Chapter Six

Analyzing the Consumer Markets

“Refer back to Definition of Marketing”

• How value can be created for

customers ?

• Understanding and analyzing the

consumer behavior
Consumer Buying Behavior

• Refers to the buying behavior of final consumers

• Individuals and households who buy goods and services for personal

consumption
• Consumer market: All the individuals and households that buy or
acquire goods and services for personal consumption.
Model of Consumer Behavior
• Is it important to study consumer buying decision criteria OR
Consumer buying behavior ?

• Most large companies research consumer buying decisions in great detail to

answer questions about what consumers buy and Why consumers buy !!!

• Marketers want to understand how the stimuli are changed into responses inside
the consumer’s black box.
Model of Consumer Behavior (Continue)
Model of Consumer Behavior (Continue)
Characteristics Affecting Consumer Behavior
Characteristics Affecting Consumer Behavior (Cont.)
https://www.youtube.com/watch?v=GOHvMz7dl2A

• Culture is the most basic cause of person’s want and behavior.

Growing up child learns basic values, perceptions, wants, and
behavior 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
Characteristics Affecting Consumer Behavior (Cont.)

• 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
• Upper upper class, lower upper class,
upper middle class, middle class,
working class, upper lower class, and
lower lower class.
Characteristics Affecting Consumer Behavior (Cont.)
Groups and Social Networks

Membership
Aspirational Groups Reference Groups
Groups

Groups that form

Groups with direct
Groups an a comparison or
influence and to
individual wishes reference in
which a person
to belong to forming attitudes
belongs
or behavior
Characteristics Affecting Consumer Behavior (Cont.)
Groups and Social Networks (Cont.)

• Word-of-mouth influence and Buzz marketing: Opinion leaders are

people within a reference group who exert social influence on others

• Online Social Networks are online communities where people socialize or

exchange information and develop opinions
Characteristics Affecting Consumer Behavior (Cont.)
Social Factors
• Family is the most important consumer-buying organization in society

• Shifts in family roles: https://www.youtube.com/watch?v=CL58hmG5oyI

• https://www.youtube.com/watch?v=QIZcgaDSyVo

• https://www.youtube.com/watch?v=jQH4zWAWwn4
Characteristics Affecting Consumer Behavior (Cont.)
Roles and Status
• Every individual has diverse roles and status
• People usually choose products appropriate to their roles and status

• Example: Consider the various roles a working mother plays

• brand manager
• wife and mother
• avid fan at a sports
• Make purchases according to each role and status she holds
• https://www.youtube.com/watch?v=Xzo5KcklF3U
 Characteristics Affecting Consumer Behavior (Cont.)
Personal Factors

Economic Personality and

Occupation Age and stage Lifestyle
situation self-concept.
• Business • Changing age • Premium • Unique
Executives brings change brands psychological
• Blue collar in purchases • Lower price characteristics
workers products

• Activities (work , Hobbies)

• Interests (Food, Fashion)
• Opinions (about themselves
and other)
https://www.youtube.com/watch?v=GI7rtNZ8278
Characteristics Affecting Consumer Behavior (Cont.)
Psychological Factors

Motivation A motive (or drive) is a need that is sufficiently pressing to direct the
person to seek satisfaction.
-Perception is the process by which people select, organize, and
interpret information to form a meaningful picture of the world
Perception
-https://www.youtube.com/watch?v=5Tb_pL47AVM

Learning Learning is the change in an individual’s behavior arising from

experience

Beliefs and Attitudes describe a person’s relatively consistent evaluations, feelings,

attitudes and tendencies toward an object or idea
Characteristics Affecting Consumer Behavior (Cont.)
Psychological Factors

https://www.youtube.com/watch?v=O-4ithG_07Q
Theory of Planned Behavior

Source: Ajzen (1980)

Oliver’s Four Stage Loyalty Model

Source: Oliver (1999)

Unified theory of acceptance and use of technology (UTAUT)
Types of Buying Decision Behavior

Complex buying Dissonance-reducing Habitual buying Variety-seeking buying

behavior buying behavior behavior behavior
• High involvement • High involvement • Low-consumer • Low consumer
• High risk • High risk involvement involvement
• Expensive products • Expensive products • Little significant brand • Significant perceived
• Significant difference • Less difference among difference brand differences
among brands brands • Low-cost • High brand switching
• Example: Car • Example: Purchasing • Frequently purchased due to boredom and
• extensive information carpet products trying new things
about products/ its • post purchase • Example: Salt • Example: Cookies
benefits dissonance (after-sale • price and sales • Encourage habitual
discomfort) promotions buying behavior: shelf
• after sale services to • Differentiators space, keeping
create difference in shelves fully stocked,
services and running frequent
reminder advertising.
Types of Buying Decision Behavior (cont)
The Buyer Decision Process
• Internal stimuli
Need recognition • External stimuli

• Personal sources
Information search • Commercial sources
• Experiential sources

• Preferences
Evaluation of alternatives • Attributes

• Purchase intention Vs purchase decision

Purchase decision • Attitudes of others The larger the gap
• Unexpected situational factors between expectation
and performance, the
• Satisfaction/Dissatisfaction
• Consumer’s expectations and Product’s perceived
greater the consumer’s
Post-purchase decision dissatisfaction
performance
• Cognitive dissonance
 The Buyer Decision Process for New
Products
• New product is a good, service, or idea that is perceived by some
potential customers as new

• 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

Awareness • Aware about product

Interest • Seek information

Evaluation • Consider for purchase

Trial • Tries product

Adoption • Make full/ regular use of product

Individual Differences in Innovation
Innovators
• Venturesome
• Take Risks

Early Adopter
• Opinion leaders
• Adopt new ideas early but carefully

Early Mainstream
• Adopt new ideas before the average person

Late Mainstream
• Adopt an innovation only after a majority of people have tried it

Lagging Adopter
• Tradition bound
Influence of Product Characteristics on Rate of
Adoption
• Apple IPhone
• Electric cars : 1% of US market
Relative Communicabilit
Compatibility Complexity
advantage y
• superior to • fits the values • Ease of use • Sharing user
existing and experience
products experiences of • Observing user
potential experience
consumers
• Additional Link: http://
www.ocdqblog.com/home/the-point-of-view-paradox.html