CHAPTER THREE

TYPES OF MARKET
Over view:
It is good always goods to have a dynamic and

changing market where demand varies from person

to person.
 It is also fascinating to have a well-oriented and

1 active consumer.
 Overview…

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 3.1. Consumer Market

What do you know about consumer market?

The consumer market is all individual & households who

buy or acquire goods and service for personal

consumption/gratification.
All of these final consumer combine to make up the
consumer market.
 In America many trillions of dollars worth of goods &

services each year, making it one of the most attractive

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consumer market in the world.
3.2. Model of Consumer Behavior
Consumers make many buying decisions every day.
Most many large companies research consumer buying
decisions in great detail to answer the following
questions:
 What customer Buy?
 When they Buy?
 Why they Buy?
 Where they Buy?
 How often they Buy?
Those are reasons are hidden in mind and factually
present.
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 Cont…..
However, Marketers attempt to influence
consumers’ decision through product, pricing,
place, and promotion management strategy.
There might be cultural, social, personal and
psychological factors as well as Micro and Macro
environmental which shape up consumer
decision.
Therefore, Consumers are assimilating all these to
purchase decision with product choice, brand
choice, dealer choice, purchase time, purchase
amount and final choice.
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3.3 Factors affecting consumer buying behavior

The consumer buying behavior consists of cultural,

social, personal and psychological factors.

1. Cultural factors:
Cultural factors exert the broadest and deepest influence

on consumer behavior and they include culture,

subculture and social class.

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 …cont’d
a. Culture: Culture is a set of learned beliefs, values,
attitudes, habits and forms of behavior that are shared by
society.
 It transmitted from generation to generation with in
that society.
It is the most determinant of a person’s want and
behavior because human behavior is largely learned.
Therefore, marketers should seriously consider the culture

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in choosing target market and preparing market programs.
 …contd
b. Subculture: A subculture is a distinct and identifiable
cultural group that has value in common with the overall
society but also has certain characteristics that are unique
to it.
c. Social class: Social class is defined by social satisfaction
that is the ranking of people in a given society.
 It is society’s relatively permanent and ordered divisions

whose member share similar values, interests and behavior.

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 Cont…!
 Marketer are interested in social class because people in

given society class tend to exhibit similar buying

behavior and social class shows distance produce and
brand preferences in such areas as clothing, home
furnishings, leisure activity and automobiles.

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 2. Social factors
A consumer’s behavior is influenced also by social

factors, such as the consumer’s reference groups, family

and social roles and statuses.

A. Reference groups: all individual’s attitudes, values and

behaviors are influenced by different groups.
 It also defined as two or more people who interact to

accomplish either individual or mutual goals.

 Reference group divided into two types: Primary and

10 Secondary groups.
I. Primary Reference groups includes: membership,
aspiration, disclaim ant and avoidance reference groups.
Membership reference group: a group to which a person holds
frequent interaction with other members of the groups.
He/she comes in regular & formal contact with the
members of this groups.
Aspiration reference group: a group to which an individual
does not holds any membership but desire to belong to
the groups. He/she tries to copy the attitudes & behaviors
11 of other members.
Disclaim ant reference group: it is a reference group to
which an individual holds a membership but does not
want to belong and therefore all his action would be
opposed to the group.

He/she tries to not to be influenced by attitudes, values and

behavior of the group.

Avoidance reference group: is the reference group to

which an individual does not hold any membership.
He/she tries to present the values and believes of such
groups.
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II. Secondary groups includes: religious group,
professional association and trade union groups.
So marketer tries to identify the reference groups of their
target market.
B. Family
 Family is a group of two or more people related by
blood, marriage or adoption and reside together.
 They go through different stage of lifecycle, so each
stage create different demands for different products.
 It is the most important consumer buying organization
in society and it has been researched extensively.

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 Household: is a group of two or more people stayed
together but may not have blood relationship.

Types of family

1.Nuclear family-Mother plus Father plus Children

2. Extended family-Nuclear plus Grand parents

Any developing countries followed this types of family.

3. Single parent family-single parent plus 1kids

At present time the world towards to become Nuclear----
extended ----- single parents.
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 3. Roles and status:
A person participates in many groups such as

family clubs and organizations, he/she can be

defined in terms of roles and status.
A role consists of the activities that a person is

expected to perform according to persons around

him or her.
 Each role consists of a status reflecting the

general esteem given to it by society.

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3. Personal characteristics

A buyer’s decisions are also influenced by personal out

ward characteristics, notably the buyer’s age and
lifecycle stage, occupation, economic circumstances,
personality and self concept.

4. Psychological characteristics
 The important psychological activities that play a role in

buying decision are motivation, perception, learning,

and attitude formation.
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 1. Motivation
To understand why consumer behave as they do, we must

first ask why a person acts at all?.

The answer is because he or she experiences a need: All

behavior starts with a need.

Security, social acceptance and prestige are other
examples of need.
A need must be aroused or stimulated before it becomes a
motive.
Therefore, Motivation is the driving force for all human
behavior
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5. Self actualization
* Need for self fulfillment
4. Esteem need
* Self respect, recognition, status,
Reputation and prestige needs
3. Social needs
*Belonging and love, need for affection
Belonging to a group and acceptance
2. Safety needs
Protection /security need
1. Physiological need
Need for food, drink, Sex and shelter
Hierarchy of needs proposed by Abraham Mass low.
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 2. Perception
 Perception is the process by which the brain

constructs an internal representation of the out

side world.
 In other word it is a translation from the external

(Physical world) in to internal (mental world).

 It is the process by which people select, organized

and interpret information in an individual way.

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 People can form different perceptions of the same
stimulus because of three perceptual processes.
1. Selective attention- the tendency for people to screen
out most of the information to which they are
exposed.
2. Selective distortion – It describes the tendency of
people to interpret information in a way that will
support what they already believe.
3. Selective retention – Consumer are likely to
remember good points made about a brand they
favor and to forget good points made about
competing brand.
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 3. Learning
Learning is any change in the content or organization of

long – term memory and it is the result of information

processing and causes changing in memory.
It refers to relatively permanent changes in behavior,

and caused by unobservable behavior such as

memorizing a brand name is a part of learning.
 From marketing point of view learning is the process by

which individuals acquire the purchase and consumption

knowledge and experience that they apply to the future
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related behavior
 4. Beliefs and Attitudes

 A consumer belief is a psychological association

between a product or brand and an attribute or feature of
the products or brand
 Attitude put people in to a frame of mind of liking or

disliking things, of moving toward or away from them.

 Attitude are difficult to change thus a company should

usually try to fit its products in to existing attitude rather

than attempt to change attitudes.
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 Types of buying decision behavior

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 Types of buying decision behavior
Based on the degree of buyer involvement and
differentiation among brand, there are four buying
behaviors.
1. Complex buying behavior: When the product is
expensive, risky, purchased infrequently, and lightly.
 Self – expressive consumer may be highly involved.
 They are highly involved in a purchase and perceive
significant difference among brand.
 Marketer should make consumer aware of brand feature
and understand their information gathering and
evaluation behavior of high involvement product.

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 2. Dissonance- Reducing Buying Behavior:
It occurs when consumers are highly involved with an

expensive, infrequent, or risky purchase, but see little

difference among brands, they might experience offer
sales dissatisfaction.
The reason is they buy quickly and recognize defects
through process of usage or people criticize them for
doing so.
Marketer attempt to contact buyers after consumers

purchase to make sure whether the latter enjoy with and

assist to mitigate /alleviate their bad feeling.
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 3. Habitual Buying Behavior:
It occurs when consumer involvements low and
little significant brand difference and when
products are less expensive, risk and the consumer
less aware and devoted to brand the purchase
behavior is going to be Habitual.
The consumer buy the product out of irrational
reasons and it can be impulse purchase.
Marketer should advertise repetitively, charge
less manage supermarket shelf property to that of
more buyers through and buy product.

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 4. Variety Seeking Buying Behavior
Consumers of such behavior reflect very
low involvement and however with
comprehensive perceived brand difference.
 Varity seekers move from a brand to
other in their purchase not out of
dissonance but boredom.
Marketer either stock shelves or deliver
on time or program sales promotion and
less price.
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 3.5 The Buying Decision Process
1. Need Recognition: 1st stage of the buyer decision
process, in which the consumer recognizes a problem
or need.
2. Information Search: Consumers can obtain
information from any of several sources. These
includes:
a. Personal sources (family, friends, neighbors,
acquaintances),
b. Commercial sources (advertising, sales people,
dealers, packaging, displays),
c. Public sources (mass media, consumer rating
organizations), and
c. Experiential sources (handling, examining, using
28 the product).
 3. Evaluation Of Alternatives:
 The stage of the buyer decision process in which
the consumer uses information to evaluate
alternative brands in the choice set.
 The marketer needs to know about alternative
evaluation – that is, how the consumer processes
information to arrive at brand choices
unfortunately, consumers do not use a simple and
single evaluation process in all buying situations.
 Marketers should study buyers to find out how
they actually evaluate brand alternatives. If they
know what evaluative process goon, marketers
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can take steps to influence the buyer’s decision.
 4. Purchase Decision:
The consumer purchase decision will be to buy the
most preferred brand, but two factors can come
between the purchase intention and the purchase
decision. The first factor is the attitudes of others.
The second factor is unexpected situational factors.
consumer may form purchase intension based on
factors such as expected income, expected price,
and expected product benefits.

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 5. Post Purchase Behavior:
The stage of the buyer decision process in which
consumers take further action after purchase, based on
their satisfaction or dissatisfaction marketer’s job does
not end when the product is bought.
After purchasing the product the consumer will be
satisfied or dissatisfied and will engage in post purchase
behavior of interest to the marketer.
Almost all major purchase result in cognitive dissonance,
or discomfort caused by post purchase conflict

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 3.6 Business Market
Business market is a process of buying goods and
services for use in the production of other product and
services that are sold, rented or supplied to other
purpose. It also includes behavior of reserving or renting
them to other at a profit.
3.6.1 Nature and scope of business Market
The business market consist all individual and
organization that buy goods and service for one of the
following process:
To make other goods and service, to resell to other
business user or to consumer and to conduct the
organization operations. Each buyer with in the business
32 market is termed as a business user.
 Reading assignment
 Characteristics of Business Market
 Purchase Decision Process
 Business Buying Behavior and its Major Types of
Busying Situation
 Participants in the Business buying process
 Major influences on Business Buyers

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 Thank you 4
your Attention!!

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