Prof. Dr. Md.

Mahmodul Hasan
Faculty of Business Administration
MBA Program 2014

CHAPTER 6: ANALYSING CONSUMER AND

BUSINESS MARKETS

INFLUENCES OF CONSUMER BEHAVIOUR

A consumers buying behaviour is influenced by 1) Cultural 2) Social, and 3) Personal
factors. Cultural factors exert the broadest and deepest influence.
1) Cultural Factors:

Culture is the fundamental determinant of a persons wants and behaviors

acquired through socialization processes with family and other key institutions.
Subcultures include 1) Nationalities, 2) Religions, 3) Racial groups, and 4) Geographic
regions.
2) Social Factors:
Seven ascending levels of Social Class
1.
2.
3.
4.
5.
6.
7.

Upper uppers
Lower uppers
Upper middles
Middle class
Working class
Upper lowers
Lower lowers

Those within a class tend to behave more alike than persons from two different social
classes. Persons are perceived as occupying inferior or superior positions according to
social class. Social class is indicated by a cluster of variables (occupation, income, etc.)
rather than by any single variable. Individuals can move up or down the social-class
ladder. Social classes show distinct product and brand preferences in many areas. Social
classes differ in media preferences. There are language differences among the social
classes.
Core Social Factors are: 1) Reference groups, 2) Family, and 3) Social roles and statuses

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014
1) Reference Groups: A persons reference groups consist of all the groups that have a
direct (face-to-face) or indirect influence on his/her attitudes or behaviour. Groups having
a direct influence on a person are called membership groups. Some memberships groups
are primary groups such as family, friends, neighbors, and co-workers with whom the
person interacts fairly continuously and informally. Some membership groups are
secondary groups such as religious or professional groups that tend to be more formal.
2) Family: The family is the most important consumer-buying organisation in society, and family
members constitute the most influential primary reference group. We can distinguish between the
following two families in the buyers life:
The family of orientation consists of parents and siblings.
A more direct influence on everyday buying behaviour is the family of procreation
namely, ones spouse and children.

3) Roles and Statuses: A person participates in many groups and a persons position in
each group can be defined in terms of role and status. Each role carries a status.
Marketers must be aware of the status symbol potential of products and brands.
3) Personal Factors:
A buyers decisions are also influenced by personal characteristics. These include 1) The
buyers age and stage in the life cycle; 2) Occupation and economic circumstances; 3)
Personality and self-concept; and 4) Lifestyle and values.
1) Age and Stage in the Life Cycle
People buy different goods and services over a lifetime. Consumption is also shaped by
the family life cycle. In addition, the psychological life cycle stage may matter. Critical
life events or transitions give rise to new needs.
2) Occupation and Economic Circumstances
Occupation influences consumption patterns and economic circumstances influence product.
These comprise of:
Spendable income (level, stability, and time pattern)
Savings and assets
Debts
Borrowing power
Attitudes toward spending and saving.

3) Personality and Self-Concept

Each person has personality characteristics that influence his or her buying behaviour.
Personality is a set of distinguishing human psychological traits that lead to relatively

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014
consistent and enduring responses to environmental stimuli. The idea is that brands have
personalities and consumers are likely to choose brands whose personalities match their
own.
Brands Personality:

Sincerity
Excitement
Competence
Sophistication
Ruggedness
4) Lifestyles and Value
People from the same subculture, social class, and occupation may lead quite different
lifestyles. A lifestyle is a persons pattern of living in the world as expressed in activities,
interests, and opinions. Lifestyle portrays the whole person interacting with his or her
environment. Marketers search for relationships between their products and lifestyle
groups. Lifestyles are shaped partly by whether consumers are money-constrained or
time-constrained.
MODEL OF CONSUMER BEHAVIOR

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014

KEY PSYCHOLOGICAL PROCESSES

1) Perception
2) Motivation
3) Learning
4) Memory
1) Perception
How the motivated person actually acts is influenced by his or her view or perception of
the situation. Perception is the process by which an individual selects, organises, and
interprets information inputs to create a meaningful picture of the world. Perception
depends not only on the physical stimuli, but also on the stimulis relation to the
surrounding field and on conditions within the individual.
2) Motivation: - person has many needs at any given time. Some are biological arising
from hunger, thirst and discomfort. motive is an internal force that encourages the
consumer towards particular course of action; it has both intensity and direction.
Motivation is also closely tied to the concept of involvement, which relates to how much
effort the consumer will exert in making decision. Highly motivated consumers will
want to get mentally and physically involved in the purchase process.
3) Learning
Learning involves changes in an individuals behaviour arising from experience. A drive
is a strong internal stimulus impelling action. Cues are minor stimuli that determine
when, where, and how a person responds. Discrimination means that the person has
learned to recognise differences in sets of similar stimuli and can adjust responses
accordingly.
4) Memory
All information and experiences individuals encounter as they go through life can end up
in their long-term memory. Cognitive psychologists distinguish between short-term
memory (STM) - a temporary repository of information. Long-term memory (LTM) - a
more permanent repository.

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014

FIVE-STAGE MODEL OF THE CONSUMER BUYING PROCESS

Beliefs and Attitudes

Evaluations often reflect beliefs and attitudes. Through experience and learning, people acquire
beliefs and attitudes. These in turn influence buying behaviour. A Belief is a descriptive thought
that a person holds about something. An Attitude is a persons enduring favorable or unfavorable
evaluation, emotional feeling, and action tendencies toward some object or idea. Attitudes:
(1) Put people into a frame of mind.
(2) Lead people to behave in a fairly consistent way toward similar objects.
(3) Can be very difficult to change.

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014

Abraham Maslow's Hierarchy of Needs Motivational Model (1943):

Extended 8 Level Hierarchy of Needs (Abraham Maslow)-2000 :

1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc.
2. Safety needs - protection from elements, security, order, law, limits, stability, etc.
3. Belongingness and Love needs - work group, family, affection, relationships, etc.
4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance,
prestige, managerial responsibility, etc.
5. Cognitive needs - knowledge, meaning, etc.
6. Aesthetic needs - appreciation and search for beauty, balance, form, etc.
7. Self-Actualization needs - realizing personal potential, self-fulfillment, seeking
personal growth and peak experiences.
8. Transcendence needs - helping others to achieve self actualization.

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014

Fredrick Herzberg's Motivation-Hygiene Theory

(Two Factor Theory)
Leading to Dissatisfaction

Leading to Satisfaction

Company policy
Supervision
Relationship w/Boss
Work conditions
Salary
Relationship w/Peers

Achievement
Recognition
Work itself
Responsibility
Advancement
Growth

Purchase Decisions
In the evaluation stage, the consumer forms preferences among the brands in the choice
set. The consumer may also form an intention to buy the most preferred brand. In
executing a purchase intention, the consumer may make up to five sub-decisions:
A) Brand
B) Dealer
C) Quantity
D) Timing
E) Payment-method

Intervening Factors
Even if consumers form brand evaluations, two general factors can intervene between the
purchase intention and the purchase decision. The first factor is the attitudes of others.
The extent to which another persons attitude reduces the preference for an alternative
depends on two things:
The intensity of the other persons negative attitude toward the consumers
preferred alternative
The consumers motivation to comply with the other persons wishes

Confidential 2014 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration
MBA Program 2014
The second factor is unanticipated situational factors that may erupt to change the
purchase intention. A consumers decision to modify, postpone, or avoid a purchase
decision is heavily influenced by perceived risk. There are many types of risks that
consumers may perceive in buying and consuming a product. Some of the risks are as
follows :
Functional risk
Physical risk
Financial risk
Social risk
Psychological risk
Time risk

THEORIES OF CONSUMER DECISION-MAKING

1) Level of Consumer Involvement: Consumer involvement can be defined in terms of
the level of engagement and active processing undertaken by the consumer in responding
to a marketing stimulus.
2) Elaboration Likelihood Model: This describes how consumers make evaluations in
both low and high involvement circumstances. Consumers follow either a central route or
peripheral route. Consumers follow the central route only if they possess sufficient
motivation, ability, and opportunity. If any of these are lacking then the consumers tend to
follow the peripheral route.
3) Low Involvement Marketing Strategies: Many products are bought under conditions of
low involvement and the absence of significant brand differences. Marketers use four
techniques to try to convert a low-involvement product into one of higher involvement.
4) Variety-Seeking Buying Behaviour: Some buying situations are characterised by low
involvement but significant brand differences. Brand switching occurs for the sake of
variety rather than dissatisfaction.
5) Decision Heuristics and Biases: Heuristics come into play when consumers forecast
the likelihood of future outcomes or events.
6) Mental Accounting: Mental accounting refers to the manner by which consumers code,
categorize, and evaluate financial outcomes of choices.
7) Profiling the Customer Buying Decision Process: This describes how marketers can
learn about the stages in the buying process for their products using either the
introspective method, retrospective method, prospective method or prescriptive method.

Confidential 2014 2015