MARKETING MANAGEMENT

Chapter 5

AnalyzingConsumer Markets

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Chapter Questions

• How do consumer characteristics influence buying behavior?

• What major psychological processes influence consumer responses to the marketing program?

• How do consumers make purchasing decisions?

• How do marketers analyze consumer decision making?

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Consumer Buying Behavior

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

• These final consumers make up the consumer market.

• The central question for marketers is:– “How do consumers respond to various marketing

efforts the company might use?”

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INTRODUCTION TO CONSUMER BEHAVIOR

• Consumer behaviour is the behaviour displayed by the consumers in searching for, purchasing, using, evaluating & disposing of products & services, that they expect will satisfy their needs

• It is the study of how individuals make decisions to spend their available resources

( money, time, efforts) on

consumption items.

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INTRODUCTION cont.

• “ Consumer behaviour reflects the totality of consumer decision with respect to the acquisition, consumption & disposition of goods, services, time & ideas by individuals over a stipulated time”

• In this dynamic & rapidly

evolving industry marketers

need to know every thing

about consumers

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WHAT IS CONSUMER BEHAVIOUR

• Consumer behaviour involves more than products

• Consumer behaviour

involves more than just buying• Consumer behaviour is a

dynamic process• Consumer behaviour involves

decision making

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INTRODUCTION cont.

• The set of decisions –• What they buy,• Why they buy• How they buy• When they buy• Where they buy• How often they buy• How much they buy• Whether they buy or not

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How And Why Consumers Buy

Model of Customer Buyer Behaviour

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Factors Influencing Consumer Behaviour

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Factors Affecting Consumer Behaviour: Culture

Subculture• Groups of people with shared

value systems based on common life experiences.

• Hispanic Consumers

• African American Consumers

• Asian American Consumers

• Mature Consumers

Culture is the Most Basic Cause of a Person's Wants and Behaviour.

The fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions.

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Factors Affecting Consumer Behavior: Culture

Social Class

• Society’s relatively permanent & ordered divisions whose members share similar values, interests, and behaviour.

• Measured by a Combination of: Occupation, Income, Education, Wealth and Other Variables.

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Subcultures

• Nationalities: Indian

• Religions: Hindu, Sikh, Muslim,

• Geographic regions: East, West, North,

South

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Factors Affecting Consumer Behaviour: Social

Roles and Status

Family Most Important Consumer Buying

Organization

Groups Membership, Reference, or Aspirational

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Characteristics of Social Classes

• Within a class, people tend to behave alike.• Social class conveys perceptions of inferior or

superior position.• Class may be indicated by a cluster of variables

(occupation, income, wealth).• Class designation is mobile over time.• Upper uppers, Lower uppers, Upper middles,

Middle class, Upper lowers, Lower lowers, Working class

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Social Factors

Referencegroups

Social roles

Statuses

Family

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Family

• Family of Orientation– Religion– Politics– Economics

• Family of Procreation– Everyday buying behaviour

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Reference Groups

• Membership: groups having direct influence on person

• Primary: with whom interaction is fairly continuously & informally e.g. family, friend

• Secondary: with whom interaction is formal & requires less continuous interaction

• Aspirational: the group which person hopes to join

• Dissociative: the group which person rejects

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Brand Personality

• Sincerity• Excitement• Competence• Sophistication• Ruggedness

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Personal Factors

• Age• Life cycle stage• Occupation• Wealth

• Personality• Values• Lifestyle• Self-concept Sincerity

Excitement

Competence

Sophistication

Ruggedness

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Personal InfluencesPersonal Influences

Age and Life Cycle Stage

Age and Life Cycle Stage OccupationOccupation Personality &

Self-ConceptPersonality & Self-Concept

Economic Situation

Economic Situation

ActivitiesActivities InterestsInterests

Lifestyle IdentificationLifestyle Identification

OpinionsOpinions

Factors Affecting Consumer Behaviour: Personal

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Factors Affecting Consumer Behaviour: Psychological

Psychological

Factors AffectingBuyers Choices

Motivation

Perception

Learning

Beliefs andAttitudes

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Key Psychological Processes

• Motivation

• Perception

• Learning

• Memory

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Motivation

• Freud’s theory: It is assumed that the psychological forces shaping people’s behaviour are largely unconscious, & a person cannot fully understand his/her own motivation

• Maslow’s hierarchy of needs: Explain why people are driven by particular needs at particular times

• Herzberg’s two-factor theory: Two factor theory that distinguishes dissatisfiers & satisfiers

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Maslow’s Hierarchy of Needs

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Perception

Perception is the process by which an individual selects, organises,& interprets information inputs to create a meaningful picture of the world. People’s perception may get effected by the process:-

• Selective attention

• Selective retention

• Selective distortion

• Subliminal perception

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Learning & Memory

• Learning involves changes in individual’s behaviour arising from experience. Learning is produced through the interplay of

• Drive• Stimuli• Cue• Response• Reinforcement

Memory: all the information & experiences individual encounters through the life is stored in long / short-term memory

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Buyer Decision Process

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Buyer Decision ProcessStep 1. Need Recognition

Internal Stimuli –

Hunger

External Stimuli-

Friends

Buyer Recognizes

a Problem or a Need Arising From:

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•Family, friends, neighbors•Most effective source of information•Advertising, salespeople•Receives the 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

The Buyer Decision ProcessStep 2. Information Search

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Consumer May Use Careful Calculations & Logical ThinkingConsumer May Use Careful

Calculations & Logical Thinking

Consumers May Buy on Impulse and Rely on Intuition

Consumers May Buy on Impulse and Rely on Intuition

Consumers May Make Buying Decisionson Their Own

Consumers May Make Buying Decisionson Their Own

Consumers May Make Buying DecisionsOnly After Consulting Others

Consumers May Make Buying DecisionsOnly After Consulting Others

Marketers Must Study Buyers to Find Out How They Evaluate Brand

Alternatives

The Buyer Decision ProcessStep 3. Evaluation of Alternatives

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Purchase IntentionDesire to buy the most preferred brand

Purchase IntentionDesire to buy the most preferred brand

Purchase DecisionPurchase Decision

Unexpected

Situational Factors

Attitudes of Others

The Buyer Decision ProcessStep 4. Purchase Decision

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Consumer’s

Expectations of Product’s Performance Product’s Perceived

Performance

Dissatisfied Customer

Satisfied Customer!

The Buyer Decision ProcessStep 5. Post purchase Behaviour

Cog

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Stages in the Adoption Process

• Awareness: Consumer becomes aware of the new product, but lacks information about it.

• Interest: Consumer seeks information about new product.

• Evaluation: Consumer considers whether trying the new product makes sense.

• Trial: Consumer tries new product on a small scale to improve his or her estimate of its value.

• Adoption: Consumer decides to make full and regular use of the new product.

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Adopter Categories