Week 3 Learning Material

Key Concepts
 Reading: Principles of Marketing 17th Edition: Chapter 5 Consumer Markets and
Buyer Behavior

Consumer buyer behavior refers to the buying behavior of final consumers—individuals and
households who buy goods and services for personal consumption.

All of these consumers combine to make up the consumer market.

 The American consumer market consists of more than 300 million people.

Model of Consumer Behavior

The central question for marketers is: How do consumers respond to various marketing
efforts the company might use?

The starting point is the stimulus-response model of buyer behavior shown in Figure 5.1.

Marketing stimuli consist of the Four Ps: product, price, place, promotion.

Other stimuli include major forces and events in the buyer’s environment: economic,
technological, political, and cultural.

The marketer wants to understand how the stimuli are changed into responses inside the
consumer’s black box, which has two parts.

1. The buyer’s characteristics influence how he or she perceives and reacts to the
stimuli.
2. The buyer’s decision process itself affects the buyer’s behavior.

Characteristics Affecting Consumer Behavior

Cultural Factors
Culture is the most basic cause of a person’s wants and behavior.

Marketers are always trying to spot cultural shifts.

Subcultures are groups of people with shared value systems based on common life
experiences and situations.

The U.S. Hispanic market consists of 45 million consumers.

The African American market has an annual buying power of $799 million and is estimated
to reach $1 trillion by 2012.

Asian Americans are the most affluent U.S. demographic segment.

Mature consumers are becoming a very attractive market. By 2015, the entire baby boom
generation will have moved into the 50-plus age bracket.

Social Classes are society’s relatively permanent and ordered divisions whose members share
similar values, interests, and behaviors.

Social class is not determined by a single factor, but is measured as a combination of

occupation, income, education, wealth, and other variables.

Social Factors

Groups and Social Networks. A person’s behavior is influenced by many small groups.

people within a reference group who, because of special skills, knowledge,

Opinion leaders are
personality, or other characteristics, exert social influence on others.

These 10 percent of Americans are called the influentials or leading adopters.

Marketers use buzz marketing to spread the word about their brands.

Online social networks are online spaces where people socialize or exchange information
and opinions.

Family is the most important consumer buying organization in society.

70 percent of women hold jobs outside the home.

Men now account for about 40 percent of all food-shopping dollars.

The nation’s 36 million kids age 3 to 11 control an estimated $18 billion in disposable
income.
Roles and Status. A role consists of the activities people are expected to perform. Each role
carries a status reflecting the general esteem given to it by society.
Personal Factors

Age and Life-Cycle Stage. People change the goods and services they buy over their
lifetimes.

Marketers are increasingly catering to a growing number of alternative, nontraditional stages

such as unmarried couples, singles marrying later in life, childless couples, same-sex couples,
single parents, extended parents (those with young adult children returning home), and others.

RBC Royal Bank has identified five life-stage segments.

1. The youth segment includes customers younger than 18.
2. Getting Started consists of customers aged 18 to 35 who are going through first
experiences.
3. Builders, customers aged 35 to 50, are in their peak earning years.
4. Accumulators, aged 50 to 60, worry about saving for retirement and investing wisely.
5. Preservers, customers over 60, want to maximize their retirement income to maintain
a desired lifestyle.

Occupation. A person’s occupation affects the goods and services bought.

Economic Situation. A person’s economic situation will affect product choice.

Lifestyle is a person’s pattern of living as expressed in his or her psychographics.

AIO dimensions are activities (work, hobbies, shopping, sports, social events), interests
(food, fashion, family, recreation), and opinions (about themselves, social issues, business,
products).

Personality and Self-Concept

refers to the unique psychological characteristics that lead to relatively consistent

Personality
and lasting responses to one’s own environment.

A brand personality is the specific mix of human traits that may be attributed to a particular
brand. One researcher identified five brand personality traits:
1. Sincerity (down-to-earth, honest, wholesome, and cheerful)
2. Excitement (daring, spirited, imaginative, and up-to-date)
3. Competence (reliable, intelligent, and successful)
4. Sophistication (upper class and charming)
5. Ruggedness (outdoorsy and tough)

The basic self-concept premise is that people’s possessions contribute to and reflect their
identities; that is, “we are what we have.”
Psychological Factors

Motivation
A motive (or drive) is a need that is sufficiently pressing to direct the person to seek
satisfaction.

Freud suggests that a person’s buying decisions are affected by subconscious motives that
even the buyer may not fully understand.

Motivation research refers to qualitative research designed to probe consumers’ hidden,

subconscious motivations.

Maslow sought to explain why people are driven by particular needs at particular times.

is the process by which people select, organize, and interpret information to form a
Perception
meaningful picture of the world.

Selective attention is the tendency for people to screen out most of the information to which
they are exposed.

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

Selective retention is the retaining of information that supports their attitudes and beliefs.

Types of Buying Decision Behavior

Figure 5.5 shows types of consumer buying behavior based on the degree of buyer
involvement and the degree of differences among brands.

Complex Buying Behavior

Consumers undertake complex buying behavior when they are highly involved in a purchase
and perceive significant differences among brands.

Consumers may be highly involved when the product is expensive, risky, purchased
infrequently, and highly self-expressive.

Typically, the consumer has much to learn about the product category.

Marketers of high-involvement products must understand the information-gathering and

evaluation behavior of high-involvement consumers.

Dissonance-Reducing Buying Behavior

Dissonance-reducing buying behavior occurs when consumers are highly involved with an
expensive, infrequent, or risky purchase, but see little difference among brands.

After the purchase, consumers might experience postpurchase dissonance (after-sale

discomfort) when they notice certain disadvantages of the purchased brand or hear favorable
things about brands not purchased.

To counter such dissonance, the marketer’s after-sale communications should provide

evidence and support to help consumers feel good about their brand choices.

Habitual Buying Behavior

Habitual buying behavior occurs under conditions of low consumer involvement and little
significant brand difference.

Consumer behavior does not pass through the usual belief-attitude-behavior sequence.

Consumers do not search extensively for information about the brands, evaluate brand
characteristics, and make weighty decisions about which brands to buy.

They passively receive information as they watch television or read magazines.

Because buyers are not highly committed to any brands, marketers of low-involvement
products with few brand differences often use price and sales promotions to stimulate product
trial.

Variety-Seeking Buying Behavior

Consumers undertake variety-seeking buying behavior in situations characterized by low

consumer involvement but significant perceived brand differences.

In such cases, consumers often do a lot of brand switching.

The Buyer Decision Process

The buyer decision process consists of five stages:

1. need recognition,
2. information search,
3. evaluation of alternatives,
4. purchase decision, and
5. postpurchase behavior.

Need Recognition

The buyer recognizes a problem or need.

The need can be triggered by either an:

 internal stimuli or
 external stimuli.

Information Search

Information search may or may not occur.

Consumers can obtain information from any of several sources.

 Personal sources (family, friends, neighbors, acquaintances),

 Commercial sources (advertising, salespeople, Web sites dealers, packaging,
displays),
 Public sources (mass media, consumer-rating organizations, Internet searches), and
 Experiential sources (handling, examining, using the product).

Commercial sources inform the buyer.

Personal sources legitimize or evaluate products for the buyer.

Evaluation of Alternatives

Alternative evaluation: how the consumer processes information to arrive at brand

choices.
How consumers go about evaluating purchase alternatives depends on the individual
consumer and the specific buying situation.

In some cases, consumers use careful calculations and logical thinking.

At other times, the same consumers do little or no evaluating; instead they buy on impulse
and rely on intuition.

Purchase Decision

Generally, the consumer’s purchase decision will be to buy the most preferred brand.

Two factors can come between the purchase intention and the purchase decision.

1. Attitudes of others.
2. Unexpected situational factors.

Postpurchase Behavior

The difference between the consumer’s expectations and the perceived performance of the
good purchased determines how satisfied the consumer is.
If the product falls short of expectations, the consumer is disappointed; if it meets
expectations, the consumer is satisfied; if it exceeds expectations, the consumer is said to be
delighted.

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 through which an individual pass from first learning
about an innovation to final adoption. Adoption is the decision by an individual to become a
regular user of the product.
Influence of Product Characteristics on Rate of Adoption

Five characteristics are important in influencing an innovation’s rate of adoption.

Relative advantage: the degree to which the innovation appears superior to existing
products.
Compatibility: the degree to which the innovation fits the values and experiences of
potential consumers.
Complexity: the degree to which the innovation is difficult to understand or use.
Divisibility: the degree to which the innovation may be tried on a limited basis.
Communicability: the degree to which the results of using the innovation can be
observed or described to others.