MARKETING MANAGEMENT

Dr. Deepak R. Gupta

CHAPTER 3 : CONSUMER MARKETS AND BUYER BEHAVIOR

Objectives
3-1 Define the consumer market and construct a simple model of consumer
buyer behavior.
 BASIC CONCEPTS OF CUSTOMER AND CONSUMER

•A customer is someone who buys goods or services

while a consumer is the one who is end user of the
same.
 EXAMPLE

Here, the guy is the customer and the girl is the consumer of the product
(engagement ring).
• Example:
Two girls purchasing dog food at the pet store for their dog. The dog is the
user of the good hence he is the Consumer and the girls are the buyer of the
good hence the Customer.
 TYPES OF CONSUMERS

1. Personal Consumer

2. Organizational Consumer
WHY CONSUMER BEHAVIOUR?
Two jam products were there in the market
and the number of population was six.
Two people preferred red jam 4 preferred yellow jam.
 BUT NOW, COUNTLESS OPTIONS ARE AVAILABLE
TODAY IN THE SEGMENT

there fore, retaining consumers is turning out to be a

difficult and complex task for brands.
 CONSUMER MARKETS AND BUYER BEHAVIOR
• Consumers make many buying decisions every day, and the buying decision is the
focal point of the marketer’s effort.
• Most large companies research consumer buying decisions in great detail to answer
questions about what consumers buy, where they buy, how and how much they buy,
when they buy, and why they buy. Marketers can study actual consumer purchases to
find out what they buy, where, and how much.
• But learning about the whys behind consumer buying behavior is not so easy—the
answers are often locked deep within the consumer’s mind.
 TO CONCLUDE CONSUMER BEHAVIOR

as a process ---is a process of satisfying consumer needs and

answering the questions: why they buy, what they buy,
how when they buy, where they buy, how much and how often
they buy and how they feel after the consumption of
goods.
why
This is the key for providing of efficient marketing
strategy.
what

when

where

how much Feeling after the usage of

products!
MODEL OF CONSUMER BEHAVIOR
THE STIMULUS RESPONSE MODEL OF CONSUMER DECISION-
MAKING
CHAPTER 3 : CONSUMER MARKETS AND BUYER BEHAVIOR

Objectives
3-2 Name the four major factors that influence consumer buyer behavior.
 SUMMARY OF
TWO OBJECTIVES

CSPP
 CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR

• Consumer purchases are influenced

strongly by cultural, social, personal,
Cultural Social
and psychological characteristics.

Personal Psychological
CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
• Consumer purchases are influenced strongly by cultural, social,
personal, and psychological characteristics.
 CHARACTERISTICS AFFECTING CONSUMER
BEHAVIOR
Influence of Cultural Factors
a. Culture: Culture is the complex way of living of individuals. It represents the way consumers live
and grow up to acquire cultural values and norms.
b. Sub Culture: Sub-cultural factors help in providing an immediate identification and socialization to
the consumer.
c. Social Class: More immediate identification and homogeneity in consumption is seen in the social
classification system used to develop a hierarchical order in every society.
Influence of Social Factors
a. Reference Group: A person's reference group has a face-to-face, direct impact or indirect impact on
his attitude and behaviour
b. Family: Aristotle in 4th B.C. defined family, as the association established by nature for the supply
of man's everyday wants. It is defined as two or more people related by blood, marriage or adoption
that reside together.
c. Roles and Status: Consumers participate in different roles in different groups like family,
professional and recreational association and formal organizations. Their role is defined in terms of
role and status.
 EXAMPLE: MC DONALDS

• Mc Donald's is a great example of a brand that adapted to the

specifications of each culture and each market
• Mc Baguette in France
• Chicken Maharaja Mac, Masala Grill Chicken in India
• Mega Teriyaki Burger and Gurakoro in Japan
 CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR

Cultural Factors

• Culture is the set of basic values, perceptions, wants,

and behaviors learned by a member of society from
family and other important institutions.
• Growing up in a society, a child learns basic
values, perceptions, wants, and behaviors from
his or her family and other important
institutions.
• A child in the United States normally is
exposed to the following values: achievement
and success, freedom, individualism, hard
work, activity and involvement, efficiency and
practicality, material comfort, youthfulness,
and fitness and health.
Cultural Factors
Respecting parents, saying thank you after
receiving a gift, asking permission to smoke if
you’re in a formal group, saying “Bless you” when
some one sneezes, etc., are certain things most
cultures prescribe on its people.

It is customary in some European countries for

friends to kiss on the cheeks when greeting one
another.

In India, it’s strange if you do the same.

Thank You #NGASCEMBAJuly2021
 CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR

Cultural Factors

• Eg: Cadbury has understood how

to market their products to the
Indian Audiences as Indians
Distribute sweets at a number of
festivals. Cadbury Celebrations
helps the distribution of
Chocolates instead of sweets
using these portable packs
making it easy for distribution.
 CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR

Cultural Factors

• Eg: Cadbury has understood how

to market their products to the
Indian Audiences as Indians
Distribute sweets at a number of
festivals. Cadbury Celebrations
helps the distribution of
Chocolates instead of sweets
using these portable packs
making it easy for distribution.
 CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
Cultural Factors

• Subcultures are groups of people within a culture with shared

value systems based on common life experiences and situations.
• A subculture is a self-organized tradition of shared
interests, lifestyles, beliefs, customs, norms, style or tastes.
• A culture is a shared social tradition that may include
language, social norms, beliefs, art, literature, music,
traditions, pastimes, values, knowledge, recreation,
mythology, ritual and religion.
• Many subcultures make up important market segments,
and marketers often design products and marketing
programs tailored to their needs.

A subculture is a group of people within a

culture that differentiates itself from the larger
culture to which it belongs
 What are Subcultures?

The India culture can be divided further into various segments :-

Religion – Hindu, Muslim, Catholics, Parsi, etc.

Regional – Mumbai, Pune, Tamil Nadu, Assam, etc.

Climatic – Tropical, deserts, dry, rainy, etc.

Age – Infants, children, teens, young adults, adults, etc.

Sex – Men, Women, Gays, Trans-genders, etc.

Under some categories, yet further diversification is possible as each

subculture and its segments are alike yet different in many ways.
 FOOD

Mobile Phones
• The urban people prefer mobile
phones with numerous amount
of features like camera quality,
Bluetooth, Stylish designs,
Internet facilities, etc. however
in rural areas not much attention
is given towards these functions
as sturdy phones are used which
perform the basic functions
calls and messages.
 How does sub culture influence consumer behaviour?

In a lot of families, there are certain numbers like

4 or 13 which are considered unlucky.

Even after knowing that there is no strong or

rational reason for that belief, a member of the
family will still consciously or consciously ignore
those numbers when it comes to getting number
plates done, buying a house on that particular
floor or doing something important on that
particular date.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Cultural Factors
• Social classes are society’s relatively permanent and
ordered divisions whose members share similar
values, interests, and behaviors.
• Measured as a combination of occupation, income,
education, wealth, and other variables.
• Almost every society has some form of social
class structure.
• Social classes are society’s relatively
permanent and ordered divisions whose
members share similar values, interests, and
behaviors.
• Upper upper class, lower upper class, upper
middle class, middle class, working class,
upper lower class, and lower lower class.
CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
• Consumer purchases are influenced strongly by cultural, social,
personal, and psychological characteristics.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Social Factors
Groups and Social Networks

Membership Groups Aspirational Groups Reference Groups

• Groups with direct • Groups an individual • Groups that form a

influence and to which wishes to belong to comparison or
a person belongs reference in forming
attitudes or behavior
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Groups and Social Networks
• Online social networks
• Buzz marketing
• Social media sites
• Virtual worlds
• Word of mouth
• Opinion leaders
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Groups and Social Networks
• Online social networks Opinion leader
• Buzz marketing A person within a reference group who,
• Word of mouth because of special skills, knowledge,
• Opinion leaders personality, or other characteristics, exerts
social influence on others.

Buzz marketing involves enlisting or even creating Word-of-mouth: influence can have a
opinion leaders to serve as “brand ambassadors” who powerful impact on consumer buying
spread the word about a company’s products. behavior. The personal words and
recommendations of trusted friends, family,
Online social networks associates, and other consumers tend to be
Online social communities—blogs, online social media, more credible than those coming from
brand communities, and other online forums—where commercial sources, such as advertisements or
people socialize or exchange information and opinions. salespeople.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Groups and Social Networks
• Online social networks
• Buzz marketing
• Word of mouth
• Opinion leaders

Buzz marketing involves enlisting or even Opinion leader

creating opinion leaders to serve as “brand A person within a reference group who, because
ambassadors” who spread the word about a of special skills, knowledge, personality, or other
company’s products. characteristics, exerts social influence on others.

Flash Mob https://www.youtube.com/watch?v=VQ3d3KigPQM

 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Groups and Social Networks
• Online social networks
• Buzz marketing
• Word of mouth
• Opinion leaders / Influencer

Opinion leader
A person within a reference group who,
because of special skills, knowledge,
personality, or other characteristics, exerts
social influence on others.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Social Factors
• Family is the most important
consumer-buying organization in
society.
• Marketers are interested in the
roles and influence of the husband,
wife, and children on the purchase
of different products and services.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Social Factors
• Role and status can be defined by a person’s
position in a group.
• A person belongs to many groups—family,
clubs, organizations, online communities.
• The person’s position in each group can be
defined in terms of both role and status. A role
consists of the activities people are expected to
perform according to the people around them.
• Each role carries a status reflecting the general
esteem given to it by society.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Social Factors
• Role and status can be defined by a person’s
position in a group.
CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
• Consider the various roles a
working mother plays. In her
company, she may play the role of
a brand manager; in her family,
she plays the role of wife and
mother; at her favorite sporting
events, she plays the role of avid
fan.
• As a brand manager, she will buy
the kind of clothing that reflects
her role and status in her
company. At the game, she may
wear clothing supporting her
favorite team.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
• Consider the various roles a
working mother plays. In her
company, she may play the
role of a brand manager; in
her family, she plays the role
of wife and mother; at her
favorite sporting events, she
plays the role of avid fan.
• As a brand manager, she will
buy the kind of clothing that
reflects her role and status in
her company. At the game,
she may wear clothing
supporting her favorite team.
CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
• Consumer purchases are influenced strongly by cultural, social,
personal, and psychological characteristics.
 CHARACTERISTICS AFFECTING CONSUMER
BEHAVIOR

Influence of Personal Factors

a. Occupational Factors: These factors include both the type of job and nature of job.
b. Lifestyle: Lifestyle is the wholesome pattern of living of a person in the world as expressed in his
values and lifestyle patterns, in his activities, interests and opinions.
Personality and Self Concept
Jennifer Aaker in her seminal article on brand personality has identified five traits as components
of brand personality.
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)
ONLINE SHOPPING VERSUS RETAIL SHOPPING
HARLEY DAVIDSON
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Personal Factors Age and Life Stage
• People change the goods and services they buy over
• A buyer’s decisions also are influenced by
their lifetimes. Tastes in food, clothes, furniture, and
personal characteristics such as the
recreation are often age related.
buyer’s occupation, age and stage,
economic situation, lifestyle, and
• Buying is also shaped by the stage of the family life
personality and self-concept.
cycle—the stages through which families might pass as
they mature over time.
Occupation
• A person’s occupation affects the goods
• Life-stage changes usually result from demographics
and services bought.
and life-changing events—marriage, having children,
• Blue-collar workers tend to buy more
purchasing a home, divorce, children going to college,
rugged work clothes, whereas executives
changes in personal income, moving out of the house,
buy more business suits.
and retirement.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Personal Factors
• Occupation affects the goods and services bought by consumers.
• Economic situations include trends in:

Spending Personal income Savings Interest rates

 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Personal Factors
• Lifestyle is a person’s pattern of living as
expressed in his or her psychographics.

• It involves measuring consumers’ major AIO

dimensions—
• activities (work, hobbies, shopping, sports, social
events),
• interests (food, fashion, family, recreation), and
• opinions (about themselves, social issues, business,
products).
CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Personal Factors

• Personality refers to the

unique psychological
characteristics that distinguish
a person or group.

• Personality is usually described

in terms of traits such as self-
confidence, dominance,
sociability, autonomy,
defensiveness, adaptability,
and aggressiveness.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Brand Personality Traits

Jennifer Aaker in her seminal article on brand

Sincerity Excitement personality has identified five traits as components
of brand personality.
1.Sincerity (Down to earth, honest, wholesome
and cheerful)
2.Excitement (daring, spirited, imaginative and
Competence Sophistication up to date)
3.Competence (reliable, intelligent and
successful)
4.Sophistication (upper class and charming)
Ruggedness 5.Ruggedness (outdoorsy and tough)
 Jennifer Aaker in her seminal
article on brand personality has
identified five traits as components
of brand personality.
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)
CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
• Consumer purchases are influenced strongly by cultural, social,
personal, and psychological characteristics.
 FACTORS INFLUENCING CONSUMER BEHAVIOR

Psychological Factors
a. Motivation: Motivation leads people to move from a general
level of need awareness to pursuing a specific goal and to take
action towards achieving that specific goal.
Motivation
b. Perception: Perception is a process through which a
consumer's mind receives, organizes and interprets physical
stimuli. Perception
c. Learning: Learning is closely related to knowledge, skill, and
intention – three basic behavioural characteristics. Learning
d. Attitude: Consumers develop favorable or unfavorable
attitudes towards products or brands before they decide to
buy the product or brand in the market place. Beliefs and attitudes
e. Beliefs: Consumers also have descriptive thoughts about
products and brands in the market place.
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Psychological Factors
• A person has many needs at any given time.
• Some are biological, arising from states of tension such as hunger, thirst, or discomfort.
• Others are psychological, arising from the need for recognition, esteem, or belonging. A
need becomes a motive when it is aroused to a sufficient level of intensity.

• A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction
of the need.

• Motivation research refers to qualitative research designed to probe consumers’ hidden,

subconscious motivations.
 • A motive (or drive) is a need that is sufficiently pressing to
MOTIVE direct the person to seek satisfaction of the need.

You go to a restaurant and place your

order.

The table next to you has ordered a

sizzler and the aroma fills in your senses.

Even though when you placed an order

you didn’t order a sizzler,
now just by seeing it on the next table you
feel tempted to have it and end up
ordering a sizzler, even when you didn’t
intend to initially.
DEVELOPING MARKETING
INFORMATION
 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.
• A motivated person is ready to act. How the
person acts is influenced by his or her own
perception of the situation.
• All of us learn by the flow of information through
our five senses: sight, hearing, smell, touch, and
taste.
• However, each of us receives, organizes, and
interprets this sensory information in an individual
way.
 Psychological Factors
CHARACTERISTICS AFFECTING
• Selective attention is the tendency for CONSUMER BEHAVIOR
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 Perceptual Processes

Selective Selective Selective

attention distortion retention
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Psychological Factors

• When people act, they learn. Learning describes changes in an

individual’s behavior arising from experience.
• Learning is the change in an individual’s behavior arising from experience
and occurs through the interplay of:

Drives Stimuli Cues

Responses Reinforcement
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Psychological Factors

A drive is a strong internal stimulus that calls for action. A drive becomes a motive when it is
directed toward a particular stimulus object.

Cues are minor stimuli that determine when, These are all cues that might influence a
where, and how the person responds. consumer’s response to his or her interest in
buying the product.

Drives Stimuli Cues

Responses Reinforcement
 CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Psychological Factors
If some of the beliefs are wrong and
A belief is a descriptive thought that a prevent purchase, the marketer will want to
person has about something based on:
launch a campaign to correct them.
– knowledge
– opinion https://www.youtube.com/watch?v=IdFiS
– Faith 64Cre4

camera buyer may hold attitudes such as

An attitude describes a person’s
relatively consistent evaluations,
feelings, and tendencies toward an
object or idea.
“Buy the best,” “The Japanese make the
best camera products in the world,” and
“Creativity and self-expression are among
the most important things in life.”
ALCOHOL OR JUICE OR SOFT DRINK
CHAPTER 3 : CONSUMER MARKETS AND BUYER BEHAVIOR

Objectives
3-3 List and define the major types of buying decision behavior and the stages
in the buyer decision process.
TYPES OF BUYING DECISION
BEHAVIOR

Complex buying
behavior

Dissonance-reducing
buying behavior

Habitual buying
behavior

Variety-seeking
buying behavior
 TYPES OF BUYING DECISION BEHAVIOR

• Consumers undertake complex buying behavior when

they are highly involved in a purchase and perceive
significant differences among brands. Consumers
may be highly involved when the product is
expensive, risky, purchased infrequently, and highly
selfexpressive.
• Typically, the consumer has much to learn about the
product category.

• For example, someone buying a new car might not

know what models, attributes, and accessories to
consider or what prices to expect.
 TYPES OF BUYING DECISION BEHAVIOR

• Dissonance-reducing buying behavior occurs when

consumers are highly involved with an expensive,
infrequent, or risky purchase but see little difference among
brands.

• For example, consumers buying carpeting may face a high-

involvement decision because carpeting is expensive and
self-expressive. Yet buyers may consider most carpet
brands in a given price range to be the same. In this case,
because perceived brand differences are not large, buyers
may shop around to learn what is available but buy
relatively quickly. They may respond primarily to a good
price or purchase convenience.
 TYPES OF BUYING DECISION BEHAVIOR

• Habitual buying behavior occurs under conditions of

low-consumer involvement and little significant brand
difference.

• For example, take table salt. Consumers have little

involvement in this product category—they simply go
to the store and reach for a brand. If they keep
reaching for the same brand, it is out of habit rather
than strong brand loyalty.

• Consumers appear to have low involvement with most

low-cost, frequently purchased products.
 TYPES OF BUYING DECISION BEHAVIOR

• Consumers undertake variety-seeking buying behavior

in situations characterized by low consumer involvement
but significant perceived brand differences. In such
cases, consumers often do a lot of brand switching.

• For example, when buying cookies, a consumer may

hold some beliefs, choose a cookie brand without much
evaluation, and then evaluate that brand during
consumption. But the next time, the consumer might pick
another brand out of boredom or simply to try something
different.

• Brand switching occurs for the sake of variety rather than

because of dissatisfaction.
THE BUYER DECISION PROCESS
 THE BUYER DECISION PROCESS
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
– External stimuli

• The need can be triggered by internal stimuli when one of the person’s
normal needs—for example, hunger or thirst—rises to a level high
enough to become a drive.

• A need can also be triggered by external stimuli. For example, an

advertisement or a discussion with a friend might get you thinking
about buying a new car.
 THE BUYER DECISION PROCESS
Information Search

Information search is the stage of the buyer decision process in which the consumer is
motivated to search for more information.

Sources of information:
– Personal sources (family, friends, neighbors, acquaintances)
– Commercial sources (advertising, salespeople, dealer and manufacturer web and mobile
sites, packaging, displays)
– Public sources (mass media, consumer rating organizations, social media, online searches
and peer reviews)
– Experiential sources (examining and using the product)
 THE BUYER DECISION PROCESS

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.
 THE BUYER DECISION PROCESS
SETS IN DECISION MAKING
Alternative evaluation is the stage of the buyer decision process in which
the consumer uses information to evaluate alternative brands in the choice
set.
 THE BUYER DECISION PROCESS
Purchase Decision

Purchase decision is the buyer’s decision about which brand to

purchase.
The purchase intention may not be the purchase decision due to:
– Attitudes of others
– Unexpected situational factors

• The first factor is the attitudes of others. If someone important to you thinks that
you should buy the lowest-priced car, then the chances of you buying a more
expensive car are reduced.
• The second factor is unexpected situational factors. The consumer may form a
purchase intention based on factors such as expected income, expected price,
and expected product benefits.
 THE BUYER DECISION PROCESS

Postpurchase Behavior

Postpurchase behavior is the stage of the buyer decision

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

Postpurchase Behavior

Cognitive dissonance is buyer discomfort

caused by postpurchase conflict.
CHAPTER 3 : CONSUMER MARKETS AND BUYER BEHAVIOR

Objectives
3-4 Describe the adoption and diffusion process for new products.
 THE BUYER DECISION PROCESS FOR
NEW PRODUCTS

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

Awareness Interest Evaluation Trial Adoption

Awareness. The consumer becomes aware of the new product but lacks information about it.
Interest. The consumer seeks information about the new product.
Evaluation. The consumer considers whether trying the new product makes sense.
Trial. The consumer tries the new product on a small scale to improve his or her estimate
of its value.
Adoption. The consumer decides to make full and regular use of the new product.
 ANALYZING AND USING MARKETING INFORMATION

Individual Differences in Innovativeness

• Innovators
• Early Adopters
• Early Mainstream
• Late Mainstream
• Lagging Adopters
 ANALYZING AND USING MARKETING INFORMATION
Influence of Product Characteristics on Rate of Adoption

• Relative advantage is the degree to which the

Relative
advantage
Compatibility innovation appears superior to existing products.
• Compatibility is the degree to which the innovation
fits the values and experiences of potential
consumers.
Complexity Divisibility • Complexity is the degree to which the innovation is
difficult to understand or use.
• Divisibility is the degree to which the innovation
may be tried on a limited basis.
• Communicability is the degree to which the results
Communicability of using the innovation can be observed or described
to others.