Consumer Markets and

Consumer Buyer Behavior

Chapter 5
 Definitions
• Consumer Buying Behavior
▪ Buying behavior of individuals and
households that buy products for
personal consumption.
• Consumer Market
▪ All individuals/households who buy
products for personal consumption.

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Buyer’s Response
? Buyer’s Black Box ?
Marketing and Other Stimuli
Behaviour
Model of Consumer
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 Model of
Consumer Behavior
• Stimulus Response Model
▪ Marketing and other stimuli enter the
buyer’s “black box” and produce certain
choice/purchase responses.
▪ Marketers must figure out what is inside
of the buyer’s “black box” and how
stimuli are changed to responses.

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 Characteristics Affecting
Consumer Behavior
Key Factors • Culture
• Subculture
• Cultural
• Social Class
• Social
• Personal
• Psychological

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 Characteristics affecting consumer behavior:
Cultural factors
⚫ Culture: the set of basic values, perceptions, wants and
behaviors learned by a member of society from family
and other important institutions
⚫ Asian Culture, African Culture, Arab Culture, American Culture
Chinese Culture etc
⚫ Subculture: smaller groups of people within each culture
with shared value systems based on common life
experiences and situations- Hispanic culture
⚫ Social class: 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
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• Cross cultural marketing : is the
practice that includes ethnic themes &
cross cultural perspectives within their
mainstream marketing.

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 Characteristics Affecting
Consumer Behavior
Key Factors • Groups
▪ Reference group
• Cultural ▪ Opinion leaders
• Social • Family
• Personal ▪ Children can
influence
• Psychological • Roles and Status

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 Social Factors Groups and Social
Networks
• Membership Groups : Groups with direct influence and to
which a person belongs
• Aspirational Reference Groups: Groups an individual
wishes to be like
• Associative Reference Groups : Groups include people
who more realistically represent the individuals’ current
equals or near-equals
• Dissociative Reference Group: group includes people that
the individual would not like to belong to

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 Social Factors
• Opinion leaders are people within a reference group
who exert social influence on others ▪
▪ Also called influentials or leading adopters or early
adopters
▪ Marketers identify them to use as brand ambassadors
• Buzz Marketing: Enlisting / creating opinion leaders
& use them
• Online Social Networks are online communities where
people socialize or exchange information and opinions: •
Blogs • Social networking sites (Facebook) •Virtual
worlds (Second Life)s brand ambassadors

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 Characteristics Affecting Consumer
Behavior
• Age and life cycle
• Occupation
Key Factors • Economic situation
• Lifestyle-pattern of living
• Cultural ▪ Activities- work, hobbies,
shopping, sports
• Social ▪ Interests- food, fashion,
recreation
• Personal ▪ Opinions- about themselves,
social issues, business,
• Psychological
product
• Personality and
self-concept
▪ Brand personality
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 Life cycle
• Young and singles, married, married with children, unmarried
couples, single parents, same sex couples etc.
Royal Bank identified five lifecycle stages:
• Youth- under 18
• Getting started- 18 to 35 yrs old-first job, first credit card, first car,
first child.
• Builders- 35 to 50 yrs- build career and family, peak earning years
• Accumulators- 50 to 60 yrs- worry about saving and investing
carefully for retirement
• Preservers- above 60yrs- want to maximize their retirement income
to maintain desired lifestyle

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 Personality and self-concept
• Personality refers to the unique psychological characteristics
that lead to relatively consistent and lasting responses to one’s
environment.
❖ Self-confidence
❖ Dominance
❖ Autonomy
❖ Defensiveness etc.

• Brand personality is the specific mix of human traits that may

be attributed to a particular brand.
▪ Sincerity- down to earth, honest. Dove
▪ Excitement- Apple
▪ Competence- CNN
▪ Sophistication- Rolex watch
▪ Ruggedness- Bata shoe

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• PART 2

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 Characteristics Affecting
Consumer Behavior
Key Factors • Motivation
▪ Needs provide motives for
consumer behavior
• Cultural ▪ Maslow’s hierarchy of needs
• Perception
• Social ▪ Selective attention, selective
distortion, selective retention
• Personal • Learning

• Psychological • Beliefs and attitudes

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Characteristics Affecting
Consumer Behavior
Maslow’s Hierarchy of Needs
Self-actualization
Esteem Needs
Social Needs
Safety Needs
Physiological Needs
food, water, shelter

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 Psychological (cont)
• Perception: process by which people select, organize and
interpret info to form a meaningful picture of the world.
▪ Selective attention- tendency of people to screen out info to which they
are exposed. Marketers must work to attract customers attention
▪ selective distortion- tendency of people to interpret info in such a way
that will support what they believed. Marketers should understand the
mindset of consumers
▪ selective retention- consumers are likely to remember good point of a
specific brand.

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• Learning describes changes in an individual’s behavior
arising from experience

• Learning occurs through:

▪ Drives
❖ Internal stimulus that calls for action
▪ Stimuli
❖ Objects that move drive to motive
▪ Cues
❖ Minor stimuli that affect response
▪ Reinforcement
❖ Feedback on action

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 Psychological (cont)
• Belief- descriptive thoughts that a person
holds about something.
▪ May be based on real knowledge, opinion, or faith
▪ May or may not carry emotional charge.
• Attitude
▪ Describes a person’s relatively consistent evaluations, feelings
and tendencies toward an object or idea.
▪ They are difficult to change
▪ “Buy the Best”

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 Type of buying decision behavior

High involvement Low involvement

Significant
differences
between brands

Few differences
between brands
Types of Buying Decision
Behavior
• Complex
▪ Highly involved, significant brand differences
▪ Example – computer

• Dissonance-reducing
▪ Highly involved, little brand differences
▪ Example – carpeting, furniture

• Habitual
▪ Low involvement, little brand differences
▪ Example – salt

• Variety-seeking
▪ Low involvement, significant perceived brand differences
▪ Example – cookies

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The buyer decision process
⚫ 5-step process:
1. Need recognition
Needs can be triggered by:
▪ Internal stimuli
❖ Normal needs become strong enough to drive behavior
▪ External stimuli
❖ Advertisements
❖ Influence of friends or others

2. Information search
1. Sources:
1. Personal- family, friends, neighbor (most effective source)
2. Commercial- ad, salespeople, website, packaging, labeling (most informative
source)
3. Public- mass media, Internet searches
4. Experiential- handling, examining, using the product
3. Evaluation of alternatives:
• Evaluation procedure depends on the consumer and the buying situation.
• Most buyers evaluate multiple attributes, each of which is weighted
differently.
• At the end of the evaluation stage, purchase intentions are formed.
4. Purchase Decision:
• Two factors intercede between purchase intentions and the actual decision:
▪ Attitudes of others
▪ Unexpected situational factors

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5. Post purchase Decision:

• Satisfaction is important:
▪ Delighted consumers engage in positive word-of-mouth.
▪ Unhappy customers tell on average 11 other people.
▪ It costs more to attract a new customer than it does to retain an
existing customer.

• Cognitive dissonance is common: is the discomfort caused by a

post-purchase conflict.

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The Buyers decision process for New Product:
New Product and Adoption Process

• A New Product is a good, service, or idea that is

perceived by some potential customers as new

• Adoption process is the mental process an individual goes

through from first learning about an innovation to final
regular use.

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Stages in the Adoption Process

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Adopter groups- for new products
⚫ The 5 adopter groups have differing values:
1. Innovators- they try new ideas at some risks.
2. Early adopters- they are opinion leaders in their
community and adopt new ideas early but carefully.
3. Early majority- they are not leaders, but they adopt
before average person
4. Late majority- they adopt an innovation only after
majority people adopted it
5. Laggards- suspicious about new things and adopt only
when it becomes tradition
Influence on product characteristics on rate
of adoption
• Relative advantage- speed the rate of adoption, and appears superior to
existing product. HDTV (better quality picture)

• Compatibility-degree to which new product is compatible to potential

consumers.

• Complexity- degree to which new product is difficult to use or

understand.

• Divisibility- degree to which new product is used in a limited basis.

Expensive product.

• Communicability - degree to which the result of using the new product

can be observed or described to others.