1. Ashesi University COURSE TITLE : MARKETING SEMESTER : FIRST, 2011/2012
MODULE 3: Understanding Customers: Buying Behaviour
Lecturer: Ebow Spio

2. Marketing Management Framework
Opportunities
Impediments
& Solutions
Product
Price
Place
Promotion
Physical Ev.
Process
People
Execute
Target Segment
Corporate/Business Objectives
Marketing Objectives
Sources of Volume/ Business
Positioning
Evaluate

3. Learning Objectives After studying module , you should be able to:
Define the consumer market and construct a simple model of consumer buyer behavior
Name the four major factors that influence consumer buyer behavior
List and understand the major types of buying decision behavior and the stages in the buyer decision process
Describe the adoption and diffusion process for new products
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4. Model of Consumer Behavior
Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption
Consumer market refers to all of the personal consumption of final consumers
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5. What is Consumer Behavior?
The study of the processes involved when:
individuals or groups
select, purchase, use, or dispose of
products, services, ideas, or experiences
to satisfy needs and desires
©2011 Dr. Michael Solomon

6. Model of Consumer Behavior
Marketing and other Stimuli
Buyer’s Black
Box
Buyer Response
Marketing
Product
Price
Place
Promotion
Other
Economic
Technological
Political
Cultural
Buyer Characteristics
Buyer Decision Process
Product Choice
Brand Choice
Dealer Choice
Purchase Timing
Purchase Amount

7. Characteristics Affecting Consumer Behavior
Cultural Factors
Buyer’s culture
Buyer’s subculture
Buyer’s social class
Social Factors
Reference groups
Family
Roles and status
Personal Factors
Age and life-cycle stage
Occupation
Economic situation
Lifestyle
Personality and self-concept
Psychological Factors
Motivation
Perception
Learning
Beliefs and attitudes
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8. Consumer Decision Making
Perception
Motivation
Self-Concept
Lifestyle
Buying
Groups & Subcultures
Culture
©2011 Dr. Michael Solomon

9. Characteristics Affecting Consumer Behavior : Cultural
Culture is the learned values, perceptions, wants, and behavior from family and other important institutions
Subculture are groups of people within a culture with shared value systems based on common life experiences and situations e.g. Fanti, Ashanti,
Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors
Social class is measured by a combination of occupation, income, education, wealth, and other variables e.g. Upper Class, Middle Class, Working Class, Lower Class in the US.
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10. Characteristics Affecting Consumer Behavior : Social Factors
Membership groups have a direct influence and to which a person belongs
Aspirational groups are groups to which an individual wishes to belong
Reference groups are groups that form a comparison or reference in forming attitudes or behavior
Opinion leaders are people within a reference group with special skills, knowledge, personality, or other characteristics that can
exert social influence on others
Buzz marketing enlists opinion leaders to spread the word
Social networking is a new form of buzz marketing
MySpace.com
Facebook.com
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11. Characteristics Affecting Consumer Behavior : Social Factors
Family is the most important consumer-buying organization in
society e.g. cooking ingredients
Social roles and status are the groups, family, clubs, and organizations to which a person belongs that can define role and social status
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12. Characteristics Affecting Consumer : Personal Factors
Personal characteristics
Age and life-cycle stage
Occupation
Economic situation
Lifestyle
Personality and self-concept
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13. Characteristics Affecting Consumer Behavior : Personal Factors
Age and life-cycle stage
RBC Royal Bank stages:
Youth—younger than 18
Getting started—18-35
Builders—35-50
Accumulators—50-60
Preservers—over 60
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14. Characteristics Affecting Consumer Behavior : Personal Factors
Occupation affects the goods and services bought by
Consumers
Economic situation includes trends in:
Personal income
Savings
Interest rates
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15. Characteristics Affecting Consumer Behavior : Personal Factors
Personality
Inner characteristics or properties of each individual. Those
characteristics which differentiate each of us and lead to relative
consistent and lasting response to one’s own environment e.g. self-
confidence, dominance, sociability, autonomy, aggression etc
Lifestyle analysis is the analysis of a person’s day to day pattern of
living as expressed in that persons activities, interests and opinions.
Aspirers : Status and Self Esteem. Materialism. Goods as symbols of achievement i.e. benz, Rolex, designer clothes
Succeeders: Need to be successful and be in control. Products that have proven quality. Will read papers like Financial Times
Mainstreamers: Security and belonging. Established products and manufacturers brands due to perceived low risk
Reformers: Seek self fulfillment rather than status. Own brands and natural products

16. Characteristics Affecting Consumer Behavior : Personal Factors
Brand personality refers to the specific mix of human traits that may be attributed to a particular brand
Sincerity
Excitement
Competence
Sophistication
Ruggedness
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17. Characteristics Affecting Consumer Behavior : Psychological Factors
Motivation
Perception
Learning
Beliefs and attitudes
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18. Characteristics Affecting Consumer Behavior : Psychological Factors
Motivation
A motive is a need that is sufficiently pressing to direct the person to seek satisfaction
Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations
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19. ©2011 Dr. Michael Solomon

20. Characteristics Affecting Consumer Behavior : Psychological Factors : Maslow’s Hierarchy of Needs
People are driven by particular needs at particular times
Human needs are arranged in a hierarchy from most pressing to least pressing
Physiological
Safety
Social
Esteem
Self-actualization
©2011 Dr. Michael Solomon

21. Satisfying Customer Needs: Hierarchy of Needs
Self-actualization needs
Esteem Needs
Self Esteem, Recognition Status
Social Needs
Love, status, friendship, acceptance
Safety Needs
Physical well being, protection
Physiological Needs (biological)
Need for : food, drink, rest
NB: A drive is a strong stimulus that encourages action to reduce a need.

22. Characteristics Affecting Consumer Behavior : Psychological Factors
Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes
Selective attention is the tendency for people to screen out most of the information to which they are exposed
Selective distortion is the tendency for people to interpret information in a way that will support what they already believe
Selective retention is the tendency to remember good points made about a brand they favor and to forget good points about competing brands
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23. Sensation and Perception
The immediate response of our sensory receptors (eyes, ears, nose, mouth, fingers) to basic stimuli such as light, color, sound, odors, and textures
Perception:
The process by which sensations are selected, organized, and interpreted
The Study of Perception:
Focuses on what we add to raw sensations to give them meaning
©2011 Dr. Michael Solomon

24. Consuming Design
©2011 Dr. Michael Solomon

25. Characteristics Affecting Consumer Behavior : Psychological Factors
Learning is the changes in an individual’s behavior arising from experience and occurs through interplay of:
Drives
Stimuli
Cues
Responses
Reinforcement
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26. Characteristics Affecting Consumer Behavior : Psychological Factors
The Learning Process
Drive
A strong stimulus that encourages action
Cues
Products, signs, ads & other stimuli
Reinforcement
Response
An effort to satisfy a drive
NB: Reinforcement of the learning process occurs when the response is
followed by satisfaction. There is a need to develop products that live up to the
promises of a firms advertising.

27. Characteristics Affecting Consumer Behavior : Psychological
Attitudes describe a or idea e.g. product, firm, ad etc. It involves liking or disliking it.
Belief is a descriptive thought that a person has about something based on:
Knowledge
Opinion
Faith
Beliefs about a product may have a positive or negative effect in
shaping consumers attitude
Attitude and Belief combine to form an expectation: an outcome or event that a person anticipates or looks forward to.
NB: Consumers may evaluate a product not just on how well it performs, but on how it performs relative to their expectations.

28. The Buyer Decision Process
Five stages in the buyer decision process
Need recognition
Information search
Evaluation of alternatives
Purchase decision
Post-purchase behavior
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29. The Buyer Decision-Making Process
Problem Recognition
Information Search
Evaluation of Alternatives
Product Choice
Outcomes
Problem Recognition : What do I need to satisfy
Information Search : How product meets needs
Evaluation of Alternatives : Ranking products based on evaluation criteria
Purchase Decision: Making a choice
Outcomes : Satisfied or not etc.
©2011 Dr. Michael Solomon

30. The Buyer Decision Process
Need Recognition
Need recognition occurs when the buyer recognizes a problem or need triggered by:
Internal stimuli
External stimuli
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31. The Buyer Decision Process
Information Search
Information search is the amount of information needed in the buying process and depends on the strength of the drive, the amount of information you start with, the ease of obtaining the information, the value placed on the additional information, and the satisfaction from searching
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32. The Buyer Decision Process
Information Search
Sources of information:
Personal sources—family and friends
Commercial sources—advertising, Internet
Public sources—mass media, consumer organizations
Experiential sources—handling, examining, using the product
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33. The Buyer Decision Process
Evaluation of Alternatives
Evaluation of alternatives is how the consumer processes information to arrive at brand choices
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34. The Buyer Decision Process
Purchase Decision
The purchase decision is the act by the consumer to buy the most preferred brand
The purchase decision can be affected by:
Attitudes of others
Unexpected situational factors
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35. The Buyer Decision Process
Post-Purchase Decision
The post-purchase decision is the satisfaction or dissatisfaction the consumer feels about the purchase
Relationship between:
Consumer’s expectations
Product’s perceived performance
The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction
Cognitive dissonance is the discomfort caused by a post-purchase conflict
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36. The Buyer Decision Process for New Products
New product is a good, service, or idea that is perceived by some potential customers as new
Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use
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37. New Concepts: Process of Adoption
Awareness
Interest
Evaluation
Trial
Decision
Adoption
NB: Post Purchase dissonance: Tension caused by uncertainty about the rightness of
a decision.

38. The Buyer Decision Process for New Products
Stages in the Adoption Process
Awareness is when the consumer becomes aware of the new product but lacks information
Interest is when the consumer seeks information about the new product
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39. The Buyer Decision Process for New Products
Stages in the Adoption Process
Evaluation is when the consumer considers whether trying the new product makes sense
Trial is when the consumer tries the new product to improve his or her estimate of value
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40. The Buyer Decision Process for New Products
Stages in the Adoption Process
Adoption is when the consumer decides to make full and regular use of the product
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41. The Buyer Decision Process for New Products
Individual Differences in Innovation
Innovators are venturesome- they try new ideas at some risk.
Early adopters are opinion leaders and adopt new ideas early but cautiously
Early majority are deliberate and adopt new ideas before the average person
Late majority are skeptical and adopt new ideas only after the majority of people have tried it
Laggards are suspicious of changes and adopt new ideas only when they become tradition
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42. The Buyer Decision Process for New Products
Influence of Product Characteristics
on Rate of Adoption
Relative advantage is the degree to which an innovation appears to be superior to existing products
Compatibility is the degree to which an innovation fits the values and experiences of potential consumers
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43. The Buyer Decision Process for New Products
Influence of Product Characteristics
on Rate of Adoption
Complexity is the degree to which the innovation is difficult to understand or use
Divisibility is the degree to which the innovation may be tried on a limited basis
Communicability : The degree to which the results of using the innovation can be observed or described to others
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44. Types of Buying Decision Behavior
Perceived Risk
Performance risk
Financial risk
Physical risk
Social risk
Ego risk

45. Types of Buying Decision Behavior
Complex buying behavior
Dissonance-reducing buying behavior
Habitual buying behavior
Variety-seeking buying behavior
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46. Types of Buying Decision Behavior
Complex Buying Behavior
When consumers are highly motivated in a purchase and perceive significant differences among brands
Purchasers are highly motivated when:
Product is expensive
Product is risky
Product is purchased infrequently
Product is highly self-expressive
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47. Types of Buying Decision Behavior
Low involvement
Frequently purchased
Inexpensive
Little risk
Little information needed
Low Involvement High Involvement
High involvement
Infrequently purchased
Expensive
High risk
Much information desired
Routinized Response
Behaviour
Limited Problem
Solving
Extended Problem
Solving

48. Types of Consumer Decisions
Continuum of Decision Making
©2011 Dr. Michael Solomon

49. Types of Buying Decision Behavior
Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands
Post-purchase dissonance occurs when the consumer notices certain disadvantages of the product purchased or hears favorable things about a product not purchased
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50. Types of Buying Decision Behavior
Habitual buying behavior occurs when consumers have low involvement and there is little significant brand difference
Variety-seeking buying behavior occurs when consumers have low involvement and there are significant brand differences
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51. Consumer Behavior Across International Borders
Differences can include:
Values
Attitudes
Behaviors
The question for marketers is whether to adapt or standardize the marketing
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52. Emerging Trends in Consumer Behavior
©2011 Dr. Michael Solomon

53. Abandon Old Boundaries!
Globalization = Dissolution of geographic boundaries
Digitalization = Dissolution of sensory boundaries
Interactivity = Dissolution of traditional marketer/customer boundaries
©2011 Dr. Michael Solomon

54. 1. Dissolution of geographic boundaries
Global Consumer Culture: People around the world are united by their common devotion to brand-name consumer goods, movie stars, celebrities, and leisure activities.
©2011 Dr. Michael Solomon

55. TRADITIONAL COMMUNICATIONS MODEL: ONE-WAY STREET
Consumer
Consumer
Company
Message
Medium
Consumer
Consumer
Buy
©2011 Dr. Michael Solomon

56. The consumer as “couch potato”
©2011 Dr. Michael Solomon

57. QUIZ
Explain what is meant by hierarchy of needs and provide examples of one or more products that enable you to satisfy each of the four levels of need
Briefly describe your own beliefs about the potential value of wearing an automobile seat belts, your attitude toward seat belts and your intention about using a seat belt the next time you’re in a car
Give an example of a recent purchase experience in which you were dissatisfied because a firm’s marketing mix did not meet your expectations. Indicate how the purchase fell short of your expectations-and also explain whether your expectations were formed based on the firm’s promotion or something else.

58. Class Presentation Take Ashesi University as an example of business
customer for books and other educational materials.
Imagine that you are representative of a publisher who
intends to sell to Ashesi University.
How will you use your understanding of business buyer
behaviour to help develop a strategy to market effectively
to Ashesi University?
List potential members of the buying centre and identify
their role? How will you deal with the different members of
the buying centre?