ANALYZING CONSUMER MARKETS & BUYING

BEHAVIOR

 “Knowing customers” are never simple.

 They state their needs and wants in one direction and act otherwise .

Model of Consumer Behavior

7 O’s Frame work

 Whenever marketing manager cannot excess the consumer, it has to rely on

7 O’s framework for consumer research.

Questions regularly asked:

 Who constitutes the market? Occupants (current +potential)

 What does the market buy
 Why does the mark
 Who participates in buying?
 How does the market buy?
 When does the market buy?
 Where does the market buy?
Objects (products)
Objectives (reasons)
Organizations (suppliers, middlemen)
Operations (delivery, cash, credit)
Occasions (eid, new year)
Outlets (stores)

 Starting point of buyer behavior is Stimulus-Response Model.

Factors influencing buying behavior:

A. Culture
Culture is a most fundamental determinant of person’s wants and behavior.
e.g. growing child acquires some value, and perceptions from its surrounding
(family+ institution and culture)

Culture is  transferable (generation to generation)

 Nurtured
 Explicit and implicit from the behavior
 Changes in culture is difficult but not impossible.

B. Subculture
They are for more specific identification and socialization.
 e.g. nationalities, religious etc.

Muslim culture

Pakistan Indonesia Malaysia

C. Social class
Earlier we have studied 6 classes divisions.
7 classes division on (page176). Table- 6.1 with addition of working class.

Division is done on the basis of similar values, interests and behavior other than
income level. (For consumers)

Characteristics of Social classes

 Each division behaves more alike.
 Persons are inferior or superior position according to their position in social
class.
 Movement from one class to another is possible.
 There are many variables on which they depend; income, education, occupation,
wealth etc.

2. Social factors:
Consumer behavior is also influenced by social factors.
e.g. family, reference groups.

a. Reference Groups:
That group, which has a direct or indirect influence on behavior of consumer.
One is direct influence group:
 Membership group

Primary Group: Secondary Groups:

Family, Friends, Neighbors, Religious groups,
Co-workers Religions, Professionals
(More interaction) trade union groups.
(Less interaction)

Consumer behavior is influential in three ways.

Reference  New behavior and life styles.

 Attitudes and self-concept.
 Pressures, which will affect the personal decisions.

 Group to which a person wants to associate himself is anspirational groups.

e.g. cricket team, Pepsi---- in brands. Aerial/ Surf.
 Dissociative groups, is one whose values or behavior individual reject.

Opinion Leaders:
It is a person that offers, advice and information about a best product
 Which one is the best product
 Or how to use product
 Benefits of product.
Etc:

b. Family:
Family members constitute the most influential primary reference group.
 Family of Orientations
e.g. from parents a person acquire orientation toward religion, politics
and economies etc.
 Family of Procreation
e.g. Spouse and Children.

Roles and Status

Person participates with many group throughout his life. E.g. family, clubs,
organizations etc.
 He has a different role and statues in each position associated.
Role: Consists of activities that a person is expected to perform.
Status: (position, where consumer works)
Each role carries a status.
(Status Symbols)

3. Personal Factors:
 Age and stage in the life cycle.
 Occupation
 Economic Circumstances
 Life styles
 Personality
 Self-Concept

Age and Stage in Life Cycle:

 With the age buying habits change.
e.g. baby food, than normal food, special food.
 Age is related with, selection of clothes, furniture, recreation etc.
 Stage refers to psychological life cycle stages.
e.g. Divorce, marriage.

Occupation:
According to occupation goods are preferred by customers.
Like engineers use; Auto CAD.(Computer programs)
Artists/ Architects use; Correl Draw.(Computer programs)

 Also work environments effect the consumer preference greatly.

Economic Circumstances:
Greatly affect the buying conditions specially, savings and monthly income.
And spending attitude.

Life Style:
 Depicts person’s activities, interests and opinions.
 Lifestyle portrays the “whole person” interacting with his or her
environment.
e.g. students, teachers, business executives, marketers, bankers.

Personality and Self- Concept:

Personality means a person’s distinguished, psychological characteristics, which
will lead to relatively constant responses.
Self-Concept:
How a person views himself, actual self-concept, and ideal self-concept.

Others Self Concept:

How she thinks others see others.

4. Psychological factors:
 Motivation
 Perception
 Learning
 Belief and attitudes

Motivation:
A person may have needs, some needs are biogenic and some are psychogenesis.
 Biogenic needs
They arise from physiological states of tension such as hunger, thirst, and
discomfort.
 Psychogenic needs
They arise from psychological state of tension, such as need of recognition,
esteem, or belonging.

 Need becomes a motive when it reaches a sufficient level of intensity.

 Motive is a need that sufficiently pressing to drive the person to act.

Conclusion:
Actually need, when reaches a certain level, it motivates a person to act.

There are 3 theories in this regard:

1. Sigmund Freud: (Theory of motivation)

He says that real forces shaping the person’s behavior or for the motivation of a person is
largely unconscious.
[Thus a person cannot fully understand his/ her motivations] id, Super Ego, Ego.
e.g. each product is capable of satisfying unique set of motives.
Like Burger at Mc Donald’s is fun, Social relaxation, status.
Motivational positioning: (Jan Callebaut)
Manufacturer will place a product in a way, seeing the motives of the people, and
specialized in one motive (where needs are strong and people are ready to act).

2. Maslow Theory Of motivation: (Abraham Maslow)

 He says that human needs are arranged in hierarchy. (From most pressing to
least pressing)
 Manufacturers try to concentrate on type of motive, in a particular area to
satisfy their needs.
3. Fredrick Herzberg: (two factor theory of motivation)

Satisfiers and Dis-satisfiers

Factors that cause Factors that cause

satisfaction dis-satisfaction

 Two implications of this theory

 First:
Seller will try to avoid dis-satisfiers i.e. poor service policy, poor
delivery.
 Second:
Seller should identify the major satisfiers or motivators and then
try to deliver it.

Perception:
A motivated person is ready to act, is influenced by his perception.
 Perception is a process in which input information, is selected, organized
and interpreted to create a meaningful picture of the world.
 Perception depends upon:
 Individual nature
 Surroundings (brought up)
 Condition of individual (happy, sad)

Different people perceive things differently, because;

 Selective attention
 Selective distortion
 Selective retention
 Selective Attention:
People are exposed to a number of stimuli daily (Adds) but they are attracted
towards some of them (rest are screened out).
This selection/ screening depends on:

 People are more likely to notice stimuli that need to a current need.
(Computers).

 People are more likely to notice stimuli that they anticipate. (New
technologies).

 People are more likely to notice stimuli, whose dimensions are large in
relation to the normal size of stimuli. (Discount on computers $100- attraction
will be there as compared to an offer of $5 discount).

 Selective distortion:
It is a tendency to twist information in way to support person’s perceptions.
 Ads do not sometimes, means what people interpret. (Nike  Just do
it)
 Manufacturer cannot do any thing but to be careful in making ads.

 Selective Retention:
People will forget much of the information but will tend to retain information
that supports their attitudes and beliefs.

Learning:
It involves changes in an individual’s behavior arising from experience.
 Human behavior is mostly learned.
Learning is produced through inter play of;
 Drive
 Stimuli
 Responses
 Reinforcement  generalization (+ve)
 Discrimination (-ve)

Drive: is a strong internal stimulus impelling action.

(Linda brown has a drive toward self-actualization)

Stimuli: Computer (reward)

Cues: are minor actions [stimuli (surroundings)], which help in decision.

e.g. (Linda brown, seeing friends computers, office computers)
Reinforcement:

Generalization: (+ve Reinforcement)

If reward is good person generalizes.
e.g. if you use IBM computer, you will go for IBM copiers, printers etc.

Discrimination: (-ve Reinforcement)

If reward is not good you will go for other brand.

 Theorists suggests that demand for product learning can be created by

associating it with strong drives, motivating cues and providing positive
reinforcement.

Beliefs and Attitudes:

Belief is a descriptive thought that a person holds about something.

Is important in products like
 Origin of product
 Country reputation in product (Japanese technology)
 Country image (American PEPSI), (Made in Japan)
 Attitude/ response towards countries. (Israeli firms)

Attitude is person’s enduring favorable or un-favorable evaluations, emotional

feelings and action tendencies toward some object or idea.
 Attitude lead people to behave in a similar way toward the same object.
 Attitude put a person into a frame of mind of liking or dis-liking toward a
product.
 People have attitude toward every thing. (politics, clothes, music, religion)
 Attitude is sort of a permanent behavior and to change that many other
attitudes mostly need adjustments.

BUYING PROCESS:
 How buying process actually takes place?

Buying roles:

Initiator: A person who first suggest the ideas of buying.

Influencer: A person whose views and advices influence the decision.

Decider: What to buy, where to buy, how to buy, whether to buy or not?
Buyer: A person who makes an actual purchase.

User: Real user of the product.

BUYING BEHAVIOR:
 Buying behavior for different products are different.
Assael give 4 types of buying behavior on the degree of involvement of buyer
and degree of difference among brands.

1. Complex Buying Behavior:

 Usually for those products
 Which are expensive
 Brought infrequently
 Risky
 And highly self expressive [priority of brand or differentiation]
 Consumers are involved in complex buying behavior when they are highly
involved in a purchase, and are aware of significant difference among brands
e.g. Air bus, Plaza.
1st. Belief
2nd. Attitude
3rd. Purchase.
 Manufacturer must introduce the strategy in which he can promote those
features of product, which will differentiate the brand prominently.

2. Dissonance Reducing Behavior:

 Highly involved consumer
 But no/ little difference in brands.
 High involvement refers to the fact that purchase is expensive, infrequent,
and risky.
 As there is little brand difference, so consumer will buy those products,
which are less in price or conveniently available e.g. carpet.
1st. Purchase
2nd. New belief
3rd. Attitudes.

 After the purchase consumer develop dissonance. If someone says some

good things about some other brand or say nasty things about the purchased
product.
 3. Habitual Buying Behavior:
 Low consumer involvement
 Absence of brand difference
e.g. salt, pencil.
 If consumer buys the same brand of salt again and again, it is a habit not
brand loyalty.
 One reason of low involvement is less cost.
 Low involvement because
 Customer does not care for product.
 Do not look for information about it.
 Do not waste time in making belief.
 Instead Ad repetition will cause in this case ‘brand familiarity’.
1st. Belief formed by brand familiarity
2nd. Purchase
3rd. No evaluation (because they don’t care)

For Low Involvement Product:

 T.V is a good advertising media.
 As simple and short message is to be delivered.
 It will gain attention if imagery or design with some attractive features
are displayed.

Manufacturer should concentrate on price cuts and promotion for low

involvement products.

Four strategies by which low involvement can be converted into high

involvement.
A- Linking of product to some involving issue e.g. toothpaste to cavity.
B- Linking product with situation e.g. coffee in morning situation, cold drink
when somebody is thirsty.
C- Linking product with personal values or ego e.g. PAF
D- Adding an important product feature e.g. plain drink with Vitamins,
powdered milk with Calcium.
 They promote the product from low involvement to moderate involvement
only.

4. Variety seeking Behavior:

 Low consumer involvement
 Much brand difference.
These are products in which consumers do brand switching.
e.g. cookies, toffees. (Just for change of taste).
Leader Firms in this type will try to provide more stock in the market;
 Not leaving any shelf space
 Repeated advertising

Challenger firms
 Try to innovate products
 New features
 Price cuts
 Free Samples
 Coupons
 To make a difference in the market.

Stages of Buying Behavior Process:

 Smart companies research the buying decision process
 Marketers can use many methods to know the stages of buying decision.

1. Introspective method:
They can think about how they themselves would act.

2. Retrospective method:
By interviewing small no. of recent purchasers asking them to recall the events
involved in purchase.

3. Prospective method:
Locate consumer who plan to buy the product and ask them how they decided to
buy.

4. Prescriptive method:
Consumers are asked to tell the ideal way, to buy the product.
 STAGES

Problem
recognition

Information search

Evaluation of
alternatives

Purchase decision

Post-purchase
behavior

1. Problem recognition:
 Buying process starts when the buyer recognizes a problem or a need.
 Need is aroused by an internal or external stimuli.
e.g. you see food, you feel hungry.
You see a new car, you want to buy it.
 Important step, also used in research process, need is to be correctively traced
out, converted into motive. (Threshold level)

2. Information search:
 Aroused consumers will look for more information.
 Two levels
 One: The mild research stage is called hyper attention.
(Linda brown pays more attention to computer Ads)
 Two: Active information search.
(Linda brown) she will particularly make an effort to find information about
computers.
 There are four sources where information can be found.
 Personal source (Family, friends, neighbors)
 Commercial sources (Adv, Sales persons, dealers, packaging)
 Public sources (Media, Consumer rating organization)
 Experimental sources (Handling, examining, using product)
 Most information comes from commercial sources, (Marketer dominated
source)
 Effective information from personal source.
 Commercial information performs informing function.
 Personal source perform evaluation function.

3. Evaluation of Alternatives:
Rating of attributes of product is done.
In evaluation process:
 Type of need
 Benefits of product
 Attributes of product are important.
Consumer evaluation is difficult to interpret because they have their own brand
beliefs.
(i.e. where each brand stands on its attributes) and the set of beliefs about a brand
makeup brand image.
There are some strategies, which will stimulate buying process of consumer
towards any brand.

I. Modification:
Technique is known as real positioning
 Adding attributes
 Features

II. Alter Belief about the Brand:

Standing of the brand in customer eyes.
 This is known as psychological repositioning.

III. Alter Beliefs about Competitor’s brands:

 Competitive de-positioning

IV. Alter the Importance Weights:

Diverting customer’s attention towards the attributes in which the brand excels.

V. Call Attention to Neglected Attributes.

VI. Shift the Buyer’s Ideals:

 Marketers will persuade buyers to change the ideals for one or more attributes
by offering any attractive attributes.
4. Purchase Decision:
Two factors are important.
 One: Attitudes of others
 Two: Un anticipated situational factors
 Mishap, emergency
 or you need money for other purposes
 Situation at that moment
 Risk factor in purchase decision

In one decision there are 5 or more sub-decisions.

1. Brand decision
2. Vendor decision (supplier, Purchase decision)
3. Quantity decision
4. Timing decision
5. Payment method (credit card, cash payment, installments)

5. Post- Purchase Behavior:

 Marketer job does not end, when product is bought but it continues after
purchase.

Satisfaction level (that matters)

How much?

Post-Purchase actions:
Satisfied customer will buy the product again.
e.g. Chevrolet
“Our best advertisement is our satisfied customers”.

Post-Purchase use and Disposal:

How consumers use and dispose off the product.
 If product is lying in the closet, it is not much satisfying.
 Send it to some body else and did not use by him self.

How Lifestyles are identified:

 Psychographics
Science of measuring and categorizing life styles of consumers.
AIO Frame work  activities, interest and opinions.
VALS TM  1978  Values and Lifestyles.
VALS 2  1988-89  Framework