Marketing Management

Part : 03
Connecting Chapter-06
with
Customers

Analyzing Consumer Markets

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Management 1
MARKETING MANAGEMENT
12th edition

6
Analyzing
Consumer Markets

Marketing
Management 2
Kotler Keller
 Chapter Questions

 How do consumer characteristics influence buying behavior?

 What major psychological processes influence consumer

responses to the marketing program?

 How do consumers make purchasing decisions?

 How do marketers analyze consumer decision making?

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 Consumer Market and Consumer Behavior

 Consumer Market : They include companies selling goods and

services to end customers for their personal or family
consumption.

 Consumer Behaviour : It is defined as the behaviour that

consumers display in searching for, purchasing, using,
evaluating, and disposing of products and services that they
expect will satisfy their needs.

 Consumer Behaviour focuses on how individuals make

decisions to spend their available resources (time, money,
effort) on consumption-related items.

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 What influences Consumer Behavior?

 A consumer‟s buying behaviour is influenced by cultural,

social, and personal factors.

a. Cultural Factors
b. Social Factors
c. Personal Factors

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 What Influences Consumer Behavior?

Cultural Factors

Social Factors

Personal Factors

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 Emerging Trends in Consumer Behavior

Metrosexual –
Straight urban man
who enjoys shopping
and using grooming
products

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 What influences Consumer Behavior?
a) Cultural Factors
 Cultural factors exert the broadest and deepest influence.
 Culture : Acquiring a set of values, perceptions, preferences
and behaviours through family and other key institutions.
 Subculture : Nationalities, Religions, Racial Groups,
Geographical Regions.
 Multicultural Marketing : Differentiating marketing strategies
with respect to different ethnic and demographic niches.
 Social Classes : Virtually all human societies exhibit social
stratification. More frequently it takes the form of Social Classes
which are hierarchically ordered and whose members share
similar values, interests and behaviour. The Social Class levels
are : Lower Lowers, Upper Lowers, Working Class, Middle Class,
Upper Middles, Lower Uppers, Upper Uppers.

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 What influences Consumer Behavior?
a) Cultural Factors

Upper Uppers
Lower Uppers
Upper Middles Social
Classes
Middle Class
Working Class
Upper Lowers
Lower Lowers
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 What influences Consumer Behavior?
b) Social Factors

Reference
Family
Groups

Social
Statuses
Roles

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 What influences Consumer Behavior?
b) Social Factors
1-Reference Groups
 In addition to cultural factors, a consumer‟s behaviour is
influenced by such social factors as Reference Groups, Family,
Social Roles and Statuses.
 Reference Groups (A person‟s reference groups consist of all
the groups that have a direct (face-to-face) or indirect
influence on his/her attitudes or behaviour. Groups having a
direct influence on a person are called “Membership Groups”.
Some membership groups are “Primary Groups” such as
family, friends, neighbours and co-workers with whom the
person interacts fairly continuously and informally. People
also belong to “Secondary Groups”, such as religious,
professional and trade-union groups which tend to be more
formal and require less continuous interaction.
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 What influences Consumer Behavior?
b) Social Factors
1-Reference Groups
 People are also influenced by groups to which they do not
belong.
 Aspirational Groups (are those a person hopes to join)
 Dissociative Groups (are those whose values or behaviour an
individual rejects)
 Manufacturers of products and brands where group influence
is strong must determine how to reach and influence Opinion
Leaders in these reference groups.
 Opinion Leader (Person in informal, product-related
communications who offers advice or information about a
specific product or product category, such as which of several
brands is the best or how a particular product may be used)

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 What influences Consumer Behavior?
b) Social Factors
1-Reference Groups
Membership groups

Primary groups

Secondary groups

Aspirational groups

Dissociative groups
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 What influences Consumer Behavior?
b) Social Factors
2-Family
 The Family is the most important consumer buying organization
in society and family members constitute the most influential
primary reference group.
 We can distinguish two families in the buyer‟s life.
i. Family of Orientation (consists of parents and siblings)
ii. Family of Procreation (consists of one‟s spouse and children)
 Marketers are interested in the roles and relative influence of
family members in the purchase of a large variety of products
and services.

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 What influences Consumer Behavior?
b) Social Factors
2-Family

Marketers are interested in the roles and relative influence

of family members in the purchase of a large variety of
products and services.
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 What influences Consumer Behavior?
b) Social Factors
2-Family
 The wife has actually acted as the family‟s main purchasing
agent, especially for foods, sundries and staple-clothing items,
however the traditional purchasing roles are changing and the
marketers would be wise to see both men and women as
possible targets.

 Another shift in buying patterns is an increase in the amount of

dollars spent and the direct and indirect influence wielded by
children and teens.

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 What influences Consumer Behavior?
b) Social Factors
3-Roles and Statuses
 The person‟s position in each group can be defined in terms
of roles and status.
 A Role consists of the activities a person is expected to
perform.
 Each role carries a Status. A senior vice president of
marketing has more status than a sales manager, and sales
manager has more status than an office clerk.
 People choose products that reflect and communicate their
role and actual or desired status in society.

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 What influences Consumer Behavior?
b) Social Factors
3-Roles and Statuses

What degree of status is

associated with various
occupational roles?

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 What influences Consumer Behavior?
c) Personal Factors
 A buyer‟s decisions are also influenced by personal
characteristics. These include the followings.

i. Age and Stage in the Life Cycle

ii. Occupation and Economic Circumstances
iii. Personality and Self-Concept
iv. Lifestyle and Values

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 Behavior changes
according to life
cycle stage

•Family
•Psychological
•Critical life events

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 What influences Consumer Behavior?
c) Personal Factors
i. Age and Stage in the Life Cycle (Age, Family Life Cycle,
Psychological Life Cycle, Critical Life Events or Transitions)
ii. Occupation and Economic Circumstances (Occupation also
influences consumption patterns. Product choice is greatly
affected by economic circumstances)
iii. Personality and Self-Concept (Each person has personality
characteristics that influence his/her buying behaviour.
Personality is a set of distinguishing human psychological
traits that lead to relatively consistent responses to
environmental stimuli. Brands also have personalities and
consumers are likely to choose brands whose personalities
match their own. Brand Personality is the specific mix of
human traits that may be attributed to a particular brand. e.g.
sincerity, excitement, competence, sophistication,
ruggedness.

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 What influences Consumer Behavior?
c) Personal Factors
Brand Personality

Sincerity

Excitement

Competence

Sophistication
MTV personality is identified
as an ‘Excitement’. Ruggedness
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 What influences Consumer Behavior?
c) Personal Factors
 Consumers often choose and use brands that have a brand
personality consistent with their own actual self-concept (how
one views oneself) or with their ideal self-concept (how one
would like to view oneself) or with others‟ self-concept (how
one thinks others see one) .
IV. Life-Style and Values (People from the same sub-culture,
social-class and occupation may lead quite different lifestyles.
“A Lifestyle is a person‟s pattern of living in the world as
expressed in activities, interests and opinions”.
 Lifestyles are shaped partly by whether consumers are money-
constrained or time-constrained. The consumers who
experience time famine are prone to Multi-tasking.
 Consumer decisions are also influenced by core values.
Marketers who target consumers on the basis of their values
believe that by appealing to people‟s inner selves, it is possible
to influence their outer selves-their purchase behaviour.
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 Key Psychological Processes

Motivation Perception

Learning Memory

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 Key Psychological Processes
 The marketer‟s task is to understand what happens in the
consumer‟s consciousness between the arrival of the outside
marketing stimuli and the ultimate purchase decisions.

 Four key psychological processes-Motivation, Perception,

Learning and Memory-fundamentally influence consumer
responses to the various marketing stimuli.

 Motive is a need that is sufficiently pressing to drive the

person to act.

 Three of the best-known theories of human motivation are of

Sigmund Freud, Abraham Maslow and Frederick Herzberg.

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 Key Psychological Processes
1- Motivation
a) Freud‟s Theory
 Freud‟s Theory : Sigmund Freud assumed that the
psychological forces shaping people‟s behaviour are largely
unconscious and that a person cannot fully understand his or
her own motivations.

 It means when a person examines specific brands, he or she

will react not only to their stated capabilities, but also to
other, less conscious cues; shape, size, weight, material,
colour and brand name cal all trigger certain associations and
emotions.

 Today motivational researchers continue the tradition of

Freudian interpretation.

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 Key Psychological Processes
1- Motivation
b) Maslow‟s Theory
 Maslow‟s Theory : Abraham Maslow sought to explain why
people are driven by particular needs at particular times.
Maslow‟s answer is that human needs are arranged in a
hierarchy, from the most pressing to the least pressing; they
are
i. Physiological Needs (food, water, shelter)
ii. Safety Needs (security, protection)
iii. Social Needs (sense of belonging, love)
iv. Esteem Needs (self-esteem, recognition, status)
v. Self-Actualization Needs (self-development)
 People will try to satisfy their most important needs first,
after its fulfilment, he/she will try to satisfy the next-most-
important need and so on.

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 Key Psychological Processes
1- Motivation
b) Maslow‟s Hierarchy of Needs

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 Key Psychological Processes
1-Motivation
c) Herzberg‟s Theory
 Herzberg‟s Theory : Frederick Herzberg developed a two-
factor theory that distinguishes “dissatisfiers” (factors that
cause dissatisfaction, also called Hygiene Factors) and
“satisfiers” (factors that cause satisfaction, also called
Motivator Factors).

 The absence of dissatisfiers is not enough; satisfiers must be

present to motivate a purchase.

 Herzberg‟s theory has two implications; first sellers should do

their best to avoid dissatisfiers; second the seller should
identify the major satisfiers or motivators of purchase in the
market and then supply them.

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 Key Psychological Processes
1-Motivation
c) Herzberg‟s Theory

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 Key Psychological Processes
2- Perception
 How the motivated person actually acts is influenced by his or
her perception of the situation.

 Perception is the process by which an individual selects,

organizes and interprets information inputs to create a
meaningful picture of the world.

 In marketing, perceptions are more important than the reality

as it is perception that will affect consumer‟s actual
behaviour.

 People can emerge with different perceptions of the same

object because of three perceptual processes : Selective
Attention, Selective Distortion, Selective Retention.

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 Key Psychological Processes
2- Perception
a) Selective Attention
 An average person is exposed lots of ads and brand
communications a day; he/she obviously cannot attend to all
of these and most stimuli will be screened out-this process is
called Selective Attention.
 For marketer, Selection Attention means that they will have
to work hard to attract consumers‟ notice.
According to some findings,
 The people are more likely to notice stimuli that relate to a
current need.
 The people are more likely to notice stimuli that they
anticipate.
 The people are more likely to notice stimuli whose deviations
are large in relation to the normal size of the stimuli.

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 Key Psychological Processes
2- Perception
b) Selective Distortion
 Selective Distortion is the tendency to interpret information
in a way that will fit our perceptions.

 Consumers will often distort information to be consistent

with prior brand and product beliefs; for example in case of
„blind taste tests‟ conducted by Pepsi and Coca Cola.

 Selective Distortion can work to the advantage of markets

with strong brands when consumers distort neutral or
ambiguous brand information to make it more positive.

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 Key Psychological Processes
2- Perception
c) Selective Retention
 Because of Selective Retention, people are likely to
remember good points about a product/service they like and
forget good points about competing products.

 Selective Retention again works to the advantage of strong

brands.

 It also explains why marketers need to use repetition in

sending messages to their target market to make sure their
message is not overlooked.

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 Key Psychological Processes
2- Perception
c) Selective Retention-Subliminal Perception
 A topic that has fascinated marketers for ages is Subliminal
Perception.

 The argument is that marketers embed covert, subliminal

messages in ads or packages. Consumers are not consciously
aware of these messages, but yet they affect their behaviour.

 Although it is clear that many subtle subconscious effects can

exist with consumer processing, however no evidence
supports the notion that marketers can systematically control
consumers at that level.

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 Key Psychological Processes
3- Learning
 Learning involves changes in an individual‟s behaviour arising
from experience.

 Most human behaviour is learned. Learning theorists believe

that learning is produced through the interplay of drives,
stimuli, cues, responses and reinforcement.

 Drive is a strong internal stimulus impelling action. Cues are

minor stimuli that determine when, where and how a person
responds.

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 Key Psychological Processes
3- Learning
 For example, you buy a Dell computer, if your experience is
rewarding, your response to computers and Dell will be
positively reinforced. Later on, when you want to buy a
printer, you would prefer Dell as you generalize your
response to similar stimuli.

 Learning theory teaches marketers that they can build

demand for a product by associating it with strong drives,
using motivating cues and providing positive reinforcement.

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 Key Psychological Processes
4- Memory

 All the information and experiences individuals encounter as

they go through life can end-up in their long-term memory.

 Cognitive psychologists distinguish between Short-Term

Memory (STM) which is a temporary repository of
information-and Long-Term Memory (LTM) which is a more
permanent repository.

 Marketing can be seen as making sure that consumers have

the right types of product and service experiences such as
the right brand knowledge structures are created and
maintained in memory.

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 Consumer Buying Process
Problem Recognition

Information Search

Evaluation

Purchase Decision

Postpurchase
Behavior
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 The Buying Decision Process
 Marketing scholars have developed a “stage model” of the
buying decision process. The consumer passes through 5
stages.
1. Problem Recognition
2. Information Search (Two Levels : Heightened Attention,
Active Information Search) (Information Sources are
Personal, Commercial, Public, Experiential)
3. Evaluation of Alternatives (Beliefs and Attitudes) (See Next
Slide)
4. Purchase Decision (In executing a purchase decision, the
consumer may make up to 5 sub-decisions : Brand, Dealer,
Quantity, Timing and Payment Method)
5. Post-purchase Behaviour (Postpurchase Satisfaction,
Postpurchase Action, Postpurchase Use and Disposal)
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 The Buying Decision Process
 Note : Consumers do not always pass through all 5 stages in
buying a product and they may skip or reverse some stages.

 Example : A woman buying her regular brand of toothpaste

goes directly from the need for toothpaste to the purchase
decision, skipping information search and evaluation.

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 The Buying Decision Process
Step-2 : Evaluation of Alternatives
Beliefs and Attitudes
 Evaluations often reflect beliefs and attitudes. Through
experience and learning, people acquire beliefs and attitudes
which in turn influence buying behaviour.
 Belief : A belief is a descriptive thought a person holds
about something. People‟s beliefs about the attributes and
benefits of a product or brand influence their buying
decisions.
 Attitude : An attitude is a person‟s consistent favourable or
unfavourable evaluation, emotional feeling and action
tendencies towards some object. Attitudes put people into a
frame of mind : liking or disliking an object, moving towards
or away from it. They can be very difficult to change.

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 Types of Consumer Buying Decision Behavior
 Consumer Buying Behaviour differs greatly for a tube of
toothpaste, a tennis racket, financial services, and a new car.
More complex decisions usually involve more buying
participants and more buyer deliberation.

 Following are the types of Consumer Buying Behaviour based

on the degree of buyer involvement and the degree of
differences among brands.

a. Complex Buying Behaviour

b. Dissonance-Reducing Buying Behaviour
c. Habitual Buying Behaviour
d. Variety Seeking Buying Behaviour

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 Types of Consumer Buying Decision Behavior

High Low
Involvement Involvement

Complex Variety-
Significant Differences Buying Behavior Seeking
Between Brands Buying Behavior

Dissonance- Habitual
Few Differences Reducing Buying Behavior
Between Brands Buying Behavior

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 Types of Consumer Buying Decision Behavior

a. Complex Buying Behaviour : Consumers undertake this

behaviour when they are highly involved in a purchase and
perceive significant differences among brands. Like while
purchasing a personal computer.

b. Dissonance-Reducing Buying Behaviour : Consumers undertake

this behaviour when they are highly involved in a purchase, but
see little difference among brands. Like while purchasing a
carpet.

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 Types of Consumer Buying Decision Behavior

c. Habitual Buying Behaviour : It occurs under conditions of low

consumer involvement and little significant brand difference.
Like the purchase of salt.

d. Variety Seeking Buying Behaviour : It occurs under conditions

of low consumer involvement, but significant perceived brand
differences. Like the purchase of cookies.

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 Activity

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