CHAPTER 6 ANALYSING CONSUMER MARKETS o Physical risk - The product poses a threat to the

Consumer Behavior- study of how individuals, groups, and physical well-being or health
organizations select, buy, use, and dispose of goods, services, o Financial risk – The product is not worth the
ideas, or experiences to satisfy their needs and wants. price paid.
Consumer Characteristics o Social risk: The product results in
1. Cultural Factors (culture, sub-culture, and social class) embarrassment from others.
2. Social Factors (groups, family, role, and status) o Psychological risk – The product affects the
3. Personal Factors (age, occupation, economic mental well-being of the user.
situation, lifestyle, personality) o Time risk - The failure of the product results in
Consumer Psychology an opportunity cost of finding another
1. Motivation- a need that is sufficiently pressing to satisfactory products.
direct the person to seek satisfaction 5. Post-purchase behavior (satisfaction <expectations
2. Perception- process by which we select, organize, and met>, action <feedback or repurchase>, use and
interpret information inputs to create a meaningful disposal)
picture of the world.  Consumers will not necessarily go through the buying
a. Selective attention- tendency to screen out process in an orderly fashion and make skip and reverse
most of the information to which they are stages and alternative between going online and offline.
exposed to
b. Selective distortion- tendency to interpret
information in a way that will support what
they already believe
c. Selective retention- tendency to remember
good points to make about a brand they
favor and to forget good points made about
competing brands.
3. Learning- induces changes in our behavior arising
from experience.
4. Memory- Cognitive psychologists distinguish between
short-term memory (STM)—a temporary and limited
repository of information—and long-term memory
(LTM)—a more permanent, essentially unlimited
repository.
 To understand how consumers make buying decisions,
marketers must identify who makes and has input into the
buying decision; people can be initiators, influencers,
deciders, buyers, or users. Different marketing campaigns
might be targeted to each type of person.
The Buying Decision Process: The Five-Stage Model
1. Problem/ Need recognition
2. Information search (sources: personal, commercial,
public, experimental)
3. Evaluation of Alternatives
a. Beliefs and attitudes (based on descriptive
thought or emotions/tendencies)
b. Expectancy value model (based on product
specs)
4. Purchase decision- two general factors can intervene
between the purchase intention and the purchase
decision
a. The intensity of the other person’s negative
attitude toward a preferred alternative and
b. Our Motivation to comply with the other
person’s wishes.
 The second factor is unanticipated situational factors that
may erupt to change the purchase by perceived risk.
o Functional risk – The product does not perform
up to expectations.