CHAPTER 5

Final
Consumers and
their Buying
Behavior
By: Team 5
Why Do They Buy
What They Buy?
We need to know our costumers,
without that it would be difficult
to focus in the right target
market and to develop and adapt
the correct market mix
Consumer behavior
is a challenge

Specific behaviors vary

a great deal for different
people, products, and
purchase situations
 There are general
behavioral principles—
frameworks—that
marketing managers
can apply to better
understand their
specific target markets
5.1 Economic Needs Affect
Most Buying Decisions
Economic buyers seek the best uses
of time and money
Economic buyers are people who know all the
facts and logically compare choices to get the
greatest satisfaction from spending their time
and money. The economic-buyer theory says
that consumers decide what to buy based on
economic needs, which are concerned with
making the best use of a consumer's time and
money as the consumer judges it.
Economic needs and examples

Economy of purchase or use (buying a less

expensive store brand of frozen pizza).

Efficiency in operation or use (a Dyson

vacuum cleaner's power makes for faster
cleanup).

Dependability in use (Toyotas have lower

repair costs over the years).

Improvement of earnings (Ally Bank offers a

better interest rate).

Convenience (a drive-through lane at a

Starbucks makes it convenient to pick up
coffee on the way to work in the morning).
 Income affects need
The ability to satisfy economic needs largely depends on
how much money a consumer has available which in turn
depends a great deal on household income.

In most households, people don't have enough income to

buy everything they want. For many products, these people
can't be customers even if they want to be. A family's
purchase of "luxuries" comes from discretionary income-
what is left of income after paying taxes and paying for
necessities.

Discretionary income is an elusive concept because the

definition of necessities varies from family to family and over
time. It depends on what they think is necessary for their
lifestyle. High-speed Internet service purchased out of
discretionary income by a lower-income family may be
considered a necessity by a higher-income family.
Consumer confidence affects
spending
Economic conditions affect
consumer confidence and
spending. In a strong economy,
consumers feel confident and
secure in their jobs.On the other
hand, when consumers worry
about job prospects or their
retirement savings decline, they
are more cautious spenders.
5.2 Psychological Influences
within an Individual
Needs motivate consumers
Everybody is motivated by needs and wants. Needs are the basic forces
that motivate a person to do something.

When a need is not satisfied, it may lead to a drive. A drive is a strong

stimulus that encourages action to reduce a need. Drives are internal-
they are the reasons behind certain behavior patterns. In marketing, a
product purchase results from a drive to satisfy some need.

Some critics imply that marketers can somehow manipulate consumers

to buy products against their will. But trying to get consumers to act
against their will is a waste of time. Instead, a good marketing manager
studies what consumer drives, needs, and wants already exist and how
they can be satisfied better.
 Consumers seek benefits to meet needs
We're all a bundle of needs and wants. The image lists some important needs that might
motivate a person to some action. This list, of course, is not complete. But thinking about
such needs can help you see what benefits consumers might seek from a marketing mix.
When a marketing manager defines a product-market, the needs may be quite specific.
Marketing managers appeal to customer needs

Consumer psychologists often argue that a

person may have several reasons for buying
sometimes at the same time. Maslow is well
known for his five-level hierarchy of needs.
The image illustrates the four levels along
with an example showing how a company
has tried to appeal to each need.
 Perception determines what
Consumer psychologists
consumers see and feel
often argue that a person
1. Selective exposure our eyes and minds seek out and
may have several reasons for notice only information that interests us. This often relates to
buying sometimes at the current needs.

same time. Maslow is well

2. Selective perception--we screen out or modify ideas,
known for his five-level
messages, and information that conflict with previously learned
hierarchy of needs. The attitudes and beliefs.
image illustrates the four
levels along with an example 3. Selective retention--we remember only what we want to
showing how a company has remember. Even when we notice stimuli in the market, we may
not place it in memory if we don't believe it or don't feel that
tried to appeal to each need.
information will be useful to us.
Learning determines what response is likely

Learning is a process that changes a person's

responses based on prior experiences, whether
they are direct or indirect. In the context of
consumers, most behaviors are learned and can
be influenced by marketing actions or external
stimuli.

The learning process involves identifying

impulses and signals in the environment that lead
to specific responses. Learning consolidation
occurs when these responses result in the
satisfaction of the impulse, strengthening the
relationship between the signals and responses.
This repeated process can lead to the
development of habits and make decision-making
more routine.
 Sales take off after Febreze
learns a lesson
Febreze's marketing managers initially struggled
with poor sales despite a strong advertising
campaign. They realized two key issues: some
people were desensitized to odors and didn't
perceive a need for Febreze, and Febreze's odor
elimination alone didn't provide positive
reinforcement.
To address this, they identified a new market
segment – people who desired a clean home. They
added fragrances to Febreze and redesigned their
advertising to show homemakers using Febreze as
a reward for completing their cleaning tasks. This
change resulted in a significant increase in sales,
with Febreze now generating over a billion dollars
in annual revenue. The lesson learned was the
importance of understanding consumer needs and
providing positive reinforcement to drive product
adoption.
Attitudes relate to buying
An attitude is a person’s point of view toward something.
The “something” may be a product, an advertisement, a
salesperson, a firm, or an idea. Attitudes are an important
topic because they affect the selective processes,
learning, and the buying decisions.

Ethics question: Do consumers

learn needs from marketing?
Some critics argue that marketing can influence people to spend
money on desires unrelated to basic needs. While consumer needs
are internal, advertising can make consumers aware of these needs
and suggest how to satisfy them. For example, advertising can help
someone recognize that they have thirst as a basic need and
suggest a specific product like Simply Lemonade to satisfy it. In
summary, advertising doesn't create needs but can raise awareness
of existing needs and generate a desire for specific products.
 It isn’t easy to change
negative attitudes
As companies offering new services, like car sharing, quickly discover, it’s not
easy to change customer attitudes. That can be especially difficult when those
attitudes are negative. A couple of decades ago, frozen foods were common in
American households. Then many consumers developed negative attitudes
toward frozen (as compared to fresh) vegetables. They thought fresh food tasted
better. In spite of the value consumers placed on convenience, sales of frozen
foods were in decline for many years
 Ethical issues may arise

Marketers must also be careful about promotion that might

encourage false
beliefs, even if the advertising is not explicitly misleading. For
example, ads for
Ultra SlimFast low-fat beverage don’t claim that anyone who
buys the product will
lose weight and look like the slim models who appear in the
ads—but some critics
argue that the advertising gives that impression. Attitudes and beliefs sometimes combine to
form an expectation—an outcome or event
that a person anticipates or looks forward to.
Meeting Consumer expectations often focus on the
benefits or value that the consumer expects
expectations is from a firm’s marketing mix. This is an
important issue for marketers because a

important consumer is likely to be dissatisfied if his or

her expectations are not met. Promotion that
overpromises can create this problem. Finding
the right balance, however, can be difficult.
 Building trust builds sales
Trust is the confidence a person has in the promises or actions of another person, brand, or
company. Trust drives expectations because when people trust, they expect the other party to
fulfill promises or perform capably. Customers may come to trust through experience with a
company or person. For example, if your dog always happily chows down Purina dog food—and
remains healthy and active—you might come to trust the Purina brand.

Psychographics focus on activities,

interests, and opinions
Psychographics or lifestyle analysis is the analysis of a person’s day-to-day
pattern of living as expressed in that person’s Activities, Interests, and Opinions—
sometimes referred to as AIOs. Understanding the lifestyle of target customers
has been especially helpful in providing ideas for advertising themes. Let’s see
how it adds to a typical demographic description. It may not help Dodge
marketing managers much to know that an average member of the target market
for a Dodge Durango is 34.8 years old, married, lives in a three-bedroom home,
and has 2.3 children
 5.3
Social Influences Affect Consumer
Behavior
 Social Class affects attitudes,
Values and Buying
Almost every society has some
social class structure. In most
countries, social
class is closely related to a person’s
occupation, but it may also be
influenced by
education, community participation,
where a person lives, income,
possessions,
social skills, and other factors—
including what family a person is
born into.
Social Media boosts social influence

Social media can also amplify the voices of

opinion leaders. A traveler can
have a lot of influence by posting a long,
detailed review of a sight that “can’t be
missed” in Thailand. A friend can rave (or
rage) about the new Marvel movie—
and influence who goes (and who stays
home). Marketing managers are trying to
figure out how to manage this type of
influence
 Reference groups help people form
attitudes groups might influence
Three different types of reference
purchase
decisions.
A reference group refers to An aspirational reference group
the people to whom an includes people an individual desires
individual looks when to be like—
forming attitudes about a for example, performers or athletes.
particular topic. Such people Many brands use famous personalities
may influence a purchase to
decision. People normally endorse their products, as when
have several reference groups Gatorade encouraged individuals to
for different topics. “Be Like
Mike” (basketball star Michael Jordan).
An associative reference group
includes
people who more realistically reflect
an individual—perhaps friends, family
members, or coworkers.
Opinion leaders influence buyers
An opinion leader is a person who
influences others. Opinion leaders aren’t
necessarily wealthier or better educated.
And opinion leaders on one subject aren’t
necessarily opinion leaders on another.
Family life cycle influences needs
Relationships with other family members influence many aspects of consumer
behavior. Family members may share many attitudes and values, consider one
another’s opinions, and divide various buying tasks. Marital status, age, and the
age of any children in the family have an especially important effect on how
people spend their income. Put together, these dimensions tell us about the
lifecycle stage of a family.
Young people and families accept new ideas
Singles and young couples seem to be more willing to try new
products and brands and they are careful, price conscious
shoppers. Many young people are waiting longer to marry,
most tie the knot eventually. These younger families
especially those with no children are still accumulating
durable goods, such as automobiles and home furnishings.
Only as children arrive and grow does family
spending shift to soft goods and services, such
as education, medical, and
personal care.
 Reallocation for teenagers
Once children become teenagers, further
shifts in spending occur. Teenagers eat more,
want to wear expensive clothes, spend money
on music, and develop recreation and
education needs that are hard on the family
budget. American teens currently spend more
than $200 billion a year. Teens have a lot of
influence on household spending for clothes,
shoes, food, and beverages. They are more
likely to be spending their own money on
entertainment categories like apps, toys,
games, books, and music
Selling to the empty nesters
Another important category is the empty
nesters people whose children are grown and
who are now able to spend their money in
other ways.
This tends to be a high income period,
especially for white collar workers.
Empty nesters are an attractive market for
many items.
Often they spend more on travel and other
things they couldn’t afford earlier in life.
 Who is the real decision maker in family
purchases?
In years past, most marketers in the
United States targeted the wife as the
family purchasing agent. Now, with
sex-role stereotypes changed and with
night and weekend shopping more
popular, men and older children take
more responsibility for shopping and
decision making. Family roles vary from
one culture to another.
5.4 Culture, Ethnicity, and
Consumer Behavior
Culture surrounds the other
influences
Culture is the whole set of Ethnic groups deserve
beliefs, attitudes, and ways special attention when
of doing things of a analyzing market
reasonably homogeneous
set of people

Failure to consider cultural One basic reason is that

differences, even subtle people from different
ones, can result in ethnic groups may be
problem influenced by very different
cultural variables
 African Americans appreciate cultural traditions
There are 44 million African Americans whom compromise 14% of the population in the US, but
there are a few southern states whose percentage is about 30%. The income for an African
American household is $40,258 and by 2019 the estimate was to have 1.4 trillion in buying power.
These consumers usually buy products tied to cultura traditions and family gatherings. A campaign
was launched by P&G to target African American women, it was named “My black is beautiful”
which included a TV show, a website and Facebook page with an estimate of 2 million members.

Asian Americans are smaller in

number, higher in income
The estimate of Asian Americans is about 19 million in the US, one third live in
California. This group boasts the highest income in a household with the estimate
being about $81,331, which some go to over 1 trillion in buying power in 2018. This
group of people often buy more product, such as organic foods and electronic
goods, many of them are first to second generation in the US and some of them
speak a language other than English in their home.
 Stereotypes are common and
misleading
The common marketer needs to study ethnic dimensions, since they can be subtle
and they change quickly. Second generation immigrants born in the US usually
differ from their parents who immigrated to the country. It is important for
marketing managers to be careful to not stereotype these ethnic consumers, it’s
important for them to learn about the Hispanic people with roots in the Caribbean
islands and Mexico including South America and Central American . As well as the
black market not being a singular group, managers should start using other
segmenting dimensions to reflect the variability in African American households.
Also important o learn about millions of Asian Americans since they could be,
Chinese, Filipino, Indian and from other backgrounds. Managers should start with
these categories but other variables should be practiced for target customers
Customer behavior differs across
international markets
Planning these strategies can be challenging since
the managers needs to understand the differences,
every foreign market needs to be treated as a
separate target market with their own submarkets
because ignoring these can lead to market failure. An
understanding of these local culture points are new
ways to blend the four Ps. Like for example, Nestle
doing feee samples to kickstart new food flavorings
in Brazil, they try to do a more cultura approach to
distribute these samples. Consumers show more
interest in the samples after the conversation took
place with a person who they trust.
 5.5
Individuals are affected by the
purchase situation
Consumers consider the purpose
for the purchase
Consumers can buy the
same type of product, yet
they may have completely
different purposes for the
purchase. The reason for the
purchase influences how the
buyer evaluates options and,
ultimately, the choice made.
Time affects what happens
When consumers make a
purchase the time they
have available for
shopping will influence
their behavior. k. The
urgency of the need is
another time-related
factor
Surroundings affect buying too
Where a purchase is made
and the surrounding
location can affect buying
behavior. The excitement
at an on-site auction may
stimulate impulse buying.
Checking out an auction
online might lead to a
different response.
 5.6
The Consumer
Decision Process
 Recognizing a need Steps in consumer
creates a problem for the problem solving
consumer
1. Information search: During this step,
customers seek information about a solution
The consumer decision process for their problem or about specific brands.
begins when a consumer becomes Customers may find information from other
customers, experts, or a company’s promotion
aware of an unmet need. The 2. Identify alternatives: During this step,
customers recognize available options for
consumer’s problem-solving meeting a need.
process then focuses on how best 3. Set criteria: During this step, customers
identify criteria and the relative importance of
to meet that need. each in preparation for the final
step. 4. Evaluate alternatives: During this step,
customers consider the costs and benefits of
various alternatives.
Three levels of problem Limited problem solving is used by consumers
when some effort is required in deciding the
solving are useful best way to satisfy a need. This is typical when
the consumer has some previous experience
Consumers use extensive problem with a product but isn’t quite sure which choice
solving when they put much effort to make at the moment.
into deciding how to satisfy a
need—as is likely for a completely Routinized response is typical when a
new purchase or to satisfy an consumer has considerable experience in how
important need. At this level of to meet a specific need and requires no new
information.
problem solving, consumers
conduct a more comprehensive
information search, identify more low-involvement purchases—purchases that
alternatives, have more criteria for have little importance or relevance for the
evaluation, and spend more time customer.
evaluating options
Buying isn’t always
rational
The idea of a decision process does
not imply that consumers always
apply rational processes in their To buy or not to buy
buying decisions. To the contrary,
consumers don’t always seek A customer who is ready to buy may have to decide
accurate information or make smart which brand to purchase and where to make the
choices that provide the best purchase (that is, which store or location). There may
be related decisions about colors, features, or other
economic value.
options as well. Buying can be complicated—and
sometimes the complexity of all the choices causes
customers to delay buying. When a consumer decides
to delay a purchase, often the sale is lost. He or she
may never return. For that reason, some marketers
make it easy for customers to come back later and
purchase.
 Consumers can have second
thoughts after a purchase
After making a purchase, buyers often have second
thoughts and wonder if they made the right choice. The
resulting tension is called dissonance a feeling of
uncertainty about whether the correct decision was made.
This may lead a customer to seek additional information to
confirm the wisdom of the purchase.

Post-purchase regret is a bigger problem

In some cases, uncertainty isn't the issue. Instead, consumers are certain about
their unhappiness with a purchase. When a post-purchase experience falls short of
expectations, it leads to customer disappointment. For instance, dining at an
expensive restaurant and receiving slow service and cold food can result in
significant dissatisfaction and regret. The diner is unlikely to return to that
restaurant. Consumers may regret purchases for various unforeseen reasons, and
this regret typically leads to different decisions in the future.
Some consumers spread
the word after they buy
Many consumers engage in post-purchase
communication, sharing their opinions and
experiences with friends. Recommendations
from friends can significantly influence our
choices, whether it's trying a new restaurant,
purchasing a hybrid car, or selecting a
veterinarian. Consumers tend to share
negative experiences more often than
positive ones, which is crucial for marketers
to consider. Marketers may need to engage in
damage control strategies to counter
negative publicity and protect a product's
reputation.
 Learning determines what response is likely
1. Need awareness: A sporting goods store may use
Some companies are already utilizing mileage data from a customer's fitness app to predict
marketing analytics and intelligent when the customer will need a replacement set of
agents throughout various stages of running shoes, leveraging fitness tracking apps like
the consumer decision-making Under Armour and Nike have developed.
process. These firms gather data
useful for predictive analytics, which 2. Information search: An automaker's website could
involves analyzing data to make prioritize presenting features that align with a
predictions about future events. For customer's past car shopping behavior, focusing on
marketing managers, these future what matters most to them, such as gas mileage and
events encompass customers' future rear seat legroom.
needs, relevant problem-solving
information, and the possibility of 3. Alternatives identification: Netflix uses a customer's
customers considering switching to past viewing behavior to provide viewing
competitors. Here are a few examples recommendations on their home page.
of how predictive analytics can be
applied in consumer decision-making: 4. Post-purchase: Marketing managers may predict if
customers will stop using a product, for example, a
bank noticing changes in a customer's credit card
usage and offering incentives like extra points or
temporary low-interest rates to retain them."
 New concepts require an adoption process

In the adoption process, individuals typically progress through the following

stages:

1. Awareness: Potential customers become aware of the product but may lack
detailed information, including how it works or its benefits.
2. Interest: Interested consumers seek general information and facts about the
product.
3. Evaluation: Consumers mentally assess the product's suitability for their
personal needs.
4. Trial: Some consumers may purchase the product to experiment with its
use. Products that are too expensive or unavailable for trial may not be
adopted.
5. Decision: Consumers decide either to adopt or reject the product based on
their evaluation and trial experience. Positive reinforcement often leads to
adoption according to psychological learning theory.
6. Confirmation: Adopters continue to reassess their decision and look for
support or further reinforcement."

This process helps illustrate how consumers approach and ultimately accept
or reject new concepts or products.