ANALYZING CONSUMER MARKETS

01 Factors Influencing Consumer Behavior

02 Psychological Processes Influencing Consumer Re-

sponses

03 Buying Decision Process

04 Behavioral Decision Theory & Behavioral Economics

05
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ANALYZING BUSINESS MARKETS
01 What is Organizational Buying?

02 Buying Situations

03 Participants in the Business-to-Business Process

04 Developing Effective Marketing Programs

05 Building Strong Loyalty Relationships

06 Institutional Buyers and Government Agencies

ANALYZING CONSUMER
MARKETS
Factors Influencing Consumer
Behavior
Consumer behavior – study of how individuals, groups and
organizations select, buy, use and dispose of
goods, services, ideas or experiences to sat-
isfy their needs and wants.
Factors Influencing Consumer
Behavior
Cultural Social

Personal
Nationalities Religions

SUBCULTURES

Racial Groups Geographic Regions

 Fun facts about the Philippine culture
1. Filipinos spend10 hours on the
internet per day
2. Filipinos are the most likely to
bargain for clothes or food
3. Tingi culture
4. More Filipino men are now doing
the groceries
5. Filipinos are among the top
spenders for snacks

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 Characteristics of
Social Classes
• Within a class, people tend to behave alike
• Social class conveys perceptions of inferior or
superior position
• Class may be indicated by a cluster of vari-
ables (occupation, income, wealth)
• Class designation is mobile over time
 Reference
Cliques
groups

SOCIAL
FACTORS
Roles and Family
Status

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 All the groups that have a direct or indirect
influence on the attitude and behavior of a
person.
Reference
groups

SOCIAL Reference groups influence members in three

ways:
FACTORS 1. They expose an individual to new
behaviors and lifestyles
2. They influence attitudes and self-
concept
3. They create pressures for conformity
that may affect product and brand
choices.
Back
 Cliques

SOCIAL
FACTORS Small groups that in-
teract frequently

Back
 2 families in a buyer’s life:
1. Family of orientation – parents and siblings
2. Family of procreation – spouse and children

SOCIAL
FACTORS
Family

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 Role consists of the activities a person is expected
to perform and each role connotes a status.
SOCIAL
FACTORS
Roles and
Status

Back
 PERSONAL FACTORS
Age and Stage in the Life Cycle
Occupation and Economic Circumstances
Personality and Self-Concept
Lifestyle and Values
PERSONAL FACTORS
Age and Stage in the Life Cycle
 PERSONAL FACTORS
Occupation and Economic Circumstances

• Occupation also influences consumption

patterns
 PERSONAL FACTORS
Personality and Self-Concept
Brand personality – specific mix of human traits that
we can attribute to a particular brand

Transparent, confident and inspiring

 PERSONAL FACTORS
Lifestyle and Values
Lifestyle - a person’s patter of living in the world
expressed in activities, interests and opinions

• Money constrained
• Time constrained
Major Psychological Processes In-
fluencing Consumer Responses
1. Motivation
2. Perception
3. Learning
4. Emotions
5. Memory
Motivation
 Theories of Human
Motivation
1. Freud’s Theory – psychological forces shaping people’s behavior are largely
unconscious and that a person cannot fully understand his or
her own motivations
2. Maslow’s Theory – human needs are arranged in a hierarchy from most to least
pressing. A higher-order need cannot be satisfied unless the
lower-order needs are satisfied first.
3. Herzberg Theory – the absence of a dissatisfier is not enough to motivate a
purchase; satisfiers must be present.
 Perception: Perceptual Pro-
cesses

1. Selective Attention
2. Selective Distortion
3. Selective Retention
4. Subliminal Perception
 Perception: Perceptual Pro-
cesses
1. Selective Attention
Which stimuli will people notice?
1. stimuli that relate to a current need
2. stimuli that they anticipate
3. stimuli whose deviations are large in relationship to the
normal size of the stimuli

2. Selective Distortion
-tendency to interpret information in a way that fits
our preconceptions
 Perception: Perceptual Pro-
cesses
3. Selective Retention
Remembering good point about a product we like and
forgetting good point about competing products

4. Subliminal Perception
Marketers embed subliminal changes in ads
or packaging
Learning
 Emotions
An emotion-filled brand story has been shown to trigger people’s desire to
pass along things they hear about brands.
 Memory
Memory is a very constructive process because we don’t remember
information and events completely and accurately all the time.

Memory retrieval – the way the information gets out of memory.

3 facts are important about memory retrieval:
1. The presence of other product information can produce interference
effects and cause us to either overlook or confuse new data
2. The time between exposure to information and encoding has been
shown generally to produce only gradual decay
3. Information may be available in memory but not accessible for recall.
 Buying Process
01 Problem Recognition

02
Information Search

03 Evaluation of Alternatives

04
Purchase Decision

04 05 Post -Purchase Behavior

 Buying Process
01 Problem Recognition

• Buyer recognizes a problem or need triggered by internal

or external stimuli

Need can be:

• Internal – hunger, thirst
• External – admiration of a friend’s new car, tv ad for a HK vacation, etc

04
 Buying Process

02 Information Search
Information Sources:
• Personal – family, friends, neighbors, acquaintances
• Commercial – advertising, web sites, e-mails,
packaging, displays
• Public – mass media, social media, consumer-rating
organization
• Experimental – handling, examining, using the product
04
Buying Process

03 Evaluation of Alternatives
Consumers will pay the most attention to
attributes that deliver the sought-after
benefits

04
 Buying Process
Types of perceived risk:
Intervening Factors: 1. Functional risk
• Attitude of others 2. Physical risk
• Unanticipated situational factors 3. Financial risk
4. Social Risk
5. Psychological Risk
6. Time Risk

04
Purchase Decision

04
 Buying Process
Post purchase satisfaction – closeness between expectations and the product’s
perceived performance
Post purchase actions – a satisfied consumer is more likely to purchase the
product again and will tend to say good things about the
brand to others. Dissatisfied customers may abandon
the brand.
Post-purchase uses and disposal – marketers should also monitor how buyers
use and dispose of the product.

04 05 Post -Purchase Behavior

 Moderating Effect on Consumer De-
cision Making
1. Low Involvement Consumer Decision Making
2. Variety Seeking Buying Behavior
 Behavioral Decision Theory &
Behavioral Economics
1. Decision Heuristics
A. Availability Heuristics
B. Representativeness Heuristics
C. Anchoring & adjustment Heuristics
2. Framing
decision framing – the manner in which choices are presented

to and seen by a decision maker

mental accounting – the way consumers code, categorize and
ANALYZING BUSINESS
MARKETS
 Organizational Buying
Organizational buying – the decision-making process by which formal
organizations establish the need for purchased
products and services and identify, evaluate
and choose among alternative brands and sup-
pliers
Business market – consists of all organizations that acquire goods and
services used in the production of other products
and service that are sold, rented or supplied to oth-
ers.
 Business vs Consumer Market
Business marketers contrast sharply with consumer markets in that:
• Fewer, larger buyers
• Close-supplier-customer relationships
• Professional purchasing
• Multiple buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Geographically concentrated buyers
• Direct purchasing
 Buying Situations
 Straight Buy
 Modified Rebuy
 New task
 Participants in the Business
Buying Process
Buying center – consists of individuals and groups who participate in the pur-
chasing decision-making process

1. Initiators 5. Approvers
2. Users 6. Buyers
3. Influencers 7. Gatekeepers
4. Deciders
 Business Buying Process
Problem Recognition
Supplier Search
Proposal Solicitation
Supplier Selection
Order- routine Specification
Performance Review
 Business Buying Process
Buyer invites qualified suppliers to submit written proposal.
After evaluation, the buyer will invite a few suppliers to
make formal presentations

Proposal Solicitation
Supplier Selection

Before selecting a supplier, the buying center will specify rank

and desired supplier attributes
 Business Buying Process

The buyer negotiates the final order, listing

the technical specifications, the quantity
needed, the expected time of delivery,
return policies, warranties, etc.

Buyer periodically reviews the performance of the

chosen supplier(s) by asking feedbacks from end Order- routine Specification
users, rating the supplier using a weighted-score
method, aggregating the cost of poor performance Performance Review
to come up with adjusted cost of purchase
including price
 Developing Effective Business to
Business Marketing Programs
• Communication and Branding Activities
• Systems Buying and Selling
• Role of Services
Building Strong Loyalty Relationships
Classifications of Buyer-Supplier relationships:
Basic buying and selling
Bare bones
Contractual Transaction
Customer Supply
Cooperative Systems
Collaborative
Mutually adaptive
Customer is King
END OF PRESENTATION

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