Determinants of Consumers

Behavior
Definition
 Consumer behavior is the study of how
individuals, groups, and organizations
select, buy, use, and dispose off
goods, services, ideas, or experiences
to satisfy their needs and wants.
 In-depth understanding of customers
helps to ensure the right products are
marketed to the right consumers in the
right way.
What Influences Consumer
Behavior?

 A consumer’s buying behavior is

influenced by cultural, social, and
personal factors. Cultural factors exert
the broadest and deepest influence.
Cultural Factors

 Culture is the fundamental determinant

of a persons’ wants and behaviors.
 Culture: subculture, and social class
are particularly important influences on
consumer buying behavior.
 A) Subcultures include nationalities,
religions, racial groups, and
geographic regions.
 B) Social class represent a group
whose members share similar values,
 Social class is indicated by a cluster of
variables (occupation, income, etc.)
 Individuals can move up or down the
social-class ladder.
 Social classes show distinct product
and brand preferences in many areas.
Social Factors

 In addition to cultural factors, a

consumer’s behavior is influenced by
such social factors as reference
groups, family, and social roles and
statuses.
 Reference groups consists of all the
groups that have a direct (face-to-face)
or indirect influence on customer’s
attitudes or behavior.
 Groups having a direct influence on a
person are called membership
groups.
 Some groups are primary groups
such as family, friends, neighbors,
and co-workers with whom the
person interacts fairly continuously and
informally.
 Other groups are secondary groups
such as religious, professional
groups that tend to be more formal
 People are significantly influenced by
their reference groups in the following
ways:
 1) They expose an individuals to new
behaviors and lifestyles, influencing
attitudes and self-concept.
 2) They create pressures for
conformity that may affect actual
product and brand choices.
 People are also influenced by groups
to which they do not belong:
 Aspiration groups are those a person
hopes to join.
 Dissociative groups are those
whose values or behavior an individual
rejects.
 Manufacturers of products and brands
where group influence is strong must
determine how to reach and influence
opinion leaders in these reference
groups.
 An opinion leader is the person in
informal, product-related
communications who offers advice or
information about a specific product or
product category.
Marketers try to reach opinion leaders by
identifying demographic characteristics
associated with opinion leadership,
identifying the media read by opinion
leaders, and directing messages at
opinion leaders.
Family

 The family is the most important

consumer-buying organization in
society, and family members constitute
the most influential primary reference
group.
 The family of orientation consists of
parents and siblings.
 A more direct influence on everyday
buying behavior is the family of
 procreation –namely, one’s spouse
and children.
Personal Factors
 A buyer’s decisions are also
influenced by personal
characteristics. These include the
buyer’s age and stage in the life cycle;
occupation and economic
circumstances; personality and self-
concept; and lifestyle and values.
Occupation and
Economic Circumstances

 Occupation influences consumption

patterns and economic circumstances
influence product
 Spendable income (level, stability, and
time pattern).
 a) Savings and assets.
 b) Borrowing power.
Concept

 Each person has personality

characteristics that influence his or her
buying behavior.
 Personality: A set of distinguishing
human psychological traits that lead to
relatively 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.
 Brand personality is defined as the
specific mix of human character
that may be attributed to a particular
brand.
Lifestyles and Value

 People from the same subculture,

social class, and occupation may lead
quite different lifestyles. A lifestyle is a
person’s pattern of living in the
world as expressed in activities,
interests, and opinions.
 Marketers search for relationships
between their products and lifestyle
groups.
KEY PSYCHOLOGICAL
PROCESSES

 The starting point for understanding

consumer behavior is the stimulus
response model.
 Maslow’s Theory
 Abraham Maslow sought to explain
why people are driven by particular
needs at particular times.
Maslow’s Hierarchy
of Needs
5
Self-
Self-
actualization
actualization
(self-development
(self-development
andrealization)
and realization)
Esteemneeds
needs
4 Esteem
(self-esteem,recognition)
(self-esteem, recognition)

Socialneeds
Social needs
3 (senseof
(sense ofbelonging,
belonging,love)
love)

Safetyneeds
Safety needs
2 (security,protection)
(security, protection)

Psychologicalneeds
Psychological needs
1 (food,water,
(food, water,shelter)
shelter)
Perception
 Perception is the process by which an
individual selects, organizes, and
interprets information inputs to create
a meaningful picture of the world.
 Perceptions affect consumer behavior
 However, remember that individuals can
perceive the same entity in different ways
 Consumer Buying Decision Process

Marketers Must Identify and Understand:

Who Makes the Buying Decision

Types of Buying Decisions

Stages in the Buying Process

 Consumer Buying Decision Process

Understand  Initiator
 Influencer
 Buying roles  Decider
 Buying behavior  Buyer
 Buying decision  User
process
 Consumer Buying Decision Process

Understand  Complex buying

behavior
 Dissonance-reducing
 Buying roles buying behavior
 Buying behavior  Habitual buying behavior
 Variety-seeking buying
 Buying decision behavior
process
 Consumer Buying Decision Process

Understand  Five stages in the

consumer buying
 Buying roles process
 Buying behavior  The amount of time
 Buying decision spent in each stage
process varies according to
several factors
Consumer Buying Decision Process

Five-Stage Model of the Consumer Buying Process

 Need Recognition
Need/Problem Recognition
 The buying process starts when the buyer
recognizes a problem or need.
 Can be triggered by internal or external

stimuli
 Needs become wants, which lead to

behavior
 Need Recognition
 Marketing stimuli can stimulate a desire for
information
 Marketers need to identify the circumstances
that trigger a particular need so that they can
develop marketing strategies that trigger
consumer interest
 Information Search (1 of 2)
 Sources of information:
 Personal (family, friends).
 Commercial (advertising,Web sites,
salespeople).
 3) Public (mass media, consumer
organizations).
 4) Experiential (handling, examining, using
the product).
 Time, effort and expense dedicated to
information search depends on:
 Degree of risk involved in the purchase
 Amount of expertise with the product category
 The most effective information often
comes from personal sources or public
sources that are independent authorities
 Consumer Buying Decision Process

Successive Sets Involved in Consumer Decision Making

 Evaluation of Alternatives

 Customers evaluate products as bundles of

attributes
 Brand attributes
 Product features
 Aesthetic attributes
 Price
 Customers place different levels of importance on
attributes
 Important considerations in the evaluation stage:
 First, the consumer is trying to satisfy a need.
 Second, the consumer is looking for certain benefits from the product
solution.
 Third, the consumer sees each product as a bundle of attributes with
varying abilities for delivering the benefits sought to satisfy this need.
 Purchase Decision
 Purchase intention and the act of buying are
distinct concepts
 Potential intervening factors between intention and
buying (car example):
 Unforeseen circumstances
 Angered by the salesperson or sales manager
 Unable to obtain financing
 Customer changes mind

 Key issues in the purchase decision stage:

 Product availability.
 Postpurchase Evaluation
 Four possible outcomes in the post purchase
stage:
 (1) Delight/Happiness/pleasure
 (2) Satisfaction
 (3) Dissatisfaction
 (4) Cognitive Dissonance

 Firm’s ability to manage dissatisfaction and

cognitive dissonance is:
 A key to creating customer satisfaction
 A major influence on word-of-mouth communication