CHAPTER 4

Consumer Markets and

Consumer Buyer Behavior
The most
important thing is
to forecast where
customers are
moving, and be in
front of them.
 What is behaviour?
Behaviour: the way in which an animal or person acts in response
to a particular situation or stimulus.
- Conscious Behaviour
Any behaviour that the person is aware of.
Ex: walking, eating, listening to the instructor, memorizing lessons in
preparation of exams, etc.
- Unconscious Behaviour
Any behaviour that the person is not fully aware of.
Ex. Mannerisms, playing or flipping of hair while talking, shaking of the
legs while sitting, biting your fingers, playing with your pen while
listening to your teacher’s discussion, etc.
 Why do we need to study “behaviour”?

- Customer purchase is influenced by many factors

- Sometimes, what customers say is not important
- Behaviours give precise reasons for buying, which is the basis for
effective marketing decisions
 Customer markets
Consumer

International Business

Government Reseller
 What is Consumer Behavior?
“Consumer behavior is the study of consumers’ choices during
searching, evaluating, purchasing, and using products and
services that they believe would satisfy their needs”
(Schiffman and Wisenblit, 2019: 33).

The study of consumer behaviour includes:

- how consumers - what they buy
think - how often they buy
- why they buy - how they dispose of it
- how often they use it
Model of Consumer Behavior
Factors affecting Consumer Behavior
Cultural
factors
– Culture

– Subculture
– Social class
Social factors

– Groups and social

networks
– Family

– Roles and status

 Groups and social networks

Groups: Two or more people who interact to accomplish individual or mutual goals

Membership Groups Reference Groups Aspirational groups

• Groups with direct • Groups that form a • Groups an

influence and to comparison or individual wishes to

which a person reference in forming belong to

belongs attitudes or behavior
Personal factors

– Occupation

– Age and life stage

– Economic situation
– Lifestyle
– Personality and self-
concept
Lifestyle:

¡ Lifestyle is a person’s pattern of living as expressed in his or her

psychographics.

¡ Involves measuring consumers’ major AIO dimensions:

à activities (work, hobbies, shopping, sports, social events),

à interests (food, fashion, family, recreation),

à and opinions (about themselves, social issues, business, products).

Personality and self-concept:

¡ The unique psychological characteristics that distinguish a person or group .

¡ Personality is usually described in terms of traits such as self-confidence,

dominance, sociability, autonomy, defensiveness, adaptability, and
aggressiveness)
Psychological factors

– Motivation

– Perception
– Learning
– Belief and attitudes
Motivation:

o A need that is sufficiently pressing to direct the person to seek

satisfaction of the need

o Sigmund Freud

o Abraham Maslow
 Motivation as a Concept
Motivation
•Definition: the driving force that impels people to act.
•Occurs when a need arises that a consumer wishes to
satisfy.
•Understanding motivation involves understanding the:
– Needs that drive people to behave in certain ways
– Goals associated with needs – the desired ‘end-state’
o Extrinsic goal: earn reward / avoid punishment
o Intrinsic goal: personally rewarding

E.g., I need an education, my goal is to become qualified

in my field
Extrinsic or Intrinsic?
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 The Motivation Process

Personal and Values /

Cultural Factors Involvement

Goal
Unfulfilled Driv achieved,
Tension Behaviour
need need
e
satisfied

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Motivation Conflicts (2 to 2)

Approach-Approach Conflict:
A person must choose between two
desirable alternatives (e.g., a new bag or
new shoes, or this app or another).

Approach-Avoid Conflict:
Exists when consumers desire a goal but
wish to avoid it at the same time (e.g.,
buying a fur coat, eating chocolate).

Avoid-Avoid Conflict:
Occurs when a choice between two
undesirable alternatives must be made
(e.g., tooth removed or root canal filling).

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 Application of Motivational
Conflicts

APPROACH-APPROACH APPROACH-AVOID AVOID-AVOID

Definition Conflict between two desirable Conflict between a desirable Conflict between two
alternatives and an undesirable alternative undesirable alternatives
linked to the same object
Consumer Wanting to go on holidays with Wanting to eat chocolate vs Spending money to repair a
example friends vs wanting to holiday wanting to avoid the fat/sugar TV vs spending money to
with family buy a new TV
Marketing Offer holiday package that Repackage chocolate into Offer interest-free loans or
responses combines both alternatives smaller portions or offer low-fat trade-in to reduce pain of
options outlaying money

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MASLOW’s Hỉeachy of Needs
Perception:

o The process by which people select, organize, and interpret information to

form a meaningful picture of the world.

o Three perceptual process: selective attention, selective distortion, and

selective retention.

Learning:

o Changes in an individual’s behavior arising from experience.

Perception

Definitions:
Perception is a process by which sensations are selected, organised and
interpreted.
The study of perception focuses on what we add to raw sensations to give
them meaning.
Sensation is the immediate response of our sensory receptors (eyes, ears,
nose, mouth, fingers) to basic stimuli such as light, colour, sound, odours and
textures.

How we see the world around us

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Perceptual Process

Sensory Organisation / Consumer

Exposure Attention
System Interpretation Behaviour

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 Sensory Systems

External stimuli, or sensory inputs, can be received on a number of

different ‘channels’ (eyes, ears, nose, smell, touch).
Inputs picked up by our five senses are the raw data that begin the
perceptual process.

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The Sensory System in the Perceptual Process

Consumer
Behaviour

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Why is Learning about
‘Learning’ Important?
How will consumers know about your brand?

How will they make purchasing decisions?

How can you persuade them to prefer your product?

They have t o LEARN about what you offer first !

If we understand how consumers learn, we can be pro- active

in helping them learn about our offerings

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 Consumer Learning Defined

Consumer learning?

Consumer learning is “the process through

which consumers acquire knowledge from
experiences with products and
observations of others’ consumption, and
use that knowledge in subsequent buying”
(Schiffman and Wisenblit, 2019: 147).

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Learning is Linked with Consumer Behaviour

Behavioural
Learning
Theories

Cognitive
Consumer
Learning
Behaviour
Theories

Memor
y

1 - 35
 Behavioural Learning Theories

• Behavioural learning theories assume that

learning takes place as the result of
responses to external events:

Stimulus-response

• People’s experiences are shaped by feedback

they receive as they go through life.
• Actions result in rewards and punishments,
which influence future responses to similar
situations.

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 Behavioural Learning Theories

Two major approaches to learning:

1. Classical Conditioning

2. Instrumental (or Operant) Conditioning

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 Classical Conditioning
Conditioned learning results when:
A stimulus that does not initially evoke a response is
paired with another stimulus that elicits a known
response
Repeated exposure means that, eventually, the
original stimulus produces the same response when
used alone
Ivan Pavlov (1849 - 1936) - first to describe how
conditioning could be used as a model for learning.
•Conditioning effects are more likely to occur after
repetition.
•Repetition increases the strength of the associations.

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 Classical Conditioning and Marketing
Creating positive associations by marketing:
•Ads often pair products with a positive
stimulus (e.g., music, humour, imagery) to
create a desirable association.
Example:
Companies can use ethnic-sounding names
for their products to transfer positive
thoughts and feelings about that country to
their products

Applications of repetition:
•Marketers attempting to condition an
association must ensure that
consumers have been exposed to the
stimulus enough times to make it
‘stick’.

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 Classical Conditioning Applications

Celebrity
Association

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 Instrumental(Operant)Conditioning
Instrumental Conditioning: learning occurs from receiving positive or
negative outcomes as a result of the behaviour.
Ø Also known as ‘operant conditioning’
Ø B. F. Skinner and the ‘Skinner Box’

Occurs in one of three ways:

• Positive reinforcement
• Negative reinforcement (remove pain)
• Punishment (discourages behaviour)

Extinction = When a positive outcome is no longer received, the learned stimulus-

response connection will not be maintained.

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 Instrumental Conditioning Application

Buying Jeans

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 InstrumentalConditioningandMarketing
Instrumental conditioning in Marketing:
When a consumer is rewarded or punished for a purchase decision. Examples
of consumption reinforcement include a simple thank you after a purchase - to
rebates and follow-up phone calls.

Frequency Marketing reinforces regular purchasers by giving them rewards with

values that increase along with the amount purchased (e.g., Frequent Flyer
Programs – loyalty programs).

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Belief:

o A descriptive thought that a person holds about something.

o Beliefs may be based on real knowledge, opinion, or faith and may or may

not carry an emotional charge

Attitude:

o A person’s consistently favorable or unfavorable evaluations, feelings, and

tendencies toward an object or idea.

What is an Attitude?

Definition of Attitude:
A lasting, general evaluation of people, products, advertisements or
issues.

•Attitude Object: anything we have an attitude towards (Ao)

•Lasting: tends to endure over time

•Tends to be:
– positive/negative
– Favourable/unfavourable

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Consumers Learn Attitudes

Sources of attitude formation

Experience
Family /
Friends

M edia

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Components of Attitude

Attitudes are formed from three components:

üThoughts / beliefs / thinking processes /

learning

ü Feelings / emotions / affect

üBehaviours / actions / trials / practice and

‘intention’ to behave

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Model of Consumer Behavior
 Four Types of Buying Behavior

High Low
involvement involvement

Significant
differences Complex buying Variety-seeking
between brands behavior buying behavior

Dissonance Habitual buying

Few differences
between brands reducing buying behavior
behavior
 Four Types of Buying Behavior

Complex buying -They are highly involved in a purchase and

behavior perceive significant differences among brands

Dissonance- It's a type of consumer buying behavior

reducing characterized by high involvement but few
buying behavior perceived differences among brands
Consumer buying behavior in situations
Habitual buying characterized by low consumer involvement and
behavior few significant perceived brand differences.
Variety-seeking Consumer buying behavior in situations
buying behavior characterized by low consumer involvement but
significant perceived brand differences
The Buyer Decision Process

Need Recognition

Information search

Evaluation of alternatives

Purchase Decision

Post-purchase behavior
 The Buyer Decision Process
The first stage of the buyer decision process, in which
Need recognition
the consumer recognizes a problem or need
Information The stage of the buyer decision process in which the
search consumer is aroused to search for more information.
Alternative The stage of the buyer decision process in which the
evaluation consumer uses information to evaluate alternative
brands in the choice set
Purchase The buyer’s decision about which brand to purchase
decision
Post-purchase The stage of the buyer decision process in which
behavior consumers take further action after purchase based on
their satisfaction or dissatisfaction with a purchase
 Need Recognition

How to make consumers recognize

Information search
their needs?

Evaluation of alternatives Stimuli

ü Internal
Purchase Decision ü External

Post-purchase behavior
 The Buyer Decision Process
The first stage of the buyer decision process, in which
Need recognition
the consumer recognizes a problem or need
Information The stage of the buyer decision process in which the
search consumer is aroused to search for more information.
Alternative The stage of the buyer decision process in which the
evaluation consumer uses information to evaluate alternative
brands in the choice set
Purchase The buyer’s decision about which brand to purchase
decision
Post-purchase The stage of the buyer decision process in which
behavior consumers take further action after purchase based on
their satisfaction or dissatisfaction with a purchase
 Need Recognition

ü Personal sources
Information search
ü Commercial sources
ü Public sources
Evaluation of alternatives ü Experiential sources

Purchase Decision

Post-purchase behavior
 The Buyer Decision Process
The first stage of the buyer decision process, in which
Need recognition
the consumer recognizes a problem or need
Information The stage of the buyer decision process in which the
search consumer is aroused to search for more information.
Alternative The stage of the buyer decision process in which the
evaluation consumer uses information to evaluate alternative
brands in the choice set
Purchase The buyer’s decision about which brand to purchase
decision
Post-purchase The stage of the buyer decision process in which
behavior consumers take further action after purchase based on
their satisfaction or dissatisfaction with a purchase
 Need Recognition

Information search
Use information to evaluate
alternative brands in the
Evaluation of alternatives choice set

Purchase Decision

Post-purchase behavior
 The Buyer Decision Process
The first stage of the buyer decision process, in which
Need recognition
the consumer recognizes a problem or need
Information The stage of the buyer decision process in which the
search consumer is aroused to search for more information.
Alternative The stage of the buyer decision process in which the
evaluation consumer uses information to evaluate alternative
brands in the choice set
Purchase The buyer’s decision about which brand to purchase
decision
Post-purchase The stage of the buyer decision process in which
behavior consumers take further action after purchase based on
their satisfaction or dissatisfaction with a purchase
 Need Recognition

Information search
§ The buyer’s decision about which
brand to purchase
Evaluation of alternatives § 2 factors come between the
purchase intention and decision:
Purchase Decision ü Attitudes of others
ü Unexpected situational factors
Post-purchase behavior
 The Buyer Decision Process
The first stage of the buyer decision process, in which
Need recognition
the consumer recognizes a problem or need
Information The stage of the buyer decision process in which the
search consumer is aroused to search for more information.
Alternative The stage of the buyer decision process in which the
evaluation consumer uses information to evaluate alternative
brands in the choice set
Purchase The buyer’s decision about which brand to purchase
decision
Post-purchase The stage of the buyer decision process in which
behavior consumers take further action after purchase based on
their satisfaction or dissatisfaction with a purchase
 Need Recognition

ü The stage of the buyer decision

Information search
process in which consumers take
further action after purchase
Evaluation of alternatives based on their satisfaction or
dissatisfaction with a purchase
Purchase Decision ü Cognitive dissonance: buyer
discomfort caused by post-
Post-purchase behavior purchase conflict
The Buyer Decision Process for New Products

Adoption process is the mental process an individual goes through

from first learning about an innovation to final regular use.

Awareness Interest Evaluation Trial Adoption