Marketing: Real People, Real Choices

Eleventh Edition

Chapter 6
Understand Consumer and
Business Markets

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Learning Objectives (1 of 2)
6.1 Define consumer behavior, and explain the purchase
decision-making process.
6.2 Explain how internal factors influence consumers’
decision-making processes.
6.3 Show how situational factors and consumers’
relationships with other people influence consumer
behavior.

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Learning Objectives (2 of 2)
6.4 Understand the characteristics of business-to-business
markets and how marketers classify business-to-business
customers.
6.5 Identify and describe the different business purchase
situations and the business buying decision process,
including the use of e-commerce and social media.
6.6 Understand what prospective employers are looking for
in an employee and how you can meet their needs, thus
increasing your chances that employer will “buy” or hire
you.

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Real People, Real Choices: Decision
Time at WW International, Inc
• Which option should be pursued?
– Option 1: Make the weekly meetings more productive
and entertaining.
– Option 2: Design an immersive well-being event that
would debunk and shift current assumptions about
Weight Watchers.
– Option 3: Organize a transformational event, but
partner with an existing organization like Wanderlust
to leverage their experience and infrastructure.

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The Consumer Decision-Making Process
• Consumer behavior is the process individuals or groups go through
to select, purchase, use and dispose of goods, services, ideas or
experiences to satisfy their needs and desires. Decision-making
behaviors are influenced by a variety of factors.
– Internal, situational, and social factors influence consumer
behavior.

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Not All Decisions Are the Same
• Amount of effort expended in decision making varies
according to the:
– Level of involvement
– Perceived risk
• Consumers use different approaches depending on the
amount of effort.
– Habitual decision making
– Extensive problem solving
– Limited problem solving

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Figure 6.1 The Consumer
Decision-Making Continuum
Decisions characterized as extensive problem solving
versus habitual decision making differ in a number of ways.

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Figure 6.2 The Consumer Decision-Making
Process

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Step 1: Problem Recognition
• Occurs whenever a consumer sees a significant difference
between his or her current state of affairs and some desired
or ideal state
– Marketing can trigger problem recognition and facilitate
consumer progression through decision process.

• What are some other ways marketers stimulate

problem recognition?
– for a new SUV?
– for a new pair of jeans?
– for coming back to school for another degree?

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Step 2: Information Search
• Consumers need adequate information to make good decisions.
• Search includes discovering alternatives available.
– Evoked set
– Consideration set
• Consumers search memory and environment for information.
– If information is inadequate, consumers seek out additional
sources, frequently using the Internet.
• Online Search
/www.google.com/ /www.bing.com/ /www.bizrate.com/
/www.pricegrabber.com/

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Step 3: Evaluation of Alternatives
• Identifying a small number of products for closer consideration
– Determinant attributes: most important features
– Evaluative criteria: dimensions consumers use to compare
competing product alternatives

It seems logical that information search and evaluation of

alternatives must occur somewhat simultaneously, especially
in extensive problem solving.
Can you explain a decision you have made when
information search and evaluation of alternatives
occurred together?

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Step 4: Product Choice
• Consumers often rely on mental shortcuts, or heuristics,
in making decisions.
• For extended problem solving decisions, may use
compensatory decision rules in which strength on one
attribute may compensate for a weakness in another.
• Heuristics are rules of thumb used by individuals to
arrive at good decision with less mental effort:
– Price equals quality
– Brand loyalty
– Country of origin

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Step 5: Postpurchase Evaluation
• Consumer satisfaction/dissatisfaction following purchase
of product is critical.
– Level of satisfaction is influenced by whether or not
expectations of quality are met or exceeded.
– Marketing communications must create accurate
expectations for the product.
– Buyer’s remorse is common.

What are some things candy bar marketers could do to

reduce your buyer’s remorse after eating a candy bar?

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Figure 6.3 Responses to Decision
Process Stages
Understanding the consumer decision process means marketers can develop strategies to
help move the consumer from recognizing a need to being a satisfied customer.
Stage in the
Decision Process Marketing Strategy Example
Problem Encourage consumers to see that existing • Create TV commercials showing the
recognition state does not equal desired state excitement of owning a new car
Information search Provide information when and where • Target marketing communications with
consumers are likely to search traditional and digital media to media vehicles
and Internet sites with high target-market
viewership
Evaluation of Understand the criteria consumers use in • Conduct research to identify most important
alternatives comparing brands and communicate own evaluative criteria
brand superiority • Create advertising and other marketing
communications that include reliable data on
superiority of a brand (e.g., miles per gallon,
safety, comfort)
Product choice Understand choice heuristics used by • Advertise “Made in America” (country of origin)
consumers and provide communication • Stress long history of the brand (brand loyalty)
that encourages brand decision
Postpurchase Encourage accurate consumer • Provide honest messages in all marketing
evaluation expectations communications and sales presentations

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The Hive Mind: Consumer Decision
Making in the Digital Age
• ZMOT: Google’s term for the zero moment of truth when
the consumer decides to make a purchase, often on a
smartphone, tablet, or laptop.
• This has led to the recognition of the “hive mind” of
consumers who spend hours online, seeking information
and advice from their social networks, until they begin to
think and act as a community, much like a hive of bees.
• Hyperchoice: term used to describe condition in which
consumers have too many choices, leading them to make
poorer decisions and experience greater frustration.

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Changes in Consumer Decision Making:
Welcome to AI
• Artificial intelligence (AI): intelligence demonstrated by
machines enabling computer systems to perform tasks
such as visual perception, speech recognition, decision
making, and language translation.
• Still in its early days, AI is rapidly moving forward in its
influence on both consumer and B2B behavior.
• Chatbots are generated by a computer program that
uses either voice or text to allow consumers to talk with
the computer’s AI capability.

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Figure 6.5 An Overview of the Perceptual
Process Sensory Stimuli

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Internal Influences on Consumers’
Decisions: Perception
• Perception is the process by which we select, organize,
and interpret information from the outside world.
• Three factors are necessary for perception to occur:
– Exposure: extent to which a person’s sensory
receptors are capable of registering a stimulus.
– Attention: extent to which a person devotes mental
processing to a stimulus.
– Interpretation: process of assigning meaning to a
stimulus based on prior associations with it and
assumptions he or she makes about it.

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Motivation

• Motivation is an internal
state that drives us to
satisfy needs by activating
goal-oriented behavior.

Consumers purchase
many products such as
bathtubs for both
functional and aesthetic
reasons.

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Figure 6.6 Maslow’s Hierarchy of Needs
and Related Products

Source: Adapted from Maslow, Abraham H.; Frager, Robert D.; Fadiman, James, Motivation and
Personality, 3rd Ed., ©1987. Reprinted and Electronically reproduced by permission of Pearson
Education, Inc., Upper Saddle River, New Jersey.
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Gamification
• Gamification is a rising business trend.
– Marketers apply game design techniques, such as
awarding points, badges, or levels, to non-game
experiences in order to engage consumers.
– Enables customers to participate in loyalty programs
and promote favorite products in a fun and
entertaining way.
– Participants earn badges, rewards, points.
– Would you study more if you could collect
badges for your efforts?

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Learning
• Learning is a relatively permanent change in behavior
caused by information or experience.
– Behavioral learning theories
▪ Classical conditioning
▪ Operant conditioning
– Cognitive learning theory
– Observational learning

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Figure 6.7 Consumers Learn in Many
Ways

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Attitudes
• Attitudes represent lasting evaluations of a person, object, or issue.

• Three components of attitude:

– Affect (feeling): emotional response
– Cognition (knowing): beliefs or knowledge
– Behavior (doing): intention to do something

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Personality: Are You What You Buy?
• Personality is the set of unique psychological
characteristics that consistently influence the way a
person responds to situations in the environment.
– Self-concept
– Self-esteem

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Age and Family Life Cycle
• Goods and services often appeal to
individuals within a certain age
group or to a stage in the Family
Life Cycle.

• What are some examples of

products (e.g., diapers), services
(e.g. various types of insurance),
or experiences (e.g., family
vacation to the Magic Kingdom)
that would be suitable for
consumers who are
– Young singles?
– Married with young children?
– Empty nesters?

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Lifestyle
• Lifestyle reflects a pattern of living.
• Psychographics groups people according to
psychological and behavioral similarities.
– Often groups are developed based on their
activities, interests, and opinions (AIOs)

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Figure 6.4 Influences on Consumer
Decision Making

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Situational and Social Influences on
Consumers’ Decisions
• Situational factors often shape purchase behaviors.
– Sensory marketing/sensory branding
– Physical environment and the purchase setting
– Time poverty

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Disruption in Consumer Behavior:
The COVID-19 Pandemic
• Mobile
• Transparency
• User-generated content
• Social networks
• Personalized data-driven disruptive marketing
• Changing brand loyalty
• Transition to digital shopping
• In-homing

Which of these do you think will change our futures?

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Social Influences on Consumer
Decisions
• We are all individuals …
– but we are also members of many groups that influence our
purchasing behavior.
• Many social influences on consumer decision making, for instance:
– Values (again)
– Trends
– Culture, subcultures, and microcultures
– Conscientious consumerism
– Social class
– Reference groups and opinion leaders
– Sex roles

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Culture
• Culture represents the shared values, beliefs, customs,
and tastes produced or practiced by a group of people.
– Includes rituals such as weddings and funerals
– Marketers tailor products to cultural values

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Subcultures and Microcultures
• A subculture is a group that:
– Coexists with other groups within a larger culture
– Have members that share a distinctive set of beliefs,
characteristics, or common experiences
– For example, members of a religious or ethnic group
• Microcultures are groups of individuals who identify
based on a common activity or art form, for instance:
– The Voice or Grey’s Anatomy fans
– Candy Crush players

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Conscientious Consumerism:
An Emerging Lifestyle Trend
• Many consumers are more aware of the social and
environmental consequences of their purchases
– And make decisions accordingly!
• In today’s connected world, criticism from consumer
sources can be damaging.

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Social Class
• Social class is the overall rank or social standing of
groups of people within a society, according to factors
such as:
– Family background
– Occupation
– Education
– Income
• Luxury products serve as status symbols.
• Mass class

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Group Membership
• “Gone along with the crowd”
• Riskier alternatives
• Reference group

What reference groups does a typical college student

like you belong to? What influences does each have
on the student?
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Opinion Leaders
• Opinion leaders frequently influence the attitudes and
behaviors of others.
• Such individuals typically share several characteristics:
– High interest in a given product category
– Update product category knowledge by reading,
talking with salespeople, and so on.
– Impart both positive and negative information
– Are among the first to buy goods

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Gender Roles
• Gender roles relate to
society’s expectations
regarding appropriate
attitudes, behaviors, and
opportunities for men and
women.
– Consumers often
associate sex-typed
products with one
gender or the other.
– Sex roles are
constantly evolving.

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Buying and Selling When the Customer
Is Another Organization
• Business-to-business (B2B) markets (also called
organizational markets) include:
– Manufacturers and other product producers
– Resellers (retailers and wholesalers)
– Government and not-for-profit institutions

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Figure 6.8 The Business Marketplace

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 Table 6.1 North American Industry
Classification System
Blank

Frozen Frozen Fruit Wireless Wireless

Fruit Example Telecommunications Telecommunications
Example Example Example
Sector (two digits) 31–33 Manufacturing 51 Information

Subsector (three digits) 311 Food Telecommunications

517
manufacturing
Industry group (four 3114 Fruit and vegetable Wired and wireless
digits) preserving and telecommunications
5173
specialty food carriers
manufacturing
Industry (five digits) 31141 Frozen food Wired and wireless
manufacturing 51731 telecommunications
carriers
U.S. industry (six digits) 311411 Frozen fruits, fruit Wireless
juice, and telecommunications
517312
vegetables, carriers (except satellite)
manufacturing

Source: United States Census Bureau, “North American Industry Classification System,”
www.census.gov/cgi-bin/sssd/naics/naicsrch?code=311411&search=2017%20NAICS%20Search

(accessed March 10, 2018).

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Figure 6.9 Key Differences in Business
Versus Consumer Markets

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Table 6.2 Differences between Organizational
and Consumer Markets (1 of 2)
Organizational Markets Consumer Markets

• Purchases made for some purpose other than • Purchases for individual or household consumption
personal consumption
• Purchases made by someone other than the user of • The ultimate user often makes the purchase
the product
• Several people frequently make the decisions • Individuals or small groups like couples and families
usually decide
• Purchases made according to precise technical • Purchases often based on brand reputation or
specifications based on product expertise personal recommendations with little or no product
expertise
• Purchases made after careful weighing of alternatives • Purchases frequently made on impulse

• Purchases based on rational criteria • Purchases based on emotional responses to products

or promotions
• Purchasers often engage in lengthy decision • Individual purchasers often make quick decisions
processes

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Table 6.2 Differences Between Organizational
and Consumer Markets (2 of 2)
Organizational Markets Consumer Markets

• Interdependencies between buyers and sellers; long- • Buyers engage in limited-term or one-time-only
term relationships relationships with many different sellers
• Purchases may involve competitive bidding, price • Most purchases made at “list price” with cash or credit
negotiations, and complex financial arrangements cards
• Products frequently purchased directly from producer • Products usually purchased from someone other than
producer of the product
• Purchases frequently involve high risk and high cost • Most purchases are relatively low risk and low cost

• Limited number of large buyers • Many individuals or household customers

• Buyers often geographically concentrated in certain • Buyers generally dispersed throughout total
areas population
• Products often complex; classified based on how • Products: consumer goods and services for individual
organizational customers use them use
• Demand derived from demand for other goods and • Demand based on consumer needs and preferences,
services, generally inelastic in the short run, subject to is generally price elastic, steady over time, and
fluctuations, and may be joined to their demand for independent of demand for other products
other goods and services
• Promotion emphasizes personal selling • Promotion emphasizes advertising including online
and social media

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Business-to-Business Demand (1 of 2)
• Business-to-business demand differs from consumer
demand.
• Demand is:
– Derived
– Inelastic
– Fluctuating
– Joint

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Figure 6.10 Derived Demand

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Business-to-Business Demand (2 of 2)
• Inelastic demand occurs when changes in price have
little or no effect on quantity sought.
• Fluctuating demand is when small changes in consumer
demand create large changes in business demand.
– Life expectancy of the product can also create
fluctuating demand.
• Joint demand occurs for two or more goods that are
used together to create a product.
• What are some other examples of joint demand?

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Figure 6.11 Elements of the Buyclass
Framework

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Professional Buyers and Buying Centers
• Trained professional buyers typically carry out buying in
business organizations.
– Procurement officers
– Buying agents
– Directors of Materials Management
• In many business buying situations, cross-functional
teams of individuals—known as a buying center—work
together to reach a decision.

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Table 6.3 Roles in the Buyer Center
Role Potential Player Responsibility

• Initiator • Production employees, sales • Recognizes that a purchase needs to

managers, almost anyone be made
• User • Production employees, • Individual(s) who will ultimately use
secretaries, almost anyone the product
• Gatekeeper • Buyers, purchasing agents • Controls flow of information to others
in the organization
• Influencer • Engineers, quality control • Affects decision by giving advice and
experts, technical sharing expertise
• specialists, outside consultants
• Decider • Purchasing agents, managers, • Makes the final purchase decision
CEOs
• Buyer • Purchasing agents • Executes the purchase decision

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Figure 6.12 Steps in the Business
Buying Decision Process

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B2B E-Commerce
• B2B e-commerce refers to internet exchanges of
information, goods, services, and payments between two
or more organizations.
– Creates efficiencies by allowing marketers to link
directly to value chain partners.
– Intranets link a firm’s departments, employees, and
databases.
– Extranets allow authorized suppliers, customers, and
other outsiders to access the firm’s Intranet.

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Dark Side of B2B E-Commerce
• Potential of Security Risks
• Malware
• Firewall
• Encryption

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B2B and Social Media
• Games generate buzz and increase brand awareness.
• B2B marketers use social media sites to promote
themselves and their businesses.
• LinkedIn is the most prominent social networking site for
B2B marketers and offers several advantages.

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Brand You: Why Employers Buy
• Step 1: Understand the Employer’s Decision Process
– Same steps that consumers take in moving toward
purchase and brand loyalty
• Step 2: Understand the Process of Creating Brand
– If you were the boss, what kind of person would you
want?

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