1. Consumer Markets & Buyer Behavior Analysis
Parva Soltani
&
Ali Golshani

2. Content Kinds of Markets Consumer Buying Behavior
Factors Affecting Consumer Behavior
Types of Decision
Decision Steps
How To Adopt a New Product

3. PEOPLE What is a Market ? But not just any People, they have to have :
Willingness to buy
Purchasing Power ( Money)
Authority

4. Different Kinds Of Market
B2B : Business to Business which refers to doing Business mostly trading between companies and organizations .
B2C : Business to Consumer is referring to sell a service or a product to the end user or consumer which is the main purpose of this presentation .

5. Bases for Segmenting Consumer Markets
Geography
Region of the world
Country
Region of the country
State
City
County

6. Bases for Segmenting Consumer Markets
Demography
age
gender
family size
family life cycle
income
occupation
education
ethnicity
nationality

7. Bases for Segmenting Consumer Markets
Psychographics
social class
lifestyle
personality

8. Bases for Segmenting Consumer Markets
Behavior
purchase occasions
benefits sought
user status
usage rate
loyalty status
readiness stage

9. Consumer Buying Behavior
Consumer Buying Behavior refers to the buying behavior of final consumers (individuals) who buy goods and services for personal consumption.
Studying Buyer behavior is to answer:
“How do consumers respond to marketing efforts the company might use?”

10. But understanding Buyer Behavior is not easy at all .
He says something …..
He does something else .
In fact a wrong understanding of Motives , Needs and Priorities of Buyers may leads to priceless mistakes .

11. Model of Buyer Behavior
Marketing and
Other Stimuli
Model of Consumer Behavior
This CTR corresponds to Figure 5-1 on p. 135 and to the material on pp
Model of Buyer Behavior
Product
Price
Place
Promotion
Economic
Technological
Political
Cultural
Buyer’s Black Box
Consumer Behavior
Consumer behavior refers to the buying behavior of final consumers -- individuals and households who buy goods and services for personal consumption.
Model of Consumer Behavior
Marketers control the stimuli or inputs consisting of the four Ps: Product, Place, Price, and Promotion. Environmental and situational influences, though perhaps beyond the control of the marketer, also influence many consumer choices. But what happens between the marketing stimuli input and the buyer’s response or output? That “black box” processing is the central question for marketers.
Teaching Tip: You may wish to discuss the “buyer’s black box” in more detail at this stage. Students sometimes become involved in the controversy regarding the presence or absence of consciousness in consumers. Consider using a two-side in-class discussion:
Side A: Experimental psychologists argue that what we call consciousness is merely a set of complex learned responses -- an ordinary physiological function.
Side B: Sociologists and social psychologists argue that consciousness is greater than the sum of its physiological parts. For marketers, the issue is sometimes linked to free will: Do marketers create needs by conditioning consumers? Do marketers offer need-fulfillers to needs consumer’s create in their “black box?”
Characteristics Affecting Consumer Behavior
Buyer’s Decision Process
Buyer’s Response
Purchase Timing
Purchase Amount
Product Choice
Brand Choice
Dealer Choice

12. Characteristics Affecting Consumer Behavior
This CTR relates to Figure 5-2 on p.135 and previews the material on pp
Culture
Social
Influences on Consumers
Cultural. Culture is the most basic influence on a person's values, priorities, and beliefs. Cultural shifts make marketing opportunities although most such changes are in secondary rather than core cultural values. Subcultures are important markets as these groups are often significantly different in their needs to warrant different marketing approaches.
Social. Social class is determined by a combination of income, occupation, education, wealth and other variables. Social factors within one's class that affect consumer behavior include reference groups & aspirational groups. Families also exert strong social influences. Finally, each relationship a person has with his or her group carries with it certain roles and status that may carry consumptive responsibilities.
Personal. Major personal factors are age and life cycle stage, occupation, economic situation, life style and personality/self-concept. Texts vary in their treatment of the PLC stages but it is clear that singles buy different products than do young marrieds with small children. Occupations differ in time constraints and social pressures to conform that affect consumption decisions. Lifestyles measured by AIO or VALS typologies can reveal different consumption patterns across otherwise dissimilar groups. The unique characteristics of each person that make up their personality also affect behavior.
Psychological. Maslow's hierarchy reminds marketers that need states vary in their intensity or motivation. Perception is the process of organizing stimuli and is influenced by selective exposure, distortion, & retention. Learning occurs in response to the presentation of information linked to relevant drives, cues, responses, and reinforcement only some of which is under the control of the marketer. Beliefs and attitudes, though shaped by cultural and social forces, may vary considerably on the individual level.
Personal
Psychological
Buyer

13. Factors Affecting Consumer Behavior: 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.
Nationalist Consumers
Religious Consumers
Geographic based Consumers
Mature Consumers
Social Class
People within a social class tend to exhibit similar buying behavior.
Occupation
Income
Education
Wealth

14. Factors Affecting Consumer Behavior: Social
Social Factors
This CTR relates to the material on pp
Groups
Membership
Reference
Family
Husband, wife, kids
Influencer,
Social Factors
Group Influence on Brand Choice
Groups vary in their influence on product and brand purchases as illustrated on the CTR. Consumers belong to several different membership groups.
Primary Groups. Primary groups are those with which we have regular but informal interaction. These include family, friends, neighbors, and co-workers.
Secondary Groups. Secondary groups are those with which we have more formal and less regular interaction such as religious groups, professional associations, and trade unions.
Reference Groups. These groups serve as direct (face-to-face) or indirect points of comparison and evaluation in a person’s formation of attitudes or behavior.
Aspirational Groups. This type of group is one to which the individual wishes to belong and emulates in adopting behaviors appropriate to that group.
Opinion Leaders. These are people within a reference group who exert influence over others due to special knowledge, skill, personality, or other characteristic.
Roles and Status

15. Factors Affecting Consumer Behavior: Personal
Personal Influences
Factors Affecting Consumer Behavior: Personal
Factors Affecting Consumer Behavior:
Personal
This CTR corresponds to Table 5-2 on p. 142 and the material on pp
Lifestyle Identification
Age and Family Life Cycle
Stage
Occupation
Economic Situation
Personality & Self-Concept
Personal Factors
Age and Family Life-Cycle Stage. Buyers’ choices are affected by changes in their age and family structure over time. Young singles have different tastes in clothes, furniture, food, and recreation than do middle aged persons with their own children. Older consumers continue to change in their preferences and additionally acquire new buyer needs such as increased health care needs.
Occupation. A person’s occupation carries with it distinct consumptive needs. White collar workers need different clothes than blue collar workers. Also, occupations usually carry their own subcultural norms and values that influence buyer behavior.
Economic Situation. Means constrain buyer behavior for almost everyone except for the most wealthy.
Personality and Self-Concept. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting response to one’s own environment. Self-concept is the basic perception that people have about who they are.
Lifestyle
Lifestyle is a person’s pattern of living as expressed in her or his activities, interests, and opinions. Determining lifestyle involves measuring AIO dimensions -- the Activities, Interests, and Opinions of consumers.
Psychographics. Lifestyle measures combined with demographic information can identify distinct market segments for consumer products and services. The best known of these methods, VALS 2, is addressed on the following CTR.
Opinions
Activities
Interests

16. Factors Affecting Consumer Behavior: Psychological
Motivation
Psychological
Factors
Perception
Beliefs and
Attitudes
Learning

17. Maslow’s Hierarchy of Needs
This CTR relates to the material on p and corresponds to Figure 5-4.
Self
Actualization
(Self-development)
Esteem Needs
(self-esteem, status)
Maslow’s Hierarchy of Needs
Maslow suggests that lower level needs must be satisfied before individuals become motivated to satisfy higher level needs. Thus consumers will respond to lower level products and promotions until those needs are met. Only then can other marketing offers be of interest. Needs include:
Physiological. Physical needs such as hunger, thirst, and bodily functions are the lowest level need and require satisfaction before other needs become important to the individual. Sometimes this helps students understand the difference between needs and wants. A thirsty person may still want an expensive car but if thirsty enough will take a drink of water.
Safety. Safety needs for security and protection are the next level needs in the hierarchy. So long as physiological needs are met, safety needs will take precedence over other needs. Fear appeals for consumer products are often linked to safety needs.
Social. Human beings are social, gregarious animals. We group together in part to fulfill physiological and safety needs but also because we enjoy and need the company of others. Going to malls to "hang out" fulfills social needs.
Esteem. To be recognized as an individual fulfills esteem needs. Self-esteem is the value a person places on himself or herself. As lower level needs become more stable, esteem needs become more important to the individual.
Self-actualization. Beyond esteem needs very successful people may still be driven to improve themselves and "accomplish something." These people are driven to self-actualize their potential.
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)

18. Different types of needs drive behaviour to satisfy those needs in an order of precedence.
Most basic needs fulfilled first.

19. Model of Buyer Behavior
External
(sociological)
Internal
(psychological)
culture
behavior
needs
learning
social class
motives
reference groups
personality
wants
family
awareness
perception
attitude
preference
marketing mix
Buyer Behavior Model

20. Buyer Behavior Attitudes are anchored in behavior.
There are two ways to change attitudes:
…directly through awareness and perception
…indirectly through learning and the feedback loop.
Attitude change is a key goal in marketing

21. Buyer Behavior Motivation weight or importance of a need
- rational motives
economy, efficiency, dependability
Of a Product
- emotional motives
attract opposite gender
care of loved ones
fear of rejection

22. Buyer Behavior Motivation (cont..)
use of emotional motives in marketing is one of the smart ways .

23. Buyer Behavior Awareness enter information search
can come from internal or external Sources
more receptive to marketing information flows

24. Buyer Behavior Perception
process by which one receives, interprets, responds to stimuli
selective perception
cross-sensory perception
subliminal perception

25. Buyer Behavior Sociological Influences Culture
set of learned responses from a society
enculturation versus acculturation

26. Buyer Behavior Sociological Influences (cont..) Social Class
lifestyle divisions of society based on occupation, wealth, power, education
in Iran, largest class is not the lowest

27. Buyer Behavior Sociological Influences (cont...) reference groups
influence attitudes, perceptions, motives
reduce risk
primary versus secondary
formal versus informal
Family versus Friends

28. Think about a specific major purchase you’ve made recently.
What buying process did you follow?
What major factors influenced your decision?

29. Types of Buying Decisions
This CTR corresponds to Figure 5-5 on p. 151 and relates to the material on pp
Types of Buying Decisions
Complex
Buying
Behavior
Variety-
Seeking
Behavior
High
Involvement
Low
Involvement
Types of Buying Decision Behavior
Complex Buying Behavior. Consumers undertake this type of behavior when they are highly involved in a purchase and perceive differences among brands. Involvement increases with the product is expensive, infrequently purchased, risky, and highly self-expressive.
Dissonance-Reducing Buying Behavior. Consumers engage in this behavior when they are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. Without objective differentiation to confirm the purchase, buyers often seek support to reduce postpurchase dissonance -- the feeling they may have made the wrong decision.
Habitual Buying Behavior. This behavior occurs under conditions of low consumer involvement and little significant brand differences. Consumers do not search extensively for information about brands. Brand familiarity aids in promoting products under essentially passive learning conditions.
Variety-Seeking Buying Behavior. Consumers may seek variety when involvement is low and there are significant perceived differences among brands. Differences may be product features -- new taste, improvements, extra ingredients -- or promotional benefits such as coupons, rebates, and price reductions.
Significant
differences
between
brands
Dissonance-
Reducing Buying
Behavior
Habitual
Buying
Behavior
Few
differences
between
brands

30. The Buyer Decision Process
Need Recognition
Information Search
The Buyer Decision Process
The Buyer Decision Making Process
This CTR corresponds to Figure 5-6 on p. 153 and relates to the material on pp
Teaching Tip: Consider asking students to describe some of their purchases decisions made at the beginning of the term and link them to steps in the process.
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
Stages in the Buyer Decision Process
Need Recognition. Problems are recognized when people sense a difference between an actual state and some desired state. Problem recognition can be triggered by either internal or external stimuli.
Information Search. Consumers vary in the amount of information search they conduct. Information search may be a survey of information stored in memory or may be based upon information available externally. Search effort varies from heightened awareness corresponding to increased receptivity for relevant information to active information search modes where the person expends some energy to obtain information that is desired. External information vary in their informational and legitimizing characteristics. Riskier decisions usually elicit more search behavior than non-risky decisions.
Evaluation of Alternatives. Following information search, the person compares decisional alternatives available. Criterion for evaluation compares product attributes of the alternatives against degrees of importance each attribute has in meeting needs, beliefs about the product or brand's ability and utility, and an evaluation procedure that ranks the alternatives by preference that forms an intention to buy.
Purchase Decision. - The individual buys a product. Purchasing other than the intended product may be due to attitudes of others exerted after the evaluation of alternatives is completed or unexpected situational factors such as point of purchases promotions that affect the alternatives' ranking.
Post-purchase Behavior. This involves comparing the expected performance of the product against the perceived performance received. Cognitive dissonance describes the tendency to accentuate benefits and downplay shortcomings.

31. Difference between an actual state and a desired state
The Buyer Decision Process Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state
Internal Stimuli
Hunger
Thirst
A person’s normal
needs
External Stimuli
TV advertising
Magazine ad
Radio slogan
Stimuli in the
environment

32. The Buyer Decision Process Step 2. Information Search
Personal Sources
The Buyer Decision Process Step 2. Information Search
Commercial Sources
Family, friends, neighbors
Most influential source of
information
Public Sources
Advertising, salespeople
Receives most information
from these sources
Experiential Sources
Mass Media
Consumer-rating groups
Handling the product
Examining the product
Using the product

33. The Buyer Decision Process Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand?
Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.

34. The Buyer Decision Process Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand
Unexpected situational factors
Attitudes of others
Purchase Decision

35. Consumer’s Expectations of Product’s Performance Dissatisfied Customer
The Buyer Decision Process
Step 5. Postpurchase Behavior
Consumer’s Expectations of
Product’s Performance
Product’s Perceived
Performance
Satisfied
Customer!
Dissatisfied Customer
Cognitive Dissonance

36. Post purchase Evaluation
Evaluation of product performance.
Cognitive dissonance.
Impacts future purchases.
Impacts word-of-mouth communications.

37. Stages in the Adoption Process
Awareness
Stages in the Adoption Process
Stages in the Adoption Process
This CTR relates to the material on p. 157.
Interest
Evaluation
Stages in the Adoption Process
The new product adoption process parallels the buyer decision process but focuses more on the interaction of consumer needs with product adoption. The new product adoption process may work best to explain how regularly used products requiring re-purchase are considered for inclusion in the consumer's consumptive behavior patterns but may also apply to some durables as well.
Awareness. In this stage the consumer is aware of the new product but lacks further information about it.
Interest. The consumer is motivated to seek information about the new product.
Evaluation. The consumer determines whether or not to try the new product.
Trial. The consumer tries the new product on a small scale to test its efficacy in meeting his or her needs. Trial can be imagined use of the product in some cases.
Adoption. The consumer decides to make use of the product on a regular basis.
Trial
Adoption

38. Adoption of Innovations
This CTR corresponds to Figure 5-7 on p. 157 and relates to the material on pp
Adoption of Innovations
Individual Differences in Innovativeness
Innovators. Innovators include the first 2.5% of buyers who adopt a new product idea. Innovators help get the product exposure but are not often perceived by the majority of potential buyers as typical consumers. Innovators like risk taking and enjoy buying new products. Innovators may purchase at skimming prices.
Discussion Note: You might discuss the ethical implications of skimming. Is it fair? Also, are there cost considerations associated with new product development that make skimming to recover high start up costs more ethical than it may seem?
Early Adopters. Early Adopters comprise about 13.5% of the buyers who adopt new products. This group serves as opinion leaders to the rest of the market and their product usage outcomes serve as motivation to later buyers to get the product.
Early Majority. Early Majority are some 34% of buyers adopting the product. They are deliberate consumers who adopt new ideas before the average person but seldom lead the market.
Late Majority. Late Majority comprise another 34% of buyers adopting the product. This group is skeptical of new products and only buys after the majority of the market has tried it.
Laggards. Laggards are the final 16% of adopters and are tradition-bound. They are suspicious of change and only adopt innovation that have already become something of a tradition.
Early Majority
Late Majority
Percentage of Adopters
Early
Adopters
Innovators
Laggards
34%
34%
13.5%
16%
2.5%
Time of Adoption
Early
Late

39. Influences on the Rate of Adoption of New Products
This CTR relates to the material on pp
Teaching Tip: The adoption of innovations may be initially confusing to students but they will usually become involved in discussion when new products of importance to them are used as examples.
Communicability
Can results be easily observed or described
to others?
Relative Advantage
Is the innovation superior to existing products?
Product Characteristics Influences
Relative Advantage. This refers to the degree to which the innovation appears superior to existing products. The greater the perceived relative advantage, the sooner the innovation will be adopted.
Compatibility. This refers to the degree to which the innovation fits the values and experiences of the potential consumers. Increased compatibility will accelerate adoption of the innovation.
Complexity. This refers to the degree to which the innovation is difficult to understand or use. Greater complexity will slow the rate of adoption of the innovation.
Divisibility. This refers to the degree to which the innovation can be tried on a limited basis. Greater divisibility will help increase the rate of adoption of the innovation.
Communicability. This refers to the degree to which the results of using the innovation can be observed or described to others. Greater communicability will increase the rate of adoption of innovation.
Product
Characteristics
Compatibility
Does the innovation
fit the values and
experience of the
target market?
Try ability
Can the innovation
be used on a
trial basis?
Complexity
Is the innovation
difficult to
understand or use?

40. Conclusion
To Have a successful Sales and Marketing it is necessary to have a clear idea of your Target Market .
With a very aggressive market researching find out how consumers in your target market may react and decide about buying a new product or service .
Try to influence very intelligently in to different steps of decision making of consumers in your Target Market .

41. Acknowledgments Dr. Ehteshami for her valuable advices.
Mr. Azadi and other colleagues of IMI for their great supports.
References
Kotler Philip, a frame work for Marketing Management ,2003
Birn Robin J ,The effective Use of Market research,2004
D. Michman Ronald & M. Mazze Edward , Lifestyle Marketing ,2003
Jobber David, Priciples and practice of Marketing,2004
Webmarketingrecources.org