Week 

6. Oct 27, 2020

Jovinda Putri Y
1714190054
Chapter Questions
1. How do consumer characteristics influence buying behavior?
Answer:
Consumer behavior refers to the selection, purchase and consumption of goods,
services, ideas and experiences for the satisfaction of their needs and wants.
There are different processes involved in the consumer’s buying behavior which are:
 What commodity to consume?
 Selects commodities that promise greater utility.
 Estimate available money that can be spent.
 Analyze the prevailing prices of commodities.
 Take the decision about the commodities to consume.

Meanwhile, there are various other factors influencing the purchases of consumers
such as social, cultural, personal, and psychological. The explanation of these
factors is given below:
a. CULTURAL FACTORS
Cultural factors comprise a set of values and ideologies of a particular community or
group of individuals. It is the culture of an individual that decides the way he/she
behaves. In simpler words, culture is nothing but the values of an individual. What an
individual learns from his parents and relatives as a child becomes his culture.
Cultural Factors are further classified into:
Culture:-The set of basic values perceptions, wants, and behaviors learned by a
member of society from family and other important institutions. Culture is the most
basic cause of a person’s wants and behavior. Every group or society has a culture,
and cultural influences on buying behavior may vary greatly from country to country.
Sub Culture: a -Group of people with shared value systems based on common life
experiences and situations.
Each culture contains smaller subcultures a group of people with a shared value
system based on common life experiences and situations. Subculture includes
nationalities, religions, racial groups, and geographic regions. Many subcultures
make up important market segments and marketers often design products.
Social Class:-Almost every society has some form of social structure; social classes
are society’s relatively permanent and ordered divisions whose members share
similar values, interests, and behavior.
b. SOCIAL FACTORS
Human beings are social animals. We need people around to talk to and discuss
various issues to reach better solutions and ideas. We all live in a society and it is
really important for individuals to adhere to the laws and regulations of society. This
in turn affects our buying behaviors.
Social Factors influencing consumer buying decision can be classified as
under:
Every individual has some people around who influence him/her in any way.
Reference groups comprise of people that individuals compare themselves with.
Every individual knows some people in the society who become their idols in due
course of time. Co-workers, family members, relatives, neighbors, friends, seniors at
the workplace often form reference groups. Reference groups are generally of two
types:
Primary Group - consists of individuals one interacts with on a regular basis. Primary
groups include Friends, Family Members, Relatives, Co-Workers.ExampleTim
wanted to purchase a laptop for himself. He went to the nearby store and purchased
a Dell Laptop. The reason why he purchased a Dell Laptop was that all his friends
were using the same model and were quite satisfied with the product. We tend to
pick up products our friends recommend.ii. Secondary Groups - Secondary groups
share an indirect relationship with the consumer. These groups are more formal and
individuals do not interact with them on a regular basis
Example - Religious Associations, Political Parties, Clubs, etc.
Role in the Society-Each individual plays a dual role in society depending on the
group he belongs to. An individual working as Chief Executive Officer with a reputed
firm is also someone’s husband and father at home. The buying tendency of
individuals depends on the role he plays in society.
Status in the society-An individual from an upper middle class would spend on
luxurious items whereas an individual from the middle to the lower-income group
would buy items required for his/her survival.
c. PERSONAL FACTORS-
Not all individuals would prefer to buy similar products. Consumer behavior deals
with as why and why not an individual purchases particular products and services.
Personal Factors play an important role in affecting consumer buying behavior.
Personal Factors influencing consumer buying decision can be classified as under:
 Occupation-The occupation of an individual plays a significant role in
influencing his/her buying decision. An individual’s nature of the job has a
direct influence on the products and brands he picks for
himself/herself.ExampleTim was working with an organization as Chief
Executive Officer while Jack, Tim’s friend now a retired professor went to a
nearby school as a part-time faculty. Tim always looked for premium brands
that would go with his designation whereas Jack preferred brands that were
not very expensive. Tim was really conscious about the clothes he wore, the
perfume he used, the watch he wore whereas Jack never really bothered
about all this.
 Economic Condition-The buying tendency of an individual is directly
proportional to his income/earnings per month. How much an individual brings
home decides how much he spends and on which products?
ExampleIndividuals with high income would buy expensive and premium
products as compared to individuals from middle and lower-income groups
who would spend mostly on necessary items. You would hardly find an
individual from a low-income group spending money on designer clothes and
watches. He would be more interested in buying grocery items or products
necessary for his survival.
 Lifestyle-Lifestyle, a term proposed by Austrian psychologist Alfred Adler in
1929, refers to the way an individual stays in society. It is really important for
some people to wear branded clothes whereas some individuals are really not
brand conscious. For example individual staying in a posh locality needs to
maintain his status and image. An individual’s lifestyle is something to do with
his style, attitude, perception, social relations, and immediate surroundings.
 Personality-An individual’s personality also affects his buying behavior. Every
individual has his/her own characteristic personality traits that reflect in his/her
buying behavior.For example fitness freak would always look for fitness
equipment whereas a music lover would happily spend on musical
instruments, CDs, concerts, musical shows, etc.
d. PSYCHOLOGICAL FACTORS
Psychological Factors influencing consumer buying decision can be classified as
under:
 Motivation-Nancy went to a nearby restaurant and ordered pizza for herself.
Why did Nancy buy pizza? Answer - She was feeling hungry and wanted to
eat something. In the above example, Hunger was the motivating factor for
Nancy to purchase pizza. There are several other factors that motivate
individuals to purchase products and services. An individual who is thirsty
would definitely not mind spending on soft drinks, packaged water, and juice,
and so on. Recognition and self-esteem also influence the buying decision of
 individuals. Why do people wear branded clothes? Answer - Individuals prefer
to spend on premium brands and unique merchandise for others to look up to
them. Certain products become their status symbol and people know them by
their choice of picking up products that are exclusive. An individual who wears
a Tag Heuer watch would never purchase a local watch as this would be
against his image.
 Perception-What an individual thinks about a particular product or service is
his/her perception of the same. For someone, a Dell Laptop might be the best
laptop while for others it could be just one of the best brands available.
Individuals with the same needs might not purchase similar products due to
differences in perception.ExampleCatherine and Roselyn had a hectic day at
work and thus wanted to have something while returning from work.
Catherine ordered a large chicken pizza with French fries and coke while
Roselyn preferred a baked vegetable sandwich. Though both Catherine and
Roselyn had the same motivation (hunger), the products they purchased were
entirely different as Roselyn perceived pizza to be a calorie-laden food.
Individuals think differently and their perceptions do not match.
 Learning-Learning comes only through experience. An individual comes to
know about a product and service only after he/she uses the same. An
individual who is satisfied with a particular product/service will show a strong
inclination towards buying the same product again.
 Beliefs and Attitude-Beliefs and attitudes play an essential role in influencing
the buying decision of consumers. Individuals create a certain image of every
product or service available in the market. Every brand has an image
attached to it, also called its brand image.Consumers purchase
products/services based on their opinions which they form towards a
particular product or service. A product might be really good but if the
consumer feels it is useless, he would never buy it.

2. What major psychological processes influence consumer responses to the

marketing program?
Answer:
The marketer's job is to understand what happens in consumer consciousness
between the arrival of outside marketing stimuli and the final purchase decision.
Four key psychological processes: motivation, perception, learning, and memory.
a. Motivation
There are 3 theories about human motivation: Sigmund Freud, Abraham Maslow,
and Frederick Herzberg.
1) Freud's theory Sigmund Freud assumes that the psychological forces that shape
a person's behavior are largely unconscious and that a person cannot fully
understand one's own motivations.
2) Maslow's theory that human needs are organized in a hierarchy from the most
pressing to the least pressing, psychological needs, security needs, social needs,
reward needs, and self-actualization needs.
3) Herzberg Herzberg's theory developed a two-factor theory that distinguishes
dissatisfier from satisfaction/satisfier. Herzberg's theory has 2 implications:
a) Sellers should do their best to avoid dissatisfaction
b) The seller must identify each satisfaction or major motivator of purchase in the
market and then supply them.
b. Perception
It is the process by which we select, organize, and translate input
information to create a meaningful picture of the world.
 Selective attention is the allocation of processing capacity to several stimuli.
Since we can't possibly hear all of this, we sort out most of these stimuli - a
process called selective attention, which means that marketers have to work hard
to attract consumer attention. And the real challenge is explaining which stimuli
people will notice.
 Selective distortion (selective distortion) is the tendency to translate information
in a way that suits our initial conceptions. Consumers often distort information to
make it consistent with the beliefs and expectations of pre-existing brands and
products. Selective distortion can work to the advantage of marketers with strong
brands when consumers distort neutral or obscure brand information to make it
more positive.
 Selective retention of the information presented, but we retain information that
supports our attitudes and beliefs.
The unconscious perception mechanism of selective perception requires the
involvement and active thinking of consumers, a topic that has fascinated many
marketers for centuries is subliminal perception.
c. Learning
Learning (learning) encourages changes in our behavior that arise from
experiences. Much of human behavior is learned by accident. Learning theorists
believe that learning is generated through the interaction of encouragement,
stimulation, signals, responses, and approaches. Learning theory teaches marketers
that they can build demand for a product by associating it with strong urges, using
strong cues, using motivating cues, and providing positive reinforcement.
 d. Memory
All the information and experiences we encounter when we live life. There
are 2 memories: 1) Short term memory is temporary and limited storage of
information. 2) Long term memory is more permanent and basically unlimited
storage.
 Memory process is a very constructive process because we do not remember
information and events completely and accurately. Memory programming
describes how and where information enters memory.
The degree to which we can easily integrate new information into existing
knowledge structures also depends heavily on its simplicity, clarity, and accuracy.
Repeated exposure to information also provides greater opportunities for processing
and subsequently the potential for stronger associations.
 Memory retrieval is the way information is retrieved from memory. There are
three very important factors in remembering brand memories:
1) The presence of other products in memory may produce an interference effect
and cause us to fail to recognize/confuse new data.
2) The time between exposure to information and programming has an effect the
longer the delay, the weaker the association.
3) Information may be available in memory but cannot be accessed (can be recalled)
without proper recovery marks or reminders.
However, memory is often reconstructive, and consumers may recall experiences
with a brand differently from the actual facts due to the intervention of other factors
or events.
3. How do consumers make purchasing decisions?
Answer:
Basic psychological processes play an important role in understanding how
consumers actually make their buying decisions. Enterprise-savvy customers to
understand the decision-making process in full - all their experiences in learning,
selecting, using, and even products.
1. Problem Introduction
The buying process begins when it realizes that a problem or need is being
triggered by an internal or external stimulus. Marketers must determine the
circumstances that require certain assistance by gathering information from a
number of consumers.
2. Information search
Consumers are often looking for a limited amount of information. We can
distinguish between the two levels of interaction with surveillance, attention, and
active information seeking.
 Information Sources, Information sources are divided into 4, namely:
1) Personal (family, friends, neighbors, colleagues)
2) Commercial (advertising, website, salesperson, distributor, packaging, display)
3) Public (mass media, consumer rating organizations)
4) Experimental (handling, inspection, use of products)
 Search dynamics initiate information, consumers are able to compete and
their features. The company must identify other brands in the consumer
choice group so that the company can plan for the right competitive appeal.
3. Alternative Evaluation
How consumers process competitive information and make final judgments. There
are several processes and most of the latest models look mostly production and
rational. Consumers will pay the most attention to the attributes that deliver benefits
that meet needs.
 Beliefs and Attitudes
Beliefs are descriptive thoughts that a person holds about something.
Attitude is a long-term evaluation of what is entered or not, one's feelings, emotional
feelings, and a person's tendency to act on objects or ideas.
 Value expectations model
Form a thinking attitude that consumers of products and services with their brand
beliefs - positive and negative based on their importance.
4. Purchasing Decisions
In the consumer stage to determine preferences between brands in the choice of
choice. Consumers may also shape the purchase intent of consumers can form 5
sub-decisions: brand, dealer, quantity, time, and method of payment.
a. Non-compensatory model of consumer choice
That is, things that are said good for a product can help make up for the bad. But
consumers usually take the mental route by using the heuristic rule path. Heuristics
are simple rules or mental shortcuts in the decision process. There are 3 heuristics:
conjunctive heuristics, lexicographical heuristics, aspect-based elimination
heuristics.
 b. Investors factor evaluation brand evaluation, 2 common factors can intervene
between the purchase intent and the purchase decision. The first is the attitude
of the other person. The second is situational factors that are not anticipated.
The consumer's decision to pay for food, or to avoid a decision is strongly
influenced by functional risk by perceived risk. Among others: functional risk,
physical risk, social risk, psychological risk, time risk.
5. Post-purchase behavior
After the purchase, the consumer may experience conflicts overseeing a
worrying feature, so the marketer's job does not end with the purchase. Marketers
must consider post-purchase satisfaction, purchase action, and post-purchase
product use.
 Post purchase satisfaction
Is a function of the closeness between expectations and the perceived
performance of the product. If the performance does not meet expectations, the
consumer is disappointed, but pay attention if it meets expectations, satisfaction is
satisfied, and if it exceeds expectations, the consumer is very satisfied. This feeling
determines whether the customer buys the product back and talks about fun or
unpleasant things about the product to others.
 Post-purchase action
If the customer is satisfied he or she will probably buy the product back and tend to
say good things about the product to others. Disappointed consumers ignore or
return or return products and may make general requests with complaints to the
company, use Lawyers, or direct to other groups.
 Post-purchase use and removal
The sales frequency driver is the level of product consumption. The faster the buyer
consumes a product, the sooner they return to the market to buy it.
The easiest way to increase usage is to learn when actual usage is critical and
persuade customers of the benefits of regular use to mitigate potential problems.
4.How do marketers analyze consumer decision making?
Answer:
The consumer decision process may not always develop in a careful planning style.
Here are some other theories and approaches:
a. Level of Consumer Engagement
We can define consumer interaction (consumer engagement) based on the level
of interaction and active processing that consumers carry out in response to
marketing stimuli.
  Elaboration likelihood model Richard Petty and John Cacioppo's elaboration
likelihood model is a widely used model of attitude formation and change,
describing how consumers make orders, in both low and high interaction
states. There are 2 persuasion tools in their model, namely: the center route
and the peripheral route. Peripheral cues for consumers include celebrity
endorsements, credible sources, or any object that generates positive
feelings. Consumers who follow the central route only if they have sufficient
motivation, abilities, and opportunities. Where factors are lacking, consumers
tend to follow the peripheral route and consider less centralized and more
extrinsic factors in their decisions.
 Low Engagement Marketing Strategy many products are purchased under
conditions of low interaction and significant absence of branding. If
consumers continue to use the same brand, it is only a habit, not strong brand
loyalty. There are 4 techniques for changing all of that: first, they can relate
the product to the number of issues involved. Second, they can relate the
product to several personal situations that involve it. Third, marketers can
design advertisements for powerful emotional battles related to personal
values or ego defenses. Fourth, the marketer may advertise an important
feature.
 The buying behavior of seekers of diversity in purchasing situations is
characterized by low interaction but significant brand differences. Consumers
often make multiple brand changes. Brand switching occurs for diversity, and
not out of dissatisfaction.
b. Heuristics and decision bias
Decision theorists identify various heuristics and biases in consumer decision
making on a daily basis. Among others: Award heuristics, representative heuristics,
anchoring heuristics, and disappointing.
 Number heuristics
Consumers base their predictions on the speed and solution by which one example
of a particular result comes to mind. If an example is too easy for them to think,
consumers may overestimate. For example, a recent product failure may cause an
error to overestimate the possibility of a product failure in the future advertising ends
up being more persuaded to buy product warranties.
 Representative heuristics
Consumers base their predictions on how representative or similar an outcome is to
other examples. One reason that packaging looks so similar for different brands
within the same product category is that they want to be seen as representative of
the category as a whole.
 Anchoring and achievement heuristics
The consumer arrives at the initial sample and adjusts accordingly based on
additional information. For service marketers, it is important to make a strong first
impression to determine a good anchor so that subsequent experiences are
translated in a more pleasant view.
Remember that marketing managers can also use heuristics and are not free of bias
in their decision making. The “marketing record: the decision trap” reveals 10
mistakes managers can make in their decisions.
c. Mental Accounting
This refers to how consumers encode, categorize, and demand financial results
from choices. Mental accounting is the tendency to categorize funds or items of
value even though there is no logical basis for that category.
According to Chicago's Richard Thaler, a mental assemblage is a group of core
principles:
1) hallway of public space.
2) Consumers tend to integrate losses.
3) Consumers tend to integrate smaller losses with larger gains.
4) occupy the advantageous space the smallness of the big loss.
The prospect theory says that determining a decision framework based on profit
and loss is based on losses according to the value function.
d. Determine the profile of the Customer Purchasing Decision process
How do the child purchase stages in the process of their product? They can judge
how they themselves will act, in an introspective method. They were able to
interview a small number of new buyers, given that they recalled events that led
them to purchase in a retrospective manner. They can use a prospective method to
find consumers who are planning to buy a product and provide information about
their thoughts on the buying process they are going through, or they can ask for an
explanation of the ideal way to buy the product, in a prescriptive method. Each
method produces an overview of the steps in the process.
Trying to understand customer behavior in that change with a product is called
mapping the customer consumption system, customer activity cycle, or customer
scenario. Marketers can do for groups that can meet their wedding dress needs, or
buy a car. Buying a car, for example, the whole group of activities: choosing a car,
purchasing funds, buying insurance, buying accessories, and so on.
5. Explain briefly  the theories of Consumer Decision Making: Involvement and
Decision Heuristics.
Answer:
Decision theorists identify various heuristics and biases in consumer decision
making on a daily basis. Among others: Award heuristics, representative heuristics,
anchoring heuristics, and disappointing.
 Number heuristics
Consumers base their predictions on the speed and solution by which one example
of a particular result comes to mind. If an example is too easy for them to think,
consumers may overestimate. For example, a recent product failure may cause an
error to overestimate the possibility of a product failure in the future advertising ends
up being more persuaded to buy product warranties.
 Representative heuristics
Consumers base their predictions on how representative or similar an outcome is to
other examples. One reason that packaging looks so similar for different brands
within the same product category is that they want to be seen as representative of
the category as a whole.
 Anchoring and achievement heuristics
The consumer arrives at the initial sample and adjusts accordingly based on
additional information. For service marketers, it is important to make a strong first
impression to determine a good anchor, so that subsequent experiences are
translated into a more pleasant view.
Remember that marketing managers can also use heuristics and are not free of bias
in their decision making. The “marketing record: the decision trap” reveals 10
mistakes managers can make in their decisions.