5-15-1

Consumer Markets and

Consumer Buyer Behavior

5-25-2Consumer Buying BehaviorConsumer Buying Behavior

• Consumer Buying BehaviorConsumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption.

• Study consumer behavior to answer:

““How do consumers respond to How do consumers respond to marketing efforts the company might marketing efforts the company might use?” use?”

5-35-3

ConsumerPurchaseDecision

Motives

Personality

Needs

Perception

Learning

AttitudesB

usi

nes

sCultu

re

Economic

Fam

ily

Social

SIMPLE MODEL FOR CONSUMER BEHAVIOUR

5-45-4Model of Consumer BehaviorModel of Consumer BehaviorMarketing andOther Stimuli

Marketing andOther Stimuli

Buyer’s Black BoxBuyer’s Black Box

Buyer’s ResponseBuyer’s Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Characteristics Affecting Consumer Behavior

Buyer’s Decision Process

Product Choice

Brand Choice

Dealer Choice

Purchase Timing

Purchase Amount

5-55-5Characteristics Affecting Consumer BehaviorCharacteristics Affecting Consumer Behavior

BuyerBuyer

Psychological

Personal

Social

Culture

5-65-6Factors Affecting Consumer Behavior:CultureFactors Affecting Consumer Behavior:Culture

Social Class

• People within a social class tend to exhibit similar buying behavior.

• Occupation

• Income

• Education

• Wealth

Social Class

• People within a social class tend to exhibit similar buying behavior.

• Occupation

• Income

• Education

• Wealth

• Most basic cause of a person's wants and behavior.

• Values

• Perceptions

• Most basic cause of a person's wants and behavior.

• Values

• Perceptions

Subculture

• Groups of people with shared value systems based on common life experiences.

• North Indian Consumers

• African American Consumers

• Asian American Consumers

• Mature Consumers

Subculture

• Groups of people with shared value systems based on common life experiences.

• North Indian Consumers

• African American Consumers

• Asian American Consumers

• Mature Consumers

5-75-7

Factors Affecting Consumer Behavior:Social Factors Affecting Consumer Behavior:Social

Groups

• Membership

• Reference

Groups

• Membership

• Reference

Family• Husband, wife, kids• Influencer, buyer, user

Family• Husband, wife, kids• Influencer, buyer, user

Roles and StatusRoles and Status

Social FactorsSocial Factors

5-85-8Factors Affecting Consumer Behavior:PersonalFactors Affecting Consumer Behavior:Personal

Personal InfluencesPersonal Influences

Age and Family Life CycleStage

Age and Family Life CycleStage OccupationOccupation

Economic SituationEconomic Situation

Lifestyle IdentificationLifestyle Identification

ActivitiesActivities OpinionsOpinions

InterestsInterests

Personality & Self-ConceptPersonality & Self-Concept

5-95-9VALS 2VALS 2

Principle Oriented Status Oriented Action Oriented

AchieversAchievers

ActualizersActualizers

StrugglersStrugglers

StriversStrivers

FulfilledsFulfilleds

BelieversBelievers

ExperiencersExperiencers

MakersMakers

Abundant ResourcesAbundant Resources

Minimal ResourcesMinimal Resources

5-105-10

Factors Affecting Consumer Behavior:PsychologicalFactors Affecting Consumer Behavior:Psychological

Psychological Factors

MotivationMotivation

PerceptionPerception

LearningLearning

Beliefs and Attitudes

Beliefs and Attitudes

5-115-11Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

Esteem Needs(self-esteem, status)

Social Needs(sense of belonging, love)

Safety Needs(security, protection)

Physiological Needs(hunger, thirst)

Self Actualization

(Self-development)

5-125-12

Types of Buying DecisionsTypes of Buying Decisions

ComplexBuying

Behavior

Dissonance-Reducing Buying

Behavior

Variety-SeekingBehavior

HabitualBuying

Behavior

HighInvolvement

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

LowInvolvement

5-135-13

The Buyer Decision ProcessThe Buyer Decision Process

Need RecognitionNeed Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

Purchase DecisionPurchase Decision

Postpurchase BehaviorPostpurchase Behavior

5-145-14

SITUATIONS

ProblemRecognition

InformationSearch

Alternative Evaluationand Selection

Outlet Selectionand Purchases

Post-purchaseProcesses

SITUATIONS

EXTERNAL INFLUENCESCulture

SubcultureDemographicsSocial Status

Reference GroupsFamily

Marketing Activities

INTERNAL INFLUENCESPerceptionLearningMemoryMotives

PersonalityEmotionsAttitudes

SELF-CONCEPTand

LIFESTYLE

Desires

Experiences and Acquisitions

Experiences and Acquisitions

Needs

DECISION MAKING PROCESSES

5-155-15

The Buyer Decision ProcessStep 1. Need RecognitionThe Buyer Decision ProcessStep 1. Need Recognition

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

Internal Stimuli

• Hunger

• Thirst

• A person’s normal needs

Internal Stimuli

• Hunger

• Thirst

• A person’s normal needs

Need RecognitionDifference between an actual state and a desired state

Need RecognitionDifference between an actual state and a desired state

5-165-16The Buyer Decision ProcessStep 2. Information SearchThe Buyer Decision ProcessStep 2. Information Search

•Family, friends, neighbors•Most influential source of information

•Advertising, salespeople•Receives most information

from these sources

•Mass Media•Consumer-rating groups

•Handling the product•Examining the product•Using the product

Personal Sources Personal Sources

Commercial SourcesCommercial Sources

Public SourcesPublic Sources

Experiential SourcesExperiential Sources

5-175-17

The Buyer Decision ProcessStep 3. Evaluation of AlternativesThe Buyer Decision ProcessStep 3. Evaluation of Alternatives

Product AttributesEvaluation of Quality, Price, & Features

Product AttributesEvaluation of Quality, Price, & Features

Degree of ImportanceWhich attributes matter most to me?

Degree of ImportanceWhich attributes matter most to me?

Brand BeliefsWhat do I believe about each available brand?

Brand BeliefsWhat do I believe about each available brand?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

5-185-18The Buyer Decision ProcessStep 4. Purchase DecisionThe Buyer Decision ProcessStep 4. Purchase Decision

Purchase IntentionDesire to buy the most preferred brand

Purchase IntentionDesire to buy the most preferred brand

Purchase DecisionPurchase Decision

Attitudes of others

Unexpected situational factors

5-195-19

The Buyer Decision ProcessStep 5. Postpurchase BehaviorThe Buyer Decision ProcessStep 5. Postpurchase Behavior

Consumer’s Expectations of

Product’s Performance

Consumer’s Expectations of

Product’s Performance

Dissatisfied Customer

Dissatisfied Customer

Satisfied Customer!Satisfied Customer!

Product’s Perceived

Performance

Product’s Perceived

Performance

Cognitive Dissonance

5-205-20Stages in the Adoption ProcessStages in the Adoption Process

AwarenessAwareness

InterestInterest

EvaluationEvaluation

TrialTrial

AdoptionAdoption

5-215-21Adoption of InnovationsAdoption of InnovationsP

erce

nta

ge

of

Ad

op

ters

Time of AdoptionEarly Late

Inn

ova

tors

Early Adopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority

5-225-22Influences on the Rate of Adoptionof New ProductsInfluences on the Rate of Adoptionof New Products

DivisibilityCan the innovation

be used on a trial basis?

CompatibilityDoes the innovation

fit the values and experience of the

target market?ComplexityIs the innovation

difficult tounderstand or

use?

Relative AdvantageIs the innovation

superior to existing products?

Communicability Can results be easily

observed or described to others?

ProductCharacteristics