Chapter 5

Consumer Markets
and
Consumer Buyer Behavior
“The most
important thing is
to forecast where
customers are
moving and to be
in front of
them…”
MARKET INDIVIDUAL
 MARKET are all
potential buyers
for a particular
product.
 TYPE OF DEFINITION RENTAL CAR
MARKET EXAMPLE

POTENTIAL All customers who may be Any driver who needs

interested in a particular temporary transportation
MARKET offering

AVAILABLE MARKET Subset: Customers who are Any driver who can afford
interested, possess the rental fees and is in the
adequate income, and have area served by rental-car
access to the offering services

QUALIFIED Subset: Customers who are Drivers in the available

qualified to buy based on market who have licenses
AVAILABLE MARKET age or other criteria and meet minimum age
restrictions

TARGET (SERVED) Subset: Customers that the Drivers in the qualified

company intends to target available market who need
MARKET for a particular offer to cover “airport to final
destinations” in the area

PENETRATED Subset: Customers who are Drivers in the target market

already buying the type of who have previously used
MARKET good or service sold by the rental car services
company
Consumer Buying
Behavior
 Consumer Buying Behavior refers
to the buying behavior of final
consumers (individuals &
households) who buy goods and
services for personal
consumption.
 Study consumer behavior to
answer:
“How do consumers respond to
marketing efforts the company might
use?”
Stimulus-Response Model
Model of Consumer
Behavior
Product Marketing and
Other Stimuli
Economic
Price Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s Black Box Affecting
Process Consumer
Behavior

Product Choice Purchase

Buyer’s Response Timing
Brand Choice
Purchase
Dealer Choice Amount
Characteristics
Affecting
Consumer Behavior
Culture
Social
Personal
Psychological
Buyer
Factors Affecting Consumer Behavior:
CULTURE
 Most basic cause of a person's wants and
behavior.
 Values
 Perceptions

Social Class
Subculture • Society’s relatively permanent &
ordered divisions whose members
• Groups of people with share similar values, interests, and
shared value systems behaviors.
based on common life
experiences. • People within a social class tend to
• Hispanic Consumers exhibit similar buying behavior.
• African American • Measured by:
Consumers ▪ Occupation
• Asian American ▪ Income
Consumers ▪ Education
• Mature Consumers ▪ Wealth
Factors Affecting Consumer Behavior:
SOCIAL
GROUPS
•Membership
•Reference

FAMILY
•Husband, wife, kids Social Factors
•Influencer, buyer, user

ROLES AND STATUS

Reference groups consist of all
groups that have direct (face-to-
face) or indirect influence on the
person’s attitudes or behavior.

Primary groups are family,

friends, neighbors and co-workers.
Secondary groups are religious,
professional and trade-union
groups.

But people are influenced by

groups which they do not belong
to: aspirational and dissociative
groups.
… and opinion leaders.
 Reference groups expose an
individual to new behaviors and
lifestyle, and influence attitudes
and self-concept; they create
pressures for conformity that may
affect actual product and brand
choices.
“… even if the buyer no longer
interacts very much with his or
her parents, their influence on the
buyer’s behavior can be
significant.”

Roles and Status. People

choose products that
communicate their role
and status in society.
Factors Affecting Consumer Behavior:
PERSONAL
Personal Influences

Age and Family Life Cycle

Occupation
Stage

Economic Situation Personality & Self-Concept

Lifestyle Identification

Activities Opinions

Interests
 People buy different goods and
services over a lifetime. Eat baby food
in the early years, most foods in the
AGE AND STAGE growing and mature years, and
IN THE LIFE CYCLE special diets in the later years. Taste in
clothes, furniture, and recreation is
also age related.

Marketers often choose life-cycle

groups as target market which should
also include single, gay and cohabitor
households

… or they could go the

psychological life-cycle stages like
“passages” or “transformation” adults
go thru life like, marriage or having
children.
 Product choice is
greatly affected by
economic
circumstances:
spendable income,
savings and assets,
debts, borrowing
OCCUPATIONAL power and attitudes
toward spending and
AND ECONOMIC
savings.
CIRCUMSTANCES
 Personality are a set of
distinguishing human psychological
traits that lead to relatively
consistent and enduring responses
to environmental stimuli.

Marketers attempt to develop brand personalities that

will attract consumers with the same self-concept. [A
person’s actual self-concept (how she views herself) may
differ from her ideal self-concept (how she would like to
view herself) and from her others-self-concept (how she
thinks others see her).
Lifestyle is a
person’s
pattern of
living in the
world as
expressed in
activities,
interests, and
opinions

LIFESTYLE
 VALS Actualizers Abundant Resources
2
Principle Oriented Status Oriented Action Oriented

Fulfilleds Achievers Experiencers

Believers Strivers Makers

Strugglers
Minimal Resources
 Actualizers are “take-
charge people”. Purchases
often reflect cultivated tastes
for relatively upscale, niche-
oriented products
Achievers are career and
work-oriented. They favor
established, prestige
products that demonstrate
success to their peers.
Fullfilleds are mature.
They favor durability,
functionality, and value in
products
Experiencers are young,
vital, enthusiastic,
impulsive and rebellious.
They spend much on
clothing, fast food, music,
movies and video.

Believers are conventional.
They favor familiar products
and established brands.
Makers are practical and
family-oriented. Favor only
products with a practical or
functional purpose.
Strivers are approval-
seeking. They favor stylish
products that emulate the
purchase of those with
greater material wealth.
Strugglers are elderly,
resigned, passive and
concerned but resourced-
constrained. They are
cautious consumers who are
loyal to favorite brands.
Factors Affecting Consumer Behavior:
PSYCHOLOGICAL

Motivation

Beliefs and Psychological

Factors Perception
Attitudes

Learning
• A motive is a need that
has a sufficient level of
intensity.
• Creating a tension state
that drives the person to
act.
• Satisfying the need
reduces the felt tension.

Motivation could be
biogenic or
psychogenic such the
need for recognition,
esteem or belonging.
Maslow’s Hierarchy of
Needs
Self
Actualization
(Self-development)

Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)
A motivated person is
ready to act. How the
motivated person
actually acts is
influenced by his or her
perception of the
situation.

Perception is the
process by which an
individual selects,
organizes, and interprets
inputs to create a
meaningful picture of
the world.
Learning involves
changes in an
individual’s
behavior arising
from experience.
When people act,
they learn.
Through doing
and learning,
people acquire
beliefs and
attitudes. These
in return
influence buying
behavior.
A belief is a descriptive
thought that a person
holds about
something.

An attitude describes a
person’s relatively
consistent evaluations,
feelings, and
tendencies toward an
object or idea.
THE BUYING
DECISION PROCESS
Types of Buying
Decisions

High Low
Involvement Involvement

Significant
differences Complex Buying Variety-Seeking
between Behavior (car) Behavior (shampoo)
brands
Few Dissonance-
differences Reducing Buying Habitual Buying
between Behavior (sugar)
brands Behavior
COMPLEX BUYING BEHAVIOR
1) Buyer develops beliefs about the product.
2) Buyer develops attitudes about the product.
3) He/she makes a thoughtful choice.
DISSONANCE-REDUCING BUYING BEHAVIOR
1) Buyer first makes the purchase.
2) Buyer acquires new beliefs.
3) Buyer ends up with a set of attitudes.
HABITUAL BUYING BEHAVIOR
▪ Buyer goes to the store and reach for the brand.
▪ If he keeps reaching for the same brand, its is
out of habit, not strong brand loyalty.
▪ Consumers have low involvement with most low-
cost, frequently purchased products.
VARIETY-SEEKING BUYING BEHAVIOR
➢ Consumers have some beliefs about a product.
➢ He chooses a brand and evaluates the product
during consumption. Next time, he reaches for
another brand out of a wish for a different
taste.
➢ Brand switching occurs for the sake of variety
rather than satisfaction,
Initiator: The person who first suggests the idea of buying the product

Influencer: The person whose view influences the decision

Decider: The person who decides whether to buy, what
to buy, how to buy or where to buy
Buyer: The person who makes the actual purchase
User: The person who uses the product

THE ROLES
The Buyer Decision
Process
Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior
The Buyer Decision Process
Step 1. Need Recognition

Need Recognition
Difference between an actual state and a desired state

Internal Stimuli External Stimuli

• Hunger
• TV advertising
• Thirst • Magazine ad
• Radio slogan
• A person’s normal
needs • Stimuli in the
environment
The Buyer Decision
Process
2 LEVELS OF AROUSAL
Step 2. Information
➢ Heightened Search
attention (receptive to information about a product)
➢ Active information search (looking for reading material, phoning
friends, visiting the store)

Personal Sources •Family, friends, neighbors

•Most influential 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
Consumer Behavior and Services

Search qualities

Experience qualities

Credence qualities
When Search Qualities are Lacking

 Personal sources of information

 More post-purchase evaluation than pre-
purchase evaluation
 Price and physical qualities are major tools
 Evoked set is smaller
 Innovations adopted more slowly
 Perceive greater risks
 Brand switching is less frequent
 Self blame for dissatisfaction
Successive sets involved in consumer decision-making
Total set
Awareness set

Consideration set
Choice set
Decision (?)
 Awareness Consideration
Total Set Choice Set Decision
Set Set

IBM ?
IBM IBM IBM
Apple Apple Apple Apple
Dell Dell Dell Dell
HP HP Toshiba
Toshiba Toshiba
Compaq Compaq
NEC
Gateway
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?

Total Product Satisfaction

Based on what I’m looking for, how satisfied
would I be with each product?

Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.
The Buyer Decision
Process
Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand

Attitudes Unexpected
of others situational
factors

Purchase Decision
The Buyer Decision Process
Step 5. Postpurchase Behavior

Consumer’s Expectations of
Product’s Performance

Product’s Perceived
Performance

Satisfied Dissatisfied
Customer! Customer

Cognitive Dissonance
 Postpurchase Behavior
 POSTPURCHASE SATISFACTION
 Buyer’s satisfaction is a function of the closeness between the
buyer’s expectations and the product’s perceived
performance. (dissatisfied, satisfied, or delighted)
 POSTPURCHASE ACTIONS
 “Our best advertisement is a satisfied customer”
 Dissatisfied customers may take public actions (complain to
the company, talk to a lawyer, or complain to other groups)
or private actions (exit options or voice options)
 POSTPURCHASE USE AND DISPOSAL
 If the product is stored in a closet, the product is probably
not satisfying, and word of mouth will not be strong.
 If sold or traded, new product sales will be depressed.
 Buyers may also find new uses for the product.
 If consumers throw the product away, marketers need to
know how they dispose of it, especially if it can hurt the
environment.
Stages in the Adoption
Process
Awareness

Interest

Evaluation

Trial

Adoption
Adoption of
Innovations
Percentage of Adopters

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5% Time of Adoption
Early Late
Influences on the Rate of
Adoption
of New Products
Communicability Relative Advantage
Can results be easily Is the innovation
observed or described superior to existing
to others? products?

Product
Divisibility Characteristics Compatibility
Can the innovation Does the innovation
be used on a fit the values and
trial basis? experience of the
target market?
Complexity
Is the innovation
difficult to
understand or use?
Marketing Other Buyer’s Buyer’s decision Buyer’s
Stimuli Stimuli Characteristics process decisions

Product Economic Cultural Problem Product

recognition choice

Price Technological Social Information Brand

search choice

Place Political Personal Evaluation of Dealer

alternatives choice

Promotion Cultural Psychological Purchase Purchase

decision timing

Post-purchase Purchase
behavior amount
“The secret to
marketing
success lies in
truly, deeply,
and passionately
understanding
your
customers…”