PRINCIPLES OF

MARKETING
Chapter Five
Consumer Markets and Consumer Buyer Behavior

© Pearson Education MBA Trần Tấn Hoan

 After studying this chapter, you should be able
to:

01 Define the consumer market and construct a simple model of

Learning consumer buyer behavior

02 Name the four major factors that influence consumer buyer

Objective behavior

03 List and understand the major types of buying decision

s behavior and the stages in the buyer decision process
04 Describe the adoption and diffusion process for new products
 I
Model of Consumer Behavior

II
Characteristics Affecting Consumer Behavior

Chapter III
Types of Buying Decision Behavior

Concepts IV
The Buyer Decision Process

V
The Buyer Decision Process for New Products

VI
Consumer Behavior Across International Borders
I. 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.

I. Model of Consumer Behavior
Marketing stimuli Other stimuli
consists of the 4 include:
Ps • Economic forces
• Product
• Technological forces
• Price
• Political forces
• Place
• Cultural forces
• Promotion
I. Model of Consumer Behavior

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II. Characteristics Affecting Consumer Behavior

Cultural Factors Social Factors

• Buyer’s culture • Reference groups
• Buyer’s subculture • Family
• Buyer’s social class • Roles and status
II. Characteristics Affecting Consumer Behavior
Personal Factors
• Age and life-cycle stage
• Occupation
• Economic situation
• Lifestyle
• Personality and self-concept

Psychological
Factors
• Motivation
• Perception
• Learning
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II. Characteristics Affecting Consumer Behavior

Culture is the learned values,

perceptions, wants, and
behavior from family and
other important institutions.
II. Characteristics Affecting Consumer Behavior

Subcultures are groups of people within a culture with shared value

systems based on common life experiences and situations.
• Chinese

• Indians

• Malays

• Eurasians
II. 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
II. Characteristics Affecting Consumer Behavior

The major social classes:

• Upper class

• Middle class

• Working class

• Lower class
II. Characteristics Affecting Consumer Behavior

Social Factors

Groups & social network

• Membership groups have a direct influence and to which a person

belongs.

• Aspirational groups are groups to which an individual wishes to belong.

• Reference groups are groups that form a comparison or reference in

forming attitudes or behavior.
II. Characteristics Affecting Consumer Behavior

Social Factors

Groups & social network

Word-of-mouth influence

The impact of the personal words and recommendations of trusted friends, family, associates and
other consumers on buying behaviour.

Opinion leaders are people within a reference group with special skills, knowledge, personality,
or other characteristics that can exert social influence on others.

• Buzz marketing enlists opinion leaders to spread the word.

• Social networking is a new form of buzz marketing such as FB, IG, Pinterest, LinkedIn…
II. Characteristics Affecting Consumer Behavior

Social Factors

• Family is the most important consumer-buying organization in society.

• Social roles and status are the groups, family, clubs, and organizations to which a
person belongs that can define role and social status.
II. Characteristics Affecting Consumer Behavior

Personal Factors

• Age and life-cycle stage

• Occupation

• Economic situation

• Lifestyle

• Personality and self-concept

II. Characteristics Affecting Consumer Behavior
Personal Factors

Age and life-cycle stage

RBC Royal Band stages:

• Youth—younger than 18 years

• Getting started—18-35 years

• Builders—35-50 years

• Accumulators—50-60 years

• Preservers—over 60 years
II. Characteristics Affecting Consumer Behavior

Personal Factors

• Occupation affects the goods and services

bought by consumers.

• Economic situation includes trends in:

 Personal income

 Savings

 Interest rates
II. 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, and opinions) to capture

information about a person’s pattern of acting and interacting in the environment.
II. Characteristics Affecting Consumer Behavior

Personal Factors

SRI Consulting’s Values and Lifestyle

(VALS) typology:

• Classifies people according to how they

spend money and time:

• Primary motivations

• Resources
II. 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 refers to the specific mix of human traits that may be attributed to a
particular brand:
• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness
Self-concept refers to people’s possessions that contribute to and reflect their identities.
II. Characteristics Affecting Consumer Behavior
Psychological Factors
• Motivation
• Perception
• Learning
• Beliefs and attitudes
II. 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.
II. Characteristics Affecting Consumer Behavior

Psychological Factors
Abraham Maslow’s
Hierarchy of Needs
• People are driven by particular
needs at particular times.
• Human needs are arranged in a
hierarchy from most pressing to
least pressing.
II. 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:
• Selective attention
• Selective distortion
• Selective retention
II. Characteristics Affecting Consumer Behavior
Psychological Factors
Perception
• 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 to forget good points about competing
brands.
II. Characteristics Affecting Consumer Behavior
Psychological Factors
• Learning is the changes in an individual’s behavior arising from experience
• Belief is a descriptive thought that a person has about something based on:
• Knowledge
• Opinion
• Faith
• Attitudes describe a person’s relatively consistent evaluations, feelings, and
tendencies toward an object or idea.
III. Types of Buying Decision Behavior

• Complex buying behavior

• Dissonance-reducing buying behavior
• Habitual buying behavior
• Variety-seeking buying behavior
III. Types of Buying Decision Behavior
Complex Buying Behavior
• Occurs when consumers are highly motivated in a purchase and
perceive significant differences among brands.
• Purchasers are highly motivated when:
• Product is expensive
• Product is risky
• Product is purchased infrequently
• Product is highly self-expressive
III. Types of Buying Decision Behavior
• Dissonance-reducing buying behavior occurs when consumers
are highly involved with an expensive, infrequent, or risky
purchase, but see little difference among brands.
• Post-purchase dissonance occurs when the consumer notices
certain disadvantages of the product purchased or hears
favorable things about a product not purchased.
III. Types of Buying Decision Behavior

• Habitual buying behavior occurs when consumers have low

involvement and there is little significant brand difference.
• Variety-seeking buying behavior occurs when consumers have
low involvement and there are significant brand differences.
 IV. The Buyer Decision Process
1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase behavior
IV. The Buyer Decision Process
Need Recognition
• Need recognition occurs when the buyer
recognizes a problem or need triggered by:
• Internal stimuli
• External stimuli
IV. The Buyer Decision Process
Information Search
Sources of information:
• Personal sources—family and friends
• Commercial sources—advertising, Internet
• Public sources—mass media, consumer
organizations
• Experiential sources—handling, examining,
using the product
IV. The Buyer Decision Process
Evaluation of Alternatives
Evaluation of alternatives is how the consumer
processes information to arrive at brand choices.
IV. The Buyer Decision Process
Purchase Decision
• The purchase decision is the act by the
consumer to buy the most preferred brand.
• The purchase decision can be affected by:
• Attitudes of others
• Unexpected situational factors
IV. The Buyer Decision Process
Post-Purchase Decision
• The post-purchase decision is the satisfaction
or dissatisfaction the consumer feels about the
purchase.
• Relationship between:
• Consumer’s expectations
• Product’s perceived performance
IV. The Buyer Decision Process
Post-Purchase Decision
• The larger the gap between expectation and
performance, the greater the consumer’s
dissatisfaction.
• Cognitive dissonance is the discomfort caused
by a post-purchase conflict.
• Customer satisfaction is a key to building
profitable relationships with consumers—to
keeping and growing consumers and reaping
their customer lifetime value.
V. The Buyer Decision Process for New Products
• A new product is a good, service, or idea that
is perceived by some potential customers as
new.
• The adoption process is the mental process
an individual goes through from first learning
about an innovation to final regular use.
V. The Buyer Decision Process for New Products

Stages in the Adoption Process

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V. The Buyer Decision Process for New Products
Stages in the Adoption Process

• Awareness is when the consumer becomes

aware of the new product but lacks information.
• Interest is when the consumer seeks
information about the new product.
V. The Buyer Decision Process for New Products
Stages in the Adoption Process
• Evaluation is when the consumer considers
whether trying the new product makes sense.
• Trial is when the consumer tries the new
product to improve his or her estimate of value.
• Adoption is when the consumer decides to
make full and regular use of the product.
V. The Buyer Decision Process for New Products
Individual Differences in Innovation
• Early adopters are opinion leaders and adopt new
ideas early but cautiously.
• Early majority are deliberate and adopt new ideas
before the average person.
• Late majority are skeptical and adopt new ideas only
after the majority of people have tried it.
• Laggards are suspicious of changes and adopt new
ideas only when they become tradition.
V. The Buyer Decision Process for New Products
Individual Differences in Innovation
V. The Buyer Decision Process for New Products
Influence of Product Characteristics on Rate of Adoption
• Relative advantage is the degree to which an innovation appears to
be superior to existing products.
• Compatibility is the degree to which an innovation fits the values and
experiences of potential consumers.
• Complexity is the degree to which the innovation is difficult to
understand or use.
• Divisibility is the degree to which the innovation may be tried on a
limited basis.
VI. Consumer Behavior Across International Borders

• Differences can include:

• Values
• Attitudes
• Behaviors
• The question for marketers is whether to adapt
or standardize the marketing.
 LEARNING OUTCOMES REVIEW

Objective1 Definetheconsumermarketandconstructasim- ple model of consumer buyer behaviour (pp. 143–144)

The consumer market consists of all the individuals and house- holds that buy or acquire goods and services for
personal con- sumption. The simplest model of consumer buyer behaviour is the stimulus–response model. According to
this model, mar- keting stimuli (the four Ps) and other major forces (economic, technological, social, cultural) enter the
consumer’s ‘black box’ and produce certain responses. Once in the black box, these inputs produce observable buyer
responses, such as brand choice, purchase location and timing, and brand engagement and relationship behaviour.
Objective 2 Name the four major factors that influence con- sumer buyer behaviour (pp. 144–157)
Consumer buyer behaviour is influenced by four key sets of buyer characteristics: cultural, social, personal and
psychologi- cal. Although many of these factors cannot be influenced by the marketer, they can be useful in identifying
interested buyers and shaping products and appeals to serve consumer needs better.
Culture is the most basic determinant of a person’s wants and behaviour. Subcultures are ‘cultures within cultures’ that
have distinct values and lifestyles and can be based on anything from age to ethnicity. Many companies focus their
marketing programmes on the special needs of certain cultural and subcul- tural segments, such as gamers or mature
consumers.
Social factors also influence a buyer’s behaviour. A person’s reference groups – family, friends, social networks,
professional associations – strongly affect product and brand choices. The buyer’s age, life-cycle stage, occupation,
economic circum- stances, personality and other personal characteristics influence his or her buying decisions.
Consumer lifestyles – the whole pat- tern of acting and interacting in the world – are also an impor- tant influence on
purchase decisions. Finally, consumer buying
behaviour is influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.
Each of these factors provides a different perspective for understand- ing the workings of the buyer’s black box.

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Objective 3 List and define the major types of buying deci- sion behaviour and the stages in the buyer decision process (pp.
157–159)
Buying behaviour may vary greatly across different types of products and buying decisions. Consumers undertake com- plex
buying behaviour when they are highly involved in a purchase and perceive significant differences among brands. Dissonance-
reducing behaviour occurs when consumers are highly involved but see little difference among brands. Habitual buying behaviour
occurs under conditions of low involvement and little significant brand difference. In situations characterised by low involvement
but significant perceived brand differences, consumers engage in variety-seeking buying behaviour.
When making a purchase, the buyer goes through a deci- sion process consisting of need recognition, information search,
evaluation of alternatives, purchase decision and post-purchase behaviour. The marketer’s job is to understand the buyer’s
behaviour at each stage and the influences that are oper- ating. During need recognition, the consumer recognises a problem or
need that could be satisfied by a product or service
in the market. Once the need is recognised, the consumer is aroused to seek more information and moves into the infor- mation
search stage. With information in hand, the consumer proceeds to alternative evaluation, during which the informa- tion is used to
evaluate brands in the choice set. From there, the consumer makes a purchase decision and actually buys the product. In the
final stage of the buyer decision process, post-purchase behaviour, the consumer acts based on satisfac- tion or dissatisfaction.
Objective 4 Describe the adoption and diffusion process for new products (pp. 159–164)
The product adoption process is made up of five stages: aware- ness, interest, evaluation, trial and adoption. New-product
marketers must think about how to help consumers move through these stages. With regard to the diffusion process for new
products, consumers respond at different rates, depend- ing on consumer and product characteristics. Consumers may be
innovators, early adopters, early majority, late majority or lagging adopters. Each group may require different marketing
approaches. Marketers often try to bring their new products to the attention of potential early adopters, especially those who are
opinion leaders. Finally, several characteristics influence the rate of adoption: relative advantage, compatibility, complexity,
divisibility and communicability.
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