Analyzing

Consumer Markets
Chapter 6
 Consumer behavior
The study of how individuals,
What groups, and organizations select,
Influences buy, use, and dispose of goods,
Consumer services, ideas, or experiences to
Behavior? satisfy their needs and wants
Influenced by cultural, social, and
personal factors
Figure 6.1
Model Of
Consumer
Behavior
 Factors Influencing Consumer Behavior

Characteristics Affecting
Consumer Behavior
  Culture is the fundamental determinant of a person’s wants and
behavior.
 Each culture consists of smaller subcultures that provide more
specific identification and socialization for their members.
Subcultures include nationalities, religions, racial groups, and
geographic regions. When subcultures grow large and affluent
enough, companies often design specialized marketing programs
Cultural factors to serve them
 Virtually all human societies exhibit social stratification, most
often in the form of social classes, relatively homogeneous and
enduring divisions in a society, hierarchically ordered and with
members who share similar values, interests, and behavior. One
classic depiction of social classes in the United States defined
seven ascending levels: (1) lower lowers, (2) upper lowers, (3)
working class, (4) middle class, (5) upper middles, (6) lower
uppers, and (7) upper uppers. Social class members show distinct
product and brand preferences in many areas
  Reference Groups A person’s reference groups are
all the groups that have a direct (face-to-face) or
indirect influence on their attitudes or behavior.
 Groups having a direct influence are called
membership groups.
Social Factors  Some of these are primary groups with whom the
person interacts fairly continuously and informally,
such as family, friends, neighbors, and coworkers.
 People also belong to secondary groups, such as
religious, professional, and trade-union groups,
which tend to be more formal and require less
continuous interaction.
  .People are also influenced by groups to which they do
not belong. Aspirational groups are those a person
hopes to join;
Reference
 dissociative groups are those whose values or behavior
groups an individual rejects.
influence  Where reference group influence is strong, marketers
members in at must determine how to reach and influence the group’s
opinion leaders.
least three
 An opinion leader is the person who offers informal
ways advice or information about a specific product or
product category, such as which of several brands is
best or how a particular product may be used
  Cliques Communication researchers propose a
social-structure view of interpersonal
communication.
 They see society as consisting of cliques, small
groups whose members interact frequently. Clique
members are similar, and their closeness facilitates
effective communication but also insulates the
Social Factors clique from new ideas.
 The challenge is to create more openness so
cliques exchange information with others in
society. This openness is helped along by people
who function as liaisons and connect two or more
cliques without belonging to either and by bridges,
people who belong to one clique and are linked to
a person in another.
Cliques
  There are two families in the buyer’s life. The family of
orientation consists of parents and siblings. From
parents a person acquires an orientation toward
religion, politics, and economics and a sense of
personal ambition, self-worth, and love.

FAMILY  A more direct influence on everyday buying behavior is

the family of procreation—namely, the person’s
spouse. The wife has usually acted as the family’s main
purchasing agent, especially for food, sundries, and
staple clothing items. Now traditional purchasing roles
are changing, and marketers would be wise to see both
men and women as possible targets
 Age/stage in life cycle
Occupation and economic
circumstances
Personal factor Personality and self-concept
Lifestyle and values
 Personal Factors

Characteristics
Affecting
Consumer  Age and life-cycle stage
Youth: younger than 18
Behavior 
 Getting started: 18–35
 Builders: 35–50
 Accumulators: 50–60
 Preservers: over 60
 Personal Factors

Characteris
tics
Affecting Occupation affects the goods and services bought by consumers
Economic situation includes trends in:
Consumer
Behavior

Personal Interest
Savings
income rates
 Personal Factors
Lifestyle is a person’s
pattern of living as
expressed in his or her
Characteristics
psychographics
Affecting  Measures a consumer’s
Consumer
Behavior AIOs (activities, interests,
opinions) to capture
information about a
person’s pattern of acting
and interacting in the
environment
 Personal Factors

Characteristics Affecting
Consumer Behavior  Personality and self-concept
 Personality refers to the unique psychological characteristics that lead to
consistent and lasting responses to the consumer’s environment
 Motivation

Key Memory
Psychological Perception
Processes

Emotions
Learning
 Maslow’s Herzberg’s
Freud’s Hierarchy Two-Factor
Theory of Needs Theory

Motivation Behavior Behavior Behavior is

is guided by is driven by guided by
subconscious lowest, dissatisfiers
motivations unmet need and
satisfiers
Freud’s  Freudian theory postulates that adult personality is made up of
three aspects: (1) the id, operating on the pleasure principle
Theory generally within the unconscious; (2) the ego, operating on the
reality principle within the conscious realm; and (3) the superego,
operating on the morality principle at all levels of consciousness.
Break 4.35-4.50
Figure 6.2
Maslow’s
Hierarchy Of
Needs
 The process by
which we select,
organize, and
interpret
Perception information inputs
to create a
meaningful picture
of the world
 Selective attention

Selective distortion
perception
Selective retention

Subliminal perception
 Psychological Factors
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
PERCEPTION 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 forget good points about
competing brands
Subliminal perception is the perception of a series of stimulus which
the person is not consciously aware of and gets under the
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[Link]
 Learning
Key Induces changes in our behavior
Psychological arising from experience
Processes Drive and cues
Generalization and discrimination
 Emotions

Key Many different

Psychological kinds of
Processes emotions can
be linked to
brands
 Memory
Short-term vs. long-term
memory
Key
Associative network memory
Psychological
model
Processes
Brand associations
Memory encoding
Memory retrieval
Hypothetical
State Farm
Mental MaP
 The consumer typically passes
through five stages
 Problem recognition
The Buying  Information search
Decision  Evaluation of alternatives
Process  Purchase decision
 Post purchase behavior
 The Buyer Decision Process

• Occurs when the buyer recognizes a

problem or need triggered by:
– Internal stimuli: when one of the person’s
normal needs—for example, hunger or thirst—
Need rises to a level high enough to become a drive
Recognition – External stimuli: an advertisement or a
discussion with a friend might get you thinking
about buying a new car

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 The Buyer Decision Process
• Personal sources—family and friends
Sources of • Commercial sources—advertising,
Information Internet
• Public sources—mass media, consumer
organizations
• Experiential sources—handling,
examining, using the product

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Figure 6.5
Sets Involved
In Decision
Making
 The Buyer Decision Process

Evaluation
of Alternatives
• How the consumer processes
information to arrive at brand choices

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Evaluation of
alternatives
Expectancy-
value model
 Suppose Linda has narrowed her choice set to four laptops (A, B, C, and D).
Assume she’s interested in four attributes: memory capacity, graphics capability,
size and weight, and price. Table 6.3 shows her beliefs about how each brand rates
on the four attributes. If one computer dominated the others on all the criteria,
we could predict that Linda would choose it. But, as is often the case, her choice
set consists of brands that vary in their appeal. If Linda wants the best memory
capacity, she should buy C; if she wants the best graphics capability, she should
buy A; and so on.
 Suppose she assigned 40 percent of the importance to the laptop’s memory
capacity, 30 percent to graphics capability, 20 percent to size and weight, and 10
percent to price.
 the expectancy-value model, we multiply her weights by her beliefs about each
computer’s attributes. This computation leads to the following perceived values:
 A noncompensatory decision-making strategy
eliminates alternatives that do not meet a particular
criterion.
A compensatory decision-making strategy weighs the
positive and negative attributes of the considered
alternatives and allows for positive attributes to
compensate for the negative ones
 Purchase decision
Compensatory vs. no compensatory models
The expectancy-value model is a compensatory model, in that perceived
good things about a product can help to overcome perceived bad things.
But consumers often take “mental shortcuts” called heuristics or rules of
thumb in the decision process. With no compensatory models of
consumer choice, positive and negative attribute considerations don’t
necessarily net out. Evaluating attributes in isolation makes decision
making easier for a consumer, but it also increases the likelihood that she
would have made a different choice if she had deliberated in greater
detail. We highlight three choice heuristics here.
A non-compensatory decision-making strategy eliminates
alternatives that do not meet a particular criterion.

A compensatory decision-making strategy weighs the

positive and negative attributes of the considered
alternatives and allows for positive attributes to
compensate for the negative ones.
 Conjunctive heuristic

Purchase decision
Compensatory vs. Lexicographic heuristic
no compensatory
models

Elimination-by-aspects heuristic
  1. Using the conjunctive heuristic, the consumer sets a
minimum acceptable cutoff level for each attribute and
chooses the first alternative that meets the minimum
standard for all attributes. For example, if Linda
Purchase decided all attributes had to rate at least 5, she would
choose laptop B.
decision  2. With the lexicographic heuristic, the consumer
Compensatory chooses the best brand on the basis of its perceived
vs. no most important attribute. With this decision rule, Linda
would choose laptop C.
compensatory  3. Using the elimination-by-aspects heuristic, the
models consumer compares brands on an attribute selected
probabilistically—where the probability of choosing an
attribute is positively related to its importance—and
eliminates brands that do not meet minimum
acceptable cutoffs.
Intervening
factors
 The first factor is the attitudes of
others. The influence on us of
another person’s attitude depends
1. attitudes of on two things: (1) the intensity of the
others other person’s negative attitude
toward our preferred alternative and
(2) our motivation to comply with
the other person’s wishes.
 Functional
risk Physical risk

2. Types of Time risk

perceived risk Financial risk

Psychological
risk Social risk
  1. Functional risk—The product does not perform
to expectations.
 2. Physical risk—The product poses a threat to the
physical well-being or health of the user or others.
 3. Financial risk—The product is not worth the price
2. Other paid.
situational  4. Social risk—The product results in
factors embarrassment in front of others.
 5. Psychological risk—The product affects the
mental well-being of the user.
 6. Time risk—The failure of the product results in
an opportunity cost of finding another satisfactory
product
 The Buyer Decision Process
• The satisfaction or dissatisfaction that the
consumer feels about the purchase
• Relationship between:
– Consumer’s expectations
– Product’s perceived performance
Post purchase • The larger the gap between expectation
and performance, the greater the
Decision consumer’s dissatisfaction
• Cognitive dissonance is the discomfort
caused by a postpurchase conflict

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 Post purchase behavior
 Post purchase
satisfaction
Post purchase
 Post purchase actions
behavior
 Post purchase uses
and disposal
Cognitive dissonance was first investigated by Leon Festinger, Cognitive dissonance refers
to a situation involving conflicting attitudes, beliefs, or behaviors.
This produces a feeling of mental discomfort leading to an alteration in one of the
attitudes, beliefs, or behaviors to reduce the discomfort and restore balance.
  cognitive dissonance, or discomfort
caused by postpurchase conflict. After the
purchase, consumers are satisfied with the
benefits of the chosen brand and are glad
to avoid the drawbacks of the brands not
bought. However, every purchase involves
cognitive compromise. So consumers feel uneasy
about acquiring the drawbacks of the
dissonance chosen brand and about losing the
benefits of the brands not purchased.
Thus, consumers feel at least some
postpurchase dissonance for every
purchase
 Amazon Prime
 Scenario: A customer subscribes to Amazon Prime but doubts if the annual fee
is worth it.

 Resolution: Amazon regularly promotes the various benefits of Prime

membership, such as free shipping, exclusive deals, and access to streaming
services, to reassure customers of the value they are receiving.
 Coca-Cola
 Scenario: A health-conscious consumer enjoys Coca-Cola but feels guilty about
the sugar content.

 Resolution: Coca-Cola addresses this by offering a range of lower-sugar and

zero-sugar options and prominently marketing these alternatives to align with
health-conscious values.
 Apple
 Scenario: A customer buys an iPhone and later sees a new model released
shortly after their purchase, causing feelings of regret.

 Resolution: Apple addresses this by offering trade-in programs and highlighting

the longevity and software updates of their products, ensuring customers feel
valued and up-to-date with the latest technology.
 Nike
 Scenario: A consumer buys a pair of Nike running shoes but feels guilty about
the cost compared to cheaper alternatives.

 Resolution: Nike reinforces the value through marketing campaigns that

highlight superior technology, performance benefits, and endorsements from
top athletes, justifying the investment.
 strategies to Handle and Leverage Cognitive
Dissonance
• Provide Reassurance: Offer guarantees, warranties, and positive customer testimonials to
reduce doubts.

• Highlight Benefits: Highlight the unique features and long-term advantages of your product or
service.
• Address Concerns Directly: Provide clear and detailed information to tackle any potential
issues head-on.
• Encourage Positive Feedback: Use customer reviews and case studies to build trust and
credibility.
• Create Value: Ensure customers see the worth of their purchase through loyalty programs and
exclusive offers.
• Facilitate Comparisons: Help customers see how your product stands out against competitors.
• Promote Flexibility: Offer easy return policies and trade-in programs to reduce buyer’s
remorse.
 Example: A consumer who is environmentally conscious but frequently
purchases products with excessive packaging.
 Dissonance: There is a conflict between the consumer's belief in sustainability
and their actions of buying products with excessive packaging.
 Possible Resolutions:

Example
[Link] Belief: The consumer might downplay the importance of reducing
packaging, arguing that it's a small contribution and that individual actions
have little impact.
[Link] Action: The consumer might start seeking out products with minimal
packaging, choosing bulk items, or opting for reusable containers.
[Link] Perception: The consumer might rationalize their behavior by claiming
that recycling the packaging offsets the environmental impact.
Figure 6.7
Customer
Product
Use/Disposal