Analyzing Consumer

Markets and
Consumer Buyer Behavior
Major aim of marketing:
to meet & satisfy customers’
needs & wants.

The most important

thing is to forecast
where customers are
moving, and be in
front of them.
Consumer Buying Behavior

The central question for marketers :

“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
Buyer Characteristics Product Choice
Marketing Cultural
Product Social Brand Choice
Price Personal Dealer Choice
Psychological
Place
Promotion
Other Purchase Timing
Buyer Decision Process Purchase Amount
Economic Problem recognition
Technological Information search
Political Evaluation
Decision
Cultural Postpurchase behavior
 Factors Influencing Consumer
Behavior
Cultural
Social
Social
Personal
Personal Psycho-
Psycho-
••Reference
logical
logical
Reference ••Age
Ageand
and
••Culture
Culture groups life-cycle ••Motivation
Motivation
groups life-cycle
••Occupation
Occupation ••Perception
••Economic Perception BUYER
BUYER
••Sub-
Sub- ••Family Economic
culture Family situation
situation ••Learning
culture Learning
••Lifestyle
Lifestyle
••Personality ••Beliefs
Beliefsand
and
••Social ••Roles
Roles Personality attitudes
Social and and
and attitudes
class
class and self-concept
status
status self-concept
 Factors Influencing
Consumer Behavior: Cultural
Cultural • Culture
Forms a person’s wants and
behavior
••Culture
Culture
• Subculture
••Subculture
Subculture Groups with shared value systems

••Social
Socialclass
class • Social Class
Society’s divisions who share values,
interests and behaviors
 Factors Influencing Consumer
Behavior: Social
• Reference Groups
• Membership
Social
Social • Aspirational
• Opinion Leaders
••Reference
Reference • “Buzz marketing”
groups
groups
• Family
••Family
Family • Many influencers
• Buyers vs. users
••Roles
Roles&&status
status
• Roles and Status
 Factors Influencing Consumer
Behavior: Social (cont.)
• Ref. Groups : have a direct or
indirect influence on the
Social person’s attitudes or behavior
Social

••Reference
• Membership Groups ğgroups
Reference to which a person belongs
groups
groups • primary groups

• secondary groups
••Family
Family
• Aspirational Groups ğgroups
••Roles to which a person would like to
Roles&&status
status belong
 Factors Influencing Consumer
Behavior: Social (cont.)
• Opinion Leader ğperson
within a reference group
Social
Social who exert influence on
others
••Reference
Reference
groups
groups • offers advice or information
about a specific product or
product category,
••Family
Family
• can be found in all social
classes
••Roles
Roles&&status
status
 Factors Influencing Consumer
Behavior: Social (cont.)
• The most important consumer-
buying organization in the
society
Social
Social
• Roles and relative influence of
••Reference
Reference family members in buying
groups
groups decisions
• Buying roles vary in different
••Family countries and social classes
Family • Buying roles change with evolving
life-styles
••Roles • joint decision making
Roles&&status
status • women arising as active buyers
• increasing role of children
 Factors Influencing Consumer
Behavior: Social (cont.)
• The person’s position in each
group ğ can be defined in
Social
Social terms of both role and status:

••Reference
Reference • A Role ğconsists of the activities
groups
groups that a person is expected to
perform according to the people
••Family
Family around him
• Each role ğcarries a status
••Roles • A Status ğ is the general esteem
Roles&&status
status
given a role by society 
 Factors Influencing Consumer
Behavior: Personal
• Family Life Cycle ğstages
throughout which families pass as they
Personal mature over time
Personal
••Age
Ageand
and
life-cycle 1. bachelor stage
life-cycle 2. newly married couples, no children
••Occupation
Occupation 3. full nest 1; youngest child under 6
••Economic
Economic 4. full nest 2; youngest child 6 or over
situation
situation 5. full nest 3; older married couples with
••Lifestyle
Lifestyle dependent children
••Personality 6. empty nest 1; older married couples no
Personality children with them
and
and
self-concept
self-concept 7. empty nest 1; older married couples no
children at home; retired
8. solitary survivor, working
9. solitary survivor, retired
 Factors Influencing Consumer
Behavior: Personal (cont.)

• Consumption patterns often

Personal shaped by:
Personal
••Age
Ageand
and
life-cycle
life-cycle • occupation &
••Occupation
Occupation • economic circumstances:
••Economic
Economic
situation
situation
••Lifestyle
Lifestyle
• spendable income,
••Personality • savings and assets,
Personality
and
and • debts,
self-concept
self-concept • attitudes towards spending &
saving.
 Factors Influencing Consumer
Behavior: Personal (cont.)
• Lifestyle ğa person’s pattern of
living as expressed in his activities,
Personal
Personal interests and opinions
••Age • Psychographics ğtechnique of measuring
Ageand
and lifestyles and developing lifestyle classifications
life-cycle
life-cycle • Major dimensions measured are:
••Occupation
Occupation • Activities (work, hobbies, social events,
••Economic
Economic entertainment, shopping, sports,vacation)
situation
situation • Interests (family, home, job, recreation,
••Lifestyle
Lifestyle fashion, food, media, achievements)
••Personality
Personality
• Opinions (themselves, social issues,
and
and politics, business, economics, products,
self-concept
self-concept future)
The VALS segmentation system:
An 8-part typology
 Factors Influencing Consumer
Behavior: Personal (cont.)
• Personality ğa person’s unique
characteristics that lead to relatively
Personal consistent and lasting responses to the
Personal environment
••Age
Ageand
and • Brand personality ğspecific mix of
life-cycle
life-cycle human traits that may be attributable to a
•• Occupation
Occupation particular brand
••Economic
Economic • Self-concept ğthe self image or general
situation
situation picture that people have of themselves
••Lifestyle
Lifestyle • Person’s actual self-concept ğhow she views
••Personality herself
Personality Ideal self-concept ğ how she would like to view
and
and
•

self-concept
self-concept herself
• Others’ self-concept ğ how she thinks others see
her
 Factors Influencing Consumer
Behavior: Psychological
• Freud’s Theory : Psychological
forces shaping people’s behavior ğ
largely unconscious
Psychological
Psychological • A person cannot understand fully his/her
own motivations
••Motivation
Motivation • Motivation research ğ looks for hidden and
subconscious motivation
••Perception
Perception • in-depth interviews / laddering
• projective techniques (i.e. word association,
••Learning
Learning sentence completion, picture interpretation,
role playing)
••Beliefs
Beliefs&&
attitudes
attitudes • Maslow’s Theory : Maslow ordered
needs based on how pressing they are
to the consumer
 Factors Influencing Consumer
Behavior: Psychological (cont.)
• Research found:
• Consumers resist prunes because prunes are wrinkled

looking and remind people of old age.

• Men smoke cigars as an adult version of thumb

sucking.
• Women prefer vegetable shortening to animal fats

because the latter arouse a sense of guilt over killing

animals.
Psychological Factors:
Maslow’s Hierarchy of Needs
 Factors Influencing Consumer
Behavior: Psychological (cont.)
• Perception ğ process by which people
select, organize and interpret
information to form a meaningful
Psychological
Psychological picture of the world
••Motivation
Motivation
1.Selective attention ğtendency of people
••Perception
Perception to eliminate most of the information to
which they are exposed
••Learning
Learning 2.Selective distortion ğ to interpret
information in a way that will support what
••Beliefs
Beliefs&&
attitudes they already believe
attitudes 3.Selective retention ğ to retain only part of
the information to which they are exposed
 Factors Influencing Consumer
Behavior: Psychological (cont.)
• Learning ğ changes in a person’s
behavior, arising from experience
• Learning occurs through the interplay
Psychological
Psychological of: drives, stimuli, cues, responses and
••Motivation
Motivation reinforcement
••Perception
Perception • A drive: strong internal stimulus that calls
for action
••Learning
Learning • Cues: minor stimuli that determine when,
••Beliefs
Beliefs&& where and how the person responds
attitudes
attitudes • If the experience is rewarding ğ the
response will be positively reinforced
 Factors Influencing Consumer
Behavior: Psychological (cont.)
• Through doing and learning ğ
people acquire beliefs and
attitudes ğ have influence on
Psychological
Psychological buying behavior
••Motivation
Motivation
• A Belief ğ descriptive thought that a
••Perception
Perception person holds about something
••Learning
Learning • An Attitude ğ a person’s consistently
••Beliefs
Beliefs&& favorable or unfavorable evaluations,
attitudes
attitudes feelings and tendencies toward an
object or idea
 The Buying Decision
Process
• Marketers have to identify:

• Who makes the buying decision

• The types of buying decisions
• The steps in the buying process
 Buying Roles –
Who makes the buying decision?

• Initiator ğ who first gives the idea of

buying the product or service
• Influencer ğwhose view or advice influences
the decision
• Decider ğ who decide on any component
of buying decision
• Buyer ğ who makes the actual purchase
• User ğ who uses the product or sevice
purchased
 Types of Buying Behavior
High Low
Involvement Involvement
Significant Complex Variety-
differences
between Buying Seeking
brands Behavior Behavior

Few Dissonance- Habitual

differences Reducing Buying Buying
between
brands Behavior Behavior
 Stages of the Buying Decision
Process
Purchase
Decision
Evaluation Postpurchase
of Alternatives Behavior
Information
Search
Problem
Recognition
 The Buyer Decision Process
Stage 1. Problem Recognition

Buyer
Needs Arising from:
State where the recognizes Internal Stimuli
buyer’s needs are
(hunger)
fulfilled and the a problem
or
buyer is satisfied. or External Stimuli
a need (friends)
The Buyer Decision Process
Stage 2. Information Search

Personal •Family, friends, neighbors

PersonalSources
Sources •Most effective source of
information
Commercial •Advertising, salespeople
CommercialSources
Sources •Receives most information
from these sources

Public •Mass Media

PublicSources
Sources •Consumer-rating groups

•Handling the product

Experiential
ExperientialSources
Sources •Examining the product
•Using the product
 The Buyer Decision Process
Successive Sets Involved in Customer Decision Making
The Buyer Decision Process
Stage 3. Evaluation of Alternatives
Consumer
ConsumerMay MayUse
UseCareful
Careful
Calculations
Calculations&&Logical
LogicalThinking
Thinking
Consumers
ConsumersMay
MayBuy
BuyononImpulse
Impulseand
and
Rely
Relyon
onIntuition
Intuition
Consumers
ConsumersMay
MayMake
MakeBuying
BuyingDecisions
Decisions
on
onTheir
TheirOwn.
Own.
Consumers
ConsumersMay
MayMake
MakeBuying
BuyingDecisions
Decisions
Only
OnlyAfter
AfterConsulting
ConsultingOthers.
Others.

Marketers must study buyers to find out how they

evaluate brand alternatives
 Consumer Evaluation Process
• The consumer is trying to satisfy a need
• The consumer is looking for certain benefits from the
product solution
• The consumer sees each product as a “bundle of
attributes”
• The attributes of interest to buyers vary by product
• Consumers differ as to which product attributes they see
as most relevant and the importance they attach to each
attribute
 Consumer Evaluation Process (cont.)

• The consumer develops “a set of brand beliefs” about

where each brand stands on each attribute (see table, next
page)
• The set of beliefs about a brand make up “brand
image”
• The consumer arrives at attitudes (judgments
/preferences) toward different brands through an
attribute evaluation procedure.
 Example: A Consumer’s Brand Beliefs
about Computers
Attribute
Computer Memory Graphics Size and
Capacity Capability Weight Price
A 10 8 6 4
B 8 9 8 3
C 6 8 10 5
D 4 3 7 8
Computer A: 0.4(10)+0.3(8)+0.2(6)+0.1(4) = 8.0

Choice will be made based on the “highest perceived value”

 Consumer Evaluation Process (cont.)

• Strategies designed to influence buyer decisions:

• Redesign the product – real positioning

• Alter beliefs about the brand – psychological positioning
• Alter beliefs about competitors’ brands – competitive
positioning
• Alter the importance weights
• Call attention to neglected attributes
• Shift the buyer’s ideas
The Buyer Decision Process
Stage 4. Purchase Decision
The Buyer Decision Process
Stage 5. Postpurchase Behavior

Satisfied Customer!

Consumer’s
Expectations of Product’s Performance ---
Product’s Perceived
Performance.

Dissatisfied Customer
 Problem Recognition

General
General Need
Need Description
Description

Product
Product Specification
Specification
-Product
-Productvalue
valueanalysis-
analysis-

Stages of Supplier
Supplier Search
Search
Business
Buying Proposal
Proposal Solicitation
Solicitation
Process
Supplier
Supplier Selection*
Selection*

Order
Order Routine
Routine Specification
Specification

Performance
Performance Review
Review
 *Example -- Supplier Analysis

Rating Scale
Attributes Importance Poor Fair Good Excellent
Weights (1) (2) (3) (4)

Price .30 x

Supplier reputation .20 x

Product reliability .30 x

Service reliability .10 x

Supplier flexibility .10 x

Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5

 Buygrid Framework -- Major Stages
(Buyphases) of Business Buying Process in
Relation to Major Buying Situations (Buyclasses)
Buyclasses
New Modified Straight
Task Rebuy Rebuy
1. Problem recognition Yes Maybe No
2. General need Yes Maybe No
description
3. Product specification Yes Yes Yes
Buyphases 4. Supplier search Yes Maybe No
5. Proposal solicitation Yes Maybe No
6. Supplier selection Yes Maybe No
7. Order-routine Yes Maybe No
specification
8. Performance review Yes Yes Yes