Training, Teaching and Learning Materials (TTLM)

RIFT VALLEY UNIVERSITY

LABU-LAFTO CAMPUS

The Ethiopian TVET-System

Marketing Operations Coordination
Level - IV

Learning
Guide
Unit of Competence: Analyze Consumer Behavior for Specific
Markets
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Module Title: Analyzing Consumer Behavior for Specific Markets
LG Code: EIS MOC4 030812
TTLM Code: EIS MOC4 M030812

Occupational Standard Marketing Operations Coordination Level IV

Unit Title Analyse Consumer Behaviour for Specific Markets
Unit Code EIS MOC4 03 0812
Unit Descriptor This unit describes the performance outcomes, skills and knowledge
required to analyse consumer behaviour to target marketing to specific
markets and specific needs.

Elements Performance Criteria

1. Confirm product 1.1. Gather information on the market or market segment for a
or service market product or service in accordance with the marketing plan
1.2. Identify consumer attributes for the market or market segment
from the market profile or existing customer data
1.3. Identify and test features of the product or service in accordance
with the marketing plan
2. Assess the 2.1. Investigate consumer need for the product or service through
reasons for analysis of trends and past performance
existing levels of 2.2. Review past marketing or positioning of a product or service in
consumer interest relation to the effectiveness of its focus of appeal
2.3. Assess, test and estimate the impact of individual, social and
lifestyle influences on consumer behaviour for a product or
service
2.4. Analyze consumer responses to previous marketing
communications
2.5. Assess organizational behaviour capability to respond quickly to
consumer demand for products or services in accordance with the
marketing plan
3. Recommend a 3.1. Ensure marketing strategies address innate and acquired needs of
focus of appeal consumers and appeal to the motives that influence decision
for marketing making
strategies for a 3.2. Present a rationale for the focus of appeal that outlines how
product or service influences on consumer behaviour will be used to target effective
marketing strategies
3.3. Ensure the focus of appeal meets legal and ethical obligations
and the budgetary requirements of the marketing plan

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Variable Range
Information on the  customer segments such as:
market or market  active customers
segment may include:  inactive customers
 former customers
 demographics
 existing product usage
 lifestyle
 non-customer segments such as:
 core prospects
 non-core prospects
 social and cultural factors
 values or attitude factors
Marketing may  business-to-consumer marketing
include:  business-to-business marketing
 direct marketing
 ideas marketing
 marketing of goods
 public sector marketing
 services marketing
 telemarketing
Individual influences  attitudes
may include:  beliefs
 learning
 past experience
 perception
 personality
 self-image
Social influences may  culture
include:  family background
 family decision-maker/s
 social class
 socioeconomic factors
Lifestyle influences  aspirations
may include:  interests
 leisure activities
Consumer responses  average order value
may include:  preferred frequency of contact
 preferred medium of contact
 preferred medium of response
 preferred order size
 preferred price point for typical purchase
 preferred range of options within a single offer

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Organisational  contract buying
behaviour may  group decision making
include:  modified re-purchase
 new purchases
 re-purchase
Legal and ethical  codes of practice
obligations may  cultural expectations and influences
include:  ethical principles
 relevant legislation
 policies and guidelines
 regulations
 social responsibilities such as:
 protection of children
 environmental issues
 societal expectations

CONCEPT OF CONSUMER BEHAVIOUR

• it the study of how consumers acquire, consume and dispose of goods, services,
experiences and ideas.
• It reflects all decisions about the acquisition, consumption and disposal of an offering by
people over time.
• The mental and emotional processes and physical activities people engage in when they
select, purchase, use, and dispose of products or services to satisfy particular needs and
desires.
• Process through which buyers make purchase decisions.

FACTORS IMPORTANT TO UNDERSTANDING CONSUMER MARKETS AND

CONSUMER BEHAVIOR:
– The size of the consumer market.
– Changes in consumer shopping habits and purchase decisions.
– Emphasis on consumer-oriented marketing.
– The design of effective marketing strategy.

LO 1. Confirm product or service market

1.1. Gather information on the market or market segment for a product or service in
accordance with the marketing plan.

Information on the market or market segment may include:

 customer segments such as:
 active customers
 inactive customers
 former customers

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 demographics
 existing product usage
 lifestyle
 non-customer segments such as:
 core prospects
 non-core prospects
 social and cultural factors
values or attitude factors
1.2. Identify consumer attributes for the market or market segment from the market profile or
existing customer data
1.3. Identify and test features of the product or service in accordance with the marketing plan
Self check
CASE:
Suppose you are the marketing officer of NK Company. The marketing manager for the
company wants you to analyze consumer behavior for specific markets.
1. Demonstrate how you can confirm product or service market?

LO2. Assess the reasons for existing levels of consumer interest

2.1. Investigate consumer need for the product or service through analysis of trends and past
performance
2.2. Review past marketing or positioning of a product or service in relation to the
effectiveness of its focus of appeal

Marketing may include:

 business-to-consumer marketing
 business-to-business marketing
 direct marketing
 ideas marketing
 marketing of goods
 public sector marketing
 services marketing
 telemarketing

2.3. Assess, test and estimate the impact of individual, social and lifestyle influences on
consumer behaviour for a product or service

A MODEL OF CONSUMER BEHAVIOR

• Consumer buying behaviour:
– Buying behaviour of final consumers
– Purchase goods and services for personal consumption
• Consumer market:
– All individuals and households
– Buy or acquire goods and services for consumption

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FACTORS INFLUENCING CONSUMER BEHAVIOUR

1. SOCIAL AND GROUP FACTORS/FORCES

A. Cultures/subcultures
Cultural influences
– Culture - Values, beliefs, preferences, and tastes handed down from one
generation to the next

B. Reference groups
 Those others look to for help and guidance including friends, co-workers,
and others.
 People or institutions such as family, friends, or celebrities:
 Whose opinions are valued
 To whom a person looks for guidance in his or her own behavior, values,
and conduct
 people that an individual refers to for comparison when making
judgements about his or her own circumstances, attitudes and
behavior.
C. Family
D. Role
E. Social class

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  Everyone belongs to multiple social groups - Family, neighborhood, clubs, and
sports teams
 Group membership influences an individual consumer’s purchases and behavior
in overt and subtle ways
Differences in group status and roles influence buying behavior
a. People make purchases designed to reflect their status within a particular group
Class rankings determined by occupation, income, education, family background, and
residence location
b. Income is not always a primary factor
Occupations and incomes of one or both parents are primary influences on social class
Individuals’ buying habits reflect the class to which they aspire

2. PERSONAL FACTORS/FORCES
Personal Determinants of Consumer Behavior
▮ Consumer behavior is affected by a number of internal, personal factors also
• Need - Imbalance between a consumer’s actual and desired states
• Motive - Inner state that directs a person toward the goal of satisfying a need
Maslow’s Hierarchy of Needs
▮ Physiological needs - Needs concerning essential requirements for survival, such as food,
water, shelter, and clothing Physiological Needs (Food, Water, Sleep)
▮
▮ Safety needs - Financial or lifestyle security, protection from physical harm, and
avoidance of the unexpectedSafety Needs (Protection, Security)
▮
▮ Social/belongingness needs - The desire to be accepted by people and groups important
to that individual Social Needs (Companionship, Friendship, Love)
▮
▮ Esteem needs - Accomplishment, Self-Respect, PrestigeA universal desire for a sense
of accomplishment and achievement
▮ Actualization needs Self-Actualization Needs
▮ Self-fulfillment, Enriching Experiences)
▮ - Desire to realize potential and find fulfillment by expressing their unique talents and
capabilities
To summarize about Abrham Maslow
• Maslow’s Hierarchy:
– Self-actualization Needs - Art, books, recreation
– Esteem Needs - Clothing, home furnishings
– Love and Belonging Needs - Mementos, gifts, photos
– Safety Needs - Burglar alarms, seat belts
– Physiological Needs - Food, heat, shelter
A. Age and Stage in the Lifecycle
B. Occupation
C. Lifestyle
D. Personality
– Reflects a person’s consistent response to his or her environment.

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 –psychological characteristics that lead to relatively consistent and enduring
responses
3. PSYCHOLOGICAL FACTORS/FORCES
A. Motivation
– Refers to a state or condition within a person that prompts goal-directed
behavior.
B. Perception
 Perception is the process by which an individual selects, organizes, and interprets
information to create a meaningful picture of the world.
– how a person organizes and interprets information
– selective attention/distortion/retention
 Meaning that a person attributes to incoming stimuli gathered through the five
senses

C. Learning
– changes in an individual’s behavior that arise from experience
– Knowledge or skill acquired as a result of experience, which changes consumer
behavior
 Knowledge or skill acquired as a result of experience, which changes consumer
behavior

Components of learning process:

– Drive - Fear, pride, greed, jealousy, hunger, thirst, comfort, and rivalry
– Cue - An object or signal in the environment that determines the nature of the
consumer’s response to a drive
– Response - Individual’s reaction to a set of cues and drives
– Reinforcement - Reduction in drive that results from a proper response
D. Beliefs and Attitudes

Attitudes
▮ Person’s enduring favorable or unfavorable evaluations, emotions, or action tendencies
toward some object or idea
▮ Attitude components:
• Cognitive
• Affective
• Behavioral
E. Self-Concept:
• The overall perception and feeling that one has about herself or himself.
F. Lifestyle:
• Describes a person’s pattern of living as expressed in activities, interests, and
opinions (AIO statements).

Individual influences may include:

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 attitudes
 beliefs
 learning
 past experience
 perception
 personality
 self-image

Social influences may include:

 culture
 family background
 family decision-maker/s
 social class
 socioeconomic factors
Lifestyle influences may include:
 culture
 family background
 family decision-maker/s
 social class

2.4. Analyze consumer responses to previous marketing communications

Consumer responses may include:

 average order value
 preferred frequency of contact
 preferred medium of contact
 preferred medium of response
 preferred order size
 preferred price point for typical purchase
 preferred range of options within a single offer

2.5. Assess organizational behaviour capability to respond quickly to consumer demand for
products or services in accordance with the marketing plan

THE CONSUMER DECISION MAKING PROCESS

1. Problem Recognition
– difference between the actual and ideal situation

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 2. Information Search
Search for alternatives and information
– Past experience
– Brochures
– Catalogs

3. Evaluation of Alternatives
– Standard Learning Hierarchy
– Dissonance-Attribution Hierarchy
– Low - Involvement Hierarchy
Standard Learning Theory
• Cognitive (Perceptual)
• Affective (Like - Dislike)
• Conative (Purchase)
Buyer’s mental evaluation of alternatives
– Friends
– Social class
– Personality
– Lifestyle
Evaluative Criteria
• Ways to compare the alternatives
– Determinant Attributes
• Aspects on which the alternatives clearly differ
– Decision Criteria
• Decision rules
4. The Purchase Decision
– What to purchase
– Where, when and how to pay
– Decision is not the same as actual purchase
5. Post Purchase Evaluation
– Cognitive Dissonance: post-purchase anxiety
Cognitive dissonance Imbalance among knowledge, beliefs, and attitudes that occurs
after an action or decision, such as a purchase.

Cognitive Dissonance:
• A form of post purchase doubt about the appropriateness of a decision.
• Cognitive Dissonance occurs when:
• Decisions are major
• The purchase is important
• Perceived risk is high
• The purchase is visible
• The decision involves a long-term commitment

Post purchase Behavior

– Speed of repairs
– Product durability

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 – Extended warranty

Organizational behavior may include:

 contract buying
 group decision making
 modified re-purchase
 new purchases
 re-purchase

LO3. Recommend a focus of appeal for marketing strategies for a product or service
3.1. Ensure marketing strategies address innate and acquired needs of consumers and appeal to
the motives that influence decision making
3.2. Present a rationale for the focus of appeal that outlines how influences on consumer
behaviour will be used to target effective marketing strategies
3.3. Ensure the focus of appeal meets legal and ethical obligations and the budgetary
requirements of the marketing plan

Legal and ethical obligations may include:

 codes of practice
 cultural expectations and influences
 ethical principles
 relevant legislation
 policies and guidelines
 regulations
 social responsibilities such as:
 protection of children
 environmental issues
societal expectations
Self check II
Demonstrate
1. Demonstrate how you can assess the reasons for existing levels of consumer interest?
3. Demonstrate how you can recommend a focus of appeal for marketing strategies for a
product or
service?
4. Write the consumer decision making process?

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 Self check III
Choice
_____1.Which one of the following Information those include on the market or market segment?
A. Inactive customers B. Inactive customers
C. Former customers D. All E. None
____2. One of the following factor that influence individual factors on consumer behavior for a
product or service.
A. Attitudes B. Beliefs C. Learning D. All E. None
____3. Which of the following are the consumer responses that analyze previous marketing
Communications?
Average order value C. Preferred frequency of contact
Preferred order size D. All E. None
____4.Which of the following is organizational behaviour capability to respond quickly to
consumer demand for products or services in accordance with the marketing plan?
Contract buying C. Group decision making
Modified re-purchase D. All E. None
____5.One of the following are the Ensure the focus of appeal meets legal and ethical obligations
that ensure the focus of appeal.
Codes of practice C. Cultural expectations and influences
Ethical principles D. All E. None
____6. The study of how consumers acquire, consume and dispose of goods, services, experiences
and ideas is____________.
A. Consumer behaviour C. Perception
B. Attitudes D. All E. None
____7.Person’s enduring favorable or unfavorable evaluations, emotions, or action tendencies
toward some object or idea.
A. Learning C. Perception
B. Attitudes D. All E. None

_____8. The process by which an individual selects, organizes, and interprets information to
create a meaningful picture of the world is_________________.
A. Learning C. Perception
B. Motivation D. All E. None
_____9. Which of the following are the factors that are important to understanding consumer
markets and consumer behavior:
A. The size of the consumer market.
B. Changes in consumer shopping habits and purchase decisions.
C. Emphasis on consumer-oriented marketing. D. All E. None
____10.One of the following is the Buyer’s mental evaluation of alternatives.
– Friends C. Social class
Personality D. All E. None

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