Chapter Six

Analyzing Consumer Markets

Analyzing Consumer Behavior
Topic Outline

• Model of Consumer Behavior

• Characteristics Affecting Consumer Behavior
• Types of Buying Decision Behavior
• The Buyer Decision Process
Model of Consumer Behavior

• Consumer buyer behavior refers to the buying behavior of

final consumers—individuals and households who buy
goods and services for personal consumption

• Consumer market refers to all of the personal consumption

of final consumers
Study of Consumer Behavior
• What Consumers Buy?
• Where they Buy?
• How much they Buy?
• When they Buy?
• Why they Buy?

• Why they Buy? –A factor that is not that easy to determine,

answers are locked with in the mind of the consumer

• How do Consumers respond to various Marketing efforts?

Model of Buyer Behavior

Buyer Responses
Buyer Attitudes and
The Environment Buyers Black Box Preferences
Marketing Stimuli Buyer Purchase Behavior:
(4PSs) Characteristics What, How Where,
Other (PEST) When
Buyer Decision
Process Brand and
Company
Relationship
Behavior
Characteristics Influencing
Consumer Behavior

Personal
Culture

• Culture • Age and

Psychological
• Motivation
Social
• Reference
• Sub Culture Groups Life Stage • Perception
• Social Class • Family • Occupation • Learning
• Roles and • Economic • Beliefs and
Status Situation Attitudes
• LifeStyle
• Personality
and Self
Concept
Characteristics Affecting
Consumer Behavior
Culture is the learned values, perceptions, wants, and behavior from family
and other important institutions

• Achievement and Success

• Efficiency and Practicality
• Respect for Elders
• Conformity
• Humanitarianism
• Youthfulness
• Fitness and Health
Characteristics Affecting
Consumer Behavior
• Cultural Shifts-Something that Marketers look out for-

• Healthy Lifestyle-Organic Food, Fitness Machines, Athletic

Clothing, Diets

• Male Cosmetics- To Look Fairer and More Handsome

Characteristics Affecting
Consumer Behavior
• Subculture are groups of people within a culture with shared
value systems based on common life experiences and situations
in the sub continent

• Muslims
• Hindus
• Sikhs
• Christians

• Sub Cultures can further be divided according to Geography:

• Punjabis
• Gujrati
• Pathans
• And So On
Characteristics 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

• Urban or Rural
Socio Economic Classification
System (SEC)
Social Factors

• Small Groups
• Family
• Social Roles
• Status
 Characteristics Affecting
Consumer Behavior
Groups and Social Networks

Membership Aspirational Reference

Groups Groups Groups
• Groups with • Groups an • Groups that
direct individual form a
influence and wishes to comparison
to which a belong to or reference
person in forming
belongs attitudes or
behavior
Characteristics Affecting
Consumer Behavior
Personal Factors

Occupation affects the goods and services bought by consumers

Blue Collar Workers tend to buy Rugged Cloths
White Collar Worker tend to buy Business/Formal Clothing

Economic situation includes trends in:

Personal Interest
Savings
income rates
 Characteristics Affecting
Consumer Behavior
Personal Factors
Lifestyle is a person’s pattern of living as expressed in his or her
psychographics

• Measures a consumer’s AIOs (activities, interests, opinions) to

capture information about a person’s pattern of acting and
interacting in the environment
Characteristics Affecting
Consumer Behavior
Personal Factors

• Personality and Self-Concept

• Personality refers to the unique psychological characteristics that
lead to consistent and lasting responses to the consumer’s
environment

• Brand Personality: Human Traits that may be attributed to a certain

Brand
• Sincerity(down to earth, honest, wholesome, cheerful)
• Excitement(daring, spirited, imaginative, upto date)
• Competence(reliable, intelligent, successful)
• Sophistication (Upper Class and Charming)
• Ruggedness (Outdoorsy and Tough)
Characteristics Affecting
Consumer Behavior
Personal Factors

• Jeep (Ruggedness), Apple (excitement),CNN (Competence), Dove

(Sincerity)

• Self Concept: Also referred to as the Self Image, people’s

possessions contribute to and reflect their identity

• We are, What we have

• To understand consumer behavior we must first understand the

relationship between consumer self concept and possessions
Characteristics Affecting
Consumer Behavior
Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes

Characteristics Affecting
Consumer Behavior
Psychological Factors
Motivation

A motive is a need that is sufficiently pressing to direct the person to seek

satisfaction

Motivation research refers to qualitative research designed to probe

consumers’ hidden, subconscious motivations

A researcher may ask the respondent to describe their favorite brands as

animals to evaluate prestige associated with them
Characteristics Affecting
Consumer Behavior
Psychological Factors

Perception is the process by which people select, organize,

and interpret information to form a meaningful picture of
the world from three perceptual processes
Characteristics Affecting
Consumer Behavior
Psychological Factors

Selective attention is the tendency for people to screen out most

of the information to which they are exposed

Selective distortion is the tendency for people to interpret

information in a way that will support what they already believe

Selective retention is the tendency to remember good points

made about a brand they favor and forget good points about
competing brands
Characteristics Affecting
Consumer Behavior
Psychological Factors

• Learning is the change in an individual’s behavior arising from

experience and occurs through interplay of:

Drives Stimuli Cues

Responses Reinforcement
Characteristics Affecting
Consumer Behavior
Psychological Factors
Beliefs and Attitudes

Belief is a descriptive thought that a person has about

something based on:
• Knowledge
• Opinion
• Faith

• Marketers are interested in beliefs because they make up

the product and brand image which affects the buying
behavior
Characteristics Affecting
Consumer Behavior
Psychological Factors

Attitudes describe a person’s relatively consistent evaluations, feelings,

and tendencies toward an object or idea.

Predisposition to act in a particular way towards and object or situation

Attitudes such as:

Buy the Best

Japanese make the best electronics
Creativity and Self Expression are the most important things in life
Types of Buying Decision
Behavior
High Involvement Low Involvement

Variety
Significant Complex
Seeking
Difference Buying
Buying
Between Brands Behavior
Behavior

Dissonance
Habitual
Reducing
Few Difference Buying
Buying
Between Brands Behavior
Behavior
Types of Buyer Decision Behavior
Complex Buying Behavior

 Behavior Exhibited in High Consumer Involvement in a Product and

Significant Differences in Perceived Brands

 Consumer may be highly involved when product is expensive, risky,

purchased infrequently and highly self expressive

 Consumer of a PC, Laptop may not know what attributes to consider

 There is a learning process that the Consumer has to go through

 Marketers need to help Customer gather information, differentiate brand

attributes by having a print ads with a Long Copy

 Using Salespeople to motivate the consumer for the final purchase

Types of Buyer Decision Behavior
Dissonance Reducing Buying Behavior

 Behavior Exhibited in High Consumer Involvement/Expensive/Risky purchase of a

Product and Few Differences in Perceived Brands

 In this case, the buyer will shop around to learn what is, available but will buy
fairly quickly because brand differences are not pronounced.

 The buyer may respond primarily to a good price or to purchase convenience

 Post Purchase Dissonance: After the purchase, the consumer might experience
dissonance that stems from noticing certain disquieting features of the product or
hearing favorable things about other brands.
Types of Buyer Decision Behavior
Habitual Buying Behavior

 Behavior Exhibited in Low Consumer Involvement purchase of a Product and Few

Differences in Perceived Brands

 Consumers have little involvement in this product, they go to a store and reach
out for a certain product

 Consumers seem to have low involvement with most low cost, frequently
purchased products

 They tend to purchase a brand because it is familiar, brand beliefs formed by

passive learning followed by purchase behavior usually not followed by evaluation

 Marketers of low involvement products often use price and sales promotions to
stimulate a product trial
Types of Buyer Decision Behavior
Variety Seeking Buying Behavior

 Some buying situations are characterized by low consumer involvement but

significant brand differences

 Here consumers are often observed to do a lot of brand’ switching.

 The consumer has some beliefs, chooses a brand of cookies without much
evaluation, and evaluates it during consumption.

 But next time, the consumer may reach for another brand out of boredom or a
wish for a different taste.

 The market leader will try to encourage habitual buying behavior by dominating
the shelf space, avoiding out-of-stock conditions

 Challenger firms will encourage variety seeking by offering lower prices, deals,
coupons, free samples and advertising that presents reasons for trying something
new.
Non-Compensatory Models of Choice

• Conjunctive: The consumer sets a minimum acceptable cut off

level for each attribute and chooses the first alternative that
meets the minimum standard for all attributes with the
conjunctive heuristic

• Lexicographic: The consumer chooses the best brand on the basis

of its perceived most important attribute.

• Elimination-by-aspects: the consumer compares brands on an

attribute selected probabilistically where the probability of
choosing an attribute is positively related to its importance and
brands are eliminated if they do not meet minimum acceptable
cutoff levels.
Perceived Risk

• Functional
• Physical
• Financial
• Social
• Psychological
• Time
Buyer Decision Process

Evaluation Post
Need Information Purchase
of Purchase
Recognition Search Decision
Alternatives Behavior