
consumption.
Study consumer behavior to answer
“How do consumers respond to
marketing efforts the company might
use?”
 Model
Model of
of Consumer
Consumer Behavior
Behavior
Product Marketing Economic
Marketing and
and
Price Other
Other Stimuli
Stimuli Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Affecting
Buyer’s
Buyer’s Black
Black Box
Box Consumer
Process
Behavior

Product Choice Purchase

Timing
Brand Choice Buyer’s
Buyer’s Response
Response
Purchase
Dealer Choice Amount
Characteristics
Characteristics Affecting
Affecting
Consumer
Consumer Behavior
Behavior
Culture
Social
Personal
Psychological
Buyer
Buyer
 Factors
Factors Affecting
Affecting Consumer
Consumer Behavior
Behavior
Culture
Culture
Most
Most basic
basic cause
cause of
of aa person's
person's wants
wants
and
and behavior.
behavior.
Values
Values and
and cultural
cultural shifts
shifts

Subculture
Subculture Social
SocialClass
Class
••Groups
Groupsofofpeople
peoplewith
withshared
shared ••People
Peoplewithin
withinaasocial
socialclass
class
value
valuesystems
systemsbased
basedon
on tend
tendto
toexhibit
exhibitsimilar
similarbuying
buying
common
commonlife
lifeexperiences.
experiences. behavior.
behavior.
••pre
preindependence
independence ••Occupation
Occupation
••Pre
Pre––liberalization
liberalization ••Income
Income
••Post
PostLPG
LPG ••Education
Education
••Mature
MatureConsumers
Consumers ••Wealth
Wealth
Cultural Habits

Acceptance of Ice tea was difficult

Acceptance of Kelloggs took time
 Factors
Factors Affecting
Affecting Consumer
Consumer Behavior
Behavior
Social
Social
Groups
Groups
••Membership
Membership
••Reference
Reference

Family
Family
••Husband,
Husband, wife,
wife, kids
kids Social
Social Factors
Factors
••Influencer,
Influencer, buyer,
buyer, user
user

Roles
Roles and
and Status
Status
Social

Cartoon Network
Pogo influencing the children with its
advertisement and there by making
them influence their parents in
purchase decisions
Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Personal
Personal
Personal
Personal Influences
Influences
Age
Ageand
andFamily
FamilyLife
LifeCycle
Cycle Occupation
Occupation
Stage
Stage

Economic
EconomicSituation
Situation Lifestyle,
Lifestyle,Personality
Personality&&
Self-Concept
Self-Concept

Lifestyle
Lifestyle Identification
Identification

Activities
Activities(work,
(work,hobbies,
hobbies,shopping,
shopping,
Opinions
Opinions(food,
(food,fashion,
fashion,
sports family
familyand
andrecreation)
sportsand
andsocial
socialevents)
events) recreation)

Interests
Interests(about
(aboutthemselves,
themselves,
social
socialissues,
issues,business
businessand
andproducts)
products)
VALS
VALS 22 Actualizers
Actualizers Abundant
Abundant Resources
Resources

Principle Oriented Status Oriented Action Oriented

Ideals Achievement Self-expression

Fulfilled
Fulfilled Achievers
Achievers Experiencers
Experiencers

Believers
Believers Strivers
Strivers Makers
Makers

Strugglers
Strugglers
Minimal
Minimal Resources
Resources
 Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Psychological
Psychological

Motivation
Motivation

Beliefs
Beliefs and
and Psychological
Factors PPerception
erception
Attitudes
Attitudes

Learning
Learning
Maslow’s
Maslow’s Hierarchy
Hierarchy of
of Needs
Needs
Self
Actualization
(Self-development)

Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)
Motives
Nutrament, a product marketed by Bristol-Myers Squibb
originally was targeted at consumers that needed to receive
additional energy from their drinks after exercise etc., a
fitness drink. It was therefore targeted at consumers whose
needs were for either love and Belonging or esteem. The
product was not selling well, and was almost terminated.
Upon extensive research it was determined that the product
did sell well in inner-city convenience stores. It was
determined that the consumers for the product were actually
drug addicts who couldn't not digest a regular meal. They
would purchase Nutrament as a substitute for a meal. Their
motivation to purchase was completely different to the
motivation that B-MS had originally thought. These
consumers were at the Physiological level of the hierarchy.
BM-S therefore had to redesign its MM to better meet the
needs of this target market.
Motives often operate at a subconscious level therefore are
difficult to measure.
Perception

Average supermarket shopper is

exposed to 17,000 products in a
shopping visit lasting 30 minutes
Are you able to notice all these
products?
Why?
Perception

What do you see?? Perception is the

process of selecting, organizing and
interpreting information inputs to
produce meaning. We chose what
info we pay attention to, organize it
and interpret it.
Learning

Helps companies and individual

customers
Beliefs and Attitudes

Knowledge and positive and negative

feelings about an object or activity-
maybe tangible or intangible, living or
non- living.....Drive perceptions
There is a difference between attitude
and intention to buy (ability to buy)
 Types
Types of
of Buying
Buying Decisions
Decisions

High Low
Involvement Involvement
Significant
differences Complex Variety-
between Buying Seeking
brands Behavior Behavior
Few
differences Dissonance- Habitual
between Reducing Buying Buying
brands
Behavior Behavior
The
The Buyer
Buyer Decision
Decision Process
Process

Need
Need Recognition
Recognition

Information
Information Search
Search

Evaluation
Evaluation of
of Alternatives
Alternatives

Purchase
Purchase Decision
Decision

Postpurchase
Postpurchase Behavior
Behavior
 The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 1.
1. Need
Need Recognition
Recognition

Need
Need Recognition
Recognition
Difference
Differencebetween
betweenan
anactual
actualstate
stateand
andaadesired
desiredstate
state

Internal
Internal Stimuli
Stimuli External
External Stimuli
Stimuli
•• Hunger
Hunger ••TV
TVadvertising
advertising
••Thirst ••Magazine
Thirst Magazinead
ad
••AAperson’s
person’snormal
normal ••Radio
needs Radioslogan
slogan
needs
••Stimuli
Stimuliin
inthe
the
environment
environment
 The
The Buyer
Buyer Decision
Decision
Process
Process
Step
Step 2.
2. Information
Information•Search
Search
Family, friends, neighbors
Personal
Personal Sources
Sources •Most influential source of
information

•Advertising, salespeople
Commercial
Commercial Sources
Sources •Receives most information
from these sources

•Mass Media
Public
Public Sources
Sources •Consumer-rating groups

•Handling the product

Experiential
Experiential Sources
Sources •Examining the product
•Using the product
 The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 3.
3. Evaluation
Evaluation of
of Alternatives
Alternatives
Product
ProductAttributes
Attributes
Evaluation
Evaluationof
ofQuality,
Quality,Price,
Price,&&Features
Features

Degree
Degreeof
ofImportance
Importance
Which
Whichattributes
attributesmatter
mattermost
mostto
tome?
me?

Brand
BrandBeliefs
Beliefs
What
Whatdo
doIIbelieve
believeabout
abouteach
eachavailable
availablebrand?
brand?

Total
TotalProduct
ProductSatisfaction
Satisfaction
Based
Basedon
onwhat
whatI’m
I’mlooking
lookingfor,
for,how
howsatisfied
satisfied
would
wouldIIbe
bewith
witheach
eachproduct?
product?
Evaluation
EvaluationProcedures
Procedures
Choosing
Choosingaaproduct
product(and
(andbrand)
brand)based
basedon
onone
one
or
ormore
moreattributes.
attributes.
 The
The Buyer
Buyer Decision
Decision
Process
Process
Step
Step 4.
4. Purchase
Purchase Decision
Decision
Purchase Intention
Purchase Intention
Desire
Desire to
to buy
buy the
the most
most preferred
preferred brand
brand

Attitudes Unexpected
of others situational
factors

Purchase
Purchase Decision
Decision
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 5.
5. Post
Post purchase
purchase Behavior
Behavior
Consumer’s
Consumer’s Expectations
Expectations of
of
Product’s
Product’s Performance
Performance

Product’s Perceived
Performance

Satisfied
Satisfied Dissatisfied
Dissatisfied
Customer!
Customer! Customer
Customer
Cognitive Dissonance
Stages
Stages in
in the
the Adoption
Adoption
Process
Process
Awareness
Awareness

Interest
Interest

Evaluation
Evaluation

Trial
Trial

Adoption
Adoption
Organization buying process: Roles
of buying centers/ Decision making
units.
The buying center consists of
five roles
(a) users - those members of the organization who
use the purchased products and services,
(b) buyers - those with formal responsibility and
authority for contracting with suppliers,
(c) influencers - those who influence the decision
process directly or indirectly by providing
information and criteria for evaluating alternative
buying actions,
(d) deciders - those with authority to choose among
alternative buying actions,
(e) gatekeepers - those who control the flow of
information (and materials) into the buying center.
(Webster and Wind, 1972).
Types of Business Purchase
Decisions

Straight Re-Purchase: These purchase situations

involve routine ordering.
Modified Re-Purchase: These purchases occur when
products or services previously considered a straight
re-purchase are for some reason now under a re-
evaluation process.
New Task Purchase: As the name suggests, these
purchases are ones the buyer has never or rarely
made before.
New Task Purchase (Steps)

1. Need Recognition
2. Search
3. Evaluate Option
4. Purchase
5. After-Purchase Evaluation
Percentage of Adopters
Adoption
Adoption of
of Innovations
Innovations

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5% Time of Adoption
Early Late
Influences
Influences on
on the
the Rate
Rate of
of Adoption
Adoption
of
of New
New Products
Products
Communicability Relative Advantage
Can results be easily Is the innovation
observed or described superior to existing
to others? products?

Product
Divisibility Characteristics Compatibility
Does the
Can the innovation
innovation
be used on a
fit the values and
trial basis?
experience of the
target market?
Complexity
Is the innovation
difficult to
understand or use?