Master in Marketing and Communication

Module 5

Consumer Markets and Consumer

Buyer Behavior

Module 5 - slide 1
Consumer Markets and Consumer
Buyer Behavior
Topic Outline
• Model of Consumer Behavior
• Characteristics Affecting Consumer
Behavior
• Types of Buying Decision Behavior
• The Buyer Decision Process
• The Buyer Decision Process for New
Products

Module 5 - slide 2
 Model of Consumer Behavior

Consumer buyer behavior refers to the buying

behavior of final consumers—individuals and
households who buy goods and services for
personal consumption

Consumer market refers to all of the personal

consumption of final consumers

Module 5 - slide 3
 Analysing consumer behaviour

• What do consumers buy? • Why do they buy?

• Where do they buy? • How do they buy?
• When do they buy? • Who buys?

Module 5 - slide 4
Stimulus-response model of buyer
behaviour

Marketing
and stimuli
Buyer’s
black box

Buyer
responses

Module 5 - slide 5
 Model of Consumer Behavior

http://www.youtube.com/watch?v=befugtgikMg

http://www.youtube.com/watch?v=ZgWvn4yldM4&feature=related

http://www.youtube.com/watch?v=j25qV5RO-nU&feature=related
Derren Brown
Module 5 - slide 6
 Characteristics Affecting
Consumer Behavior
Factors Influencing Consumer Behavior

Module 5 - slide 7
 Characteristics Affecting
Consumer Behavior

Culture is the learned values, perceptions,

wants, and behavior from family and other
important institutions

Module 5 - slide 8
 Culture
Country Clusters
NEAR NORDIC
EASTERN
Turkey Finland
Denmark
ARAB Iran GERMANIC
Bahrain Greece Sweden
Austria
United Arab Emirates Norway
Abu-Dhabi Germany
Kuwait Oman Saudi Arabia Switzerland

Singapore Malaysia
United States Australia
Hong
FAR
Kong Chile Canada ANGLO
EASTERN France
South Vietnam Philippines Argentina United Kingdom
Belgium New Zealand
Thailand Indonesia Mexico Ireland
Taiwan Peru LATIN
LATIN EUROPEAN South Africa
AMERICAN
Italy Spain
Venezuela
Columbia Portugal
Brazil Israel
Japan India
INDEPENDENT

Chapter 5- slide 9
 Culture - Geert Hofstede

•Power distance
•Uncertainty avoidance
•Individualism/collectivism
•Masculinity/femininity

Chapter 5- slide 10
 Characteristics Affecting
Consumer Behavior
Subculture are groups of people within a culture
with shared value systems based on common life
experiences and situations
• Hispanic
• African American
• Asian
• Mature consumers

Module 5 - slide 11
 Characteristics Affecting
Consumer Behavior
Social classes are society’s relatively
permanent and ordered divisions whose
members share similar values, interests,
and behaviors
• Measured by a combination of occupation,
income, education, wealth, and other
variables

Module 5 - slide 12
Characteristics Affecting
Consumer Behavior
Social classes

http://www.rhodeislandhousing.org/

Module 5 - slide 13
 Characteristics Affecting
Consumer Behavior
Groups and Social Networks

Membership Aspirational Reference

Groups Groups Groups
• Groups with • Groups an • Groups that
direct individual form a
influence wishes to comparison
and to belong to or reference
which a in forming
person attitudes or
belongs behavior

Module 5 - slide 14
 Characteristics Affecting
Consumer Behavior
Groups and Social Networks
• Word-of-mouth influence and
buzz marketing
– Opinion leaders are people
within a reference group who
exert social influence on others
– Also called influentials or
leading adopters
– Marketers identify them to use
as brand ambassadors
http://www.tremor.com/
Module 5 - slide 15
Characteristics Affecting
Consumer Behavior
Groups and Social Networks

• Online Social Networks are

online communities where
people socialize or exchange
information and opinions
• Include blogs, social
networking sites (facebook),
virtual worlds (second life)

Module 5 - slide 16
 Characteristics Affecting
Consumer Behavior
Social Factors

• Family is the most important consumer-buying

organization in society
– Family of orientation
– Family of procreation

• Wife as main purchasing agent

• Children’s influence on family buying decisions

Module 5 - slide 17
 Characteristics Affecting
Consumer Behavior

Children in Europe
• 76 million under 14
• Estimated €18bn in disposable income
• Influence an additional €100bn that their families spend
in food, clothing, entertainment, personal care items.
• Influence family decision about vacations, cars, mobile
phones

Module 5 - slide 18
 Characteristics Affecting
Consumer Behavior
Social Factors

• Social roles and status

are the groups, family,
clubs, and organizations
that a person belongs to
that can define role and
social status

Module 5 - slide 19
 Consumer buying roles

• Initiator: Person who first suggests or

thinks of the idea of buying a particular
product.
• Influencer: A person whose views or
advice will influence the product or
service.
• Decider: Buying decision maker of the
product
• Buyer: Ultimate purchaser
• User: Ultimate user
Module 5 - slide 20
 Characteristics Affecting
Consumer Behavior
Personal Factors

• Age and life-cycle stage

• RBC Royal Band stages
– Youth: younger than 18
– Getting started: 18–35
– Builders: 35–50
– Accumulators: 50–60
– Preservers: over 60

Module 5 - slide 21
 Characteristics Affecting
Consumer Behavior
Personal Factors

Occupation affects the goods and services

bought by consumers
Economic situation includes trends in:

Personal Interest
Savings
income rates

Module 5 - slide 22
 Characteristics Affecting
Consumer Behavior
Personal Factors

Lifestyle is a person’s
pattern of living as
expressed in his or her
psychographics
• Measures a consumer’s
AIOs (activities, interests,
opinions) to capture
information about a
person’s pattern of acting
and interacting in the
environment
Module 5 - slide 23
 Characteristics Affecting
Consumer Behavior
Personal Factors

• Personality and self-concept

– Personality refers to the unique psychological
characteristics that lead to consistent and
lasting responses to the consumer’s
environment

Module 5 - slide 24
 Characteristics Affecting
Consumer Behavior
Personal Factors

Personal
Dominance Autonomy
Factors

Defensiveness Adaptability Aggressiveness

Module 5 - slide 25
 Characteristics Affecting
Consumer Behavior
Brand Personality Traits
A brand personality is the specific mix of human traits that may
be attributed to a particular brand. One researcher identified
five brand personality traits:
1. Sincerity (down-to-earth, honest, wholesome, and
cheerful)
2. Excitement (daring, spirited, imaginative, and up-to-date)
3. Competence (reliable, intelligent, and successful)
4. Sophistication (upper class and charming)
5. Ruggedness (outdoorsy and tough)

Module 5 - slide 26
 Characteristics Affecting
Consumer Behavior
Personal Factors

• Self-concept (or self-image)

– The complex mental picture that people have
of themselves.
– How do you view yourself?
– “We are what we have” (?)

Module 5 - slide 27
 Characteristics Affecting
Consumer Behavior
Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes

Module 5 - slide 28
 Characteristics Affecting
Consumer Behavior
Psychological Factors
Motivation
A motive is a need that is sufficiently pressing to
direct the person to seek satisfaction
– Biological
– Psychological
Motivation research refers to qualitative research
designed to probe consumers’ hidden,
subconscious motivations

Module 5 - slide 29
Characteristics Affecting
Consumer Behavior
Maslow’s Hierarchy of Needs

Module 5 - slide 30
 Characteristics Affecting
Consumer Behavior
Psychological Factors

Perception is the process by

which people select,
organize, and interpret
information to form a
meaningful picture of the
world from three perceptual
processes
– Selective attention
– Selective distortion
– Selective retention

Module 5 - slide 31
 Characteristics Affecting
Consumer Behavior
Psychological Factors

Selective attention is the tendency for people to

screen out most of the information to which they
are exposed
Selective distortion is the tendency for people to
interpret information in a way that will support
what they already believe
Selective retention is the tendency to remember
good points made about a brand they favor and
forget good points about competing brands

Module 5 - slide 32
 Characteristics Affecting
Consumer Behavior
Psychological Factors

• Learning is the change in an individual’s

behavior arising from experience and
occurs through interplay of:

Drives Stimuli Cues

Responses Reinforcement

Module 5 - slide 33
 Characteristics Affecting
Consumer Behavior
Psychological Factors
Beliefs and Attitudes

Belief is a descriptive thought that a person

has about something based on:
• Knowledge
• Opinion
• Faith

Module 5 - slide 34
 Characteristics Affecting
Consumer Behavior
Psychological Factors

Attitudes describe a
person’s relatively
consistent evaluations,
feelings, and
tendencies toward an
object or idea

Module 5 - slide 35
 Types of Buying Decision
Behavior

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

Module 5 - slide 36
Types of Buying Decision
Behavior
Four Types of Buying Behavior

Module 5 - slide 37
 Buying decision behaviour

• Complex buying behaviour: High involvement in a purchase and

perceived significant differences among brands. Consumers may
be highly involved when the product is expensive, risky,
purchased infrequently, and highly self-expressive. (Ex.: car)
• Dissonance-reducing buying behaviour: Situations characterised
by high involvement with an expensive, infrequent or risky
purchase but few perceived differences among the brands. (Ex.:
carpeting)
• Habitual buying behaviour: Characterised by low consumer
involvement and few significant perceived brand differences
(Ex.: salt)
• Variety seeking buying behaviour: Low consumer involvement
but significant perceived brand differences (Ex.: cookies)

Module 5 - slide 38
 The buyer decision process

Need
recognition
Information
search
Evaluation of
alternatives
Purchase
decision
Postpurchase
behaviour

Module 5 - slide 39
 The Buyer Decision Process
Need Recognition

• Occurs when the buyer recognizes a

problem or need triggered by:
– Internal stimuli
– External stimuli

Module 5 - slide 40
 The Buyer Decision Process
Information Search
Sources of Information
• Personal sources - family and
friends
• Commercial sources -
advertising, Internet
• Public sources - mass media,
consumer organizations
• Experiential sources - handling,
examining, using the product

Module 5 - slide 41
 The Buyer Decision Process
Evaluation of Alternatives
During this stage consumers:
• Look for certain benefits that can be acquired by
buying a product
• Attach degrees of importance to each attribute
• Develop brand beliefs about each brand
• Use a utility function for each attribute
• Arrive at attitudes toward each brand through an
evaluation procedure

Module 5 - slide 42
 The Buyer Decision Process
Evaluation of Alternatives – Expectancy value model
Example: notebook computer
Importance Alternative
Brands
Attributes Weight A B C
Size 0.2 4 6 2
Memory 0.5 6 3 7
Warranty 0.1 5 5 4
Price 0.2 4 6 7
A score can be calculated for each brand by multiplying the importance weight for
each attribute by the brand’s score on that attribute. These weighted scores are then
summed to determine the score for that brand. For example:
ScoreBrand A = (0.2 x 4) + (0.5 x 6) + (0.1 x 5) + (0.2 x 4) = 0.8 + 3.0 + 0.5 + 0.8 = 5.1.
This consumer will select the brand with the highest score.

Module 5 - slide 43
 The Buyer Decision Process
Evaluation of Alternatives – Expectancy value model
Example: notebook computer
Importance Alternative
Brands
Attributes Weight A B C
Size 0.2 4 6 2
Memory 0.5 6 3 7
Warranty 0.1 5 5 4
Price 0.2 4 6 7
Calculate the scores for brands B and C. Which brand would this consumer likely
choose?
ScoreBrand B = (0.2 x 6) + (0.5 x 3) + (0.1 x 5) + (0.2 x 6) = 1.2 + 1.5 + 0.5 + 1.2 = 4.4
ScoreBrand C = (0.2 x 2) + (0.5 x 7) + (0.1 x 4) + (0.2 x 7) = 0.4 + 3.5 + 0.4 + 1.4 = 5.7
Based on this analysis, the consumer would probably select Brand C because it has
the highest score.
Module 5 - slide 44
 The Buyer Decision Process
Purchase Decision

• The act by the consumer to buy the most

preferred brand
• The purchase decision can be affected by:
– Attitudes of others
– Unexpected situational factors

Module 5 - slide 45
 The Buyer Decision Process
Post-Purchase Decision
• The satisfaction or dissatisfaction that the
consumer feels about the purchase
• Relationship between:
– Consumer’s expectations
– Product’s perceived performance
• The larger the gap between expectation and
performance, the greater the consumer’s
dissatisfaction
• Cognitive dissonance is the discomfort caused
by a post-purchase conflict
Module 5 - slide 46
 The Buyer Decision Process
Post-Purchase Decision

Customer satisfaction is a key to building

profitable relationships with consumers - to
keeping and growing consumers and
reaping their customer lifetime value

Module 5 - slide 47
 The Buyer Decision Process for
New Products

Adoption process is the mental process an

individual goes through from first learning
about an innovation to final regular use.
• Stages in the process include:

Awareness Interest Evaluation Trial Adoption

Module 5 - slide 48
 Adopter categorisation on the
basis of relative time of adoption
of innovations

Source: Reprinted with permission of The Free Press, a Division of Simon & Schuster, Inc., by Everett
M. Rogers. Copyright © 1995 by Everett M. Rogers from Diffusion of Innovations, fourth edition.
Copyright © 1962, 1971, 1983 by The Free Press

Module 5 - slide 49
 The Buyer Decision Process for
New Products
Influence of Product Characteristics
on Rate of Adoption

Relative
Compatibility Complexity
advantage

Divisibility Communicability

Module 5 - slide 50
 Discussing the concepts
• Thinking about the purchase of a hi-fi system, indicate
the extent to which cultural, social, personal, and
psychological factors affect how a buyer evaluates hi-
fi products and chooses a brand.

• Describe and contrast any differences in the buying

behaviour of consumers for the following: a music
download, a notebook computer, a pair of trainers,
and a breakfast cereal.

Module 5 - slide 51
 Discussing the concepts
• How do consumers respond to various marketing
efforts the company might use? List the buyer
characteristics that affect buyer behavior and
discuss which one(s) influence you most when
making a new-car purchase decision.
• Name and describe the types of consumer buying
behavior. Which one would you most likely use if
deciding on a laptop computer purchase and which
for picking a restaurant for dinner?
• Explain the stages of the consumer buyer decision
process and describe how you or your family went
through this process to make a recent purchase.
Module 5 - slide 52
 Discussing the concepts
1. How might a marketer influence a consumer’s
information search through each of the four
information sources discussed in the chapter?
2. What is a “new” product and how do consumers
go about deciding whether to adopt a new
product?
3. What product characteristics influence an
innovation’s rate of adoption? Discuss the
characteristics of mobile navigation systems in
relation to the rate of adoption.

Module 5 - slide 53
 Exercise

• You are the Marketing Team of a company

that produces and sells frozen food.
• In order to develop the best marketing
strategy, you have to identify the cultural,
social, personal and psychological factors
that can influence the purchase of your
products.