You are on page 1of 27

ANALYZING CONSUMER MARKETS AND BUYER BEHAVIOR

Professor G M Chowdhury

4/21/2013

February 2013

objectives

1. How do consumer characteristics influence buying behavior? 2. What major psychological processes influence consumer responses to the marketing program? 3. How do consumers make purchasing decisions?

4/21/2013

Analyzing Consumer Market

The aim of marketing is to meet and satisfy target customers needs and wants better than competitors. Marketers must have a thorough understanding of how consumers think, feel, and act and offer clear value to each and every target consumer. Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means understanding customersgaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes so the right products are always marketed to the right customers in the right way. 4/21/2013

What influences consumer behavior:


1-Cultural Factors 2-Social Factors 3-Personal Factors

A-AGE AND

STAGE IN THE LIFE CYCLE B-OCCUPATION AND ECONOMIC CIRCUMSTANCES C-PERSONALITY AND SELF-CONCEPT D-LIFESTYLE AND VALUES
4/21/2013

Cultural Factors
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. Virtually all human societies exhibit social stratification that sometimes takes the form of a caste system (social class).
4/21/2013

Social Factors

REFERENCE GROUPS:
Consist of all the groups that have a direct (face-to-face) or indirect influence on a persons attitudes or behavior. Membership groups: (types: primary and secondary). Opinion leader Aspirational groups & Dissociative groups

FAMILY:
Family of orientation - parents and siblings. family of procreation - spouse and children.

ROLES & STATUSES

Consists of the activities a person is expected to 4/21/2013 perform. Each role carries a status.

Personal Factors

buyer's age and stage in the life cycle


Consumption is shaped by the family life cycle and the number, age, and gender of people in the household at any point in time. Marketers should also consider critical life events or transitionsmarriage, childbirth, illness, relocation, divorce, career change, widowhoodas giving rise to new needs.

occupation and economic circumstances

greatly affected by spendable income, savings and assets, debts, borrowing power, attitudes toward 4/21/2013 spending and saving.

Personal Factors
Cont.

personality and self-concept


often described in terms of such traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness and adaptability Brand personality is the specific mix of human traits that may be attributed to a particular brand. Examples Sincerity, Excitement, Competence, Sophistication and Ruggedness.

lifestyle and values


Lifestyle is a persons pattern of living in the world as expressed in activities, interests and opinions. 4/21/2013 Core value determine, at a basic level, people's choices

Key Psychological Processes

4/21/2013

Four Key Elements Psychological Processes


1-MOTIVATION - A motive is a need that is sufficiently
pressing to drive the person to act. Three of the best-known theories of human motivation those of Sigmund Freud, Abraham Maslow, and Frederick Herzbergcarry quite different implications for consumer analysis and marketing strategy.

2- PERCEPTION - Perception is the process by which an


individual selects, organizes, and interprets information inputs to create a meaningful picture of the world and physical stimuli and conditions of individual's surroundings 4/21/2013 reactions stimuli.

Four Key Elements Psychological Processes


Cont.

3-LEARNING - involves changes in an individual's


behavior arising from experience. Most human behavior is learned.

4-MEMORY - All the information and experiences


individuals encounter as they go through life can end up in their long-term memory.

4/21/2013

1-MOTIVATION

FREUDS THEORY:

Sigmund Freud assumed that the psychological forces shaping people's behavior are largely unconscious, and that a person cannot fully understand his or her own motivations. Shape, size, weight, material, color, and brand name can all trigger certain associations and emotions. Abraham Maslow sought to explain why people are driven by particular needs at particular times. Maslow arranged human needs in a hierarchy, from the most 4/21/2013 pressing to the least pressing.

MASLOWs THEORY:

1-MOTIVATION
Cont.

Maslows Hierarchy of Needs

4/21/2013

1-MOTIVATION
Cont.

HERZBERG'S THEORY:
Frederick Herzberg developed a two-factor theory that distinguishes: 1. dissatisfiers (factors that cause dissatisfaction) and 2. satisfiers (factors that cause satisfaction). Herzberg's theory has two implications. 1. First, sellers should do their best to avoid dissatisfiers. Although these things will not sell a product, they might easily unsell it. 2. Second, the seller should identify the major satisfiers or motivators of purchase in the market and then supply them. These satisfiers will make the major 4/21/2013 difference as to which brand the customer buys.

2- PERCEPTION

SELECTIVE ATTENTION The average person may be exposed to over 1,500 ads or brand communications a day. Most of these stimuli will be screened out a process called selective attention.
People

are more likely to notice stimuli that relate to a current need. People are more likely to notice stimuli that they anticipate. People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli. 4/21/2013

2- PERCEPTION
Cont.

SELECTIVE DISTORTION: It is the tendency to interpret information in a way that will fit the Consumers preconceptions.
Consumers

will often distort information to be consistent with prior brand and product beliefs. 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.

4/21/2013

2- PERCEPTION
Cont.

SELECTIVE RETENTION:

People will fail to register much information to which they are exposed in memory, but will tend to retain information that supports their attitudes and beliefs.
Because of selective retention, consumers are likely to remember good points about a product they like and forget good points about competing products. Selective retention again works to the advantage of strong brands. It also explains why marketers need to use repetition in sending messages to their target marketto make sure their message is not overlooked.

Subliminal Perception

4/21/2013

3-LEARNING
When people act, they learn. Learning involves changes in an individual's behavior arising from experience. Most human behavior is learned. 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 recognize differences in sets of similar stimuli and can adjust responses accordingly.
4/21/2013

4-MEMORY
All the information and experiences individuals encounter as they go through life can end up in their long-term memory. MEMORY PROCESSES: 1. Memory encoding refers to how and where information gets into memory. 2. Memory retrieval refers to how information gets out of memory.

4/21/2013

4-MEMORY
Cont.

Three factors are particularly important in the successful recall of brand information by consumers:
First, the presence of other product information in memory can produce interference effects. It may cause the information to be either overlooked or confused. Second, the time since exposure to information at encoding affects the strength of a new association the longer the time delay, the weaker the association. Third, information may be "available" in memory (i.e., potentially recallable) but may not be 4/21/2013 "accessible" (i.e., unable to be recalled) without the proper retrieval cues

The Buying Decision Process


The Five-Stage Model

4/21/2013

The Five-Stage Model

Stage I: Problem Recognition

The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli. Marketers need to identify the circumstances that trigger a particular need so that they can develop marketing strategies that trigger consumer interest.

Stage II: Information Search


1- Personal sources: Family, friends, neighbors, acquaintances 2- Commercial sources : Advertising, Web sites, salespersons, dealers, packaging, displays 4/21/2013 3- Public sources : Mass media, consumer-rating

The Five-Stage Model


Cont.

Stage III: Evaluations of alternatives


The consumer is trying to satisfy a need. The consumer is looking for certain benefits from the product solution. The consumer sees each product as a bundle of attributes with varying abilities for delivering the benefits sought to satisfy this need.

Consumers will pay the most attention to attributes that deliver the sought-after benefits. Evaluations often reflect beliefs and attitudes.

A belief is a descriptive thought that a person holds about something. An attitude is a person's enduring favorable4/21/2013 or unfavorable evaluation, emotional feeling, and action tendencies toward

The Five-Stage Model


Cont.

Stage IV: Purchase Decisions Intervening Factors attitudes of others unanticipated situational factors Types of risks
1. Functional risk- the product does not perform up 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 paid. 4. Social risk- the product results in embarrassment from 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

4/21/2013

The Five-Stage Model


Cont.

Stage V: Postpurchase Behavior The marketer's job therefore does not end with the purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses. POSTPURCHASE SATISFACTION Satisfaction is a function of the closeness between expectations and the product's perceived performance, the consumer is disappointed; if it meets expectations, satisfied; if it exceeds delighted. POSTPURCHASE ACTIONS Satisfaction or dissatisfaction with the product will 4/21/2013 influence subsequent behavior. If the consumer is

The Five-Stage Model


Cont.

Stage V: Postpurchase Behavior

POSTPURCHASE USE AND DISPOSAL Marketers should also monitor how buyers use and dispose of the product. A key driver of sales frequency is product consumption ratethe more quickly buyers consume a product, the sooner they may be back in the market to repurchase it.

4/21/2013

The End

4/21/2013