Analyzing

Consumer Markets
Chapter Questions
 How do consumer characteristics influence
buying behavior?
 What major psychological processes
influence consumer responses to the
marketing program?
 How do consumers make purchasing
decisions?
 In what ways do consumers stray from a
deliberate rational decision process?
Consumer Behavior
What is Consumer Behavior?

Consumer behavior: the

study of the
processes involved
when individuals or
groups select,
purchase, use, or
dispose of products,
services to satisfy
needs and desires.

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What Influences
Consumer Behavior?

Cultural Factors

Social Factors

Personal Factors
 Cultural Factors
 Culture is the ideas, norms, and social
behavior of a particular people or society.
 It is fundamental determinant of a person’s
wants and behaviors acquired through
socialization processes with family and
other key institutions.
 Culture, subculture are particularly
important influences on consumer buying
behavior. Culture is the fundamental
determinant of a person’s wants and
behavior.
Subcultures
 Nationalities
 Religions
 Racial groups
 Geographic regions
 Social Class
 It is a division of a society based on social and
economic status.

 Each and every society across the globe has

form of social class. The social class is not just
determined by the income, but also other
factors such as the occupation, family
background, education and residence location.
Social class is important to predict the
consumer behavior.
Social Factors
Reference groups

Social roles

Statuses
Social Classes
Upper uppers

Lower uppers

Upper middles

Middle

Working

Upper lowers

Lower lowers
Reference Groups
 Membership groups
 Primary groups
 Secondary groups
Personal Factors
 Personality
Age
 Life cycle stage
Values
 Occupation
Lifestyle
 Wealth
Self-concept
Age and Stage of Lifecycle
Occupation and Economic
Circumstances
Personality
 Brand Personality
 Brand personality is a set of human
characteristics that are attributed to
a brand name. A brand personality is
something to which the consumer can relate;
an effective brand increases its brand equity
by having a consistent set of traits that a
specific consumer segment enjoys.
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)
 Cont..
 For instance, Levi’s on “ruggedness”; MTV on
“excitement”; CNN on “competence
Figure 6.1 Model of
Consumer Behavior
 Sensation?
 Perception?
 Perception is the process by which these
sensations are selected, organized, and
interpreted. The study of perception, then,
focuses on what we add to these raw
sensations to give them meaning
Sensory Systems
 Vision
 Scent
 Sound
 Touch
 Taste
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 Marketers communicate meaning on a visual
channel using a product’s color, size, and
styling.
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 Red can create feelings of excitement and

stimulate appetite,red backgrounds perform
better when consumers have to remember
details.
 Red is used to grab attention
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 Women are drawn toward brighter tones,

perhaps because females see color better
than males.
 Older people prefer white and bright tones,
perhaps because colors look duller to older
people
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 Like color, odor can also stir
emotions and memory.
 Scent Marketing is a form of
sensory marketing that we may
see in coffeeshops,chocolates
detergents, and more.
 Scent Marketing
 People will know that they are entering a
particular store as soon as they step in and
smell its beautiful aroma.
 McDonalds
 Starbucks
 Sound
 Background music helps create a personal
space for customers, giving them privacy as
they walk around the store, browse the
products and make comments to friends or
family
Touch
 Key Concepts in the Use of Touch
 Touch matters.
People are more sure about what they
perceive when they can touch it.
 Taste
 Taste is influenced by biological factors (taste
receptors) and cultural factors (the image and
values associated with food influence how we
experience taste).
 Perception
 Perception is a three-stage process that
translates raw stimuli into meaning
 Exposure
 When a stimulus comes within the range of
someone’s sensory receptors.
 Perception
 Subliminal Perception
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 Perception Cont..
 Stage 2
 Attention is the extent to which processing
activity is devoted to a particular stimulus

 Stage 3
 Interpretation
 Interpretation refers to the meaning we assign
to sensory stimuli.
 Motivation
 Motivation is the driving force within
individuals that impels them to action.
 Motivation is the driving force within
individuals that impels them to
action. Motivation is the activation or
energization of goal-oriented behavior.
Motivation may be intrinsic or extrinsic.
 Motivation

Maslow’s Herzberg’s
Freud’s Hierarchy Two-Factor
Theory of Needs Theory

Behavior Behavior Behavior is

is guided by is driven by guided by
subconscious lowest, motivating
motivations unmet need and hygiene
factors
 Freud’s Theory
 Freudian motivation theory assume that
unconscious psychological forces, such as
hidden desires and motives, shape an
individual's behavior, like their purchasing
patterns.
 Someone who buy a specific brand will react
not only to there stated capabilities but also to
other less conscious cues such as shape,
colour, material, brand name etc.
Maslow’s Hierarchy
 Maslow’s Need Hierarchy.
 The theory suggests that people will try to
satisfy their most important need first and then
try to satisfy the next most important. For
example, a starving man (need 1) will not take
an interest in the latest happenings in the art
world (need 5), nor in how he is viewed by
others (need 3 or 4), nor even in whether he is
breathing clean air (need 2), but when he has
enough food and water, the next most
important need will become salient.
Two-Factor Theory
 Motivating Factors
 The presence of motivators causes employees
to work harder. They are found within the
actual job itself.
 Hygiene Factors
 The absence of hygiene factors will cause
employees to work less hard
Learning
 Learning
 Learning is a relatively permanent change in
behavior that is caused by experience. A
consumer can learn from direct experience or
by observing events that affect others.
 We can learn without even trying— that is by
just observing. This casual, unintentional
acquisition of knowledge is called incidental
learning.
Intentional Learning
 Intentional learning is
generally defined
as learning that is
motivated by intentions
and is goal directed. ... In
other words: To be
engaged in intentional
learning the learner has
to invest some effort in
reflection and in
controlling and
maintaining learning strat
egies
Unintentional Learning
  Incidental learning refers
to any learning that is
unplanned or unintended
 Incidental
learning happens outside
formal teaching environm
ents. It's what happens
when we learn something
new from watching
television, reading a
book, talking with a
friend, playing a video
game 
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Types of Behavioral Learning
Theories
Classical conditioning: a
stimulus that extract a
response is paired with
another stimulus that
initially does not extract a
response on its own.
Instrumental conditioning
(also, operant conditioning):
the individual learns to
perform behaviors that
produce positive outcomes
and to avoid those that yield
negative outcomes.
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Instrumental Conditioning
 occurs as the individual learns to perform
behaviors that produce positive outcomes and
to avoid those that yield negative outcomes.
This approach is closely associated with B.F.
Skinner.
Emotions
 Emotions
 A brand or product may make a consumer feel
emotions like pride and confidence . An ad
may create feelings of amusement, disgust, or
wonder. Emotions are connected to the
choices we make as consumers.
Memory
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 Sensory Memory
 The information we receive from our senses.
 Storage is temporary
 Sensory memory is a very brief memory that allows
people to retain impressions of sensory information
after the original stimulus has ceased. It is often
thought of as the first stage of memory that involves
registering a tremendous amount of information about
the environment, but only for a very brief period.
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 Short Term Memory

 It also holds the information for short period of
time.
 It holds the information we are currently
processing.
 It can hold about seven items +/- 2.
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 Long Term Memory

 It allow us to retain information for a long
period of time.
 Process of rehearsal allows information to
move from short term memory into long term
memory.
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 The more effort it takes to process information

the more likely the information will transfer to
LTM.
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 Learning Objective 6
 Our brains process information about brands
to retain them in memory.
 Short Term Memory & Long Term Memory
 It also holds the information for short period of time. It holds the
information we are currently processing. It can hold about seven
items to nine items. Whereas long term memory allow us to retain
information for a long period of time. Process of rehearsal allows
information to move from short term memory into long term
memory. Important information is gradually transferred from
short-term memory into long-term memory. The amount of
information that we can hold in long-term memory is thought to be
infinite
Figure 6.4 Consumer Buying Process

Problem Recognition

Information Search

Evaluation of alternatives

Purchase Decision

Postpurchase Behavior
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 Occurs when consumer sees difference between
current state and ideal state
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 The process by which we survey the
environment for appropriate data to make a
reasonable decision
Sources of Information

Personal

Public
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EVALUATION OF ALTERNATIVES
Figure 6.5 Successive Sets in
Decision Making
 The Expectancy Value Model
 The expectancy value model of attitude
formation suggests that consumers evaluates
products and services by combining their
brand beliefs the positive and negatives
according to importance.
 Linda wants to buy a computer and she is
interested in 4 attributes.

 Memory capacity
 Graphics capability
 Size and weight
 Price

 Table 6.3 shows her beliefs about each brand

 From 0-10 where 10 represent the highest level on the attribute , Price
however is indexed in reversed manner
Table 6.3 A Consumer’s Brand
Beliefs about Laptop Computers
 If we knew the weights Linda attaches to each
attributes, we could more reliably predict her
choice.
 Suppose she assigned 40% of importance to
memory.
 30% to graphic capability
 20% to size and weight
 10% to price
 To find Linda’s perceived value for each laptop
we multiple her weights by her beliefs about
each computer.
 Stage 4: Product Choice
 Once we assemble the relative options in a
category ; eventually we have to choose one.
 Stage 5: Post purchase Evaluation
 Lastly is the post-purchase behavior. Some
businesses may believe that once their product is
bought, they’ve won! It’s over! But maintaining a good
relationship and open communication with consumers
even after they have invested is critical. Consumer
satisfaction is a strong influencer of repeat purchase
behaviour and loyalty, as well as referrals. Someone
who has had a good experience with a product will
likely suggest it to their friend. On the other hand,
someone who is disappointed with their experience
might warn their peers not to invest in the same
product
Three Types of
Decision-Making
Perceived Risk
 Functional
 Physical
 Financial
 Social/Psychological
 Time
Cont..
 Monetary risk: occurs when making a poor choice will have a
monetary consequence. Any purchase that costs a lot is subject to
this risk
 Functional risk: the product does not perform up to expectations.
 Physical risk: the product poses a threat to the physical well-being
or health of the user or others.
 Social risk: Social risk is the risk that the choice will reflect poorly
on the consumer and damage his or her self-esteem or confidence
the product results in embarrassment from others
 Psychological risk: the product affects the mental well-being of the
user
 Time risk: This kind of risk refers to the consumer’s worry about
time consumption when purchasing a new product. The consumer
here worries about how much of his time as well as the effort the
new product would consumer or the failure of the product results in
an opportunity cost of finding another satisfactory product
Figure 6.7 How Customers
Use or Dispose of Products
Low-Involvement Decision Making
 Heuristics
 Heuristics can be mental shortcuts that ease
the cognitive load of making a
decision. ... Examples that
employ heuristics include a rule of thumb or
an educated guess.
Biases in Decision making
Heuristics

Country of Origin

Familiar Brand Names

Higher Prices
 For Review
 How do consumer characteristics influence
buying behavior?
 What major psychological processes influence
consumer responses to the marketing
program?
 How do consumers make purchasing
decisions?
 In what ways do consumers stray from a
deliberate rational decision process?