MARKETING MANAGEMENT 12th edition

Chapter 6

Analyzing Consumer Markets

Kotler

Keller

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?
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Road Map: Previewing the Concepts

Understand the consumer market and the major factors that influence consumer buyer behavior. Identify and discuss the stages in the buyer decision process. Describe the adoption and diffusion process for new products. Define the business market and identify the major factors that influence business buyer behavior. List and define the steps in the business buying decision process.
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INTRODUCTION TO CONSUMER
People differ in-Age, Gender, education, demographic, Occupation, income, Marital status, as well as in Psychographics: activity preference opinion Individual diversity is matched by diversity of mkts So many ways of mkts:- exist local, national, global, (Mass mktg to niche mktg)
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INTRODUCTION cont.

Great diversity in advtg media Air, television, Press, cable TV, Internet, world wide web Despite the diversity among us there are many similarities Born with same set of biological needs We acquire new needs Shape our need by/ for environment culture, education, experience

INTRODUCTION cont.
Still we purchase few things on regular basis those things might be common among many of us. That means in purchasing goods, services & ideas behaviour is involved This in turn affects demand, supply employment, savings etc. Thus consumer behaviour is an integral part of flow of all business activities.
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INTRODUCTION cont.
Consumer behaviour is the behaviour displayed by the consumers in searching for, purchasing, using, evaluating & disposing of products & services, that they expect will satisfy their needs It is the study of how individuals make decisions to spend their available resources( money, time, efforts) on consumption items.
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INTRODUCTION cont.
Consumer behaviour reflects the totality of consumer decision with respect to the acquisition, consumption & disposition of goods, services, time & ideas by individuals over a stipulated time In this dynamic & rapidly evolving industry marketers need to know every thing about consumers 8

WHAT IS CONSUMER BEHAVIOUR

Consumer behaviour involves more than products Consumer behaviour involves more than just buying Consumer behaviour is a dynamic process Consumer behaviour involves decision making
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INTRODUCTION cont.
The set of decisions What they buy, Why they buy How they buy When they buy Where they buy How often they buy How much they buy Whether they buy or not

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Consumer Buying Behavior

Consumer Buying Behavior refers to the buying behavior of final consumers individuals & households - who buy goods and services for personal consumption. These final consumers make up the consumer market. The central question for marketers is:
How do consumers respond to various marketing efforts the company might use?
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How And Why Consumers Buy

Model of Customer Buyer Behaviour

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Model of Consumer Behavior

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Factors Influencing Consumer Behaviour

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Factors Affecting Consumer Behaviour: Culture

Culture is the Most Basic Cause of a Person's Wants and Behaviour.
The fundamental determinant of a persons wants and behaviors acquired through socialization processes with family and other key institutions.

Subculture
Groups of people with shared value systems based on common life experiences. Hispanic Consumers

African American Consumers

Asian American Consumers Mature Consumers
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Factors Affecting Consumer Behavior: Culture

Social Class
Societys relatively permanent & ordered divisions whose members share similar values, interests, and behaviour. Measured by a Combination of: Occupation, Income, Education, Wealth and Other Variables.
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Indian Subcultures
Nationalities: Indian Religions: Hindu, Sikh, Muslim, Geographic regions: East, West, North, South Special interests: Business, Service, Army

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Factors Affecting Consumer Behaviour: Social

Groups Membership, Reference, or Aspirational

Family Most Important Consumer Buying Organization

Roles and Status
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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. Upper uppers, Lower uppers, Upper middles, Middle class, Upper lowers, Lower lowers, Working class
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Social Factors

Reference groups

Family

Social roles

Statuses

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Family
Family of Orientation Religion Politics Economics Family of Procreation Everyday buying behaviour

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The Family Life Cycle

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Reference Groups
Membership: groups having direct influence on
person

Primary: with whom interaction is fairly

continuously & informally e.g. family, friend

Secondary: with whom interaction is formal &

requires less continuous interaction

Aspirational: the group which person hopes to

join

Dissociative: the group which person rejects

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Brand Personality
Sincerity Excitement Competence Sophistication Ruggedness

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Personal Factors
Age Life cycle stage Occupation Wealth Personality Values Lifestyle Self-concept
Sincerity Excitement Competence Sophistication Ruggedness
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Factors Affecting Consumer Behaviour: Personal

Personal Influences
Age and Life Cycle Stage Economic Situation Personality & Self-Concept

Occupation

Lifestyle Identification

Activities

Interests

Opinions
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Factors Affecting Consumer Behaviour: Psychological

Motivation

Beliefs and Attitudes

Psychological Factors Affecting Buyers Choices

Perception

Learning

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Key Psychological Processes

Motivation Perception Learning Memory

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Motivation
Freuds theory: It is assumed that the psychological
forces shaping peoples behaviour are largely unconscious, & a person cannot fully understand his/her own motivation

Maslows hierarchy of needs: Explain why

people are driven by particular needs at particular times

Herzbergs two-factor theory: Two factor theory

that distinguishes dissatisfiers & satisfiers

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Maslows Hierarchy of Needs

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Perception
Perception is the process by which an individual
selects, organises,& interprets information inputs to create a meaningful picture of the world. Peoples perception may get effected by the process:-

Selective attention Selective retention Selective distortion Subliminal perception

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Learning & Memory

Learning involves changes in individuals behaviour

arising from experience. Learning is produced through the interplay of Drive Stimuli Cue Response Reinforcement
encounters through the life is stored in long / short-term memory
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Memory: all the information & experiences individual

Buyer Decision Process

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Buyer Decision Process Step 1. Need Recognition

Buyer Recognizes a Problem or a Need Arising From:

Internal Stimuli

External Stimuli-

Hunger

Friends

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The Buyer Decision Process Step 2. Information Search

Personal Sources Commercial Sources Public Sources Experiential Sources
Family, friends, neighbors Most effective source of information Advertising, salespeople Receives the most information from these sources

Mass Media Consumer-rating groups

Handling the product Examining the product Using the product
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The Buyer Decision Process

Step 3. Evaluation of Alternatives
Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition
Consumers May Make Buying Decisions on Their Own Consumers May Make Buying Decisions Only After Consulting Others

Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives 36

The Buyer Decision Process

Step 4. Purchase Decision
Purchase Intention

Desire to buy the most preferred brand

Attitudes of Others

Unexpected Situational Factors

Purchase Decision
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Non-compensatory Models of Choice

Conjunctive: consumer sets a minimum acceptable
cutoff level, selects that brand which meets minimum standards

Lexicographic: chooses the brand on the basis of its

perceived most imp attribute

Elimination-by-aspects: compare brands on the

basis of attributes, brands are eliminated if they do not meet minimum acceptable level.

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Perceived Risk

Figure 9.6

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The Buyer Decision Process

Step 5. Postpurchase Behaviour
Satisfied Customer! Consumers Expectations of Products Performance Products Perceived Performance
Cognitive Dissonance
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Dissatisfied Customer

Other Theories of Consumer Decision Making

Involvement Elaboration Likelihood Model Low-involvement marketing strategies Variety-seeking buying behavior Decision Heuristics Availability Representativeness Anchoring and adjustment

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Stages in the Adoption Process

Awareness: Consumer becomes aware of the

new product, but lacks information about it. Interest: Consumer seeks information about new product. Evaluation: Consumer considers whether trying the new product makes sense. Trial: Consumer tries new product on a small scale to improve his or her estimate of its value. Adoption: Consumer decides to make full and 42 regular use of the new product.

Adopter Categories

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Influence of Product Characteristics on Rate of Adoption

Communicability
Can results be easily observed or described to others?

Relative Advantage
Is the innovation superior to existing products?

Can the innovation be used on a limited basis?

Divisibility

Is the innovation difficult to understand or use?

Complexity

Does the innovation fit the values and experience of the target market?

Compatibility

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Mental Accounting
Consumers tend to
Segregate gains Integrate losses Integrate smaller losses with larger gains Segregate small gains from large losses

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