CONSUMER MARKETS AND BUYER BEHAVIOR

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Student Learning Outcomes
By the end of this chapter, the student should be able to:

1. Define the consumer market and construct a simple model of consumer buyer behavior.
2. Name the four major factors that influence consumer buyer behavior.
3. List and define the major types of buying decision behavior and the stages in the buyer
decision process.
4. Describe the adoption and diffusion process for new products.

Consumer buyer behavior refers to the buying behavior of final consumers—individuals and
households that buy goods and services for personal consumption. All of these final consumers
combine to make up the consumer market.

Model of Consumer Behavior

Marketers can study the what they buy, where, when and how much, but learning about the
whys behind consumer buying behavior is not so easy—the answers are often locked deep
within the consumer’s mind. Marketers want to understand how the stimuli are changed into
responses inside the consumer’s black box, which has two parts; (1)buyer’s characteristics
affecting consumer behaviour; and (2) the buyer’s decision process.

Characteristics Affecting Consumer Behavior

Consumer purchases are influenced strongly by cultural, social, personal, and psychological
characteristics.

A. Cultural Factors
Cultural factors exert a broad and deep influence on consumer behavior. Marketers
need to understand the role played by the buyer’s culture, subculture, and social class.
i. Culture. Culture is the most basic cause of a person’s wants and behavior.
Every group or society has a culture, and cultural influences on buying
behavior may vary greatly from both county to county and country to
country. Marketers are always trying to spot cultural shifts so as to discover
new products that might be wanted.
ii. Subculture. Subculture is a group of people with shared value systems based
on common life experiences and situations. Subcultures include nationalities,
religions, racial groups, and geographic regions.
iii. Social Class. Social classes are society’s relatively permanent and ordered
divisions whose members share similar values, interests, and behaviors.
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. Marketers are interested in social class because people within
a given social class tend to exhibit similar buying behavior.

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B. Social Factors
A consumer’s behavior also is influenced by social factors, such as the consumer’s
small groups, social networks, family, and social roles and status.
i. Groups and Social Networks. Group are two or more people who interact to
accomplish individual or mutual goals. Groups that have a direct influence and
to which a person belongs are called membership groups. In contrast, reference
groups serve as direct (face-to-face interactions) or indirect points of
comparison or reference in forming a person’s attitudes or behavior.
Furthermore, word-of-mouth are the personal words and recommendations of
trusted friends, family, associates, and other consumers tend to be more
credible than those coming from commercial sources, such as advertisements
or salespeople. Also, opinion leaders are people within a reference group who,
because of special skills, knowledge, personality, or other characteristics, exert
social influence on others. Some experts call this group the influentials or
leading adopters. However, online social networks are online communities
where people socialize or exchange information and opinions. Social
networking communities range from blogs and message boards to social
media sites and even communal shopping sites. These online forms of
consumer-to-consumer and business-to-consumer dialogue have big
implications for marketers.
ii. Family. Family members can strongly influence buyer behavior. Marketers are
interested in the roles and influence of the husband, wife, and children on the
purchase of different products and services. Husband–wife involvement varies
widely by product category and by stage in the buying process. Buying roles
change with evolving consumer lifestyles. Marketers in industries that have
traditionally sold their products to only women or only men—from groceries
and personal care products to cars and consumer electronics—are now
carefully targeting the opposite sex. Other companies are showing their
products in “modern family” contexts. Children also have a strong influence on
family buying decisions. Furthermore, the majority of parents felt that their
kids exert more influence on family purchases than they did themselves when
growing up
iii. Roles and Status. 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. Each role carries a status
reflecting the general esteem given to it by society. People usually choose
products appropriate to their roles and status.
C. Personal Factors
A buyer’s decisions also are influenced by personal characteristics such as the buyer’s
occupation, age and stage, economic situation, lifestyle, and personality and self-
concept.
i. Occupation. A person’s occupation affects the goods and services bought. Blue-
collar workers tend to buy more rugged work clothes, whereas executives buy
more business suits. Marketers try to identify the occupational groups that have
an above-average interest in their products and services. A company can even
specialize in making products needed by a given occupational group.
ii. Age and Life Stage. Buying is also shaped by the stage of the family life cycle—
the stages through which families might pass as they mature over time. Life-
stage changes usually result from demographics and life-changing events—
marriage, having children, purchasing a home, divorce, children going to
college, changes in personal income, moving out of the house, and retirement.
Life-stage segmentation provides a powerful marketing tool for marketers in all
industries to better find, understand, and engage consumers. Armed with data
about the makeup of consumer life stages, marketers can create targeted,
actionable, personalized campaigns based on how people consume and interact
with brands and the world around them.
iii. Economic Situation. Marketers watch trends in spending, personal income,
savings, and interest rates. In today’s more value-conscious times, most

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companies have taken steps to create more customer value by redesigning,
repositioning, and repricing their products and services.
iv. Lifestyle. People coming from the same subculture, social class, and occupation
may have quite different lifestyles. Lifestyle is a person’s pattern of living as
expressed in his or her psychographics. It involves measuring consumers’ major
AIO dimensions—activities (work, hobbies, shopping, sports, social events),
interests (food, fashion, family, recreation), and opinions (about themselves,
social issues, business, products). Lifestyle captures something more than the
person’s social class or personality. It profiles a person’s whole pattern of acting
and interacting in the world. When used carefully, the lifestyle concept can help
marketers understand changing consumer values and how they affect buyer
behavior. Consumers don’t just buy products; they buy the values and lifestyles
those products represent.
v. Personality and Self-Concept. Personality refers to the unique psychological
characteristics that distinguish a person or group. Personality is usually
described in terms of traits such as self-confidence, dominance, sociability,
autonomy, defensiveness, adaptability, and aggressiveness. Personality can be
useful in analyzing consumer behavior for certain product or brand choices. The
idea is that brands also have personalities, and consumers are likely to choose
brands with personalities that match their own. A brand personality is the
specific mix of human traits that may be attributed to a particular brand. One
researcher identified five brand personality traits: sincerity (down-to-earth,
honest, wholesome, and cheerful), excitement (daring, spirited, imaginative, and
up-to-date), competence (reliable, intelligent, and successful), sophistication
(glamorous, upper class, charming), and ruggedness (outdoorsy and tough).
Many marketers use a concept related to personality—a person’s self-concept
(also called self-image). The idea is that people’s possessions contribute to and
reflect their identities—that is, “we are what we consume.” Thus, to understand
consumer behavior, marketers must first understand the relationship between
consumer self-concept and possessions.
D. Psychological Factors
A person’s buying choices are further influenced by four major psychological factors:
motivation, perception, learning, and beliefs and attitudes.
i. Motivation. A person has many needs at any given time. A need becomes a
motive when it is aroused to a sufficient level of intensity. A motive (or drive) is a
need that is sufficiently pressing to direct the person to seek satisfaction. Two of
the most popular theories of human motivation are the theories of Sigmund Freud
and Abraham Maslow— carry quite different meanings for consumer analysis and
marketing. The theory of Sigmund Freud suggests that a person’s buying
decisions are affected by subconscious motives that even the buyer may not fully
understand. On the other hand, Maslow’s theory suggests that human needs are
arranged in a hierarchy, from the most pressing at the bottom to the least
pressing at the top. They include physiological needs, safety needs, social needs,
esteem needs, and self-actualization needs. A person tries to satisfy the most
important need first. When that need is satisfied, it will stop being a motivator,
and the person will then try to satisfy the next most important need.
ii. Perception. A motivated person is ready to act. How the person acts is influenced
by his or her own perception of the situation. All of us learn by the flow of
information through our five senses: sight, hearing, smell, touch, and taste.
However, each of us receives, organizes, and interprets this sensory information in
an individual way. Perception is the process by which people select, organize, and
interpret information to form a meaningful picture of the world. People can form
different perceptions of the same stimulus because of three perceptual processes:
selective attention, selective distortion, and selective retention. Selective attention—
the tendency for people to screen out most of the information to which they are
exposed—means that marketers must work especially hard to attract the
consumer’s attention. Selective distortion describes the tendency of people to
interpret information in a way that will support what they already believe.
Selective retention means that consumers are likely to remember good points

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made about a brand they favour and forget good points made about competing
brands.
iii. Learning. Learning describes changes in an individual’s behavior arising from
experience. Learning theorists say that most human behavior is learned. Learning
occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.
A drive is a strong internal stimulus that calls for action. A drive becomes a motive
when it is directed toward a particular stimulus object. Cues are minor stimuli that
determine when, where, and how the person responds. All the cues might
influence a consumer’s response to his or her interest in buying the product. If the
experience is rewarding, the consumer will probably use the product more and
more, and his or her response will be reinforced.
iv. Beliefs and Attitudes. Through doing and learning, people acquire beliefs and
attitudes which can also influence their behaviour. A belief is a descriptive thought
that a person holds about something. Beliefs may be based on real knowledge,
opinion, or faith and may or may not carry an emotional charge. Attitude
describes a person’s relatively consistent evaluations, feelings, and tendencies
toward an object or idea. Attitudes put people into a frame of mind of liking or
disliking things, of moving toward or away from them.

Buying Decision Behavior and the Buyer Decision Process

A. Types of Buying Decision Behavior

More complex decisions usually involve more buying participants and more buyer
deliberation.
i. Complex Buying Behavior. Consumers undertake complex buying behavior when
they are highly involved in a purchase and perceive significant differences
among brands. Consumers may be highly involved when the product is
expensive, risky, purchased infrequently, and highly self-expressive.
ii. Dissonance-Reducing Buying Behavior. Dissonance-reducing buying behavior
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 carpet brand or hear
favorable things about brands not purchased. To counter such dissonance, the
marketer’s after-sale communications should provide evidence and support to
help consumers feel good about their brand choices.
iii. Habitual Buying Behavior. Habitual buying behavior occurs under conditions of
low-consumer involvement and little significant brand difference. Consumers
appear to have low involvement with most low-cost, frequently purchased
products. Consumers do not search extensively for information about the
brands, evaluate brand characteristics, and make weighty decisions about which
brands to buy. Thus, the buying process involves brand beliefs formed by passive
learning, followed by purchase behavior, which may or may not be followed by
evaluation.
iv. Variety-Seeking Buying Behavior. Consumers undertake variety-seeking buying
behavior in situations characterized by low consumer involvement but significant
perceived brand differences. In such cases, consumers often do a lot of brand
switching. Brand switching occurs for the sake of variety rather than because of
dissatisfaction.
B. The Buyer Decision Process
The buyer decision process consists of five stages: need recognition, information search,
evaluation of alternatives, the purchase decision, and postpurchase behavior. Clearly, the
buying process starts long before the actual purchase and continues long after.
Marketers need to focus on the entire buying process rather than on the purchase
decision only.
i. Need Recognition. The buying process starts with need recognition—the buyer
recognizes a problem or need. The need can be triggered by internal stimuli when
one of the person’s normal needs rises to a level high enough to become a drive. A
need can also be triggered by external stimuli. At this stage, the marketer should

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research consumers to find out what kinds of needs or problems arise, what
brought them about, and how they led the consumer to this particular product.
ii. Information Search. An information search is the stage of the buyer decision
process in which the consumer is motivated to search for more information.
Consumers can obtain information from any of several sources. These include
personal sources (family, friends, neighbors, acquaintances), commercial sources
(advertising, salespeople, dealer and manufacturer web and mobile sites,
packaging, displays), public sources (mass media, consumer rating organizations,
social media, online searches and peer reviews), and experiential sources
(examining and using the product). The relative influence of these information
sources varies with the product and the buyer.
iii. Evaluation of Alternatives. Alternative evaluation is the stage of the buyer
decision process in which the consumer uses information to evaluate alternative
brands in the choice set. How consumers go about evaluating purchase
alternatives depends on the individual consumer and the specific buying situation.
Marketers should study buyers to find out how they actually evaluate brand
alternatives. If marketers know what evaluative processes go on, they can take
steps to influence the buyer’s decision.
iv. Purchase Decision. Generally, the consumer’s purchase decision will be to buy the
most preferred brand, but two factors can come between the purchase intention
and the purchase decision. The first factor is the attitudes of others. If someone
important to you thinks that you should buy the lowest-priced product, then the
chances of you buying a more expensive product are reduced. The second factor is
unexpected situational factors. The consumer may form a purchase intention
based on factors such as expected income, expected price, and expected product
benefits. However, unexpected events may change the purchase intention. Thus,
preferences and even purchase intentions do not always result in an actual
purchase choice.
v. Postpurchase Behavior. After purchasing the product, the consumer will either be
satisfied or dissatisfied and will engage in postpurchase behaviour. Thus,
postpurchase behaviour is the stage of the buyer decision process in which
consumers take further action after purchase, based on their satisfaction or
dissatisfaction. The buyer satisfaction or dissatisfaction with a purchase lies in the
relationship between the consumer’s expectations and the product’s perceived
performance. If the product falls short of expectations, the consumer is
disappointed; if it meets expectations, the consumer is satisfied; if it exceeds
expectations, the consumer is delighted. The larger the negative gap between
expectations and performance, the greater the consumer’s dissatisfaction. This
suggests that sellers should promise only what their brands can deliver so that
buyers are satisfied. Therefore, a company should measure customer satisfaction
regularly. It should set up systems that encourage customers to complain. In this
way, the company can learn how well it is doing and how it can improve.

The Buyer Decision Process for New Products

A new product is a good, service, or idea that is perceived by some potential customers as new.
The adoption process is defined as the mental process through which an individual passes from
first learning about an innovation to final adoption. Adoption is the decision by an individual to
become a regular user of the product.

A. Stages in the Adoption Process. Consumers go through five stages in the process of
adopting a new product:
i. Awareness. The consumer becomes aware of the new product but lacks
information about it.
ii. Evaluation. The consumer considers whether trying the new product makes
sense.
iii. Trial. The consumer tries the new product on a small scale to improve his or her
estimate of its value.

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iv. Adoption. The consumer decides to make full and regular use of the new
product.
B. Individual Differences in Innovativeness. People differ greatly in their readiness to try
new products. People can be classified into the adopter categories. The five adopter
groups have differing values. Innovators are venturesome—they try new ideas at some
risk. Early adopters are guided by respect—they are opinion leaders in their
communities and adopt new ideas early but carefully. Early mainstream adopters are
deliberate—although they rarely are leaders, they adopt new ideas before the average
person. Late mainstream adopters are skeptical—they adopt an innovation only after a
majority of people have tried it. Finally, lagging adopters are tradition bound—they are
suspicious of changes and adopt the innovation only when it has become something of
a tradition itself. This adopter classification suggests that an innovating firm should
research the characteristics of innovators and early adopters in their product
categories and direct initial marketing efforts toward them.
C. Influence of Product Characteristics on Rate of Adoption. The characteristics of the
new product affect its rate of adoption.
i. Relative advantage. The degree to which the innovation appears superior to
existing products.
ii. Compatibility. The degree to which the innovation fits the values and
experiences of potential consumers.
iii. Complexity. The degree to which the innovation is difficult to understand or use.
iv. Divisibility. The degree to which the innovation may be tried on a limited basis.
v. Communicability. The degree to which the results of using the innovation can be
observed or described to others.

Other characteristics influence the rate of adoption, such as initial and ongoing costs, risk and
uncertainty, and social approval. The new product marketer must research all these factors
when developing the new product and its marketing program.

References

Armstrong, G., Adam, S., Denize, S., Volkov, M. & Kotler, P. (2018). Principles of
Marketing. Pearson Australia Group Pty Ltd. Melbourne, Australian. 7th Edition.

Boone, L. & Kurtz, D. (2014). Principle of Contemporary Marketing: Cengage Learning Asia Pte.
Ltd.

Kotler, P. & Armstrong, G. (2018). Principles of Marketing. Pearson Education Limited. United
States edition, 17th edition.

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