Consumer Behavior

Understanding
the Mystery

Consumer Behavior Defined

The buying behavior of final

consumers- individual and
households who buy goods and
services for personal consumption

(Kotler and Armstrong, 2001)

Model of Consumer Behavior

External Stimuli
Marketing Mix
Economic
Political
Cultural
Technological

Buyers
Black Box

Buyers
Responses

Buyer
Characteristics

Product Choice
Brand Choice
Dealer Choice
Purchase
Timing
Purchase
Amount

Buyer Decision
Process

Characteristics Affecting
Consumer Behavior

Cultural

Social

Personal

Psychological

Cultural Factors
z

Culture- Set of basic values, perceptions, wants, and

behaviors learned by a member of society from family
and other important institutions

Subculture- Group of people with shared value

systems based on common life experiences and
situations (i.e. nationalities, religions, geographic
regions, racial groups)

Social Class- Relatively permanent and ordered

divisions in a society whose members share similar
values, interests, and behaviors

Social Classes
1. Upper Uppers
2. Lower Uppers
3. Upper Middles
4. Middle Classes
5. Working Class
6. Upper Lower
6

7. Lower Lowers

Social Factors
z

Groups- Membership or Reference/Aspirational

Groups, Opinion Leader is a person with a reference
group who, because of special skills, knowledge,
personality or other characteristics, exerts influence on
others

z
z

Family
Roles (expected actions) and Status (general
esteem)

Personal Factors
z
z
z
z
z

Age and Life-Cycle Stage

Occupation
Economic Situation
Lifestyle
Personality and Self concept

Lifestyle
SRI Consulting Values and Lifestyles

High Resources

Low Resources

Principal-Oriented

Fulfilleds

Believers

Status-Oriented

Achievers

Strivers

Action-Oriented

Experiencers

Makers

Psychological Factors
z
z

Motivation
Perception- Selective Attention, Selective Distortion,
Selective Retention

Learning- Association Learning/Stimulus-Response,

Reinforcement, Modeling (Rodafinos, 2000).

10

Beliefs and Attitudes

Maslows Hierarchy of Needs

Self- Actualization
Esteem Needs
Social Needs
Safety Needs
Physiological Needs

11

Types of Buying Behavior

Significant Differences
between Brands
Few Differences
between Brands

12

High
Involvement

Low
Involvement

Complex Buying
Behavior
(Real Estate)
DissonanceReducing
Buying Behavior
(AirConditioning)

Variety-Seeking
Buying Behavior
(Tooth Brass)
Habitual Buying
Behavior
(Grocery
Products)

The Buyer Decision Process

1. Need Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Postpurchase Behavior
13

1. Need Recognition
The buyer senses a difference
between his/her actual state and
some desired state
z
z

14

Internal Stimuli
External Stimuli

2. Information Search
z
z

Heightened Attention
Active Information Research

Types of Sources
Personal (Word-of-Mouth)
Commercial (Less influencing)
Public
Experiential
15

3. Evaluation of Alternatives
All Brands
Known Brands

Unknown Brands

Acceptable Brands Unacceptable Brands Overlooked Brands

Purchased Brands

16

Rejected Brands
(Bovee et al, 1995)

4. Purchase Decision
Product Choice
Brand Choice
Dealer Choice
Purchase Timing
Purchase Amount
Intention

17

Attitudes of Others
Unexpected Situational Factors

Decision

5. Postpurchase Behavior
Customers further actions after
the purchase, based on their
satisfaction or dissatisfaction
Consumers Expectations vs Perceived Performance

Cognitive Dissonance- Buyer Discomfort caused

by postpurchase conflict

18

Why we need Satisfied Customers?

z
z
z

19

Old customers cost less

Satisfied customers is the best promotion
(word-of-mouth)
Dissatisfied customers is the worse thing that
can happen (satisfied tell 3 people, dissatisfied
tell 11 people)
Dissatisfied customers rarely give a second
chance (96%)

Stages in the Adoption Process

z
z
z
z
z

20

Awareness
Interest
Evaluation
Trial
Adoption

Individual Differences in
Innovativeness
z
z
z
z
z

21

Innovators (2.5%)- Risky

Early Adopters (13.5%)- Opinion Leaders
Early Majority (34%)- Before the Average
Late Majority (34%)- Skeptical
Laggards (16%)- Traditional and Suspicious

Product Characteristics
and Rate of Adoption
z
z
z
z
z

22

Relative Advantage- How superior is it?

Compatibility- Does it fit?
Complexity- How understandable is it?
Divisibility- Can we try it first?
Communicability- Are the results of using it
easy to communicate?