CHAPTER 3

CUSTOMER BEHAVIOR
  Why are customers important to a business?
CONTENTS  Model of Consumer Behavior
 Characteristics affecting consumer behavior
 The Buyer Decision Process
 Business Markets and Buying Behavior
Explain some key terms
What are the difference between CUSTOMER, CONSUMER and BUSINESS ?

 A CUSTOMER is a person who has purchased something or engaged in some form

of exchange transaction.

 A CONSUMER is a person who consumes or uses something.

Example: a child could be a consumer of breakfast cereal, while the child's
mother would be the customer.

 A BUSINESS is an organization (such as a store, company, or factory) that

makes, buys, or sells goods or provides services in exchange for money
 1
Why are customers
important to a business?
1. Why are customers important to a business?
To get a better sense of the importance of understanding
consumer behavior, we begin by first looking at Apple.

What makes Apple users so fanatically loyal? Partly, it’s

the way the equipment works. But at the core, the brand
itself is a part of their own self-expression and lifestyle.

It’s a part of what the loyal Apple customer is.

1. Why are customers important to a business?

“Companies don’t give job security.

Only satisfied customers do.”
1. Why are customers important to a business?

OR
market share customers’ satisfaction
1. Why are customers important to a business?
In fact, most companies pay more attention to
their market share than to their customers’ satisfaction.

This is a mistake!!!

Market share is a backwardlooking metric; customer satisfaction is

a forward-looking metric.

If customer satisfaction starts slipping,

then market share erosion will follow very soon.
1. Why are customers important to a business?
Companies need to monitor and improve the level of customer satisfaction.
The higher the customer satisfaction, the higher the retention.
Here are four facts:
Acquiring new customers can cost 5 to 10 times more than the costs involved in satisfying and
retaining current customers.
The average company loses between 10 and 30 percent of its customers each year.

A 5 percent reduction in the customer defection rate can increase profits by 25 to 85 percent,
depending on the industry.

The customer profit rate tends to increase over the life of the retained customer.
Explain some key terms
 CONSUMER MARKETS BUSINESS MARKETS
 CONSUMER (B2C – BUSINESS TO  BUSINESS (B2B – BUSINESS TO BUSINESS)
CONSUMER) The products and services of the business are
The final customer is the consumer with a B2C marketed to other businesses.
business. Examples: include advertising agencies, web
Examples: Housecleaning services, restaurants hosting and graphic design services, office
and retail stores. Websites that offer consumer furniture manufacturers and landlords who
products are B2C. lease office and retail space.
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 2
Model of Consumer Behavior
2. Model of Consumer Behavior

Study customer behavior to answer:

How do consumers respond to various

marketing efforts the company might use?
2. Model of Consumer Behavior

MODEL OF CONSUMER BEHAVIOR

 3
Characteristics affecting
consumer behavior
3. Characteristics affecting consumer behavior
3. Characteristics affecting consumer behavior
 3. Characteristics affecting consumer behavior
Cultural Factors

CULTURE SUBCULTURE SOCIAL CLASS

The set of basic values, perceptions, A group of people with shared value Relatively permanent and ordered
wants, and behaviors learned by a systems based on common life divisions in a society whose members
member of society from family and other experiences and situations. share similar values, interests, and
important institutions. behaviors.
 3. Characteristics affecting consumer behavior
Cultural Factors

CULTURE SUBCULTURE SOCIAL CLASS

Example: The shift toward informality has Example: four such important Example: The Major American
resulted in more demand for casual subculture groups include Hispanic Social Classes: Upper Class, Middle
clothing and simpler home furnishings. American, African American, Asian Class, Working Class, Lower Class.
American, and mature consumers.
3. Characteristics affecting consumer behavior
 3. Characteristics affecting consumer behavior
REFERENCE GROUPS
People often are influenced by
reference groups to which they do not
belong.
Social Factors
FAMILY ROLES AND STATUS
A role consists of the activities people
The family is the most important
are expected to perform according to
consumer buying organization in
the people around them. Each role
society. Family members can strongly
carries a status reflecting the general
influence buyer behavior.
esteem given to it by society.
 3. Characteristics affecting consumer behavior
Social Factors
 Informal reference groups
Example:
 Families
 A group of local mothers
 Peer groups
REFERENCE GROUPS  Formal reference groups
People often are influenced by Example:
reference groups to which they do not • Labor unions
belong. • Mensa, a society for people with high IQ
• Mothers Against Drunk Driving (MADD)
 3. Characteristics affecting consumer behavior
FAMILY
The family is the most important
consumer buying organization in
society. Family members can strongly
influence buyer behavior.
Social Factors
For example, today women account
for 50 percent of all technology
purchases. So consumer electronics
companies are increasingly
designing products that are easier to
use and more appealing to female
buyers.
 3. Characteristics affecting consumer behavior
Social Factors

Consider the various roles a working mother plays:

 In her company, she plays the role of a brand manager.

 In her family, she plays the role of wife and mother.
ROLES AND STATUS  At her favorite sporting events, she plays the role of avid fan.
A role consists of the activities people
are expected to perform according to As a brand manager, she will buy the kind of clothing that reflects her role and
the people around them. Each role
status in her company.
carries a status reflecting the general
esteem given to it by society.
3. Characteristics affecting consumer behavior
 Ques: Các câu sau sau cho thấy yếu tố nào trong hai yếu tố culture và social tác động đến hành vi
khách hàng
VD: 1. Subculture

1. Businessmen meet for lunch to discuss business in a luxury restaurant.

2. I bought a new laptop and my family suggested different products
3. working in a group, you need to listen to each other's opinions to make a decision
4.Singer Jack represents Vivo phone brand and Jack's fans have purchased to enhance
the value of the phone brand
5. I would like to buy an iphone 13 but my father and mother have different
6.I'm a high school student so I have to wear a school uniform
7. Muslim Arabs do not eat pork because pigs are unclean animals
8. Foreigners come to India to travel but decide not to eat like their culture
9. Rich people often eat at luxurious restaurants and like to wear clothes in big domestic
and foreign brands.
10. Koreans have a culture of eating seaweed soup on their birthday
11. American family come to Vietnam to travel but still adamantly do not eat dog meat
 3. Characteristics affecting consumer behavior
Personal Factors

Age & Personality &

Occupation Economic situation Lifestyle
life-cycle stage self-concept
 3. Characteristics affecting consumer behavior
Personal Factors

“Consumers experience many life-stage changes during their lifetimes. As their life
stages change, so do their behaviors and purchasing preferences. Marketers who are
armed with the data to understand the timing and makeup of life-stage changes among
their customers will have a distinct advantage over their competitors.”
(Acxiom)

Age &
life-cycle stage *Acxiom Corporation is a marketing technology and services company with offices in the United States,
Europe, Asia, and South America.
3. Characteristics affecting consumer behavior
Personal Factors

A person’s occupation affects the goods and services bought. Blue-collar

workers tend to buy more rugged work clothes, whereas executives buy more
business suits.

Occupation
 3. Characteristics affecting consumer behavior
Personal Factors

A person’s economic situation will affect his or her store and product
choices. Marketers watch trends in personal income, savings, and interest
rates.

Economic situation
3. Characteristics affecting consumer behavior
Personal Factors
Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It profiles a
person’s whole pattern of acting and interacting in the world.

It involves measuring consumers’ major AIO dimensions:

▪ Activities: work, hobbies, shopping, sports, social events.
▪ Interests: food, fashion, family, recreation.
▪ Opinions: about themselves, social issues, business, products.

Lifestyle Consumers don’t just buy products; they buy the values and
lifestyles those products represent.
3. Characteristics affecting consumer behavior
Personal Factors
 Personality:
Refers to the unique psychological characteristics that distinguish a person or
group.
 Self-concept:
The idea is that people’s possessions contribute to and reflect their identities—
Personality &
that is, “we are what we have.”
self-concept
3. Characteristics affecting consumer behavior
3. Characteristics affecting consumer behavior
Psychological Factors

motivation perception learning beliefs and attitudes

 3. Characteristics affecting consumer behavior
Psychological Factors

motivation perception learning beliefs and attitudes

A need that is sufficiently
pressing to direct the person
to seek satisfaction of the
need.
The process by which people
select, organize, and interpret
information to form a
meaningful picture of the world.
Belief
Changes in an A descriptive thought that a person holds
individual’s behavior about something.
arising from experience. Attitude
A person’s consistently favorable or
unfavorable evaluations, feelings, and
tendencies toward an object or idea.
3. Characteristics affecting consumer behavior
Psychological Factors

Maslow’s
Hierarchy of Needs

motivation
 4
The Buyer Decision Process
4. The Buyer Decision Process

BEFORE PURCHASE DURING AFTER

The buying process starts long before the actual purchase and continues long after. In fact, it might
result in a decision not to buy. Therefore, marketers must focus on the entire buying process, not just
the purchase decision.
 4. The Buyer Decision Process

I need a book! Use Google Search Evaluation of Make a choice Feel Satisfied

Alternatives
 4. The Buyer Decision Process

Occurs when the buyer recognizes a problem or need triggered off

by:
 Internal stimuli
 External stimuli

NEED RECOGNITION
 4. The Buyer Decision Process

Maslow’s
Hierarchy of Needs

NEED RECOGNITION
 4. The Buyer Decision Process

Several sources of information:

 Personal sources: family, friends, neighbors, acquaintances.
 Commercial sources: advertising, salespeople, dealer Web sites,
packaging, displays.
 Public sources: mass media, consumer rating organizations, Internet
searches.
 Experiential sources: handling, examining, using the product.
INFORMATION SEARCH
 4. The Buyer Decision Process

Commercial sources: the consumer receives the most

information about a product

Personal sources: the most effective sources

INFORMATION SEARCH
 4. The Buyer Decision Process

Personal sources: the most effective sources

As one marketer states, “It’s rare that an advertising

campaign can be as effective as a neighbor leaning over
the fence and saying, ‘This is a wonderful product.’”
INFORMATION SEARCH
 4. The Buyer Decision Process

How the consumer processes information to arrive at

brand choices?

EVALUATION OF ALTERNATIVES
 4. The Buyer Decision Process

 The act by the consumer to buy the most preferred brand.

 The purchase decision can be affected by:
 Attitudes of others
 Unexpected situational factors
PURCHASE DECISION
 4. The Buyer Decision Process

 The satisfaction or dissatisfaction that the consumer feels about the purchase.
 Relationship between:
 Consumer’s expectations
 Product’s perceived performance
 The larger the gap between expectation and performance, the greater the
consumer’s dissatisfaction.
 Cognitive dissonance is the discomfort caused by a post-purchase conflict.

POSTPURCHASE BEHAVIOR
 5
Business Markets
and Business Buying Behavior
 5. Business Markets
and Business Buying Behavior

Characteristics of
Business Markets
5. Business Markets
and Business Buying Behavior

A Model of Business Buyer Behavior

 5. Business Markets
and Business Buying Behavior

Participants in the Business Buying Process

Buying center: All the individuals and units that play a role in the purchase decision-making
process.
The buying center includes all members of the organization who play any of five roles in the
purchase decision process:
 Users
 Influencers
 Buyers
 Deciders
 Gatekeepers
 Participants in the Business
are those that will use the product
or service
Buying Process
Users

help define
specifications and
provide information
Gatekeepers Influencers
control the flow for evaluating
of information Buying alternatives
center

have formal or informal have formal authority to select

power to select and Deciders Buyers the supplier and arrange
approve final suppliers terms of purchase
5. Business Markets
and Business Buying Behavior

Major Influences on Business Buyer Behavior

5. Business Markets
and Business Buying Behavior

Stages of the Business Buying Process

What do you need to
remember?
Model of Consumer Behavior
Characteristics affecting consumer behavior
The Buyer Decision Process

BEFORE PURCHASE DURING AFTER

The buying process starts long before the actual purchase and continues long after. In fact, it might
result in a decision not to buy. Therefore, marketers must focus on the entire buying process, not just
the purchase decision.