The Importance of Understanding

Consumer Behavior

Explain why
marketing managers
should understand
consumer behavior

1
 Learning Outcomes

1 Explain why marketing managers should understand

consumer behavior

2 Analyze the components of the consumer decision-

making process

3 Explain the consumer’s postpurchase evaluation

process

4
Identify the types of consumer buying decisions and
discuss the significance of consumer involvement
 Learning Outcomes

5 Identify and understand the cultural factors that

affect consumer buying decisions

6 Identify and understand the social factors that affect

consumer buying decisions

7 Identify and understand the individual factors that

affect consumer buying decisions

8 Identify and understand the psychological factors

that affect consumer buying decisions
 What will you buy / do if given P 1,000

1. Power Bank

2. Splurge on Food

3. Donate to any charitable institution

4. Treat my friends
 Buying Motives of Consumers

• Primary motive – consumer buys any one of any

class of goods regardless of type to satisfy a need.
• Selective motive – consumer buys a particular
commodity within a class or considers the type of
product.
• Emotional motive – consumer buys as a result of
being swayed by emotions (imitation, belongingness,
status, innovation, vanity)
• Rational motive – consumer buys using reason or
intelligence (economy, convenience, desire for
quality)
 Consumer
Decision-Making Process

Consumer
Decision-Making
Process A five-step process used
by consumers when
buying goods or services.
 Other Factors Influencing
Consumer Buying Decisions

Cultural Social
Factors Factors CONSUMER
DECISION- BUY /
MAKING DON’T BUY
PROCESS
Psycho-
Individual
logical
Factors
Factors
 Exhibit 6.1
Consumer Decision-Making Process

9
 Need Recognition

Need Result of an imbalance between

Recognition actual and desired states.

10
Need Recognition

Preferred
Present State
Status

Marketing helps consumers recognize

an imbalance between present status
and preferred state.
 Stimulus
Stimulus

Any unit of input affecting

one or more of the five senses:
•sight
•smell
•taste
•touch
•hearing
 Information Search

Internal Information Search

• Recall information in memory

External Information search

• Seek information in outside

environment
• Non-marketing controlled –
Reference groups
• Marketing controlled
Evaluation of Alternatives
and Purchase

Evoked Set Analyze product

attributes
Rank attributes by
importance

Use cutoff criteria

Purchase!
 Mental Accounting (manner which consumers
code, categorize, and evaluate financial outcomes of choice)

• Consumers tend to…

– Segregate gains
• Sum of parts maybe greater than the whole—multiple
benefits
– Integrate losses
• House buyers more inclined to view additional
expenditures favorably given the high price of the
house
– Integrate smaller losses with larger gains
• Withholding taxes from monthly paycheck than one
lump-sum payment
– Segregate small gains from large losses
4-15 • Rebate for purchasing an automobile
 Perceived Risk
• Functional—product does not perform
• Physical—product poses treat to physical
well-being or health of the user or others
• Financial—product is not worth the price
paid
• Social—product results in
embarrassment from others
• Psychological—product affects the
mental well-being of the user
• Time—failure of product results in an
opportunity cost of finding another
satisfactory product
 Purchase

To buy
or not to buy...

Determines which attributes

are most important
in influencing a
consumer’s choice

2
 Post-purchase Behavior

Explain the consumer’s

postpurchase
evaluation process

18
 Postpurchase Behavior
Consumers can reduce dissonance by:
❑ Seeking information that reinforces positive
ideas about the purchase
❑ Avoiding information that contradicts the
purchase decision
❑ Revoking the original decision by returning
the product

Marketing can minimize dissonance through effective

communication with purchasers.
 Post Purchase Behavior
• The actual experience of the consumer
will significantly impact whether he/she
will purchase the product again or not
depending he/she was satisfied.
• In case consumer is not satisfied –
he/she will go back to the information
search part to find out if there are other
products that can address his/her
needs.
 Other Influences on
Consumer Buying Decisions

Identify and understand

the other factors that
affect consumer
buying decisions

21
 Other Factors Influencing
Consumer Buying Decisions

Cultural Social
Factors Factors CONSUMER
DECISION- BUY /
MAKING DON’T BUY
PROCESS
Psycho-
Individual
logical
Factors
Factors
 Culture
• Culture is the sum of the “values, rituals,
symbols, beliefs, and thought processes
that are learned, shared by a group of
people, and transmitted from generation
to generation”
Components of Culture
Religion

Language

Myths

Customs

Rituals

Laws

Material artifacts
 Value

Value

Enduring belief that a specific

mode of conduct is
personally or socially
preferable to another mode
of conduct.
 Subculture

Subculture

A homogeneous group
of people who share
elements of the overall
culture as well as cultural
elements unique to their
own group.
 Social Class

Social Class

A group of people in a society

who are considered nearly equal
in status or community esteem,
who regularly socialize among
themselves both formally and
informally, and who share
behavioral norms.
Social Class Measurements
Occupation

Income

Education

Wealth

Other Variables
 Social Influences on
Consumer Buying Decisions

Identify and
understand the
social factors that
affect consumer
buying decisions

29
Social Influences
Reference
Groups

Opinion
Leaders

Family
Members
 Exhibit 6.5
Types of Reference Groups
Primary: small,
informal group
Direct Face-to-Face
membership
Secondary: large,
formal group

Reference Groups
Aspirational Group
that someone would
like to join
Indirect
Nonmembership
Nonaspirational Group
with which someone
wants to avoid being
identified
Opinion Leaders…
…are the first to try new products
and services out of pure curiosity.
…can be challenging to locate.

Marketers are increasingly using

blogs, social networking, and other
online media to determine and attract
opinion leaders.
 Family
Purchase Process Roles
in the Family
• Initiators

• Influencers

• Decision Makers

• Purchasers

• Consumers
 Individual Influences on
Consumer Buying Decisions

Identify and
understand the
individual factors that
affect consumer
buying decisions

34
Individual Influences

Personality
Age
Gender Self-Concept
Life Cycle
Lifestyle
 Age and Family Life Cycle
Stage
• Consumer tastes in food, clothing,
cars, furniture, and recreation are
often age related.

• Marketers define target markets

according to life cycle stages such as
“young singles” or “young married with
children.”
 Psychological Influences on
Consumer Buying Decisions

Identify and understand

the psychological
factors that affect
consumer buying
decisions

37
Psychological Influences

Perception

Motivation

Learning

Beliefs & Attitudes

Marketing Implications
of Perception
▪ Important attributes
▪ Price
▪ Brand names
▪ Quality and reliability
▪ Product or repositioning changes
▪ Foreign consumer perception
 Motivation

Freud’s Maslow’s Herzberg’s

Theory Hierarchy Two-Factor
of Needs Theory
Behavior
is guided by Behavior Behavior is
subconscious is driven by guided by
Motivations lowest, motivating
(id, ego, unmet need and hygiene
Superego) factors
 Motivation

Maslow’s
Hierarchy
of Needs
A method of classifying human
needs and motivations into five
categories in ascending order of
importance.
 Exhibit 6.6
Maslow’s Hierarchy
of Needs
 Types of Learning

An experience changes
Experiential
behavior

Not learned through direct

Conceptual
experience