BUS271

CONSUMER
MARKETS
&
MARKETING
RESEARCH

[email protected]
Who are consumers?

You, she, he, we, I, they, Kendall

Jenner, my grandmother, Justin
Bieber, Boris Johnson, the president
of our university, your 3 year old
niece, mayor of your town, your
family, the Queen, …

Individuals who buy products or

services for personal consumption
are called consumers.

Consumer markets are made up of all

the individuals and households that
buy or acquire goods and services
for personal consumption.
 Consumer Behavior

The study of the processes involved

when individuals or groups select,
purchase, use or dispose of
products, services, ideas or
experiences to satisfy needs,
wants, and desires.
Acquisition
How do the consumers make their decisions?

Use / consumption
How do the consumers consume the product/service?

Disposition
How do the consumers dispose of products/services?
symbolic meaning of
consumption

WHAT MEANING DO THE CONSUMERS ATTACH TO ALL

THESE ACTIONS?
Hence, the need to
understand the consumers…

• Who?

• How?

• What?

• Where?

• When?
Characteristics Affecting Consumer Behavior
Cultural Factors

Factors Influencing Consumer Behavior

Importance of Culture in Consumer Behaviour
Culture can be viewed as the collective memory of a society
(shared meanings, rituals, norms and traditions among
members).

Consumption choices cannot be understood without

considering the cultural context in which they are made.

Culture forms the prism through which people view products

and try to make sense of their own and other people’s
behaviour.
 Culture
Accumulation of shared
meanings, rituals,
norms, and traditions…

Abstract ideas AND

material objects

An overall system within

which other systems
are organized…
 Characteristics Affecting Consumer Behavior
Cultural Factors

Subcultures are groups of

people within a culture with
shared value systems based on
common life experiences and
situations.
 Characteristics Affecting Consumer Behavior
Cultural Factors
Social classes are society’s relatively permanent and ordered
divisions whose members share similar values, interests, and
behaviors.

Measured as a combination of occupation, income, education,

wealth, and other variables.

It is still a rather poor determinant of how consumers behave 

why do you think?
Characteristics Affecting Consumer Behavior
Social Factors

Groups and Social Networks

Membership Aspirational Reference

Groups Groups Groups
• Groups with • Groups an • Groups that
direct individual form a
influence wishes to comparison
and to which belong to or reference
a person in forming
belongs attitudes or
behavior
 Characteristics Affecting Consumer Behavior
Social Factors
Groups and Social Networks
Online social networks
Social media sites
Virtual worlds
Word of mouth
Opinion leaders

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 Characteristics Affecting Consumer Behavior
Social Factors
Family is still the most important consumer-buying organization in most
societies.
A person belongs to many groups: family, clubs, organizations, online
communities.

Role and status can be defined by a person’s position in a group.

Role: activities people are expected to perform according to the people around
them.

Each role carries a status reflecting the general esteem given to it by society.
Consider yourself:
 Characteristics Affecting Consumer Behavior
Personal Factors
Age and Life-cycle stage: we change the goods/services we buy over our
lifetime.
Tastes in food, clothes, furniture, leisure are often age related.
Buying is also shaped by the stage of the family life cycle – the stages through
which families might pass as they mature over time.
Life stage changes usually result from demographics and life-changing events
PRIZM Lifestage Groups system - what could go wrong with
something developed in the USA based on USA consumer data?
66 segments
11 life-stage groups
 Characteristics Affecting Consumer Behavior
Personal Factors

Occupation affects the goods and services bought by

consumers.

Economic situations include trends in:

Personal Interest
Spending Savings
income rates
 Characteristics Affecting Consumer Behavior
Personal Factors
Lifestyle is a person’s pattern of living as expressed in his or her
psychographics.

Look at consumers’ major AIO dimensions! TASTE

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

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.
 Characteristics Affecting Consumer Behavior
Personal Factors

Personality refers to the unique

psychological characteristics
that distinguish a person or
group.
Characteristics Affecting Consumer Behavior
Personal Factors
Brand Personality Traits (??)

Sincerity Excitement Competence

Sophistication Ruggedness

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Characteristics Affecting Consumer Behavior

Psychological Factors

Motivation

Perception

Learning

Beliefs and attitudes

 Characteristics Affecting Consumer Behavior

Psychological Factors

A motive (or drive) is a need that is sufficiently pressing to direct the

person to seek satisfaction of the need.

Motivation research refers to qualitative research designed to probe

consumers’ hidden, subconscious motivations.

Why we do what we do = motivation

Characteristics Affecting Consumer Behavior
Psychological Factors
Perception how we select,
organize, and interpret
information to form a
meaningful picture of the
world.

Perceptual Processes

Selective Selective Selective

attention distortion retention
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 Characteristics Affecting Consumer Behavior

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

Selective distortion  tendency for people to interpret information in a

way that will support what they already believe.

Selective retention  tendency to remember good points made about

a brand they favor and forget good points about competing brands.
 Characteristics Affecting Consumer Behavior

Psychological Factors
Learning is the change in an individual’s behavior arising
from experience and occurs through the interplay of:

 Behavioral
Drives Stimuli Cues Responses Learning

Reinforcement  Instrumental
Learning
 Characteristics Affecting Consumer Behavior
Psychological Factors
A belief is a descriptive thought that a person has about something
based on:
knowledge
opinion
faith

An attitude describes a person’s relatively consistent evaluations,

feelings, and tendencies toward an object or idea.

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Types of Buying Decision Behavior

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

 Types of Buying Decision Behavior

FIGURE | 5.5 Four Types of Buying Behavior

 MANAGING
MARKETING
MANAGING MARKETING
INFORMATION TO GAIN CONSUMER
INFORMATION TO
INSIGHTS GAIN CONSUMER
INSIGHTS
 CONSUMER INSIGHTS
The real value of marketing
fresh marketing information-based information lies in how it is
understandings of consumers and used – in the consumer
the marketplace that become the insights that it provides.
basis for marketplace offerings,
engagement, and relationships. Insights Teams

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 CONSUMER INSIGHTS
Fresh and deep glimpse into customer needs, wants, desires

Important but difficult to obtain

Consumption motives not obvious
Consumers usually can’t tell you what and why

Better information and more effective use of existing information

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 Managing Marketing Information
Companies are forming customer
insights teams
Include all company
functional areas
Collect information from a
wide variety of sources
Use insights to create more
value for their customers
 Marketing Information System
Marketing information
system (MIS) refers to the
people and procedures
dedicated to assessing
information needs,
developing the needed
information, and helping
decision makers to use the
information to generate
and validate actionable
consumer and market
insights.
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Marketing Information and Customer Insights
Managing Marketing Information

FIGURE | 4.1 The Marketing Information System

Copyright © 2016 Pearson Education, Inc.

4-10
 Assessing Marketing Information Needs

A marketing information system (MIS) provides

information to the company’s marketing and
other managers and external partners such as
suppliers, resellers, and marketing service
agencies.
Developing Marketing Information

Marketers obtain information from

Internal data

Marketing intelligence

Marketing research
 Competitive Marketing
Intelligence
Competitive marketing
intelligence is the
systematic collection and
analysis of publicly
available information about
consumers, competitors,
and developments in the
marketing environment.
 Marketing Research

Marketing research  systematic design, collection, analysis,

and reporting of data relevant to a specific marketing
situation facing an organization.

e.g. what is the awareness level for my latest

advertisement?
 Marketing Research

Problem: market share is not growing

Research objectives: find out why people are not choosing your brand
 Marketing Research
Developing the Research Plan

First, look at what existing data you

have

Second, decide on the specific research

design to best solve the marketing
research problem
Potential Uses of Market
Research
Diagnosing a situation
Unfamiliar areas, new ideas.

Screening alternatives
New products, packaging
Concept testing

Discovering new ideas

Tapping unknown consumer needs
Can be potentially disastrous
 Marketing Research

Developing the Research Plan

Secondary data is information that already exists somewhere,

having been collected for another purpose.

Primary data is information collected for the specific purpose at

hand.
 Marketing Research
Gathering Secondary Data

Disadvantages
Advantages
- data may not be

Lower cost Relevant

Obtained quickly Accurate

Cannot collect Current

otherwise
Impartial
 Marketing Research

Defining the Problem and Research Objectives

Exploratory research
Descriptive research
Causal research

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Marketing Research

Primary Data Collection

Copyright © 2016 Pearson Education, Inc. 4-28

 Marketing Research
Primary Data Collection

Observational research involves gathering primary data

by observing relevant people, actions, and situations.

Ethnographic research involves sending trained observers

to watch and interact with consumers in their “natural
environments.”
 Marketing Research
Primary Data Collection

Survey research involves gathering primary data by

asking people questions about their knowledge,
attitudes, preferences, and buying behavior.

Experimental research involves gathering primary data

by selecting matched groups of subjects, giving them
different treatments, controlling related factors, and
checking for differences in group responses.
 Managing Marketing Information
to Gain Customer Insights
Learning Objective 5

Analyzing and Using Marketing Information

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In the 130 Loyalty Schemes launched in the UK over the last 10 years
half the value (£1.5 billion) of unvalued points is sitting “lost”, unclaimed

......and the value of the data they hold?

They have gathered so much data that it is

like trying to take a drink from a fire hydrant
Sam Taverner, Axiom