Consumer Markets And Buyer BehaviourDocument Transcript
Consumer markets and buyer behavior
Model of consumer behavior: Marketing and environmental stimuli
enter the buyers consciousness. The buyer’s characteristics and decision
process lead to certain purchase decisions. The marketer’s task is to
understand what happens in the buyer’s consciousness between the
arrival of outside stimuli and the buyers purchase decision.
A consumer buying behavior is influenced by cultural, social, personal
and psychological factors.
CULTURAL FACTORS: Culture, sub culture and social
class are important in buying behavior.
Culture: Culture is the most fundamental determinant of a person’s
wants and behavior. The growing child acquires a set of values,
perception, preferences and other key institution.
Sub cultural: Each culture consist of smaller sub cultures that provide
more specific identification and socialization for their members. Sub
culture includes nationalities, religions, racial, groups and geographic
regions. Many sub culture make up important market segments and
marketers often design products and marketing programs tailored to
Social class: Virtually all human societies’ exhibit social satisfaction
some times takes the form of a caste system. Where the members of
different caste are reared for certain roles and cannot change their caste
Social classes are relatively homogenous and enduring
divisions in a society, which are hierarchically ordered and whose
members share similar values, interests and behavior.
SOCIAL FACTORS: In addition to cultural factors, a consumers
behavior is influenced by such social factors as reference groups, family
and social roles and statuses.
Example: Taj Residency target at upper class where as fast foods target
at middle class.
Reference groups: A persons reference groups consists of all the groups
that have a direct or indirect influence on the person’s attitudes or
behavior. Grouped having a direct influences on a persons are called
Some membership groups are primary groups
such as family, friends, neighbor and co workers, with whom the
persons interact fairly continuously and informally.
Family: The family is the most important consumer buying
organization in society, and it has been researched extensively. Family
members constitute the most influential primary reference group.
Marketers are interested in the roles and relationship influencing
the husband, wife, children’s and others in making a purchase.
Roles and status: A person participates in many groups – family, clubs,
organization then person’s position in each group can be defined in
terms of role and status’s role consists of the activates that a persons is
expected to perform. Each role carries a status.
Example: Supreme Court judge as more status than a sales manager.
PERSONAL FACTORS: A buyers decisions are also influenced by
personal characteristics. These include the buyer’s age and stages in life
cycle, occupation, economic circumstances, lifestyle, personality and self
Age and stages in life cycle: people buy different goods and services
over a life time. They eat baby food in the early years, most foods in the
growing and mature years and special diets in later years. Taste in
clothes, furniture is also age related. Consumption is shaped by the
family life cycle.
Occupation and economic circumstances: occupation also influences a
person’s consumption pattern. A blue collar worker will buy work
clothes, work shoes and lunch boxes. A company chair man will buy
expensive suit, air travel etc. Marketers try to identify the occupational
groups that have above average interest in there products and services.
Products choice is greatly affected by economic circumstances.
Economic indicators point to a decision. Marketers can take steps to
redesign, re position and re price their products so they continue to
offer value to target customer.
Life style: people from same sub culture, social class, and occupation
may lead quite different life style. Marketers search for relation ship
between their products and life style groups. There are 9 stages in life
Example: A computer manufactures might find that most computer
buyers are achievement oriented. The marketers may than aim the
brand more closely at the achievers life style.
Personality and self concept: each person as distinct personality that
influences buyers’ behavior. Personality is usually described in terms of
such traits as self confidence, dominance, autonomy, deference,
PSYCOLOGICAL FACTORS: A persons buying behavior are
influenced by 4 major psychological factors.
MOTIVATION: A persons has many needs at any given time. Some
needs are bio genet i.e., they arise from physiological states of tension
such as hunger, thirst, discomfort other needs are psychogenic. They
arise from psychological states of tension such as the need for
recognition, esteem or belonging.
PERCEPTION: Perception is the process by which an individual
selects, organizes and interprets in formations inputs to create a
meaningful picture of the world. People can emerge with different
perceptions of the same because of 3 perpetual processes. They are
Selective attention: It means that marketers have to work hard
to attract consumers’ attention.
Selective distortion: it is the tendency to twist information in to
personal meaning and interpret information in a way that will fit our
Selective retention: In this we are likely remember good points
mentioned about a product. We like and forget good points about
LEARNING: Learning involves changes in an individual’s behavior
arising from experience. Most human behavior is learning. Learning
theorist believe that learning is produced through interplay of drives,
stimuli, cues, response and reinforcement. Learning theory teaches
marketers that they can build up demand for a product by associating it
with strong drives, using motivating cues and providing positive
BELIFES AND ATTITUDES: through doing a learning, people
acquire beliefs and attitudes. There is an influence on buying behavior.
A belief is a descriptive thought that a person holds about something.
An attitude is a person’s enduring favorable or unfavorable
evaluations, emotional feelings and actions tendencies towards some
object or idea.
THE BUYING DECISION PROCESS
Marketers have to go beyond the various influences on buyers and
develop an understanding of how consumers actually make there
buying decisions. Specifically marketers must identify who makes the
buying decisions and the steps in the buying process.
BUYING ROLES: IT is easy to identify the buyer for many products.
In United States men usually choose their shaving equipment and
women choose there cosmetics marketers must be carefully in making
their targeting decisions, because buying roles changes. We can
Distinguish 5 roles people may play.
Initiator: A person who first suggest the idea of buying the product or
Influencer: A persons whose view or advice influences the decision.
Decides: A person who decides on any component of a buying
decision whether to buy, what to buy, how to buy or where to buy.
Buyer: The person who makes actual purchase.
User: A person who consumes or uses the products or services.
BUYING BEHAVIOUR: Consumers decisions making vary with the
type of buying decision. The decision to buy tooth paste, a tennis racket,
and a new car are all very different. Assail distinguished 4 types of
consumer buying behavior based on the degree of buyer involvement
and degree of difference among brands.
COMPLEX BUYING BEHAVIOR: It involves a 3 step process. First
the buyer develops belief about the product. Second he or she develops
attitudes about the product. Third he or she make a thought full choice.
DISSONANCE- REDUCING BUYER BEHAVIOR: Some times the
consumer is highly involved in a purchase but sees little difference in
brands. The high involvement is based on the facts that the purchase is
expensive, infrequent and risky.
Example: Car buying is a high involvement decision because it is
HABITUAL BUYING BEHAVIOR: Many products are brought
under conditions of low involvement and absence of significant brand
differs. Consider salt, consumers have little involvement in this
category, they go to store and reach for the brand there is a good
evidence that consumers have low involvement when the product is of
low cost an d frequently purchased.
VARIETY SEEKING BUYING BEHAVIOR: Some buying situations
are characterized by low involvement but significant brand differs.
Here consumers often do a lot of brand switching .Think about cookies.
The consumers has some belifies about cookies; choose a brand of
cookies without much evaluation.
THE STAGES OF BUYING DECISION PROCESS
The smart companies research the buying decision process involved in
their product category. The consumers’ passes through 5 stages:
Evaluation of alternatives
Purchase decision and
Post purchase behavior
Having identified the potential segments and selected one or more to target, the marketer
must next decide what position to pursue. A position is the way a firm’s product, brand,
or organization is viewed relative to the competition by current and prospective
customers. If a position is how a product is viewed, then positioning is a firm’s use of all
the elements at its disposal to create and maintain in the minds of a target market a
particular image relative to competing products
When positioning a product, the marketer wants to convey the benefit most desired by
the target market. A classic example of successful positioning is the original Head and
shoulders shampoo. As the first shampoo positioned as a dandruff remedy, the product’s
name implied the benefit, the medicinal fragrance suggested its potency, and the color
and consistency, and the color (blue-green) and consistency (a paste rather than a liquid)
indicated that it wasn’t an ordinary shampoo
There are three steps in a positioning strategy:
1. Select the positioning concept
To position a product or an organization, a marketer needs to first determine what is
important to the target market.. Marketers can then conduct positioning studies to see
how members of a target market view competing products or stores on the important
dimensions. The results of this research can be portrayed in a perceptual map that locates
the brand or organization relative to alternatives on the dimensions of interest.
2. Design the dimension or feature that most effectively the
A position can be communicated with a brand name, a slogan, the appearance or other
features of the product, the place where it is sold, the appearance of employees, and in
many other ways. However, some features are more effective than others. It is important
to not overlook details. According to a consultant, chairs for customers are vital in
upscale retail environments because they signal that5 the seller “cares.” Because the
marketer has limited resources, decisions have to be mad4 on how best to convey the
desired positioning concept.
3. Coordinate the marketing mix components to convey a
Even though one or two dimensions may be the primary position communicators, all
the elements of the marketing mix- the product, price, promotion, and distribution-should
complement the intended position. Many product failures are the result of inconsistent
positioning that confuses consumers. For example, a compact car with a high price tag
(Cadillac Cimarron), and Tetley Instant Iced Tea (in Britain, where the people take great
pride in brewing tea) both flopped.
Over time a position may erode because of lack of attention, become less attractive to
the market as needs or tastes change, or be usurped by a competitor. Hence positions
must be regularly monitored and sometimes adjusted
Once the firm has identified its market segment opportunities in t has to decide how
many and which once to target.
1) EVALUATING THE MARKET SEGMENTS : In evaluating different market
segments, the firm must look at two factors the segments overall attractiveness I.e. size,
growth, profitability scale economics. Second the firm must consider whether investing
in the segment makes since given the firms objectives and resources.
2) SELLING THE MARKET SEGMENTS: Hearing evaluated different
segments, the company can consider five patterns of target market selection.
a) Single Segment Concentration: the company may select a single segment
vockswagen concentrates on the small company market and Porsche on the sports can
market. Through concentrated market the firms gains a strong knowledge of the segments
needs and achieves a strong market presence.
b) Selective Specialization: here the firm selects a no of segments, each objectively
attractive and appropriative there may be little or number if synergy among segments but
each segment premises to be a money market this multi segment coverage strategy has
the advantage of diversifying the firms risk.
c) Product Specialization : here the firm specializes in making a certain product that it
sells to several segments.
Eg: could be microscope manufactures increases scopes to universities laboratories govt
laboratories commercial laboratories.
Through a product specialization strategy , the firm builds a strong reputation in the
specific product area.
d) Market Specialization : Here the firm concentrates on serving any needs of a
particular customer group.
Eg is firm that sell an assortment of products only to university laboratories, including
microscopes, oscilloscope, Bunsen, because and chemical flasks.
The firm gains a strong reputations in saving this customer group and becomes a channels
for feather products that the customer group could use.
e) Full market coverage: here a firm attempts to save all customer groups, unit all the
products they might need. Only very lounge fives can undertake a full market coverage
Eg. IBM, general motors, coca cola etc I,e large firms can ever a whole market in two
broad ways. Through underestimated marketing or differentiated market.
3) ADDITIONAL CONSIDERATION: fore other consideration must be taken in
to ale in valuating and selecting segments.
a) Ethical choice of market target: market targeting sometimes generates public
controversy. The public is concerned when marketers take unifies advantage of
*****groups or disadvantaged groups.
b) Segment interrelationships and super segments: in selecting more than one segment
to serve, the company should pay attention to segment inter relationships on the cost,
performance and technology side.
Companies should try to operate in super segments rather than in is dated segment. A
super segment is a set of segments shaving some exploitable similarly.
c) Segment by segment incision plans: a company would be wise to enter one segment
at a time uitanont revealing its total expansions plans. The competitors must not know to
what segment the firm will move
d) Inter segment co-operation: the but way to manage segments is to appoint segment
managers with sufficient authority and responsibility for building their segments brinier
at the some time, segment managers. Should not be so segment forced as to co-operation
with other company personnel
SEGMENTING CONSUMER AND BUSINESS MARKETS
Whenever a market for a product are service canvases of two or more buyers. The
market is capable of being segmented i.e divided in to meaningful buyers groups. The
propose of segmentation is to determine only among buyers which may be consequent in
choosing away them or making to them.
Bases for segmenting consumer markets: two brood group of variables are used to
segment consumer markets. Some researches try to form segments by looking at
consumer characteristic and other researches try to firm segments by looking at consumer
The major segmentation variables are
1) Geographic segmentation: geographic segmentation call for dividing the market in to
different geographic units such as nations, states, regions, countries, cities. The company
can operates in one or a few geographic areas or operates in all but pay attention to local
2) Demographic segmentation: in demographic segmentation the market is divided in to
groups on the basis of variable such as age, family, size, family life cycle, gender, income
etc. demographic variable are the most popular basis for distinguishing customer groups.
Here is how certain demographic variables have been used to segment market.
a. Age and life cycle stage: consumer wants and abilities change with age.
b. Gender: gender segmentation has long been applied in clothing havistyling,
cosmetics, and magazines. Occasionally other marketers notice an opportunity for
c. Income: income segmentation is a long standing practice in such product and
service categories as automobiles, boats, clothing, cosmetics and travel. How ever
income does not always predict the but customer for a given product.
e.g. blue collar workers was among the first purchase of colors television sets, it
was cheaper for then to buy there sets than to go to movies and restaurants
d. Generation: many recovers are now turning to generation segmentation. Each
generation is profoundly influenced by the times in which it grower up the music,
movies, polities, and events of that period.
e. Social class : social class has a strong influence on prefere the car clothing home
furnishings, deisure activities, and retailers, money companies design products
and services for specific social classes.
3) Psychographic segmentation: in this segmentation buyers are divided in to
different groups on the basis of life style or personality and values
a. life style: people exhibit many more lifestyles than are suggested by the seven
social classes, the goods they consume express their lifestyles companies making
cosmetics alcoholic beverages, and fruiture are always seeking opportune on life
b. Personality: marketers have personality variables to segment ,markets. They
endow their products with brand personalities that correspond to consumer
c. Values: some marketers segment by core values, the belief systems that under lie
consumer attitudes and behaviors, core value go much deeper than behavior or
attitude and deter mite, at a basic level and derive oral the long term.
d. Personality: marketers have personality variables to segment markets. They
endow their product with brand personalities that correspond to consumer
e. Values: some marketers segment by core values, the belief systems that under lie
consumer attitudes and behaviors, core values go much deeper than behavior or
attitude and determinate at a basic level and desire orel the long term.
4) Behavioral segmentation : many marketers believe that behavioral variables
occasions, behefils, user states, usage uati loyalty states one the best starting
points for constructing market segments.
a. Occasions: buyers can be distinguished according to the occasions they develop a
need, purchase a product, or use a product and occasions segmentation can help
firms expend product usage.
Eg. Orange juice is usually consumed at breakfast. A orange juice consumer can
try to promote drinking orange juice unable occasions level, dinner, midday
b. Benefits: buyer can be clarified according to the benefits they seek
Eg. Haley reported true benfit segmentation of the toothpaste market. He
found four benefits segments; economy medicinal, cosmetic and
c. User states: markets can be segmented in to consumers,
Eg. user potential user, first time user, and regular uses of a product.
d. loyal states: consumers have buying degree of loyalty to specific brands, stores
and other entitir.
e. Buyer readiness stage: a market consists of people in different stages of
readiness to buy a product. Some all universe of the product, some all avaus,
some all informet and some derive the product.
f. Attitude: five attitude groups can be ford in a market enthusiastic, positive,
indifferent, negative and
5). Multi: attribute segmentation: one of the most promising developments in multi
attribute segmentations called geo-destering geo-destering yields richer descriptions
of consumers and neighbor goods than traditional demographic.
Business market consist of all organization that acquire of all goods and services used
in the production of other products or services that are sold, rented, or supplied to
others. the major industries making up the business market agriculture, forestry and
fisheries mining, manufacturing, construction, transportation, communication, public
utility, banking finance and insurance distribution and services.
BUSINESS MARKET HAVE SEVERAL CHARACTERISTICS
Fewer buyer: The business marketer normally deals with for fewer buyer than
the consumer marketers does.
Larger buyer: A few larger buyer do most of the purchasing in such industries
as aircraft engines and defines weapon.
Close supplier-customer relationship: Because of the smaller customer base
and the importance and power of the larger customers, suppliers are frequently
expected to customize their offering to individual business customer needs