Analyzing Consumer Markets

Chapter 6
 Chapter 6 Outline
• Factors that Influence Consumer Buying Behavior
– Cultural Factors
– Social Factors
– Personal Factors
• Key Psychological Processes that influence consumer
responses
– Motivation
– Perception
– Learning
– Emotions
– Memory
• The Buying Decision Process: The Five-Stage Model
 What Influences Consumer Behavior

• Consumer behavior is the study of how

individuals, groups, and organizations select,
buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and
wants.
 Factors that Influence Buying Behavior

• A consumer’s buying behavior is influenced

by the following factors:
– Cultural
– Social
– Personal
• Cultural factors have broadest and deepest
influence on consumer buying behavior.
 Factors that Influence Buying Behavior
Cultural Factors
• Culture is the fundamental determinant of a
person’s wants and behavior which are acquired
through socialization processes with family and
other key institutions.
• Each culture consists of subcultures that
provide more specific identification and
socialization for their members.
• Subcultures include nationalities, religions,
racial groups, and geographic regions.
 Factors that Influence Buying Behavior
Cultural Factors
• All human societies have some form of social
classes which are relatively homogeneous and
enduring divisions in a society, hierarchically
ordered and with members who share similar
values, interest, and behavior.
• Social class members show very similar
product and brand preferences in many areas
such as clothing, home furnishing, leisure
activities and automobiles.
 Factors that Influence Buying Behavior
Social Factors
Reference groups are all groups that have a direct (face-to-
face) or indirect influence on a person’s attitude or behavior.
Groups that have a direct influence on a person are called
membership groups.
Types of Membership groups:
• Primary groups are groups that a person interacts with
regularly and informally, such as family, friends, neighbors,
or coworkers.
• Secondary groups are groups that a person has less
continuous and more formal interaction with. Examples:
Religious and professional groups.
 Factors that Influence Buying Behavior
Social Factors
• Reference groups influence members in at least three
ways.
– They expose an individual to new behaviors and lifestyles
– They influence attitudes and self-concept
– They create pressures for conformity that may affect
product and brand choices.
• People are also influenced by groups to which they do
not belong.
– Aspirational groups are groups that a person hopes to join.
– Dissociative groups are groups whose values or behavior a
person rejects.
 Factors that Influence Buying Behavior
Social Factors
• An opinion leader is a person who offers
informal advice or information about a specific
product or a product category, such as which of
several brands is best or how a particular product
may be used.
• Marketers try to reach opinion leaders by
identifying their demographic and psychographic
characteristics, identifying the media they read,
and directing messages to them.
 Factors that Influence Buying Behavior
Social Factors
• Cliques A narrow exclusive circle or group of persons.
especially one held together by common interests, views, or
purposes. e.g. high school cliques
• Communication researchers see society as consisting of
cliques, small groups whose members interact frequently.
• Clique members are similar, and their closeness facilitates
effective communication but also insulates the clique from
new ideas. The challenge is to create more openness so
cliques exchange information with others in society. This
openness is helped along by people who function as liaisons
and connect two or more cliques without belonging to
either and by bridges, people who belong to one clique and
are linked to a person in another
 Factors that Influence Buying Behavior
Social Factors
• Family is the most important consumer
buying organization in society and family
members constitute the most influential
primary reference groups.
• Two families in a buyer’s life:
– Family of orientation- is made up of parents and
siblings.
– Family of procreation- A person’s wife and
children.
 Factors that Influence Buying Behavior
Social Factors
• Family is the most important consumer
buying organization in society and family
members constitute the most influential
primary reference groups.
• Two families in a buyer’s life:
– Family of orientation- is made up of parents and
siblings.
– Family of procreation- A person’s wife and
children.
 Factors that Influence Buying Behavior
Social Factors
• Roles and status We each participate in many groups
—family, clubs, organizations—and these are often
an important source of information and help to
define norms for behavior. We can define a person’s
position in each group in terms of role and status.
• A role consists of the activities a person is expected
to perform. Each role in turn connotes a status.
– People choose products that reflect and communicate
their role and their actual or desired status in society.
Marketers must be aware of the status-symbol potential
of products and brands.
 Factors that Influence Buying Behavior
Personal Factors
Age and stage in the life cycle-Affects consumers’
taste in food, clothes, and recreation.
Occupation and Economic circumstances-
Influences consumption patterns.
• Marketers try to identify the occupational
groups that have above-interest in their
products and services and customize products
and services from them.
 Factors that Influence Buying Behavior
Personal Factors
Personality which is a set of distinguishing human psychological
traits that lead to relatively consistent and enduring responses
to environmental stimuli (including buying behavior).
• Brand personality are the specific mix of human traits that
consumer attribute to a particular brand.
– Sincerity (down to earth, honest, wholesome, and cheerful)
– Excitement (daring, spirited, imaginative, and up to date)
– Competence (reliable, intelligent, and successful)
– Sophistication (upper-class and charming)
– Ruggedness (outdoorsy and tough)
• Consumers often choose brands that match their own
personality.
 Factors that Influence Buying Behavior
Personal Factors
Lifestyle is a person’s pattern of living in the world as
expressed in activities, interests, and opinions.
• Marketers search for relationships between their
products and lifestyle groups.
• Lifestyles are shaped partly by whether consumers
are money-constrained or time constrained.
• Consumer decisions are also influenced by core
values, the belief system that underlie attitudes
and behavior.
 Key Psychological Processes that influence
consumer responses
Motivation
Motivation-The process that initiates, guides
and maintains goal-oriented behaviors.
• Motivation has both direction- people select
one goal over another- and intensity-people
pursue the goal with more or less vigor.
 Motivation
Freud’s theory of human motivation
• This theory posits that unconscious psychological
forces, such as hidden desires and motives, shape an
individual's behavior, like their purchasing patterns.
• Freud's theory has been applied to the relationship
between the qualities of a product, such as touch,
taste, or smell, and the memories that it may evoke in
an individual. Recognizing how the elements of a
product trigger an emotional response from the
consumer can help a marketer understand how to
lead a consumer toward making a purchase.
 Motivation
Maslow’s Hierarchy of Needs
• Abraham Maslow
sought to explain why
people are driven by
particular needs at
particular times.
• His answer is that
human needs are
arranged in a hierarchy
from most to least
pressing needs.
 Motivation
Maslow’s Hierarchy of Needs
• Self-actualization needs-Self-development and
realization.
• Esteem needs- Self-esteem, recognition, and
status.
• Social needs- Sense of belonging
• Safety needs- Security and protection.
• Physiological needs- Hunger and thirst.
A person tries to satisfy the most important need
first.
 Motivation
Herzberg’s Two-Factor Theory
• Frederick Herzberg developed a two-factor theory that
distinguishes
– dissatisfiers (factors that cause dissatisfaction) from
– satisfiers (factors that cause satisfaction)
• The absence of dissatisfiers is not enough to motivate a
purchase; satisfiers must be present.
– For example, a computer that does not come with a warranty
is a dissatisfier. Yet the presence of a product warranty does
not act as a satisfier or motivator of a purchase because it is
not an essential element that act as a source of intrinsic
satisfaction. Ease of use is a satisfier.
 Key Psychological Processes that influence
consumer responses
Perception
Perception- is the process by which people
select, organize, and interpret information.
• In marketing, perceptions are more important
than reality, because perceptions affect
consumers’ behavior.
 Key Psychological Processes that influence
consumer responses
Perception
People emerge with different perceptions of the same
object because of three perceptual processes:
Selective attention- The act of focusing on a particular object
of interest for a period of time while simultaneously ignoring
irrelevant information that is also occurring.
Selective distortion- The tendency to interpret information in
a way that will support what people already believe or what
they want to believe/preconceptions.
Selective retention- The tendency to retain information that
supports our attitudes and beliefs. consumers are likely to
remember good points made about a brand they like and
forget good points made about competing brands.
 Key Psychological Processes that influence
consumer responses
Perception
• Subliminal perception describe any situation in which
unnoticed stimuli are perceived.
• Subliminal messages can be seen in our advertisements if
we look hard enough. Does this mean we are really
influenced by subliminal messages?
– We buy certain cars because the rhetoric used enhances our
desire to or we my buy products because the ad in a magazine
persuades us underneath our threshold of perception. We may
drink certain brands of soda because of product placement in
movies that we perhaps do not notice. We recycle the products
because the cast members in primetime television do, but we do
not consciously see this while tuning in.
 Key Psychological Processes that influence
consumer responses
Learning
• Learning describes changes in an individual’s behavior
arising from experience.
• Consumer buyer behavior is a partly learned behavior.
Consumers "learn" their buyer behavior through
– Drives
– Cues
– Responses
– Reinforcement
• Each one of these builds upon the other.
Key Psychological Processes that influence
consumer responses
Learning
 Key Psychological Processes that influence
consumer responses
Emotion
• Emotions Consumer response is not all cognitive
and rational; much may be emotional and
invoke different kinds of feelings.
• A brand or product may make a consumer feel
proud, excited, or confident. An ad may create
feelings of amusement, disgust, or wonder.
• Brands like McDonald’s, and Coca-Cola have
made an emotional connection with loyal
customers for years.
 Key Psychological Processes that influence
consumer responses
Memory
Consumers have prior learning experiences,
which are accumulated in their minds. The total
accumulation of past experiences are known as
memory. Memory can be divided into short-term
memory or long-term memory.
Consumers build brand associations (brand-
related thoughts, feelings, perceptions, images,
experiences, beliefs, attitudes, ) on the basis of
information stored in their memory.
The Buying Decision Process: The Five-Stage
Model
1. Problem Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Postpurchase Decision
Consumers do not always pass through all five
stages-they may skip or reverse some.
 The Buying Decision Process: The Five-Stage
Model
1. Problem Recognition
• The buying process starts when the buyer
recognizes a problem or a need is triggered by
internal (hunger or thirst) or external stimuli
(advertisement).
• Marketers need to identify the circumstances
that trigger a particular need by gathering
information from a number of consumers.
• Marketers can then develop marketing
strategies that will spark consumer interest.
 The Buying Decision Process: The Five-Stage
Model
2. Information Search
• Two levels of engagement in the search:
• 1. Heightened attention- A consumer simply becomes more receptive to information about a
product.
• 2. Active information- A consumer begins to actively look from information about a product.

• Major information sources to which consumers will

turn to:
– Personal: family, friends, neighbors, and acquaintances.
– Commercial: Advertising, Web sites, salespeople,
packaging, and displays.
– Public: Mass media, consumer-rating organizations.
– Experiential: Handling, examining and using the product.
 The Buying Decision Process: The Five-Stage
Model
2. Information Search
• By gathering information, the consumer learns more
about competing brands and features.
• Consumers will choose from the competing brands
through a process:
– Total Set-All brands available in a category
– Awareness Set- All the brands that a consumer is aware of.
– Consideration Set- All the brands that a consumer will
consider.
– Choice Set-The consumer will choose from two or three
brands in a category
The Buying Decision Process: The Five-Stage
Model
2. Information Search
 The Buying Decision Process: The Five-Stage
Model
3. Evaluation of Alternatives
• Some basic concepts help explain the
consumer evaluation processes:
– First, the consumer is trying to satisfy a need.
– Second, the consumer is looking for certain
benefits from the product solution.
– Third, the consumer sees each product as a bundle
of attributes with abilities to deliver the benefits.
• Consumers will pay attention to attributes that
deliver the sought after benefits.
 The Buying Decision Process: The Five-Stage
Model
3. Evaluation of Alternatives
• The consumer arrives at attitudes toward various
brands through an attribute-evaluation procedure,
developing a set of beliefs about where each brand
stands on each attribute.
• The expectancy-value model of attitude formation
posits that consumers evaluate products and services
by combining their brand beliefs—the positives and
negatives—according to importance.
 The Buying Decision Process: The Five-Stage
Model
4. Purchase Decision
• Two general factors can intervene between
the purchase intention and purchase
decision:
1. Attitudes of others: The influence of another
person depends on two things:
• A) The intensity of the other’s negative attitude towards a preferred
alternative.
• B) The buyers' motivation to comply or listen to the other person’s wishes.
 The Buying Decision Process: The Five-Stage
Model
4. Purchase Decision
2. Unanticipated situational factors: Factors that may emerge to
change the purchase decisions. Examples: Losing a job or some
other purchase becomes more urgent.
• A consumer decision to postpone, or avoid a purchase
decision is influenced by one or more perceived risks:
– Functional risk: The product does not perform to expectation.
– Physical risk: The product poses a threat to the physical well-being or
health of the user or others.
– Financial risk: The product is not worth the price.
– Social risk: The product results in embarrassment in front of others.
– Psychological risk: The product affects the mental well-being of the
user.
– Time risk- The failure of the product results in an opportunity cost of
finding another satisfactory product.
The Buying Decision Process: The Five-Stage
Model
4. Purchase Decision
 The Buying Decision Process: The Five-Stage
Model
5. Postpurchase Decision
Postpurchase Behavior
• Consumer may experience dissonance from
noticing certain disquieting features or
hearing favorable things about other brands.
• Marketers must monitor
– Postpurchase satisfaction
– Postpurchase action
– Postpurchase product use and disposal
 Behavioral Decision Theory
Behavioral decision theorists have identified many
situations in which consumers make seemingly
irrational choices.
• Decision heuristics
– Availability heuristics
– Representativeness heuristics
– Anchoring and adjustment heuristics
• Decision framing is the manner in which choices
are presented to and seen by a decision maker.
• Mental accounting describes the way consumers
code, categorize, and evaluate financial outcomes
of choices.