Consumer Markets and Consumer Buying Behavior

What is Market

A Market is a social arrangement that allows

buyers and sellers to discover information and carry out a voluntary exchange

Consumer market

All the individuals and households who buy or acquire goods and services for personal consumption

Requirements of a Market

Must need or desire a particular product

Must have the ability to purchase the product

Must be willing to use their buying power

Must have the authority to buy specific products

Types of Markets

Consumer markets Industrial Markets International Markets

What to Ask in the Market

What do the customers buy? Why do the customers buy? Who are the buyers? How do they buy?

How much do they buy? Where do they buy from?

Consumer Behavior

Consumer behavior - the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions

Consumer Buying Behavior

Refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption

Studying consumer behavior answers to:

““How do consumers respond to How do consumers respond to marketing efforts the company marketing efforts the company

might use?”might use?”

Marketing andOther Stimuli

Marketing andOther Stimuli

Buyer’s Black BoxBuyer’s Black Box

Buyer’s ResponseBuyer’s Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Characteristics Affecting Consumer Behavior

Buyer’s Decision Process

Product Choice

Brand Choice

Dealer Choice

Purchase Timing

Purchase Amount

Model of Model of Consumer Buying Consumer Buying BehaviorBehavior

Post-purchase Behavior Assess value in consumption Post-purchase Behavior Assess value in consumption

PurchaseBuying valuePurchase

Buying value

Evaluation of AlternativesAssessing value

Evaluation of AlternativesAssessing value

Information SearchSeeking a value

Information SearchSeeking a value

Need RecognitionPerceiving a value

Need RecognitionPerceiving a value

FactorsFactors

Cultural, Cultural, Social Social

PersonalPersonal Psychological Psychological

FactorsFactors

Cultural, Cultural, Social Social

PersonalPersonal Psychological Psychological

Cultural Factors

Culture Most basic cause of a person's

wants and behavior. Values Perceptions

Subculture Groups of people with shared value

systems based on common life experiences.

Hispanic Consumers African American Consumers Asian American Consumers Mature Consumers

Social Class People within a social class tend to

exhibit similar buying behavior. Combination of Occupation,

Income, Education, Wealth

Social Factors

Reference Groups Family Roles and Status

Personal Factors

Age and Family Life Cycle Stage Occupation Economic Situation Lifestyle Personality & Self-Concept

Psychological Factors

Motivation Perception Learning Beliefs and Attitudes

Maslow Needs Hierarchies

Consumer Decision Process

Need Recognition

Marketing helps consumers recognize an imbalance between present status and preferred state

Information Search: Seeking Value

Internal Search- Recall information from memory

External Searchinformation from outside environment

Alternative Evaluation

Analyze product attributes Use cutoff criteria Rank attributes by importance

Purchase Decision

Buying the most preferred brand Intention Unexpected situational factors

Post-purchase Behavior

Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions Did I make a good decision? Did I buy the right product? Did I get a good value?

Involvement and Problem-Solving Variations

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

Routine Response Behavior

• Little involvement in selection process• Frequently purchased low cost goods• May stick with one brand• Buy first/evaluate later• Quick decision

Limited Decision Making

• Low levels of involvement• Low to moderate cost goods• Evaluation of a few alternative

brands• Short to moderate time to decide

Extensive Decision Making

• High levels of involvement• High cost goods• Evaluation of many brands• Long time to decide• May experience cognitive

dissonance

Comparison of problem-solving variations

Total Set Awarness Set

Consideration Set

Choice Set

Decision

A B C D E F G

A C D E F

A D E

A D

?

Brand Quality

Price After Sales Services

Weight

A 10 5 7 6

D 7 8 5 7

Quality: %40, Price:%30, Services: %20, Weight: %10

For Brand A: (0.4 x10) + (0.3 x 5) + (0.2 x 7) + (0.1 x 6) = 7.5

For Brand D: (0.4 x 7) + (0.3 x 8) + (0.2 x 5) + (0.1 x 7) = 6.9

Buyer Decision Process for New Products

Stages Awareness Interest Evaluation Trial Adoption

Business Markets

Individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations.

Characteristics of Business Markets

Market Structure and Demand Nature of Buying Types of Decisions and the

Decision Process

Market Structure and Demand

Business markets contain fewer but larger buyers

More geographically concentrated Demand in business markets is

derived from final consumer demand Demand is more inelastic Demand fluctuates more and more

quickly

Nature of the Buying Unit

Business purchases involve more buyers

Buying involve more professional purchasing effort

Types of Decision and the Decision Process

Business buyers usually face more complex buying decision

Business buying process is more formalized

Buyers and sellers work more closely together and build close relationships