9/4/2025

Consumer
Markets

Consumer Market
Learning 01 How do consumer characteristics
influence buying behavior?
Objectives 02 What major psychological processes influence
consumer responses to the marketing
program?

03 How do consumers make purchasing decisions?

How do marketers analyze consumer decision

04 making?

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Consumer Buying Behavior

CONSUMER BEHAVIOR can be defined as The study of how individuals, groups,

the mental and emotional processes and and organizations select, buy, use,
the physical activities that people engage
in when they select, purchase, use and and dispose of goods, services,
dispose of products or services to satisfy ideas, or experiences to satisfy their
particular needs and wants needs and wants

Consumer/Customer Buying
Behavior refers to the buying The central question for marketers is:
behavior of final consumers - “How do consumers respond to
individuals & households who buy various marketing efforts the
goods and services for personal company might use?”
consumption

Marketers must fully understand both the theory and the reality of consumer behavior.

Model of Consumer Behavior

The stimulus-response model

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Model of Consumer Behavior

Buyer’s Black Box

What Influence Consumer Buying Behavior?

Consumer Characteristics

Culture Social Personal

factors

Culture Reference groups Age/stage in life cycle

Subcultures Cliques Occupation and economic circumstances
Social classes Family Personality and self-concept
Roles and status Lifestyle and values

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Culture’s Pervasive
Impact
Culture influences Cultures impact the birth
every part of our lives rates, food consumed
and even the disease
affected …
The members in the society put their
value on certain things, which creates
the culture and is the main influence Cultures teach us what
in the meaning of the goods they is acceptable within a
then consume. The goods that the society.
consumer spends time, attention and
money on are filled
with cultural meaning (McCracken,
1990).

What is Culture?
Culture is the fundamental determinant of a person’s wants and behaviors
acquired through socialization processes with family and other key institutions.

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Culture & Sub Cultures

Each culture consists of smaller subcultures that provide more specific identification and socialization for
their members (common life experiences and situations)

Subcultures include:
Religions
Nationalities

subculture

Geographical Racial Groups

Regions

**Seven languages of Catherine Tate

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Social Class Social class measurements

A group of people in a
society who are
considered nearly society’s relatively
equal in status or permanent and
community esteem, ordered divisions
who regularly socialize whose members share
among themselves similar values,
both formally and interests, and
informally, and who behaviors.
share behavioral
norms.

Characteristics of Social Classes

Class may be
Social class conveys
Within a class, indicated by a
perceptions of
people tend to cluster of variables
inferior or superior
behave alike (occupation,
position
income, wealth)

Social classes show

Social classes differ
Class designation is distinct product and
in media
mobile over time brand preferences
preferences.
in many areas.

There are language

differences among
the social classes.

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Social Factors
Clique

Cliques are small groups

Reference groups
whose members interact
Who and what ?
frequently
.

Content Title
Here

.
Family
Social
Roles & Statuses

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Reference Groups
A person’s reference groups consists of all the
Reference groups that have a direct (face-to-face) or
Groups indirect influence on his/her attitudes or behavior

Direct influence
= Membership groups
Direct Indirect

Non
Primary secondary Aspirational Aspirational

family, friends, neighbors, consisting of individuals whose values or behavior an individual

and co-workers with whom religious, professional groups that (not necessarily known rejects. The buyer evaluates these elements
the person interacts fairly tend to be more formal personally) with whom a together with the monetary cost to form a
continuously and informally. person desires to be total customer cost.
associated

Reference Groups – Opinion Leader @ Influencers

An individual who influences the opinion of others

An opinion leader is the person who offers informal 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

Marketers are now going to social media to find opinion

leaders.
Teenagers
Movie stars
Sports figures
Celebrities

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Implications of Reference Groups

• They serve as information sources and influence perceptions

• Their norms either constrain or stimulate consumer behavior
• Reference groups expose an individual to new behaviors and
lifestyles, influencing attitudes and self-concept
• They affect an individual’s aspiration levels
• They create pressures for conformity that may affect actual product
and brand choices

Reference Groups Member’s Purchases

Required conditions:

The purchased
item must be
It tends to be
The purchased conspicuous; it
strongest when
product must be must stand out as
the product is
one that others something
visible to others
can see and unusual, a brand
whom the buyer
identify or product that
respects
not everyone
owns

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Roles and Status

What degree of status is associated with various
occupational roles?
A person belongs to many groups—family, clubs,
organizations, and online communities. The person’s
position in each group can be defined in terms of both
role and status.

A role consists of the activities people are expected to

perform according to the people around them
(behavior - rights and obligations)

Each role carries a status reflecting the general esteem

Each role carries a status given to it by society (a socially determined position in a
group or a society)

Family
The family is the most important
social institution for many consumers,
Men and women may respond
influencing values, attitudes, and
differently to marketing
buying behavior
messages

Marketers are interested in the

roles and relative influence of
Another shift in buying patterns
family members in the purchase Family is an increase in the amount of
of a large variety of products
dollars spent and the direct and
and services
indirect influence wielded by
children and teens
With expensive products and services,
the vast majority of husbands and
wives engage in more joint decision-
making
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Purchase Roles in the Family Democratic decision making ??

 Initiators
 Influencers
 Decision
Makers
 Purchasers
 Consumers Children
Influence
Purchase
Decisions

Personal Factors

Occupation and
Age/stage in life Personality and Lifestyle and
economic
cycle self-concept values
circumstances

Our taste in food, clothes, furniture, and recreation is often related to our age. Consumption is also shaped by the family life
cycle and the number, age, and gender of people in the household at any point in time

Personality: A set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to
environmental stimuli. Personality traits such as self-confidence, dominance, autonomy, deference, sociability, defensiveness,
and adaptability.

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The Five Dimensions Brand Personality –

Consumers choose and use brand that have a brand personality consistent with their own actual self-concept (how one views themselves).

(down-to-earth)
Sincerity
(daring)
Excitement

Competence (reliable)

Sophistication (upper-class)

(outdoorsy)
Ruggedness

A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions.
Lifestyle portrays the “whole person” interacting with his or her environment.

Lifestyles also are shaped partly by whether consumers are money-constrained or

time-constrained.

Consumers who experience time famine are prone to multitasking, doing two or more
things at the same time.

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•Consumer
Infographic Style
Psychology - Key Psychological Processes

Marketing and environmental

stimuli enter the consumer’s • Motivation
consciousness, and a set of
psychological processes
combine with certain consumer
characteristics to result in
• Memory
decision processes and
purchase decisions.
• Perception
The marketer’s task is to.
understand what happens in
the consumer’s consciousness • Learning
between the arrival of the
outside marketing stimuli and
the ultimate purchase
decisions.
Psychology is the scientific study of the mind and behavior

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Motivation
• A need becomes a motive when it is aroused to a sufficient level of intensity to drive us to act
• Motivation is a driving force which affects the choice of alternatives in the behaviour of a person.
It improves, stimulates and induces employees leading to goal-oriented behaviour

Mercedes Benz 125 Years of innovation "The Best or Nothing" Toyota Care Commercial

Memory
Repository of information – temporary (limited
repository) or Permanent (unlimited repository)

Brand association - all brand-related thoughts,

feelings, perceptions, images, experiences, beliefs,
attitudes, and so on, that become linked to the brand
node

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The process by which we select, organize, and interpret information inputs to create
Perception a meaningful picture of the world
.

. Perception is the meaning that a person attributes to incoming stimuli gathered

through the five senses
—sight, hearing, touch, taste, and smell

A person’s act is influenced by his or her view or perception of the situation

A motivated person is ready to act—how is influenced by his or her perception of the

situation. In marketing,
perceptions are more important than reality because they affect consumers’ actual
behavior.

Perceptions
Selective Attention
• We screen most stimuli out—a consumer notices certain stimuli and ignores others
Selective Distortion
• The tendency to interpret information in a way that fits our preconceptions
• Consumers will often distort information to be consistent with prior brand and product beliefs
and expectations.
• Selective distortion can work to the advantage of marketers with strong brands when
consumers distort neutral or ambiguous brand information to make it more positive.
• Consumer changes or distorts information that conflicts with feelings or beliefs
Selective Retention
• Consumers retain information that supports their attitudes and beliefs.
• They are likely to remember good points about a product they like and forget good points
about competing products. The need for repetitions in promotion.
Subliminal Perception
• Stimulus is below the level of consumers’ awareness
• Not consciously aware of these messages, but yet they affect their behavior (association we
made)

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Marketing Implications of Perception

Marketers must recognize the
importance of signals in a
Important Attributes consumers perception of
products

Higher Price

Brand Names

Quality And Reliability

Threshold Level of Perception

Product or Repositioning Changes

Learning
Drive and cues
Induces changes in our behavior arising • A drive is a strong internal stimulus
from experience. impelling action
• Cues are minor stimuli that determine
We act we learn. when, where, and how a person
responds

Generalization and discrimination

• Generalization – A company can enter the market by appealing to the same drives
competitors use and providing similar cues because buyers are more likely to
transfer loyalty to similar brands
• Discrimination - A company might design its brand to appeal to a different set of
drives and offer strong cue inducements to switch

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Learning

Induces changes in our behavior arising

from experience. Drive and cues Generalization and discrimination
We act we learn.

Emotions
• Marketers are increasingly recognizing the power of emotional appeals especially
if these are rooted in some functional or rational aspects of the brand.
• Many different kinds of emotions can be linked to brands.

Humor etc

Five-Stage Model of the

Consumer Buying Process
The Buying Decision Process
The consumer typically passes through five stages
• Problem recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior

Problem Recognition
• The buyer recognizes a problem/need triggered by
internal/external stimuli

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Information Search

Personal Sources Commercial Sources

Family, friends, neighbors Advertising, salespeople
Most effective source of Receives most information from
information these sources

Experiential Sources
Public Sources
Handling the product
Mass Media
Examining the product
Consumer-rating groups
Using the product

Evaluation of alternatives
Sets Involved In Decision Making

A Consumer’s Brand Beliefs about Laptop Computers

Attribute Attribute Attribute

Attribute
Laptop Computer Memory Graphics Size and
Price
Capacity Capacity Weight
A 8 9 6 9
B 7 7 7 7
C 10 4 3 2
D 5 3 8 5

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Intervening Factors
Steps between Evaluation of Alternatives and a Purchase Decision

Types of Perceived Risk

A consumer’s decision to modify, postpone, or avoid a purchase decision is heavily influenced by one or more types of perceived risk

Functional risk

Physical risk

Time risk

Financial risk

Psychological risk

Social risk

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Postpurchase behavior
• Postpurchase satisfaction
• Postpurchase actions
• Postpurchase uses and disposal

Moderating Effects on Consumer Decision Making

Types of Consumer Buying Decisions

Routine Limited Extensive

Response Decision Decision
Behavior Making Making

More
Less
Involvement
Involvement

Variety-Seeking Buying Behavior (low involvement but significant brand differences. Here consumers often do a lot of brand switching.

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Analyzing
Business
Markets

Business Markets
01 What is the business market, and how
Learning Objectives does it differ from the consumer market?

02 What buying situations do organizational

buyers face?

03 Who participates in the business-to-business

buying process?

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Business Market
Consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or
supplied to others

The business market consists of all the organizations that acquire goods and services used in the production of other products or services
that are sold, rented, or supplied to others

The major differences between the consumer market and the B2B market lie:

• in the complexity of the decision process and

• the amount of people involved in the final purchasing decision.

The special set of concepts and skills needed in business-to-business marketing include

• professional salespeople;
• products that meet specific and sometimes specially engineered needs of a set of a few customers;
• marketing promotional aspects that deemphasize price in exchange for services;
• delivery terms;
• special financing arrangements; and other traditional “non-marketing” considerations.

In the business-to-business marketing both the selling firm and the buying firm includes

• members of other disciplines (engineering, transportation, warehousing, finance, and others) from the beginning of the process to the
time of actual purchase.
• The addition of these people fosters strong ties between the two firms but also lengthens the time and complexity of the sale.

Characteristics of Business Markets

Multiple sales calls

Fewer, larger buyers Derived demand (derived from the demand for consumers
goods – important to understand consumer buying
behavior)
Close supplier-customer Inelastic demand (not much affected by price change esp
relationships in short run)

Fluctuating demand (volatile – an increase in consumer

Professional purchasing
Customize offerings to
individual business
customer needs
demand can lead to much larger increase in demand…)

Geographically concentrated buyers

Many buying influences (buying
committees)
Direct purchasing

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Buying Situation
The business buyer faces many decisions in making a purchase. The number
of decisions depends on the buying situation:
complexity of the problem being solved, newness of the buying requirement,
number of people involved, and time required.

Straight rebuy
reorder

Change product specifications

Modified rebuy

New task

The Buying Center

Initiators requests the product

Users

Influencers Influence the buying decision

Deciders makes the decision of what to purchase

Approvers authorize the proposal

Buyers have the formal authority to purchase

Gatekeepers
have the power to prevent seller
information from reaching members of the buying center

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Targeting Within the Business Center

• Who are the major decision participants?
• What decisions do they influence, and how deeply?
• What evaluation criteria do they use?

The Purchasing/Procurement Process

• Business buyers seek the highest benefit package
(economic, technical, service, and social) in
relationship to a market offering’s costs

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Stages in the Buying Process (1)

• Someone in the company recognizes a problem or need that can be met

Problem recognition by acquiring a good or service

General need description and • Next, the buyer determines the needed item’s general characteristics,
product specification required quantity, and technical specifications

• Catalog sites
• Vertical markets
• Buying alliances
Supplier search • “Pure Play” auction
• Private exchanges
• Spot and barter markets

Proposal solicitation • The buyer next invites qualified suppliers to submit written proposals

Stages in the Buying Process (2)

• Overcoming price pressures
• Solution selling
Supplier Selection • Risk and gain sharing
• Number of suppliers

• After selecting suppliers, the buyer negotiates the final order,

Order-routine specification listing the technical specifications, the quantity needed, the
expected time of delivery, return policies, warranties, etc.

• The buyer periodically reviews the performance of the chosen

Performance review supplier(s)

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Segmenting Consumer Markets

Geographic Demographic Psychographic Behavioral

Nations, states, regions, Age and Life Cycle, Life Motivation, perceptions,Knowledge, attitudes,
counties, cities, or Stage learning, memory uses
neighborhoods Generation, Income or responses to
. Race & Culture, Gender products

How Should Business Markets Be

Segmented?
Demographic

Operating variables

Purchasing approaches

Situational factors

Personal characteristics

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Major Segmentation Variables for Business Markets

Major Segmentation Variables for Business Markets
Demographic
1. Industry: Which industries should we serve?
2. Company size: What size companies should we serve?
3. Location: What geographical areas should we serve?

Operating Variables
4. Technology: What customer technologies should we focus on?
5. User or nonuser status: Should we serve heavy users, medium users, light users, or nonusers?
6. Customer capabilities: Should we serve customers needing many or few services?

Purchasing Approaches
7. Purchasing-function organization: Should we serve companies with a highly centralized or
decentralized purchasing organization?
8. Power structure: Should we serve companies that are engineering dominated, financially
dominated, and so on?
9. Nature of existing relationship: Should we serve companies with which we have strong
relationships or simply go after the most desirable companies?
10. General purchasing policies: Should we serve companies that prefer leasing? Service contract?
Systems purchases? Sealed bidding?
11. Purchasing criteria: Should we serve companies that are seeking quality? Service? Price?

Major Segmentation Variables for Business

Situational Factors
12. Urgency: Should we serve companies that need quick and sudden delivery
or service?
13. Specific application: Should we focus on a certain application of our
product rather than all applications?
14. Size or order: Should we focus on large or small orders?
Personal Characteristics
15. Buyer-seller similarity: Should we serve companies whose people and
values are similar to ours?
16. Attitude toward risk: Should we serve risk-taking or risk-avoiding
customers?
17. Loyalty: Should we serve companies that show high loyalty to their
suppliers?

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Geographic

Consumer/
Industry Types
Macro
Segmentation
Consumer Size

Product Use
Business Markets

Purchasing
Criteria

Decision Making
Micro
Structure &
Segmentation
Process

Org
Innovativeness

Market Targeting
Steps in the Segmentation Process
blank Description
1. Needs-Based Segmentation Group customers into segments based on similar needs and benefits sought
by customers in solving a particular consumption problem.
2. Segment Identification For each needs-based segment, determine which demographics, lifestyles,
and usage behaviors make the segment distinct and identifiable
(actionable).
3. Segment Attractiveness Using predetermined segment attractiveness criteria (such as market
growth, competitive intensity, and market access), determine the overall
attractiveness of each segment.
4. Segment Profitability Determine segment profitability.
5. Segment Positioning For each segment, create a “value proposition” and product-price
positioning strategy based on that segment’s unique customer needs and
characteristics.
6. Segment “Acid Test” Create “segment storyboard” to test the attractiveness of each segment’s
positioning strategy.
7. Marketing-Mix Strategy Expand segment positioning strategy to include all aspects of the marketing
mix: product, price, promotion, and place.

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