Analyzing Consumer Markets

Chapter Questions

• How do consumer characteristics influence buying behavior?

• What major psychological processes influence consumer responses to the marketing program?

• How do consumers make purchasing decisions?

• How do marketers analyze consumer decision making?

Tata Steel used steeljunction® to

encourage consumers to go steel shopping and to develop

deeper understanding of

individual and household

customers.

Figure 6.1 Model of Consumer Behavior

What Influences Consumer Behavior?

Cultural FactorsCultural Factors

Social FactorsSocial Factors

Personal FactorsPersonal Factors

What is Culture?

Culture is the fundamental determinant of a person’s wants and behaviors acquired

through socialization processes with family and other key institutions.

Subcultures

Nationalities Nationalities

ReligionsReligions

Racial groupsRacial groups

Geographic regionsGeographic regions

Social Classes

Upper uppersLower uppersUpper middlesMiddle class

Working classUpper lowersLower lowers

Characteristics of Social Classes

• Within a class, people tend to behave alike• Social class conveys perceptions of

inferior or superior position• Class may be indicated by a cluster of

variables (occupation, income, wealth)• Class designation is mobile over time

Social Factors

Referencegroups

Social roles

Statuses

Family

Reference Groups

Membership groupsMembership groups

Primary groupsPrimary groups

Secondary groupsSecondary groups

Aspirational groupsAspirational groups

Dissociative groupsDissociative groups

Provogue uses teenage icons as brand ambassadors and a youth targeted website to connect to its

customers

Radio Shack Targets Women with Female Store Managers

Roles and Status

What degree of status is associated with various occupational roles?

Personal Factors

Age

Values

Life cyclestage

Occupation

Personality

Self-concept

Wealth

Lifestyle

The Family Life Cycle

Brand Personality

SinceritySincerity

ExcitementExcitement

CompetenceCompetence

SophisticationSophistication

RuggednessRuggedness

Lifestyle Influences

Multi-tasking

Time-starved

Money-constrained

Faysal Bank of Pakistan has

extended banking hours

for time-pressed

executives.

Table 6.2 LOHAS (Lifestyles of Health and Sustainability) Market

Segments• Sustainable Economy• Healthy Lifestyles• Ecological Lifestyles• Alternative Health Care• Personal Development

Key Psychological Processes

Motivation

MemoryLearning

Perception

Motivation

Freud’sTheory

Behavioris guided by subconsciousmotivations

Maslow’sHierarchyof Needs

Behavioris driven by the lowest, unmet need

Herzberg’sTwo-Factor

Theory

Behavior isguided by motivating

and hygienefactors

Maslow’s Hierarchy of Needs

Herzberg’s Two-Factor Theory

Perception

Selective Attention

Subliminal Perception

Selective Retention

Selective Distortion

Figure 6.3 State Farm Mental Map

Figure 6.4 Consumer Buying Process

Problem Recognition

Information Search

Evaluation

Purchase Decision

PostpurchaseBehavior

Problem Recognition

Sources of Information

Personal

ExperientialPublic

Commercial

Figure 6.5 Successive Sets Involved in Consumer Decision

Making

Table 6.8 Sales and ProductLife Cycle

Figure 6.6 Stages between Evaluation of Alternatives and

Purchase

Non-Compensatory Models of Choice

• Conjunctive• Lexicographic• Elimination-by-aspects

Perceived Risk

FunctionalFunctional

PhysicalPhysical

FinancialFinancial

SocialSocial

PsychologicalPsychological

TimeTime

Figure 6.7 How Customers Use and Dispose of Products

Rural Consumer Behaviour

• Rural consumers are more brand loyal• Restrictions on consumption• Collective consumption behaviour: for

family rather than individual• Seasonality of consumption based on

seasonality of agricultural production/income

• Specific patterns in the five-stage buying decision process

Other Theories of Consumer Decision Making

Involvement• Elaboration

Likelihood Model• Low-involvement

marketing strategies

• Variety-seeking buying behavior

Decision Heuristics• Availability• Representativenes

s• Anchoring and

adjustment

Mental Accounting

• Consumers tend to…–Segregate gains– Integrate losses– Integrate smaller losses with larger gains–Segregate small gains from large losses

Marketing Debate

Is target marketing ever bad?

Take a position:1. Targeting minorities is exploitive.

or

2. Targeting minorities is a sound business practice.

Marketing Discussion

Do you have rules you employ in spending money? Do you follow Thaler’s four principlesin reacting to gains and losses?