Consumer Markets

and Consumer
Buyer Behavior

“The purpose of business is to create and keep a customer.”

Peter Drucker
Consumer Buying Behavior

◼ Consumer Buying Behavior : buying

behavior of final consumers – individuals &
households who buy goods and services
for personal consumption.
◼ All of these final consumers make up the
consumer market.
Simple Response Model
The central question for marketers is:
“How do consumers (may) respond to various
marketing efforts the company might use?”
The starting point → stimulus-response model

Stimulus Organism Response

 Stimulus-Response Model of
Consumer Behavior

Marketing and Buyer’s Black Box Buyer

Other Stimuli Responses
Buyer Characteristics
Marketing Cultural
Product Social Product Choice
Price Personal Brand Choice
Psychological Dealer Choice
Place
Promotion
Other
Buyer Decision Process Purchase Timing
Economic Problem recognition
Technological Information search Purchase Amount
Political Evaluation
Decision
Cultural Postpurchase behavior
 Factors Affecting Consumer
Behavior
Cultural
Social
Personal
•Age and
Psycho-
•Culture •Reference life-cycle logical
groups
•Occupation •Motivation
•Sub- •Economic •Perception BUYER
culture •Family situation •Learning
•Lifestyle •Beliefs and
•Roles •Personality attitudes
•Social and and
class status self-concept
 Factors Affecting Consumer
Behavior

Culture
Key Factors
◼ Forms a person’s wants
and behavior
◼ Cultural Subculture
◼ Social ◼ Groups with shared
value systems
◼ Personal
Social Class
◼ Psychological ◼ Society’s divisions who
share values, interests
and behaviors
 Factors Influencing Consumer
Behavior:Cultural

Cultural

•Culture

•Subculture

•Social class
Cultural Dimensions by
Geert Hofstede

https://www.youtube.com/watch?v=IHdqPqWle04
High Context vs.
Low Context Cultures

https://www.youtube.com/watch?v=o-
ZWNy6vyfw
 Factors Affecting Consumer
Behavior
Subculture → groups of people
within a culture with shared value
systems based on common life
experiences and situations
◼ Hispanic subculture in the US
 Factors Affecting Consumer
Behavior
Social classes are society’s relatively permanent
and ordered divisions whose members share
similar values, interests, and behaviors
◼ Measured by a combination of occupation,
income, education, wealth, and other variables

◼ Turkey → SES analyses (www.tuad.org)

▪ (Turkish Researchers Association / member of
ESOMAR)
This advertiser
uses the fact that
teens are strongly
influenced by
groups when
purchasing
fashion items
 Factors Affecting Consumer
Behavior

Key Factors
 Reference groups
◼ Cultural
◼ Membership
◼ Social
◼ Aspirational
◼ Personal
◼ Psychological  Opinion Leaders
◼ Buzz marketing
Social Factors

Membership Groups → groups

to which a person belongs
 Have a direct influence on
a person’s behavior
 Primary groups → with
whom there is regular, but
informal interaction
 Secondary groups → more
formal and require less
interaction
Harley Owners Group
Social Factors
▪ Opinion Leader : person
within a reference group who
exert influence on others
▪ Also called influentials or
leading adopters
▪ offers advice or information about
a specific product or product
category,
▪ can be found in all social classes
Social Factors
Groups and Social Networks
◼ Online Social Networks are
online communities where
people socialize or
exchange information and
opinions
◼ Include blogs, social
networking sites, brand
communities
Social Factors
◼ Family → The most important consumer-
buying organization
 Family members : primary reference group
 Roles of the family members in buying decisions
◼ Buying roles vary in different countries and social
classes
◼ Buying roles change with evolving life-style
 joint decision making,
 women arising as active buyers,
 increasing role of children
 Social Factors

◼ The person’s position in each group : can be

defined in terms of both role and status
◼ A Role : consists of the activities that a person is
expected to perform according to the people
around him
◼ Each role → carries a status
◼ A Status → the general esteem given a role
by society
 Factors Affecting Consumer
Behavior

Key Factors  Age and life cycle

 Occupation
 Economic situation
◼ Cultural
 Lifestyle
◼ Social
◼Activities, interests and
◼ Personal opinions
◼ Psychological ◼Lifestyle segmentation

 Personality and self-concept

Personal Factors
◼ Family Life Cycle : stages throughout which
families pass as they mature over time
 Stages in family life cycle:

1.bachelor stage
2.newly married couples, no children
3.full nest 1; youngest child under 6
4.full nest 2; youngest child 6 or over
5. full nest 3; older married couples with dependent children
6.empty nest 1; older married couples no children with them
7. empty nest 1; older married couples no children at home;retired
8.solitary survivor, working
9.solitary survivor, retired
Personal Factors

◼ Personality : a person’s unique

characteristics that lead to relatively consistent
and lasting responses to his environment

◼ Self-concept : the self image or general

picture that people have of themselves
◼ Products/ brands can:

 be consistent with actual self OR

 help us reach ideal self
Dimensions of Self-Concept

How I see myself How I would like

to see myself
(Actual Self) (Ideal Self)

How others see How I would like

myself others see myself
(Social Self) (Ideal Social Self)
 Personal Factors
◼ Lifestyle → a person’s pattern of living as
expressed in his activities, interests and
opinions
 Psychographics : technique of measuring lifestyles
and developing lifestyle classifications

 Major dimensions measured are - AIOs

◼ Activities

◼ Interests

◼ Opinions
AIOs and Lifestyle Dimensions
 Excerpts from AIO Inventory

Instructions: Please read each statement and place an “x” in the box that best
indicates how strongly you “agree” or “disagree” with the statement.
Agree Disagree
Completely Completely
I feel that my life is moving faster and faster,
sometimes just too fast. [1] [2] [3] [4] [5] [6] [7]

If I could consider the “pluses” and “minuses,”

[1] [2] [3] [4] [5] [6] [7]
technology has been good for me.
[1] [2] [3] [4] [5] [6] [7]
I find that I have to pull myself away from e-mail.

Given my lifestyle, I have more of a shortage of [1] [2] [3] [4] [5] [6] [7]
time than money.

I like the benefits of the Internet, but I often don’t [1] [2] [3] [4] [5] [6] [7]
have the time to take advantage of them.
 Values and Lifestyles (VALS)

Actualizers High Innovation

High Resources

Fulfilleds Achievers Experiencers

Believers Strivers Makers

Strugglers
Low Resources Low Innovation
 Factors Affecting Consumer
Behavior

Key Factors
 Motivation
◼ Cultural  Perception
◼ Social  Learning
◼ Personal  Beliefs and attitudes
◼ Psychological
 Psychological Factors: Motivation

◼ This 55 years-old
man is asked about
the reason of
purchasing a two-
seat, red sport car

◼ His answer was

high performance
capability of the car
Psychological Factors: Motivation

◼ A motive is a need that is sufficiently pressing to

direct the person to seek satisfaction
◼ Motivation research is based on Freud’s
approach→ Looks for hidden and subconscious
motivation
◼ Maslow ordered needs based on how pressing
they are to the consumer
Maslow’s Hierarchy of Needs

Self
Actualization
(Self-development)
Esteem Needs
(self-esteem, recogn.)

Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst, shelter)
New product of Coca-Cola

https://www.youtube.com/watch?v=aGfdubL
AtY8
Psychological Factors: Perception
◼ Perception → process by which people select,
organize and interpret information
◼ Perception Includes:
 Selective attention
◼ Consumers screen out information

 Selective distortion
◼ People interpret to support beliefs

 Selective retention
◼ People retain points to support attitudes
Psychological Factors: Learning
◼ Learning → changes in a person’s behavior,
arising from experience
◼ Learning occurs through the interplay of:
 Drives
◼ Internal stimulus that calls for action
 Stimuli
◼ Objects that move drive to motive
 Cues
◼ Minor stimuli that affect response
 Reinforcement
◼ Feedback on action
Psychological Factors: Beliefs and
Attitudes
◼ Belief
a descriptive thought about a
brand or service
 may be based on real
knowledge, opinion, or faith
◼ Attitude
 describes a person’s evaluations,
feelings and tendencies toward
an object or idea
 They are difficult to change
 The Buying Roles

◼ 5 roles people might play in a buying decision

 Initiator- who first gives the idea of buying the
product or service
 Influencer - whose view or advice influences the
decision
 Decider - who decide on any component of buying
decision
 Buyer - who makes the actual purchase
 User - who uses the product or sevice purchased
Types of Buying Decision Behavior
High Low
Involvement Involvement
Significant Complex Variety-
differences
between Buying Seeking
brands Behavior Behavior

Few Dissonance- Habitual

differences Reducing Buying Buying
between
brands Behavior Behavior
 The Buyer Decision Process

Purchase
Decision
Evaluation Postpurchase
of Alternatives Behavior
Information
Search
Need
Recognition
 The Buyer Decision Process

Process Stages
◼ Needs can be triggered by:
◼ Need recognition  Internal stimuli
◼ Normal needs become
◼ Information search strong enough to drive
behavior
◼ Evaluation of
 External stimuli
alternatives
◼ Advertisements
◼ Purchase decision ◼ Friends of friends
◼ Postpurchase
behavior
 Problem Recognition

Buyer
Needs Arising from:
State where the recognizes Internal Stimuli
buyer’s needs are
(hunger)
fulfilled and the a problem
or
buyer is satisfied. or External Stimuli
a need (friends)
 The Buyer Decision Process

Process Stages ◼ Consumers exhibit

heightened attention or
◼ Need recognition actively search for
◼ Information search information.
◼ Evaluation of ◼ Sources of information:
alternatives  Personal
◼ Purchase decision  Commercial
 Public
◼ Postpurchase
behavior  Experiential
◼ Word-of-mouth
 Information Search

Personal Sources •Family, friends, neighbors

•Most effective source of
information
Commercial Sources •Advertising, salespeople
•Receives most information
from these sources

Public Sources •Mass Media

•Consumer-rating groups

•Handling the product

Experiential Sources •Examining the product
•Using the product
 The Buyer Decision Process

Process Stages
◼ Evaluation procedure
depends on the consumer
◼ Need recognition and the buying situation.
◼ Information search ◼ Most buyers evaluate
multiple attributes, each of
◼ Evaluation of which is weighted
alternatives differently.
◼ At the end of the evaluation
◼ Purchase decision stage, purchase intentions
◼ Postpurchase are formed.
behavior
 Evaluation of Alternatives

Consumer May Use Careful

Calculations & Logical Thinking

Consumers May Buy on Impulse and

Rely on Intuition
Consumers May Make Buying Decisions
on Their Own.

Consumers May Make Buying Decisions

Only After Consulting Others.

Marketers Must Study Buyers to Find Out

How They Evaluate Brand Alternatives
 Evaluation of Alternatives

 The consumer is looking for certain benefits from the

product solution
 The consumer sees each product as a “bundle of
attributes”
◼ Consumers differ as to which product attributes they see
as most relevant
◼ Consumers differ as on the importance of weights they
attach to each attribute
 The consumer develops a set of brand beliefs about
where each brand stands on each attribute
 The consumer arrives at attitudes (judgments
/preferences) toward different brands through an
attribute evaluation procedure.
The Buyer Decision Process
Successive Sets Involved in Customer Decision Making
 The Buyer Decision Process

Process Stages
◼ Two factors intercede
◼ Need recognition between purchase
intentions and the actual
◼ Information search
decision:
◼ Evaluation of  Attitudes of others
alternatives  Unexpected situational

◼ Purchase decision factors

◼ Postpurchase
behavior
 The Buyer Decision Process

Process Stages
◼ Satisfaction is important:
 Delighted consumers
◼ Need recognition engage in positive word-
of-mouth.
◼ Information search  Unhappy customers tell on
average 11 other people.
◼ Evaluation of  It costs more to attract a
alternatives new customer than it does
to retain an existing
◼ Purchase decision customer.
◼ Postpurchase ◼ Cognitive dissonance is
common
behavior
 Postpurchase Behavior

Satisfied Customer!

Consumer’s
Expectations of Product’s Performance ---
Product’s Perceived
Performance.

Dissatisfied Customer
◼ Consumer Buying Journey (by McKinsey)

 Not inventing the wheel ☺

but,
 Nice visualization!

https://www.youtube.com/watch?v=XR96kLGB72g
 Buyer Decision Process for
New Products

◼ New Products
 Good, service or idea that is perceived by
customers as new.
◼ Stages in the Adoption Process
 Marketers should help consumers move
through these stages.
 Stages in the Adoption Process
Awareness: Consumer is aware of
product, but lacks information.
Interest: Consumer seeks
Information about new product.

Evaluation: Consumer considers

trying new product.
Trial: Consumer tries new
product on a small scale.

Adoption: Consumer decides

to make regular use of product.
 Buyer Decision Process for
New Products

◼ Individual Differences in Innovativeness:

 Consumers can be classified into five

adopter categories, each of which behaves
differently toward new products
 Adopter Categories
Percentage of Adopters

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5%
Early Time of Adoption Late
Adopter Groups for Technological Innovations
 Buyer Decision Process for
New Products
Product Characteristics influencing the adoption rate
Relative
Advantage
Is the innovation
superior to existing
products?
Communicability Compatibility :
: Can results be Does the innovation
easily observed or fit the values and
described to others? experience of the
target market?

Divisibility : Complexity :
Can the innovation Is the innovation
be used on a trial difficult to
basis? understand or use?
 Buyer Decision Process for
New Products
◼ International Consumer
Behavior
 Values, attitudes and behaviors
differ greatly in other countries.
 Physical differences exist which
require changes in the marketing
mix.
 Customs vary from country to
country.
 Marketers must decide the degree
to which they will adapt their
marketing efforts.