CONSUMER BEHAVIOR N106 C.

Santos, MST, DBA

CONSUMER BEHAVIOR

Profitable marketing begins with the

discovery and understanding of consumer
needs and in satisfying these needs.
BUYING PROCESS
Social Influences
Marketing Influences
Situational Influences
Psychological Influences
Consumer Decision Making
SOCIAL INFLUENCES
Culture
Family, Religious institutions, Educational institutions
Social Class
Upper, Middle, working and lower class
Reference Groups and Families
Family, close friends, fraternal organizations and professional
organizations
MARKETING INFLUENCES

8 Ps
SITUATIONAL INFLUENCES
Physical Features
Social Features
Time
Task Features
Current Conditions
PSYCHOLOGICAL INFLUENCES
Product Knowledge
Product class, form, brand, model, ways to purchase
Product Involvement
High-involvement, extensive decision-making
CONSUMER DECISION-MAKING
Need Recognition
Alternative Search
Alternative Evaluation
Purchase Decision
Post-Purchase Evaluation
NEED RECOGNITION
Physiological needs
Safety needs
Belongingness and love needs
Esteem needs
Self-Actualization needs
ALTERNATIVE SEARCH
Internal sources
1. Exposure to Information
Group sources 2. Attention to the Information
Marketing sources 3. Understanding of the Information
4. Retention of the Information
Public sources
Experiential sources
ALTERNATIVE EVALUATION
Brands in a Product Class
Viable Alternatives
Set of Attributes
Relevance
Desired Attributes
Consumer Likes Best
 PURCHASE DECISION
Product Type
Brand
Model
Dealer selection
Method of payment
Delivery
Warranty, etc
 POST PURCHASE EVALUATION
Customer Satisfaction
Frequent Reinforcement, Promotional Efforts
Loyalty, Habitual Purchases
Cognitive dissonance
Disconfirmation Paradigm (expectation before and
after)
MARKET SEGMENTATION
MARKET SEGMENTATION
Based on the idea that a product can satisfy the needs
and wants of ALL customers
Variation in Consumer Wants, Needs and Preferences
Based on the idea that a product or service can serve
more than one customer
Profitable service to a group of customers - TARGET
MARKET
MARKET SEGMENTATION PROCESS MODEL

Delineate the Firms Current Situation

Determine Customers Needs and Wants
Divide market on relevant dimensions
Develop product positioning
Decide segmentation strategy
Design marketing mix strategy
 RELEVANT DIMENSIONS
Consumers are grouped according to
similarities – a homogeneous segment
of a heterogeneous total market
 RELEVANT DIMENSIONS
A priori vs Post-Hoc Segmentation
Relevant Segmentation Dimensions
Marketing Experience and Expertise
Previous Research
Purchase Trends
Managerial Judgment
 THE PESSIMISTS
Business Family Entertainment
Sidelined Citizens
Less Affluent
Not interested

More Affluent Hand Shakers Traditionalists Media junkies

THE OPTIMISTS
Business Family Entertainment
Gadget
Less Affluent Technodrivers Digital Hopefuls
Grabbers
New Age
More Affluent Fast Forwards Mouse Potatoes
Nurturers
BASES FOR SEGMENTATION

Benefit Segmentation
Psychographic Segmentation
Geo-demographic Segmentation
BENEFIT SEGMENTATION
Basic assumption: benefits are the basic reasons for the
market segments
Attempts to measure consumer value systems and consumer
perception of various brands
Example: according to Russel Haley on toothpaste
 Colorful package for the senses
 Fluoride for the worrier group
 Gleaming white for the social segments interest in white teeth
PSYCHOGRAPHIC SEGMENTATION
Focuses on the personal attributes of the consumer
Lifestyle – activities, interests, opinions
VALS and VALS2 Researches by SRI International
 National surveys on 2,500 consumers, 1st survey developed the
segmentation, 2nd survey, confirmed the segmentation
 Vertical dimension represents resources such as income, education,
health, intelligence, eagerness to buy, energy level, self-confidence
 Horizontal dimension on self orientations – principle-oriented, status-
oriented and action-oriented
GEO-DEMOGRAPHIC SEGMENTATION

Focus on geography – region, province,

municipality, city, etc
Focus on demographics – sex, gender,
income, etc
GEO-DEMOGRAPHIC SEGMENTATION
Actualizer – highest income, finer things
Fulfilled – high-resource group, principle-
oriented, mature
Believers – conservative, predictable, family-
centered, modest income
GEO-DEMOGRAPHIC SEGMENTATION
Achievers – status-oriented, successful, work-oriented,
respect authority
Strivers – values similar to achievers but fewer
resources, style is important as they try to emulate
people they admire
Experiencers – youngest of the segments with a
median age of 25, lots of energy, engage in physical
exercise and social activities
GEO-DEMOGRAPHIC SEGMENTATION

Makers – practical, self-sufficient, into

functional products
Strugglers – oldest of the segments with a
median age of 61, tend to be brand-loyal
PRODUCT POSITIONING
PRODUCT POSITIONING
Focus on superiority on an attribute
Less expensive (Hyundai)
safer (Volvo)
higher quality (Toyota)
 more prestigious (Lexus)
 PRODUCT POSITIONING
By use or application
Campbells soup
lunch item
Soup
Sauce
dip
PRODUCT POSITIONING

Product users
Johnsons baby shampoo
For babies
For adults
PRODUCT POSITIONING

Relative to a product class

Caress soap
positioned as a bath oil product
than a bath soap
PRODUCT POSITIONING

Against competitors
Coke and Pepsi
McDonalds and Jollibee
SEGMENTATION STRATEGY
NOT to enter the market
NOT to segment but be for mass market
Market to one segment
Market to more than one segment with a separate
marketing mix for each
SEGMENTATION STRATEGY
Basis of decision:
Measurable - Social class vs income
Meaningful - Long-term profit
Marketable – can be served efficiently
 Consumer Competitor Market

REQUIREMENTS
 Coffee Sales
4

3.5

COMPETITIVE
2.5

1.5 LANDSCAPE
1

0.5

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0 0.5 1 1.5 2 2.5 3 3.5
Iced Espresso Drip
KEY TO SUCCESS Better
Sales
THANK YOU
Email
dcinds.santos@gmail.com