Trier 3

Consumer (and business)

buyer and market behaviour

Previewing concepts (1)

Define the consumer market and
construct a simple model of consumer
buyer behaviour

Demonstrate how culture, subculture and

social class influence consumer buying
behaviour
Describe how consumers personal
characteristics and primary psychological
factors affect their buying decisions

Previewing concepts (2)

List and understand the major
types of buying decision behaviour
and the stages in the buyer decision
process
Discuss how consumer decision making
varies with the type of buying decision

Previewing concepts (3)

Define the business market and explain
how business markets differ from
consumer markets
List and define the steps in the business
buying decision process

Harley-Davidson Motorfietsen

The brand - Harley-Davidson

Most products and personalities come

and go but others, like the HarleyDavidson, achieve long-lasting cult
status. Why do you think this occurs?
Harley-Davidson makes motorcycles.
What do Harley-Davidson owners buy?
How do you think the buying process for
buying a Harley-Davidson differs from
buying other 20,000 products?

Harley-Davidson
Harley has instilled a high degree of brand
loyalty in its target market.
The company researches its customer base to
understand buyer behaviour.
The research revealed seven core customer
types: 1) adventure-loving traditionalists, 2)
sensitive pragmatists, 3) stylish status-seekers,
4) laid-back campers, 5) classy capitalists, 6)
cool-headed loners, and 7) cocky misfits.

Harley-Davidson
The Harley-Davidson example shows that
many factors affect consumer buying
behaviour.
Consumer buyer behaviour refers to the
buying behaviour of final consumers
individuals and households who buy goods
and services for personal consumption.

Analysing consumer behaviour:

Kipling's six Qs
What do
consumers buy?
Where do they
buy?
When do they buy?

Why do they
buy?
How do they buy?
Who buys?

Key Question!

How do consumers respond to various

marketing efforts?

The starting point for answering this

question is the stimulus-response model
of buyer behaviour shown in Figure 5.1.

Figure 5.1 Stimulus-response

Model of buyer behaviour
Marketing
and stimuli
Buyers
black box
Buyer
responses

Key Q - What is in the buyers black box?

Marketing and other stimuli enter the consumers

black box and produce certain responses.
Marketing stimuli consist of the 4 Ps: product,
price, place, and promotion.
Other stimuli include major forces and events in
the buyers environment.
The buyers characteristics influence how he or
she perceives and reacts to the stimuli.
The buyers decision process itself affects the
buyers behaviour.

What is neuromarketing?

Researchers are using technology to

look inside the brain
Neuromarketing is the use of neurotechnology to improve marketing
decision making.

Factors Influencing
Consumer Behaviour
Cultural
Social
Culture

Reference
groups

Subculture

Family

Social
class

Roles
and
status

Personal
Age and
life-cycle
Occupation
Economic
situation
Lifestyle
Personality
and
self-concept

Psychological
Motivation
Perception
Learning
Beliefs and
attitudes

Buyer

What is culture?

Culture is the set of basic values,

perceptions, wants and behaviours
learned by a member of society from
family and other important institutions.

Cultural factors

Culture is the most basic cause of a persons

wants and behaviour. Culture is the set of basic
values, perceptions, wants and behaviours
learned by a member of society from family and
other important institutions.

Each culture contains smaller subcultures, or

groups of people with shared value systems
based on common life experiences and
situations. Subcultures include nationalities,
religions, racial groups, and geographic regions.

Influences on Culture

Subcultures

Nationalities
Religion
Racial groups
Geographic regions

HSBC is the first to

offer Islamic financial products.

Cultural factors (cont)

Social classes are societys relatively permanent
and ordered divisions whose members share
similar values, interests, and behaviours.
Social class is not determined by a single factor,
such as income, but is measured as a combination
of occupation, income, education, wealth, and
other variables.

Social classes

Social factors
Social factors can also affect consumer behaviour.

Reference groups

Family

Roles and status

Think-Pair-Share
Consider an item you bought which is
typical of what your peers (a key reference
group) buy, such as a compact disc, a
mountain bike or a brand of trainer.
Were you conscious that your friends
owned something similar when you made
the purchase? Did this make you want the
item more or less? Why or why not?

What is an opinion leader?

Opinion leaders are people within a
reference group who, because of special
skills, knowledge, personality, or other
characteristics, exert influence on others.
Manufacturers of products and brands
subjected to strong group influence must
figure out how to reach opinion

Figure 5.3 Extent of group influence

on product and brand choice

Blogs and social networking sites

Social networking, social interaction

carried out over Internet media,
illustrates the importance of social
influence on consumer behaviour.

MySpace.com; Facebook.com

VWs Helga relied

on social networking for branding

Family members can strongly influence

The buyers parents make up the family of orientation.
The family of procreation (the buyers spouse and
children) has a more direct influence on everyday
buying behaviour.
Husband-wife involvement varies widely by product
category and by stage in the buying process
Children may also have a strong influence on family
buying decisions in the form of pester power.

Think-Pair-Share
Now, think of brands that you currently use
which your parents also use. Examples
may include soap, tea, or butter/milk.
Did you think through these purchases as
carefully as those influenced by your peers
or were these purchases simply the result
of following old habits?

Figure 3.4 Family Life Cycle

Consumers buying roles

Initiator
Influencer
Decider
Buyer
User

Decision-making unit (DMU)

The initiator is the person who first suggests or
thinks of the idea of buying a particular product or
service.
The influencer is the person whose view or advice
influences buying decision.
The decider is the person who ultimately makes the
buying decision or any part of it.
The buyer is the person who makes the actual
purchase.

Role and Status

A persons position within each group can be

determined in terms of role and status.
A role consists of the activities that people are expected
to perform according to the persons around them.
Status is the general esteem given to a role by society.

Personal factors

Buyers age
Lifecycle stage
Occupation
Economic situation
Lifestyle
Personality
Self-concept

Personal Factors Affecting Consumer Behaviour:

Personal Influences
Age and Life Cycle
Stage

Occupation

Economic Situation

Personality & Self-Concept

Lifestyle Identification

Activities

Opinions

Interests

Family life-cycle stages

Young

Middle-aged

Single
Married without children
Married with children
Divorced with children

Older
Older married
Older unmarried

Single
Married without children
Married with children
Married without
dependent children
Divorced without children
Divorced with children
Divorced without
dependent children

Think-Pair-Share

How should a marketer of bedroom

furniture consider life-cycle stage in
his/her strategy?

Can you think of a furniture retailer that

places emphasis on a particular life-cycle
stage?

Individual exercise

Go to the VALS Web site at

http://www.sric-bi.com/VALS/presurvey.shtml.

Take the VALS survey. Read and

consider the profiles that result from your
survey. What things do you agree with?
Disagree with?
What four products have high indexes for
your type? Do you buy these products?
Do you think that an instrument such as
this has any value to marketers?

Think-Pair-Share

In designing adverts for a soft drink, which

would you find more helpful: information
about demographics or lifestyles? Give
examples.

What is personality?
Personality is a persons
distinguishing psychological
characteristics that lead to relatively
consistent and lasting responses to his
or her own environment.

Personality
Personality can play a
role in consumer
behaviour, particularly
with high involvement
products (e.g., choice
of holiday)

Source: Hayes & Jarvis (Travel) Ltd http://www.hayesandjarvis.co.uk

Brands have personalities too

Sincerity

Sophistication

Excitement

Ruggedness

Competence

Personality and Self-Concept

Related to personality is a persons selfconcept. The basic self-concept premise

is that peoples possessions contribute to
and reflect their identities.

We are what we have

- Visit somebodys home/apartment?

Factors Affecting Consumer Behaviour:

Psychological
Motivation

Beliefs and
Attitudes

Psychological
Factors

Learning

Perception

What is suggested by
Freuds theory of motivation?
Freud suggested that a
persons buying decisions are
affected by subconscious
motives that even the buyer
may not understand.

Figure 5.4
Maslows hierarchy of needs

Exercise
Study Maslows hierarchy of needs
Cut out print ads that appear to be focused
on appealing to the different needs of this
hierarchy. Find one ad for each level of
needs.

Perception

Perception is the process by which

people select, organise and interpret
information to form a meaningful
picture of the world

Perceptions

Selective
attention

Selective
perception

Selective
retention

What is the difference between

attitudes and beliefs?
A belief is a descriptive thought a
person has about something.
An attitude describes a persons
favourable or unfavourable evaluations,
feelings, and tendencies towards an
object or idea.

Skoda Responded to
Negative Attitudes

PEER GROUP EFFECTS

How do you get
young people to
change their attitudes
about Clarks shoes
from Shoes their
parents would wear
to Cool and
modern?

Consumer decision process

Consumer choice results from a

complex interplay of cultural, social,
personal, and psychological factors.

Figure 5.5 Four types of

buying behaviour

Buying decision behaviour

Habitual buying behaviour
Characterised by low consumer involvement
and few significant perceived brand
differences

Variety seeking buying behaviour

Low consumer involvement but significant
perceived brand differences

Endorsements from celebrities

increase sales

What is dissonance-reducing
buying behaviour?

Dissonance-reducing buying
behaviour is consumer behaviour in
situations characterised by high
involvement but few perceived
differences among brands.

Dissonance-reducing buying behaviour

Dissonance-reducing buying behaviour occurs

when consumers are highly involved with an
expensive, infrequent, or risky purchase, but see
little difference among brands.

After the purchase, consumers might experience

postpurchase dissonance (after-sale discomfort)
when they notice certain disadvantages of the
purchased brand or hear favorable things about
brands not purchased.

UNDERSTANDING BUYING
PROCESSES IS CRUCIAL

Months of marketing planning can be

dismissed in the few moments that a buyer
makes a purchase decision

Figure 5.6
The buyer decision process
Need
recognition
Information
search
Evaluation of
alternatives
Purchase
decision
Postpurchase
behaviour

The Buyer Decision Process

Step 1. Need Recognition
Need Recognition
Buyer Recognizes a Problem or Need

Internal Stimuli

External Stimuli

Hunger

TV advertising

Thirst

Magazine advert

A persons normal needs

Radio slogan

Stimuli in the environment

The Buyer Decision Process

Step 2. Information Search
Personal Sources

Commercial Sources

Public Sources

Experiential Sources

Family, friends, neighbours

Most effective source of
information
Advertising, salespeople
Receives most information from
these sources
Mass Media
Consumer-rating groups

Handling the product

Examining the product
Using the product

Information Search
What kind of
purchase will address
problem?
How can the product
be obtained?
What information is
needed?

Source: C&G http://www.cheltglos.co.uk

What do consumers do during

the alternative evaluation stage of the
buying process?
Look for certain benefits that can be
acquired by buying a product
Attach degrees of importance to each attribute
Develop brand beliefs about each brand
Use a utility function for each attribute
Arrive at attitudes toward each brand through an
evaluation procedure

Interactive Decision Aids

Stages in adopting a new product

Awareness
Interest
Evaluation
Trial
Adoption

The Buyer Decision Process

Step 5. Postpurchase Behaviour
Consumers Expectations of
Products Performance
Products Perceived Performance

Satisfied Customer!

Dissatisfied Customer

Cognitive Dissonance

Post-Purchase Evaluation
Affects likelihood of
repeat purchase
May evoke cognitive
dissonance

Post-purchase evaluation
Has the purchase lived up to its expectations?
Marketers can help reduce cognitive dissonance by:

Ensuring that customers needs and wants have been

carefully researched.

Tailoring the marketing mix to suit the audience.

Painting a realistic picture of the product/service in all

advertising literature.

Making sure consumers expectations are rooted in

reality - for example letting the consumer test the
product/service before purchase.

Good after sales care.

POST-PURCHASE EVALUATION
Did our purchase live up to
expectations?
If not, we could:
Return the product
Tell others
Rationalise our thoughts to overcome
"cognitive dissonance"

Impact of Dissatisfied Customers

Dissatisfied customers can tell up to eleven

other people about their bad experiences, which
is two to three times more people than a
satisfied customer will talk to.
Smith, 1993

Review of the
Decision-Making Process
Im hungry

Problem recognition

Whats available?

Information search

Cakes or chocolate?

Information evaluation

Snickers!

Decision

I shouldve had cake.

Post-purchase evaluation