Consumer Markets and Consumer Buyer

Behavior

Chapter 5

Business Studies Department, BUKC

 Learning Goals

1. Learn the consumer market and construct model of

consumer buyer behavior

2. Know the four factors that influence buyer behavior

3. Understand the types of buying decision behavior and

stages in the process

4. Comprehend the adoption and diffusion process for

new products

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 Consumer buyer behavior and consumer
market

Consumer buyer behavior is the buying behavior of final

consumers – individuals and households who buy goods and
services for personal consumption

All the consumers who buy or acquire the goods and services
for personal consumption include in consumer market

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 Model of consumer behavior

• Marketers can study actual consumer purchases to find out

what they buy, where they buy and how much. But learning
about the whys of consumer buying behavior is not so easy –
the answers are often locked deep within the consumer’s mind.

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 Stimulus-Response Model of Consumer Behavior
The central question for marketers is: how do consumers respond to various marketing
efforts the company might use?

Marketing and other stimuli enter the consumer’s “black box” and produce
certain responses.

“The aim of the marketers is wants to understand how the stimuli are changed
into responses inside the consumer’s black box”

Stimuli Buyer’s Black Box Buyer Response

4P’s Buyer characteristics Product choice
Other characteristics Buyer decision process Brand choice
• economic
Dealer choice
• technological
• political Purchase timing
• cultural Purchase amount

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 Stimulus-Response Model of Consumer Behavior
Example: Apple introduces a new iTouch device and features it in
TV ads. We can measure the outputs of consumer buying
decisions. (20,000 customers buy the new Apple device at the
company’s webs site within a week of introduction)

It is very difficult to see inside the consumer’s head and figure out
whys of buying behavior (that is why it is called black box).
Marketers spend a lot of time and money trying to figure out what
makes consumers tick

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 Characteristics Affecting Consumer Behavior
Cultural factors
The marketers need to understand the role played by the
buyer’s culture, subculture and social class

1.Culture: shared values, perception, wants and behavior learned

by the member of the society from family and other important
institutions.
• Marketers are always trying to spot cultural shifts in order to
discover new products that might be wanted. For example the
cultural shift toward great concern about health and fitness,
especially among young urban women, has created a huge
industry for health and fitness services, exercise equipment and
clothing, organic food, and variety and diets.

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 Characteristics Affecting Consumer Behavior

2. Sub-culture: Each culture contains smaller subcultures or group

of people with shared value systems based on common life
experiences and situations.
Includes nationalities, religions, geographic region etc.
 Many subcultures make up important market segments and
marketers often design products and marketing programs
tailored to their needs.

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 Characteristics Affecting Consumer Behavior
3. Social class: Relatively permanent and ordered division in a
society whose members share similar values, interest, and
behaviors.
• It is determined on the basis many variables like income,
occupation, education, wealth etc
• Marketers have developed a socioeconomic classification
system to segment urban households on the basis of level of
education and occupation of the chief wage earner of the
household.
• Marketers are interested in socioeconomic classes because
people within a given socioeconomic class tend to exhibit similar
buying behavior

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 Characteristics Affecting Consumer Behavior
Social factors
Consumer behavior is also influenced by factors like small
groups & social network, family, and social roles & status.

1.Group: Two or more people who interact to accomplish

individual or mutual goals
• Many small groups influence a person’s behavior.
• “Reference groups” serve as a direct reference in forming a
person’s attitude or behavior. People are often influenced by
reference group to which they do not belong.
 For example aspirational group is one to which individual
wishes to belong as when a young cricket player hopes to
someday become a cricket star like waseem akram

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 Characteristics Affecting Consumer Behavior

 Marketer try to identify the reference group of their target

markets.

 Person within a reference group who, because of special skills,

knowledge, personality, or other characteristics, exerts social
influence on others is called Opinion leader

 Marketers often try to identify opinion leaders for their products

and direct marketing efforts towards them

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 Characteristics Affecting Consumer Behavior

They use buzz marketing by enlisting or even creating opinion

leaders to serve as “brand ambassador “ who spread the word
about their products.

 Online social networks – blogs, websites, communities etc are

used widely by marketers to promote their brand and to build
closer relationship with their customers. They have also created
online web pages for product recommendations and website for
online selling

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 Characteristics Affecting Consumer Behavior
Companies can even create their own social networks. For
example proctor and gamble has set up capessa.com, a
gathering place for real women to share their stories, offer
their personal wisdom and practical advice, improve their lives,
and be inspired. The only thing that is missing is the kitchen
table. This site gives a women a place to express themselves
and P& G an opportunity to observe and learn more about their
needs and feelings.
 Results of online social networks are difficult to measure and
control.

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 Characteristics Affecting Consumer Behavior
2. Family: Family members can strongly influence buyer behavior
 Marketers are interested in the role and influence of the
husband, wife, and the children on the purchase of different
products and services. Brooke Bond Red Label tea in India
encourages its consumers to send in stories of their marriage. It
promises to print the interesting ones on the package of the tea,
along with the family photograph.

 Women plays a vital role in the purchasing of the various

household products therefore marketers target the decision
maker of the family. Children are also equally involved in
decision making of the various products since they are given the
freedom to select whatever they prefer

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 Characteristics Affecting Consumer Behavior
3. Roles and status: A person belongs to many groups – family,
clubs and organizations. His position can be defined in each
group in terms of role and status.

 People choose products appropriate to their roles and status

 Consider the various roles a working mother plays. In her

company, she plays the role of a brand manager, in her family
she plays a role of a wife and mother. As a brand manager, she
will buy the kind of clothing that reflects her role and status in
her company

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 Characteristics Affecting Consumer Behavior
Personal factors
1. Buyer’s age and life cycle stage:
 People change the goods and services they buy over their
lifetimes.
 Taste in food, clothes, furniture etc are age related.
 Buying is also shaped by stages in the family life cycle.
Marketers develop appropriate products and marketing plan for
each stage.
 There are 5 life stage segments:
a)Youth segment – customers younger than 18
b) Getting started – age 18 to 35 who are going through first
experiences, such as graduation
c) Builders – age 35 to 50, are in their peak earning age. As they
build careers and family, they tend to borrow more than they
invest

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 Characteristics Affecting Consumer Behavior
d) Accumulators – age 50 to 60 worry about saving for retirement
and investing wisely.
e) Preservers – customers over 60, want to maximize their
retirement income to maintain a desired lifestyle

2. Occupation: The person’s occupation effects the goods and

services bought.
Example: executives buy business suits
 A company can even specialize in making products needed by
a given occupational group. For example companies in Sialkot,
Pakistan, supply surgical instruments to surgeons all over the
world.

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 Characteristics Affecting Consumer Behavior

3. Economic situation:
 Economic indicators point to a recession, marketers can take
steps to redesign, reposition, and reprice their products closely.
 Some marketers target consumers who have lots of money and
resources, charging prices to match.
 For example: Rolex positions its luxury watches as “a tribute to
elegance”, an object of passion, a symbol for all time.” whereas
Timex make more affordable watches.

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 Characteristics Affecting Consumer Behavior

4. Lifestyle: “ A person’s pattern of living as expressed in his or

her activities, interests and opinion”
 People coming from the same subculture, social class, and
occupation may have quite different lifestyles.
 Lifestyle captures something more than the person’s social
class or personality. It profiles a person’s whole pattern of
acting and interacting in the world.
 Consumers don’t just buy products, they buy the value and
lifestyles those products represent.
 For example ChenOne provides its customers a wide range of
styles, trends etc in home furniture, kitchen accessories,
bedroom and bathroom accessories, crockery and decorative
accessories, all under one roof. The shopping environment is
specially created to show the modern lifestyles of its customers.

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 Characteristics Affecting Consumer Behavior
5. Personality and self-concept:
 Human personality is described in terms of traits such as self-
confidence, dominance, sociability, aggressiveness etc.
Personality can be useful in analyzing consumer behavior for
certain product or brand choices.
 Brands also have personalities, and that consumers are likely to
choose brands with personalities that match their own
One researcher identified 5 brand personality traits:
1.Sincerity (down to earth, honest …)
2.Excitement ( daring, spirited, imaginative…)
3.Competence (reliable, intelligent and successful)
4.Sophisticated (upper class and charming)
5.Ruggedness (outdoorsy and tough)

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Goal 2: Know the four factors that influence consumer buying behavior
 Characteristics Affecting Consumer Behavior
 Example: well known brands are strongly associated with one
particular trait: Jeep with ruggedness, Apple with excitement,
Dove with sincerity etc.
 These brands will attract persons who are high on the same
personality traits.

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 Characteristics Affecting Consumer Behavior
Psychological factors
1. Motivation:
“Motive is a need that is sufficiently pressing to direct the
person to seek satisfaction”
 Two theories of human motivation were introduced by Sigmund
Freud and Abraham Maslow
 Freud’s theory suggests that a person’s buying decision are
affected by subconscious motives that even the buyer may not
fully understand. Example: a middle aged customer in Pakistan
buys Engro Food’s Olwell milk might explain that she simply is
health conscious and wants to maintain her daily intake of
calcium. At a deeper level she might be trying to impress others
with her slim appearance. At a still deeper level, she may be
buying the milk to feel young and attractive again.

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 Characteristics Affecting Consumer Behavior

 The term motivation research refers to qualitative research

designed to probe consumers hidden subconscious
motivations. Consumers often don’t know or cant describe
just why they act as they do.
Motivation researchers use techniques to uncover emotions
and attitude toward brands and products.
 Abraham answered “why does one person spend much time
and energy on personal safety and another on gaining the
esteem of others?”
Maslow’s answer is that human needs are arranged in a
hierarchy from the most pressing at the bottom to the least
pressing at the top.

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 Characteristics Affecting Consumer Behavior

A person tries to satisfy the most important need first. When

the need is satisfied, it will stop being a motivator and the
person than will try to satisfy the next most important need.
For example: starving people (physiological need) will not
take interest in the latest happenings in the world (self
actualization needs), nor in how they are seen or esteemed by
others (social or esteem needs) nor even in whether they are
breathing clean air (safety needs).

2. Perception:
“The process by which people select, organize and interpret
information to form a meaningful picture of the world”

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 Characteristics Affecting Consumer Behavior

 People can form different perceptions of the same stimulus

because of three perceptual processes: selective attention,
selective distortion and selective retention.

Example: people are exposed to an estimated 3,000 to 5,000

ad messages every day. It is impossible for a person to pay
attention to all these stimuli. Selective attention is the
tendency for people to screen out most of the important
information to which they are exposed – means marketers
must work especially hard to attract the customer’s attention

 Even noticed stimuli do not always come across in the

intended way.

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 Characteristics Affecting Consumer Behavior
 Selective distortion describes the tendency of people to
interpret information in a way that will support what they
already believe.

 For example: if you distrust a company you might perceive

even honest ads from that company as questionable,
therefore marketers must try to understand the mind sets of
consumers and how these will affect interpretation of
advertising and sales information.

 Because of selective retention, consumers are likely to

remember good points made about a brand they favor and to
forget the good points of the competing brands

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 Characteristics Affecting Consumer Behavior
3. Learning: “changes in individual behavior arising from
experience”
 learning theorist say that most human behavior is learned

 Learning occurs through the interplay of drives, stimuli, cues,

responses, and reinforcement.

 Drive is a strong internal stimulus that calls for action. A drive

becomes a motive when it is directed towards a particular
stimulus object.

 Example, a person’s drive for self actualization might motivate

him or her to look into buying a camera. The consumer’s
response to the idea of buying the camera is conditioned by
the surrounding cues (minor stimuli that determine how a
person responds).

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 Characteristics Affecting Consumer Behavior

 For example, a person might spot several camera brands in a

shop window, hear a special sale price or discuss cameras with
a friend. These are all cues which might influence a consumers
response to his or her interest in buying the product.
 Example. If a consumer buys a camera and the experience is
rewarding, the consumer will use the camera more and more,
and his or her response will be reinforced

4. Beliefs and attitudes:

 “Belief is a descriptive thought that a person holds about
something”
 “A person’s consistently favorable or unfavorable evaluations,
feelings, and tendency towards an object or idea is known as
attitude”

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 Characteristics Affecting Consumer Behavior
 Through learning, people acquire beliefs and attitudes
 Marketers are interested in beliefs that people formulate about
specific products and services, because these beliefs make up
product and brand images that affect buying behavior. If some
of the beliefs are wrong and prevent purchase, the marketer
will want to launch a campaign to correct them.
 Attitude are difficult to change therefore a company should try
to fit its products into existing attitudes rather than attempt to
change attitude. Example, McDonald’s does not sell beef and
pork products in India as it is a religious taboo

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 Types of buying decision behavior
1. Complex buying behavior
“Consumer buying behavior in situation characterized by high
consumer involvement in a purchase and significant perceived
differences among brands”

 Consumers may be highly involved when the product is

expensive, risky, purchased infrequently and highly self
expressive

 Example a PC buyer may not know what attributes to

consider. Buyer passes through a learning process, first
developing beliefs about the product, than making a
thoughtful product choice.

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 Types of buying decision behavior
2. Dissonance-Reducing buying behavior
“high involvement in purchase but few perceived differences”
For example, consumer buying furniture or curtain material
may face high involvement decision because they are
expensive and self expressive. Because perceived brand
differences are not large , buyers may shop around to learn
what is available, but buy relatively quickly.

 After the purchase consumer might experience post

purchase dissonance(after sale discomfort), when they
notice certain disadvantages of the purchased furniture brand
or hear favorable things about brands not purchased.

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 Types of buying decision behavior
3. Habitual buying behavior:
“low consumer purchase involvement and few significantly perceived
brand differences”

 Example. Salt

 Consumers appear to have low involvement with most low cost

frequently purchased products.

 Consumers do not go for information search or evaluation process

 TV is usually more effective than print media because it is a low

involvement medium suitable for passive learning

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 Types of buying decision behavior
4. Variety-seeking buying behavior
“low consumer involvement but significant perceived brand
differences”
 Example. biscuits
 Consumers appear to have low involvement with most low cost
frequently purchased products.
 Consumers do not go for information search or evaluation
process.
 Brand switching takes place because consumers want to try
something different. Brand switching occurs for the sake of
variety rather than because of dissatisfaction
 Firms will encourage variety seeking by offering lower prices,
special deals, coupons, free samples, and advertising that
presents reasons for trying something new

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 The Buyer Decision Process

“Consumer recognizes a need or

problem”
• Need is triggered by internal stimuli
Process Stages (when one of the person’s normal
needs – hunger, thirst, - rises to a
level high enough to become a drive)
Need recognition • It is also triggered by external
stimuli.
Information search • Example. And advertising or a
Evaluation of alternatives discussion with a friend may get you
Purchase decision thinking about the purity of water
you drink
Post purchase behavior
• Marketers should find out the
needs and problems of consumers

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 The Buyer Decision Process

“Consumers exhibit heightened

attention or actively search for
Process Stages information”
• Example: you have decided you
need a car, you will pay more
Need recognition attention to car ads, cars owned by
Information search friends and car conversations. Even
search the web , talk with friends
Evaluation of alternatives
and gather information in other
Purchase decision ways.
Postpurchase behavior • Information can be gathered by
the following ways:
1. Personal sources:
Family, friends, neighbors etc

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 The Buyer Decision Process

2. Commercial sources:
Advertising, sales person, packaging
Process Stages 3. Public sources:
Mass media, internet searches
4. Experimental sources:
Need recognition Handling, examining, using the
Information search product
Evaluation of alternatives • generally the consumers receives
the most information about a
Purchase decision
product from commercial sources –
Postpurchase behavior those controlled by marketers
• the most effective sources
however tends to be personal
sources

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 The Buyer Decision Process

• As more information is
obtained, consumers
Process Stages awareness and knowledge of
the available brands and
features increases
Need recognition • In your car information search,
Information search you will learn about the several
Evaluation of alternatives brands available.
Purchase decision
Postpurchase behavior

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 The Buyer Decision Process

Process Stages “Consumer uses information to

evaluate alternative brands in
the choice set”
Need recognition • Example. After gathering
Information search information you have narrowed your
Evaluation of alternatives car choices to three brands and
suppose you are interested in 4
Purchase decision
attributes – styling, operating
Postpurchase behavior economy, price and warranty. You
would choose the car having the
maximum attributes required by you

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 The Buyer Decision Process

Process Stages “The buyers decision about

which brand to purchase”
• Consumers purchase decision will
Need recognition be to buy the most preferred
Information search brand, but two factors can come
Evaluation of alternatives between the purchase intention
and the purchase decision
Purchase decision
• The first factor is the attitude of
Postpurchase behavior others - peoples
recommendation
• Second is unexpected situational
factors (economic downfall )..
Reduced price of competitors
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 The Buyer Decision Process

Process Stages Consumers take further

action after purchase, based
on their satisfaction or
dissatisfaction.
Need recognition • satisfaction and dissatisfaction is
Information search determined in terms of
Evaluation of alternatives consumer’s expectations and
product performance
Purchase decision • almost all major purchased result
Postpurchase behavior in cognitive dissonance
(discomfort caused by post
purchase conflict)

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 The Buyer Decision Process

Process Stages Why is it important to satisfy

customers?
• It is a key to building profitable
relationships with consumers – to
Need recognition keeping and growing consumers
Information search • satisfied consumers buy product
Evaluation of alternatives again, talk in favor of the product
and pay less attention to
Purchase decision competing brands
Postpurchase behavior • A dissatisfied consumer responds
differently, bad word of mouth

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 Buyer Decision Process for New Products
New Products
 Good, service or idea that is perceived by customers as new.
It may have been around for a while, but our interest is in how consumers learn about
products for the first time and make decisions on whether to adopt them.
Stages in the Adoption Process
 Marketers should help consumers move through these stages.
“The mental process through which an individual passes from first hearing
about an innovation to final adoption”
 Consumers go through 5 stages in the process of adopting a new product:
1. Awareness: the consumers become aware of the new product, but lack information
about it
2. Interest: the consumer seeks information about the new product.
3. Evaluation: the consumer considers whether trying the new product makes sense
4. Trail: the consumer tries the new product on a small scale to improve his or her
estimate of its value
5. Adoption: consumer makes full use of the new product

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 Buyer Decision Process for New Products
Example: A luxury car producer might find that many potential
customers know about and are interested in its new model but
aren’t buying because of uncertainty about the model's benefits
and the high price. The producer could launch a “take one home
for the weekend” promotion to high value prospects to move them
into the trial process and lead them to purchase

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 Thank You

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