Introduction to Marketing

#4 Understanding Consumer Behaviors

MKTG 2501:
Introduction to Marketing

Mengzhou (Austin) Zhuang

mzhuang@hku.hk

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Agenda
• The consumer decision process

• Key factors affecting consumer behavior

• Types of buying behavior

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Course Roadmap
Part I. Defining Marketing and the Marketing Process
• Introduction and the marketing process
• Company and marketing strategy
Part II. Understanding the Marketplace and Customer Value
• Assessing (global) marketing environment
• Understanding customer behaviors
• Managing marketing information
Part III. Customer-Driven Marketing Strategy
• Segmentation, targeting, and positioning
Part IV. Designing Integrated Marketing Programs
• Product, services, and branding
• New product development and PLC
• Pricing and marketing channel
• Integrated marketing communication 3
Consumer Buying Process

Postpurchase
Problem Alternative
Information Purchase behavior:
recognition: evaluation:
search: decision: Value in
Perceiving a Assessing
Seeking value Buying value consumption
Need value
or use

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 Step 1: Need Recognition

• Need recognition is the first stage of the buyer

decision process, in which the consumer
recognizes a problem or need triggered by:
– Internal stimuli: hunger, thirst, …
– External stimuli: discussion, observe, …

Needs Wants Demands

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Step 1: Need Recognition

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Step 2: Information Search
• Information search is the stage of buyer decision process in which
consumer is motivated to search for information.
‒ Constructing your consideration set
‒ Without a preferred or satisfying product in hand

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Different Levels of Information Search

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Different Levels of Information Search

• Consumers are unlikely to know all alternatives available

on the market; They only know a subset of them
(awareness set)

• Some alternatives can meet the initial buying criteria

(consideration set)

• Only a few will remain as strong candidates (choice set)

and the consumer makes a final choice from this set.
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Step 3: Evaluation of Alternatives

• Alternative evaluation is the stage of the buyer

decision process in which the consumer uses
information to evaluate alternative brands in
the choice set.

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Different Levels of Information Search

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Evaluation of Alternatives

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Step 4: Purchase Decisions
• Purchase decision is the buyer’s decision about which
brand to purchase.

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Step 4: Purchase Decisions
• Purchase decision is the buyer’s decision about which
brand to purchase.
Evaluation of
alternatives

Purchase
Intention

Purchase
Decision
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 Factors that Affect Purchase Decisions
• Two factors can intervene between the purchase intention and the
purchase decision.

Evaluation of
alternatives

Purchase
Intention

Attitudes of Unexpected
others situation

Purchase
Decision
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Factors that Affect Purchase Decisions
• Attitudes of others
➢ Others’ attitudes may directly influence your choice
❖ Depending on relationship type, confidence in one’s own
judgments, perceived similarity with others

➢ Motivations relevant to social interactions

❖ Impression management: Consumers tend to buy more
expensive and diverse products when being observed

❖ Embarrassment: The sales of sexual products decrease when it

is displayed in easy-to-observe areas

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Step 5: Post-purchase Evaluation

• Post-purchase behavior is the stage of the buyer decision

process in which consumers take further action after
purchase, based on their satisfaction or dissatisfaction.

• Why do we care?
– CLV
– Word-of-Mouth
– Brand reputation

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Stage 5: Post-purchase Evaluation

• Managing customer satisfaction (expectation)

➢ Performance < Expectation → Disappointment

➢ Performance = Expectation → Satisfaction

➢ Performance > Expectation → Delight

• Asymmetric influence
• |Disappointment| >> |Delight|
• Attribution theory
• Delight -> because I am good at evaluating products
• Disappointment -> the seller/brand is not trustworthy
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Stage 5: Post-purchase Evaluation
• Cognitive dissonance: discomfort caused by
post-purchase cognitive conflict
I like cigarettes. Smoking is unhealthy.

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 Stage 5: Post-purchase Evaluation

• A cognitive dissonance study

• One group: Get paid for doing a boring task
• The other group: Not get paid for doing a boring task

• Which group do you predict will report higher enjoyment

of the boring task?

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Stage 5: Post-purchase Evaluation

Enjoyment of the task

1.5
1
0.5
0
-0.5
-1
Before After
Unpaid Paid

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 Stage 5: Post-purchase Evaluation

• A cognitive dissonance study

• One group: Get paid for doing a boring task
• The other group: Not get paid for doing a boring task

• Which group do you predict will report higher enjoyment

of the boring task?

• What if they were forced to speak good things about

the task, and then report the enjoyment?

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Stage 5: Post-purchase Evaluation

Enjoyment of the task

1.5
1
0.5
0
-0.5
-1
Before After
Unpaid Paid

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What if the product is new?

Adoption process of new product

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The New Products Adoption Process

Hang

Punchboard
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The New Products Adoption Process

Whether to adopt the new product (give it a try)?

Awareness Interest Evaluation Trial Adoption

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Rate of Adoption

Consumption
pioneers

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Characteristics Affecting
Consumer Behavior

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Characteristics Affecting
Consumer Behavior

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Cultural Influences on the Consumer
Purchase Decision Process
Culture is the set of basic values, perceptions, wants, and behaviors
learned by a member of society from family and other important
institutions.
Subcultures are groups of people within a culture with shared
value systems based on common life experiences and situations.

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Cultural Influences on the Consumer
Purchase Decision Process

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Cultural Influences on the Consumer
Purchase Decision Process

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Cultural Factors: Social Class
• Social class: Relatively permanent and ordered divisions in
a society whose members share similar values, interests,
and behaviors
➢ Upper class
➢ Middle class
➢ Working class
➢ Lower class

• Determined by income, occupation,

education, and wealth

• Different social classes show distinct product and brand

preferences.
Social class matters!
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Cultural Factors: Social Class

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Characteristics Affecting
Consumer Behavior

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Social Influences on the Consumer
Purchase Decision Process
• Reference groups

➢ Membership group: a person actually belongs

➢ Aspiration group: a person wishes to be a member of or

wishes to be identified with

➢ Dissociative group: a person wishes to maintain a

distance due to differences in values or behaviors

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Who buy luxury brands?

Who will buy them?

Rich or poor?
Social class?

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Who buy luxury brands?
• Reference groups: Consider the customers of luxury brands

One type of customers: I am rich or of high social class. I want

to let others know about my identity
→ To signal membership group

Another type of customers: I am not rich, but I want others to

perceive me as rich (or not perceive me as a poor person)
→ To affiliate with the aspiration group
→ To distance from the dissociative group

• How should I adjust price to increase sales?

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Who buy luxury brands?

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Who buy luxury brands?

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Social Comparison
• What makes people happy?
• Look downward!

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Social Comparison
• Consequences of social comparison in marketing:
• Consumers’ satisfaction may depend on what others get
(e.g., “why do others get free upgrades?”)

• Body dissatisfaction: Frustration induced by comparison

with attractive mannequin

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Agenda
• The consumer decision process

• Key factors affecting consumer behavior

• Types of buying behavior

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Characteristics Affecting
Consumer Behavior

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Characteristics Affecting
Social

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Characteristics Affecting
Social

Guys, do you enjoy sending your

significant other flowers on special
“dates”?

Yes or No?

Vote at PollEv.com/3528mktg753

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Characteristics Affecting
Consumer Behavior

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Brand Personality
• Personality: The unique psychological characteristics that
distinguish a person or group.

• Attracting customers with similar personality 49

Characteristics Affecting
Consumer Behavior

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Psychological Influences on the Consumer
Purchase Decision Process
• Motivation
➢ Needs provide motives for consumer behavior
➢ Motivation research
➢ Maslow’s hierarchy of needs

• Perception
➢ Selective attention
➢ Selective distortion
➢ Selective retention

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 Motivation
• Motivation is a need that is sufficiently pressing to direct the
person to seek satisfaction.

• Sigmund Freud: Subconscious motives drives buying

behaviors

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Subconscious motives

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Subconscious motives

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 Motivation
• Motivation is a need that is sufficiently pressing to direct the
person to seek satisfaction.

• Sigmund Freud: Subconscious motives drives buying

behaviors

• Abraham Maslow: Motives are recalled in a hierarchical

structure

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Maslow’s Hierarchy of Needs
Priority

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Psychological Influences on the Consumer
Purchase Decision Process
• Motivation
➢ Needs provide motives for consumer behavior
➢ Motivation research
➢ Maslow’s hierarchy of needs

• Perception
➢ Selective distortion
➢ Selective retention
➢ Selective attention

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 Perception
• Perception is the process by which people select, organize,
and interpret information to form a meaningful picture of the
world

• Can be colored by our mind

➢ We see what we want to see

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 Perception
• Selective distortion is the tendency for people to interpret
information in a way that will support what they already
believe (e.g., zodiac)

Earth is flat! 59
 Perception
• Selective retention is the tendency to remember good points
made about a stimulus (e.g., a brand) they favor and forget
good points about competing stimuli

People react to “new” iPhone 6s

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 Perception
• Selective attention is the tendency for people to screen out
most of the information to which they are exposed
• People’s attention span is limited
• Attentional blindness

• Vision Examination

• Vision Examination II

• Vision Examination III

• Selective attention is why consumers make more impulse

purchases when they go to the grocery store on an empty
stomach than when they go after a meal.
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Types of Buying Behaviors

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Types of Buying Behavior

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 Types of Buying Behavior:
Complex Buying Behavior

• Should present detailed information about the products.

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 Types of Buying Behavior:
Dissonance-Reducing Buying Behavior

• Consumers may shop quickly based on budget constraint, but

experience post-purchase dissonance because the attractiveness of all
items is similar
• Should work on after-sale communications to make consumers feel good
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about their choices
 Types of Buying Behavior:
Variety-Seeking Buying Behavior

• Market leader: Should dominate shelf space, keep shelves fully stocked,
and run frequent reminders to encourage habitual buying behavior

• Challenger: Encourage variety seeking by offering special deals,

coupons, free samples, etc.
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 Types of Buying Behavior:
Habitual Buying Behavior

• Can do price drop and sales promotions

• Can add new product features to differentiate own products

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Session Review
• The buyer decision process

• Factors affecting consumer behavior

➢ Cultural
➢ Social
➢ Personal
➢ Psychological

• Four types of buying behavior

➢ Complex
➢ Dissonance-reducing
➢ Variety-seeking
➢ Habitual

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Next Week…

• Managing Marketing Information, Ch. 4

• Case analysis, published next week

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