Chapter 6: Analyzing Consumer Markets

I. What Influences Consumer Behavior

Consumer Behavior- 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

A. Cultural Factors

Culture- the fundamental determinant of a person’s wants and behavior

Subculture- subdivisions of culture that provide more specific identification and

socialization, such as nationalities, religions, racial groups, and geographical
regions

Social Classes- homogeneous and enduring divisions in a society, which are

hierarchically ordered and whose members share similar values,
interests, and behavior

* Cultural factors exert the broadest and deepest influence

B. Social Factors

1. Reference Groups- all the groups that have a direct (face-to-face) or indirect influence
a person’s attitudes or behavior

Membership Groups- have direct influence

Primary Groups- interacts fairly continuously and informally
Secondary Groups- tend to be more formal and require less continuous
interaction

Aspirational Groups- a group that a person hopes to join

Dissociative Groups- a group with values or behavior an individual rejects

Opinion Leader- the person who offers informal advice or information about a
specific product or product category, such as which of several
brands is best or how a particular product may be used

2. Family
Family of Orientation- consist of parents and siblings
Family of Procreation- one’s spouse and children
3. Role and Status
Role- consists of the activities a person is expected to perform
Status- one’s position within his or her own hierarchy or culture

C. Personal Factors

1. Age and Stage in the Life Cycle

- Family Life Cycle
- Psychological Life Cycle
- Critical Life Events or Transitions

2. Occupation and Economic Circumstances

3. Personality and Self-Concept

Personality- set of distinguishing human psychological traits that lead to relatively

consistent and enduring responses to environmental stimuli (including
buying behavior)

Brand Personality- the specific mix of human traits that we can attribute to a
particular brand

a. Actual Self-concept: how we view ourselves

b. Ideal Self-concept: how we would like to view ourselves
c. Other’s Self-concept: how we think others see us

4. Lifestyle and Values

Lifestyle- a person’s pattern of living in the world as expressed in activities,

interests, and opinions
a. Money Constrained Lifestyle
b. Time Constrained Lifestyle

Multitasking- doing two or more things at the same time

Core Values- the belief systems that underlie attitudes and behavior
II. Key Psychological Processes

Four Key Psychological Processes

1. Motivation
2. Perception
3. Learning
4. Memory

A. Motivation: Freud, Maslow, Herzberg

Biogenic Needs- arise from physiological states of tension

Psychogenic Needs- arise from psychological states of tension

Motive- a need that is aroused to a sufficient level of intensity to drive us to act

Intensity- the vigor with which we pursue the goal

1. Freud’s Theory
- the psychological forces shaping people’s behavior are largely unconscious, and
that a person cannot fully understand his or her own capabilities

2. Maslow’s Theory
- explains why people are driven by particular needs at particular times
a. Self-actualization Needs
b. Esteem Needs
c. Social Needs
d. Safety Needs
e. Physiological Needs

3. Herzberg’s Theory
- a two-factor theory that distinguishes dissatisfiers (factors that cause
dissatisfaction) and satisfiers (factors that cause satisfaction)

B. Perception
- the process by which we select, organize, and interpret information inputs to
create a meaningful picture of the world

1. Selective Attention
- the mental process of screening out certain stimuli while noticing others

Attention- the allocation of processing capacity to some stimulus

2. Selective Distortion
- the tendency to interpret information in a way that fits our preconceptions
3. Selective Retention
- the tendency to remember good points about a product that consumers like and
good points about competing products are forgotten

4. Subliminal Perception
- receiving and processing subconscious messages that affect behavior

C. Learning
- it induces changes in our behavior arising from experience

Drive- a strong internal stimulus impelling action

Cues- minor stimuli that determine when, where, and how a person responds

Discrimination- the process of recognizing differences in sets of similar stimuli and

adjusting responses accordingly

Hedonic Bias- the general tendency of people to attribute success to themselves

and failure to external causes

D. Memory

Short Term Memory- a temporary and limited repository of information

Long Term Memory- a more permanent, essentially unlimited repository

Brand Associations- consists of all brand-related thoughts, feelings, perceptions,

images, experiences, beliefs, attitudes, and so on that
become linked to the brand mode

1. Memory Processes

Memory encoding- describes how and where information gets into memory

2. Memory Retrieval

Memory retrieval- the way information gets out of memory

III. The Buying Decision Process: The Five-Stage Model

Five-Stage Model:
1. Problem Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Postpurchase Behavior

A. Problem Recognition
* Problem is triggered by an internal or external stimuli

B. Information Search

Heightened Attention- milder search state

Active Information Seek- looking for reading material, phoning friends, going
online, and visiting stores to learn about the product

1. Information Sources
a. Personal
b. Commercial
c. Public
d. Experential

2. Search Dynamics

Total Set of Brands AvailableAwareness SetConsideration SetChoice Set Decision

Market Partitioning- the process of identifying the hierarchy of attributes that guide
consumer decision making in order to understand different
competitive forces and how these various sets get formed

C. Evaluation of Alternatives
* Consumers will pay the most attention to attributes that deliver the sought-after
benefits

1. Beliefs and Attitudes

Belief- a descriptive thought that have a person holds about something

Attitudes- a person’s enduring favorable or unfavorable evaluations, emotional
feelings, and action tendencies toward some object or idea
2. Expectancy Value Model
- consumers evaluate products and services by combining their brand beliefs—
positive and negative—according to their weighted importance

D. Purchase Decision

1. Noncompensatory Models of Consumer Choice

Heuristics- rule of thumb or mental shortcuts in the decision process

a. Conjunctive Heuristics: the consumer sets a minimum acceptable cut-off level
for each attribute and chooses the first alternative that
meets the minimum standard for all attributes

b. Lexicographic Heuristics: the consumer chooses the best brand on the basis of
its perceived most important attribute

c. Elimination-by-aspects Heuristics: the consumer compares brands on an

attribute selected probabilistically and
eliminates brands that do not meet the
minimum acceptable cut offs

2. Intervening Factors

- Attitude of others
- Unanticipated situational factors
- Functional Risk: does not conform to specifications
- Physical Risk: poses a threat to the physical well-being or health of the use
or others
- Financial Risk: not worth the price paid
- Social Risk: results in embarrassment from others
- Psychological Risk: affects the mental well-being of the user
- Time Risk: failure of the product results in an opportunity cost of finding
another satisfactory product

E. Postpurchase Behavior

1. Postpurchase Satisfaction

Disappointed: performance falls short of expectation

Satisfied: performance meets expectations
Delighted: performance exceeded expectations
2. Postpurchase Actions

Exit option- deciding to stop buying the product

Voice Option- deciding to warn friends

3. Postpurchase Use and Disposal

Product Consumption Rate- the more quickly buyers consume a product, the sooner they
may be back in the market to repurchase it

IV. Other Theories of Consumer Decision Making

A. Level of Consumer Involvement

- the level of engagement and active processing the consumer undertakes in
responding to a marketing stimulus

1. Elaboration Likelihood Model

- an influential model of attitude formation and change
- Central Route
- Peripheral Route
- Peripheral Cues

2. Low-Involvement Marketing Strategies

* Evidence suggests consumers have low involvement with most low-cost, frequently
purchased products

3. Variety-Seeking Buying Behavior

* Brand switching occurs for the sake of variety, rather than dissatisfaction

B. Decision Heuristics and Biases

1. Availability Heuristic: consumers base their predictions on the quickness and ease
with which a particular example of an outcome comes to mind

2. Representative Heuristic: consumers base their predictions on how representative or

similar the outcome is to other examples

3. Anchoring and Adjustment Heuristic: consumers arrive at an initial judgment and then
adjust it based on additional information
C. Mental Accounting
- refers to the way consumers code, categorize, and evaluate financial outcomes
of choices

1. Segregate gains
2. Integrate losses
3. Integrate smaller losses with larger gains
4. Segregate small gains from large losses

Prospect theory- maintains that consumers frame their decision alternatives in terms of
gains and losses according to a value function

D. Profiling the Customer Buying-Decision Process

1. Introspective Method: they can think about how they themselves would act
2. Retrospective Method: interview a small number of recent purchasers, asking
them to recall the events leading to their purchase
3. Prospective Method: to locate consumers who plan to buy the product and ask
them to think out loud about going through the buying
process
4. Prescriptive Method: asking consumers to describe the ideal way to buy the
product