MARKETING MANAGEMENT

Chapter 5
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?
• How do marketers analyze consumer
decision making?
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 Consumer Buying Behavior
• Consumer Buying Behavior refers to the buying
behavior of final consumers -individuals &
households - who buy goods and services for
personal consumption.
• These final consumers make up the consumer
market.
• The central question for marketers is:
– “How do consumers respond to various marketing
efforts the company might use?”

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 INTRODUCTION TO
CONSUMER BEHAVIOR
• Consumer behaviour is the behaviour displayed by
the consumers in searching for, purchasing, using,
evaluating & disposing of products & services, that
they expect will satisfy their needs
• It is the study of how individuals make decisions to
spend their available resources
( money, time, efforts) on
consumption items.

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INTRODUCTION cont.
• “ Consumer behaviour reflects the totality of
consumer decision with respect to the
acquisition, consumption & disposition of
goods, services, time & ideas by individuals
over a stipulated time”
• In this dynamic & rapidly
evolving industry marketers
need to know every thing
about consumers
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 WHAT IS CONSUMER
BEHAVIOUR
• Consumer behaviour involves more than
products
• Consumer behaviour
involves more than just buying
• Consumer behaviour is a
dynamic process
• Consumer behaviour involves
decision making

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 INTRODUCTION cont.
• The set of decisions –
• What they buy,
• Why they buy
• How they buy
• When they buy
• Where they buy
• How often they buy
• How much they buy
• Whether they buy or not

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How And Why Consumers Buy
Model of Customer Buyer Behaviour

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Factors Influencing
Consumer Behaviour

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 Factors Affecting Consumer
Behaviour: Culture

Culture is the Most Basic Cause of a

Person's Wants and Behaviour.

The fundamental Subculture

determinant of a • Groups of people with shared
person’s wants and value systems based on
common life experiences.
behaviors acquired
through socialization • Hispanic Consumers
processes with family • African American Consumers
and other key • Asian American Consumers
institutions. • Mature Consumers 10
 Factors Affecting Consumer
Behavior: Culture

Social Class
• Society’s relatively permanent
& ordered divisions whose
members share similar
values, interests, and
behaviour.
• Measured by a Combination
of: Occupation, Income,
Education, Wealth and Other
Variables.
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 Subcultures

• Nationalities: Indian
• Religions: Hindu, Sikh, Muslim,
• Geographic regions: East, West, North,
South

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Factors Affecting Consumer
Behaviour: Social

Groups
Membership, Reference,
or Aspirational
Family
Most Important Consumer Buying
Organization

Roles and Status

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 Characteristics of Social Classes

• Within a class, people tend to behave alike.

• Social class conveys perceptions of inferior or
superior position.
• Class may be indicated by a cluster of variables
(occupation, income, wealth).
• Class designation is mobile over time.
• Upper uppers, Lower uppers, Upper middles, Middle
class, Upper lowers, Lower lowers, Working class

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 Social Factors

Reference
Family
groups

Social
Statuses
roles

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 Family
• Family of Orientation
– Religion
– Politics
– Economics
• Family of Procreation
– Everyday buying behaviour

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 Reference Groups
• Membership: groups having direct influence on person
• Primary: with whom interaction is fairly continuously &
informally e.g. family, friend
• Secondary: with whom interaction is formal & requires
less continuous interaction
• Aspirational: the group which person hopes to join
• Dissociative: the group which person rejects

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 Brand Personality
• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness

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 Personal Factors
• Age • Personality
• Life cycle stage • Values
• Occupation • Lifestyle
• Wealth • Self-concept
Sincerity
Excitement
Competence
Sophistication
Ruggedness

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 Factors Affecting Consumer
Behaviour: Personal

Personal Influences

Age and Life Economic Personality &

Cycle Stage Occupation Situation Self-Concept

Lifestyle Identification

Activities Interests Opinions

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 Factors Affecting Consumer
Behaviour: Psychological
Motivation

Psychologica
l
Beliefs and Factors Perception
Attitudes Affecting
Buyers
Choices

Learning 21
 Key Psychological Processes
• Motivation
• Perception
• Learning
• Memory

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 Motivation
• Freud’s theory: It is assumed that the psychological
forces shaping people’s behaviour are largely
unconscious, & a person cannot fully understand his/her
own motivation
• Maslow’s hierarchy of needs: Explain why
people are driven by particular needs at particular times
• Herzberg’s two-factor theory: Two factor theory
that distinguishes dissatisfiers & satisfiers

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Maslow’s Hierarchy of Needs

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 Perception
Perception is the process by which an individual
selects, organises,& interprets information inputs to
create a meaningful picture of the world. People’s
perception may get effected by the process:-
• Selective attention
• Selective retention
• Selective distortion
• Subliminal perception

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 Learning & Memory
• Learning involves changes in individual’s behaviour
arising from experience. Learning is produced through
the interplay of
• Drive
• Stimuli
• Cue
• Response
• Reinforcement
Memory: all the information & experiences individual
encounters through the life is stored in long / short-term
memory
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Buyer Decision Process

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 Buyer Decision Process
Step 1. Need Recognition

Buyer
Recognizes
a
Internal Problem External
Stimuli – or a Stimuli-
Hunger Need Friends
Arising
From:

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The Buyer Decision Process
Step 2. Information Search

•Family, friends, neighbors

Personal
Personal Sources
Sources •Most effective source of
information
•Advertising, salespeople
Commercial
Commercial Sources
Sources •Receives the most information
from these sources
•Mass Media
Public
Public Sources
Sources •Consumer-rating groups

•Handling the product

Experiential
Experiential Sources
Sources •Examining the product
•Using the product
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The Buyer Decision Process
Step 3. Evaluation of Alternatives

Consumer
Consumer May
May Use
Use Careful
Careful
Calculations
Calculations &
& Logical
Logical Thinking
Thinking
Consumers
Consumers May
May Buy
Buy onon Impulse
Impulse and
and
Rely
Rely on
on Intuition
Intuition
Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
on
on Their
Their Own
Own
Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
Only
Only After
After Consulting
Consulting Others
Others
Marketers Must Study Buyers to Find
Out How They Evaluate Brand 30
The Buyer Decision Process
Step 4. Purchase Decision

Purchase
Purchase Intention
Intention
Desire
Desire to
to buy
buy the
the most
most preferred
preferred brand
brand
Unexpect
Attitude
ed
s of
Situationa
Others
l Factors

Purchase
Purchase Decision
Decision 31
 The Buyer Decision Process
Step 5. Post purchase Behaviour

Satisfied Customer!

Cognitive Dissonance
Consumer’s
Expectations of Product’s Performance
Product’s Perceived
Performance

Dissatisfied Customer
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Stages in the Adoption Process

• Awareness: Consumer becomes aware of the new

product, but lacks information about it.
• Interest: Consumer seeks information about new
product.
• Evaluation: Consumer considers whether trying the
new product makes sense.
• Trial: Consumer tries new product on a small scale to
improve his or her estimate of its value.
• Adoption: Consumer decides to make full and regular
use of the new product.
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Adopter Categories

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