Consumer
Markets and
Consumer Buyer
Behavior
Chapter 5
Definitions
Consumer buyer behavior:
refers to the buying behavior
of final consumers –
individuals and households
who buy goods and services
for personal consumption.
Model of Consumer Behavior
Characteristics Affecting Consumer
Behavior
Buyer
Characteristics Affecting Consumer
Behavior
Culture
-The set of basic values, perceptions, wants and behaviors
learnt by a member of society from family and other
important institutions.
-Forms the most basic cause of a person’s wants and
behavior
Sub-culture
-Groups with shared value systems based on common life
experiences and situations
Culture and Sub-
culture
Characteristics Affecting Consumer
Behavior
Social Class
-Divisions in a society whose members share similar
values, interests and behaviors.
-Upper class, upper-middle class, middle class,
working class etc.
-Not determined by “income” only
-Measured as a combination of occupation, income,
education, wealth, and other variables
Characteristics Affecting Consumer
Behavior: Social Factors
Groups, Social Networks, and Influencer
Marketing
-
Reference Group
-
Opinion Leaders
-
-
Word-of-mouth influence
-
Online Social Networks
Characteristics Affecting Consumer
Behavior: Social Factors
Family
- The most important membership reference group.
- Roles and influence of the husband, wife, and
children.
- The family of orientation vs. the family of
procreation
- Children may also have influence on family buying
decisions.
Characteristics Affecting Consumer Behavior: Family
Gender roles have blurred and
no longer an accurate way of
segmentation for some
product categories.
Characteristics Affecting Consumer
Behavior: Social Factors
Roles and Status
- A person plays different role in different groups
- The same person can play the following roles:
Wife and mother in the family,
HR Manager in the office
President in the local charitable organization.
Characteristics Affecting Consumer
Behavior
Personal Factors
Age and life stage
Occupation
Economic situation
Lifestyle
Personality and self-concept
Characteristics Affecting Consumer
Behavior: Age
Based on Age:
-Banking need varies
-Preference for shoe varies (older prefer more comfort)
-Price point varies (affordability vs. luxury)
Characteristics Affecting Consumer
Behavior: Occupation
Characteristics Affecting Consumer
Behavior: Personality & Self-concept
-Personality: The unique psychological characteristics that
distinguish a person or group.
- Traits such as:
Self-confidence
Openness
Adaptability
Dominance
Optimism
Characteristics Affecting Consumer
Behavior: Lifestyle
-A person’s pattern of living as expressed in his or her
activities, interests, and opinions. (AIO Dimensions)
-Consumers don’t just buy products; they buy the values and
lifestyles those products represent.
Self-concept
-Self-concept: how people perceive themselves.
-Consumers have multiple “selves” because people act
differently in different situations (e.g., at school, at work,
with friends).
- Three components of self-image:
Components
of Self-
concept
Actual Ideal Social
Characteristics Affecting Consumer
Behavior: Personality & Self-concept
Brand personality
Practicality Competence
and (reliable, intelligent,
simplicity and successful)
Happiness Freedom and
and ruggedness
friendliness
Characteristics Affecting Consumer
Behavior: Psychological Factors
Motivation Emotions
Perception Memory
Characteristics Affecting Consumer
Behavior: Psychological Factors
Motivation
Motive: A need that is sufficiently pressing to direct
the person to seek satisfaction of the need.
Essential for Example: food,
Biological
physical existence water, air, clothing
Needs
etc.
Learned from Example: self-
Psychological parents, social esteem, power,
Needs environment, and prestige, affection,
interactions with achievement etc.
Characteristics Affecting Consumer
Behavior: Psychological Factors
Theory by Sigmund Freud: suggest that a person’s
buying behavior is affected by subconscious motives that
even the buyer may not fully understand.
Theory by Abraham Maslow: suggest that human needs
are arranged in a hierarchy from the most pressing at the
bottom to the least pressing at the top.
Maslow’s hierarchy of needs
Characteristics Affecting Consumer
Behavior: Psychological Factors
Perception
The process by which people select, organize, and
interpret sensory information to form a meaningful
picture of the world.
People can form different perceptions of the same stimulus:
Selective attention
Tendency to screen out most of the information
Selective distortion
Tendency to interpret in a way that support existing
beliefs
Characteristics Affecting Consumer
Behavior: Psychological Factors
Emotions
-Emotions are mental states that arise
spontaneously rather than from conscious
effort and reflect people’s positive or
negative reactions to internal and external
stimuli.
-Consumer response is not all cognitive
and rational. Many responses may be
emotional.
Characteristics Affecting Consumer
Behavior: Psychological Factors
Memory
-The brain’s ability to record, store, and
retrieve information and events
-Ingeneral, memory can be described as a
process of encoding and retrieval.
The Buyer Decision Process
CONSUMER DECISION JOURNEY
Jane’s Decision Process
of Buying a Laptop
Jane
Need Recognition
Internal Stimuli-
Hunger, Thirst
External Stimuli-
Marketing communications
Discussion with a friend
Information Search
Personal Sources- Family,
Friends
Commercial Sources- Ads,
salespeople, product websites
Public Sources- Review
websites, social media, online
search
Experiential sources- Trying Jane asks her friend who
and using the product is an expert in tech
Note: As you search more products. She also
info, your knowledge about watches some review
available products increases videos about HP Laptops
uploaded on YouTube.
Successive Sets Involved in Consumer
Decision Making
Evaluation of Alternatives
Consumers don’t use a uniform
method to evaluate
alternatives.
It depends/varies based on a lot Jane got to know that there are 5
of factors (e.g., consumer laptop options (from different
characteristics)
brands) available within her
budget. Her preferred laptop
You might shortlist 3 options, features are lightweight,
and then evaluate them based durability and reliable
on your preferred criteria (style,
durability etc.) performance. She now evaluates
the 5 laptop brands based on her
preferred criteria. Then she
Consumers develop purchase finally ranks 1. Laptop-A and 2.
intention at this stage
Laptop-B
Evaluation of Alternatives
Belief
A descriptive thought 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
Influences our mind to like/dislike something.
Expectancy-Value Model
Purchase Decision
Buyer’s decision about which brand
to purchase, from whom to purchase
and when to purchase.
Purchase Intention might not
After going to the store, always lead to purchase decision
Jane found out her first
preferred laptop (Laptop-
A) is out of stock. Attitude of others
Therefore, she decides to Unexpected situational factors
go for Laptop-B.
Purchase Decision
A consumer’s decision to modify, postpone, or avoid a purchase
decision is heavily influenced by one or more types of perceived
risk
Types
Functional Risk
Physical Risk
Financial Risk
Social Risk
Psychological Risk
Time Risk
Post-Purchase Behavior
Purchase leads to satisfaction or
dissatisfaction.
“Consumers’ expectations vs.
Jane feels satisfied after product’s perceived performance”
using the product for a
few weeks. She shares a Cognitive Dissonance: Buyer
positive review on the discomfort caused by post-
company website. She purchase conflict.
also tells her friends about
her positive experience
with the product.
QUESTIONS
?