TARUN

KUMAR
REPORT

CONSUMER MARKETS
AND CONSUMER BUYING
BEHAVIOR

B15180

CONSUMER MARKETS AND CONSUMER BUYING

BEHAVIOR
REPORT
DEFINING CONSUMER MARKET
The consumer market consists of all the individuals and households who buy or acquire goods and
services for personal consumption. The simplest model of customer buying behavior is the stimulus
response model. According to this model, marketing stimuli (4 Ps) and other major forces enter the
consumers black box and produce certain responses. Once in the black box, these inputs produce
observable buyer responses, such as product choice, brand choice, purchase timing, and purchase
amount.

FACTORS THAT INFLUENCE CONSUMER BUYING BEHAVIOR

Four key sets of buyer characteristics influence consumer buying behavior:

Cultural
Social
Personal
Psychological

Culture includes the basic values, perceptions, preferences, and behaviors that a person learns from
family and other institutions
Social factors include a persons reference groups family, friends, social networks, professional
acquaintances.
The buyers age, life cycle stage, occupation, economic circumstances, lifestyle, and personality are
the personal factors.
Consumer buying behavior is influenced by four major psychological factors motivation, perception,
learning, and beliefs and attitudes

TYPES OF BUYING DECISION BEHAVIOR

A consumer exhibits complex buying behavior when he/she is highly involved in a purchase and
perceive significant differences among brands.
Dissonance-reducing behavior occurs when consumers are highly involved but see little difference
among brands

Habitual-buying behavior occurs under conditions of low involvement and little significant brand
difference.
In situations characterized by low involvement but significant perceived brand differences, consumers
engage in variety seeking buying behavior

STAGES IN BUYER DECISION PROCESS

Buyer decision process consists of
Need recognition
Information Search
Evaluation of alternatives
Purchase decision
Post purchase behavior
During need recognition, the consumer recognizes a problem or need that could be satisfied by a
product or service in the market.
Once the need is recognized, the consumer is aroused to seek more information and moves into the
information search stage.
With information in hand, the consumer proceeds to alternative evaluation, during the information is
used to evaluate brands in the choice set.
From there, a consumer makes a purchase decision and actually buys the product.
In the post-purchase behavior, the consumer takes action based on satisfaction or dissatisfaction

BUYER DECISION PROCESS FOR NEW PRODUCTS

Stages in the adoption process

Awareness The consumer becomes aware of the new product, but lacks information about it
Interest The consumer seeks information about the new product
Evaluation The consumer considers whether trying the new product makes sense
Trial The consumer tries the new product on a small scale to improve his or her estimate of its
value
Adoption The consumer decides to make full and regular use of the new product

INFLUENCE OF PRODUCT CHARACTERISTICS ON RATE OF ADOPTION

Five characteristics are especially important in influencing an innovations rate of adoption -

Relative advantage - The degree to which the innovation appears superior to existing products.
Compatibility The degree to which the innovation fits the values and experiences of potential
consumers
Complexity The degree to which the innovation is difficult to understand or use.
Divisibility The degree to which the innovation may be tried on a limited basis.
Communicability The degree to which the results of using the innovation can be observed or
described to others