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ANALYSING

CONSUMER MARKETS

Compiled By Nuunu
Introduction
 Successful marketing requires that companies
fully CONNECT with their customers – this means
marketers have to understand in-depth their
lifestyles and changes that occur during their lives
so that the right products are marketed to the right
customers. This presentation explores the
dynamics of individual consumer buying.
Questions to be addressed
 How do consumer characteristics influence
buying behavior?
 What major psychological processes influence
consumer response to the marketing program?
 How do consumers make purchasing
decisions?
 How do marketers analyze consumer decision
making?
Factors that influence consumer
buying behavior
 Cultural Factors:
 Culture
This exerts the broadest and deepest influence; it is the
fundamental determinant of a person’s wants and behavior.

Exposure to certain values through upbringing by families


and other institutions, relationship to others and rituals.
 Subculture
Each culture consists of smaller subcultures
which include, religion, nationality, racial groups
and geographic regions. Companies should
therefore design specialized marketing programs
to serve them.

Different ethic and demographic niche markets


do not always respond well to mass marketing,
e.g. in the US, there are the Latinos, Asians,
African-Americans e.t.c
 Social Classes
Social classes include; lower lowers, upper
lowers, working class, middle class, upper
middles, lower uppers and upper uppers.

The above classes show distinct product and


brand preferences in many areas such as; home
furnishings, clothes, leisure activities, cars and
media preference. For example; upper class
prefer to read books and magazines rather than
watch television like the lower classes would.
 Social Factors:
Social Factors include the following;
 Reference groups: Consumers are directly
and indirectly influenced by reference
groups.
Direct groups include membership groups
that is;
• Primary groups which include family, friends and
neighbors.
• And Secondary groups which are religious,
professional groups and trade unions.
Indirect groups include Aspirational groups in
which an individual hopes to join and
Dissociative groups whose values and
behavior are detested by an individual.

Reference groups affect members in form of


new behavior and lifestyle, attitudes and self
concept and they create pressures for
conformity that may affect product and brand
choices.
 Family: There are 2 forms of family;
• Family of orientation – this consists of parents and
siblings.
• Family of pro-creation – this consists of spouse and
children.

 Roles and statuses: A role consists of the


activities a person is expected to undertake.
Each role carries a status. People pick products
that show and communicate their role and actual
desired status in society. Marketers should be
aware of the status-symbol potential of
products and brands.
 Personal Factors:
a buyer’s decision is also influenced by personal factors
in the following ways;
 Age and stage in the lifecycle – tastes and preferences
are often related to our age. Consumption is shaped by
family lifecycle, number, age and gender of people in a
household.
 Occupation and Economic circumstances - a working
class worker for example will buy work clothes, shoes…
an engineer will buy overalls, flash lights and so on.
Product choice is also affected by economic
circumstances like spendable income, savings, assets,
debts, borrowing power and attitude towards spending
and saving.
 Personality and self concept
• Personality is a set distinguishing human
psychological traits that lead to relatively consistent
and enduring responses to environmental stimuli
(buying behavior).
Traits can include self confidence, dominance,
autonomy, deference, sociability, defensiveness and
adaptability.
• Brands have personality so consumers are most likely
to chose brands that match their personality.
• Brand personality is a specific mix of human traits
that we can attribute to a particular brand.
• Customers chose and use brands that have a
brand personality consistent with their own
actual self concept (how we view ourselves)
although the match may instead be based on
the ideal self concept (how we’d like to view
ourselves) or even on other’s self concept
(how we think others see us).

• Other consumer are self monitors – sensitive


to how others see them.
 Lifestyle and values – Lifestyle is a person’s
pattern of living in the world as expressed in
activities, opinions and interests.
• Lifestyle shows a whole person interacting
with his environment.
• Marketers should search for a relationship
between their products and lifestyle groups.
• For example, computer manufacturers may
find that most computer buyers are
achievement oriented and aim the brand more
clearly at the achiever lifestyle.
• Consumer buying behavior is also influenced
by core values – which are the belief systems
that underlie attitudes and behavior.
• They determine people’s choices and desires
over the long term.
Key psychological processes

 The starting point for understanding


consumer behavior is through the
stimulus response model.
 The marketers task is to understand what
happens in the consumer’s consciousness
between the arrival of the outside
marketing stimuli and the ultimate
purchase decision.
Stimulus response model
CONSUMER
PSYCOLOGY

Motivation
Perception
Learning
Memory
MARKETING OTHER STIMULI
STIMULI

Products & svs Economic


Technological
Price BUYING
Political PURCHASE
Distribution DECISION
Cultural DECISION
Communication PROCESS

CONSUMER
CHARACTERISTICS

Cultural
Social
Personal
 There are 4 key psychological processes that
influence consumer responses and these are;
Motivation, Perception, Learning and Memory.
1. Motivation – we have needs; biogenic and
psychogenic. A need becomes a motive. A
motive drives us to act on the need.
Motivation has both direction and intensity.
There are 3 best Known theories of Human
motivation; Freud’s theory, Maslow’s theory
and Herzberg’s theory.
 Freud’s Theory – assumes that the
psychological forces shaping people’s
behavior are largely unconscious; that a
person cannot fully understand his or
her motivations.
 Maslow’s theory – he sought to explain
why people are driven by particular
needs at particular times which is why
he arranged human needs in hierarchy
from the most pressing to the least
pressing
Maslow’s Hierarchy of needs

People will satisfy the most


Important needs first, then Self actualization needs
The next most important.

Esteem needs

Social needs

Safety needs

Physiological
needs
 Herzberg’s Theory – he developed a two-factor
theory that distinguishes between dissatisfiers
(factors that cause dissatisfaction) and satisfiers
(factors that cause satisfaction.
• That the absence of dissatisfiers is not enough to
motivate a purchase; satisfiers must be present.
• For example, a phone without warranty is a
dissatisfier and yet presence of product warranty
would not act as a satisfier of motivator of purchase
because it is not a source of intrinsic satisfaction.
• Ease of use would be a satisfier.
• Sellers should avoid dissatisfiers.
2. Perception – a motivated person is ready
to act. How she acts is influenced by her
view of the situation.
• Perception is more important than reality in
marketing.
• Perception affects consumer’s actual
behavior.
• People can emerge with different
perceptions of the same object because of 4
perceptual processes; selective attention,
selective distortion, selective retention
and sublimal perception.
a) Selective attention – allocation of processing
capacity to some stimulus.
• We are exposed to ads and brand
communications daily but we cant attend to
all these.
• We screen out most of the stimuli and this
process is known as selective attention.
• Marketers should work hard to attract
consumer’s notice therefore. The challenge
comes when it is time to explain which
stimuli people will notice.
b) Selective Distortion – is the tendency to
interpret information in a way that suits
our preconceptions.
• Consumers will often distort information to
be consistent with prior brand and product
beliefs and expectations. For Example the
Guinness incident.
• It can work to the advantage of marketers
with strong brands when consumers distort
brand information to make it more positive.
c) Selective retention – most of us do not
remember much of the information we
are exposed to but we can retain that
information that supports our attitudes
and beliefs.
• We remember good points about a product
we like.
• We forget good points about a competing
product.
• Repetition is advised to make sure the
message is sent home.
d) Sublimal Perception – in this case,
marketers embed covert sublimal
messages in ads or packaging.
Consumers are not aware of the yet they
affect their behavior.
This mechanism does not engage the
customer or keep their thoughts active
about the product.
3. Learning – when we act, we then learn.
Learning includes changes in our
behavior.
 Learning is produced through an
interplay of drives (strong internal stimuli
that impels action) and cues (minor
stimuli that determine when, where and
how a person responds).
4. Memory – all information and
experiences we encounter as we go
through life can end up in our long term
memory.
 Nodes – stored information connected by
links that vary in strength.
? STM
? LTM
? Associative Network Memory
? Memory Processes
? Memory Retrieval
The Buying Decision Process
? How do consumers make purchase decisions
 Smart companies try to fully understand the
customer’s buying decision process – all their
experiences in learning, choosing and even
disposing of a product.
 Marketing scholars have developed a 5 stage
model of the buying-decision process.
The consumer passes through the
following 5 stages:
 Problem recognition – the buying process
starts when a buyer recognizes a problem
or need that is triggered by internal stimuli
(normal needs such as hunger and thirst)
and external stimuli (admiration towards a
neighbors car, an ad on television).
The above needs will trigger the possibility
of making a purchase.
 Information search – often, we search for
limited information. There are 2 levels of
involvement with info search;
 Heightened attention – is the 1st level where
a person simply becomes more receptive to
info about a product.
 Active Information search – a person now
looks for reading material, phones friends,
visits stores, goes on-line to learn more
about the product.
 Information search continued
• Information sources include; personal,
commercial, public and experiential.
• Through gathering of information about
competing brands and their features, the
buyer puts them in a choice set and makes a
decision.
 Evaluation of alternatives – some basic
concepts will help us try to understand
consumer evaluation processes. First, the
consumer is trying to satisfy a need.
Second, the consumer is looking for
certain benefits from the product solution.
Third, the consumer sees each product as
a bundle of attributes with varying abilities
for delivering benefits sought to satisfy this
need.
 Purchase Decision – intention to buy the
most preferred brand from the choice set.
Evaluation of
alternatives

Purchase
intention

Attitudes of Unanticipated
others Situational factors

PURCHASE
DECISION
 Post purchase behavior – marketers job
does not end at Purchase. They must
monitor post purchase satisfaction, post
purchase actions and post purchase
product uses.
 Post purchase satisfaction – satisfaction is a
function of the closeness between expectations
and the product’s perceived performance.
 Post purchase actions – if a consumer is
satisfied, he or she will purchase the product
again and say good things about the brand.
Dissatisfaction is the total opposite.
 Post purchase use and disposal – marketers should also
monitor how buyers use and dispose of the product.
Rent it To be (re) sold
Give it
away
Get rid of it
temporarily Lend it
To be used

Trade it
Get rid of it
Permanently Direct to
PRODUCT
Use it to consumer
serve
original
purpose Sell it Through a
middle man
Keep it Convert it
to serve a
new
Throw it
purpose To
away intermediary
Store it