Analyzing Consumer Markets

Adopting a holistic marketing orientation means understanding customers - gaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes so the right products are marketed to the right customers in the right way and at the right time.

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must fully understand both the theory and reality of consumer behavior. A consumer's buying behavior is influenced by cultural, social, and personal factors. Among them, cultural factors exert the broadest and deepest influence.

 Fig. Consumer Behavior

 

Culture Factors

Culture, subculture, and social class are particularly important influences on consumer buying behavior. Culture is the fundamental determinant of a person's wants and behavior. Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Social classes are homogeneous and enduring divisions in a society, hierarchically ordered and with members who share similar values, interests, and behavior. 

Social Factors

Social factors such as reference groups, family , and social roles and status affect consumer buying behavior. Reference groups are all the groups that have a direct (face-to-face) or indirect influence on a customer's attitudes or behavior. Family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. Roles and Status can define a person's position in each group. A role consists of the activities a person is expected to perform. Each role in turn connotes a status.

Personal Factors

Personal characteristics that influences a buyer's decision include age and stage in the life cycle, occupation and economic circumstances, personality and self-concept, and lifestyle and values.

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. Five key psychological processes - motivation, perception, learning, emotions, and memory - fundamentally influence consumer responses.

  

The Buying Decision Process: The Five-Stage Model

Smart companies try to fully understand customers' buying decision process - all the experiences in learning, choosing, using, and even disposing of a product. The Five-Stage Model process includes: problem recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. Customers don't always pass through all five stages - they may skip or reverse some. 

Problem Recognition

The buying process starts when the buyer recognizes a problem or need triggered by internal stimuli (such as hunger or thirst) or external stimuli (such as seeing an ad). Marketers need to identify the circumstances that trigger a particular need by gathering information from a number of consumers.

Information Search

Information sources for consumers fall into four groups: personal (family, friends, neighbors, acquaintances), commerical (advertising, Web sites, salespersons, dealers, packaging, displays), public (mass media, consumer-rating organizations), and experiential (handling, examining, using the product). In the milder search state, heightened attention, a person simply becomes more receptive to information about a product. In an active information search, a person talks with friends, search online, and visits stores to learn about the product. Marketers should identify the consumer's information sources and evaluate their relative importance so it can prepare effective communications.

Evaluation of Alternatives

The consumer sees each product as a bundle of attributes with varying abilities to deliver the benefits. The attributes of interest to buyers vary by product. A belief is a descriptive thought that a person holds about something. An attitudes, a person's enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. The consumer arrives at attitudes toward various brands through an attribute evaluation procedure, developing a set of beliefs about where each brand stands on each attribute. The expectany-value model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs - the positives and negatives - according to importance.

Purchase Decision

In the evaluation stage, the consumer forms preferences among the brands in the choice set and may also form an intention to buy the most preferred brand. Even if consumers form brand evaluations, two general factors such as the attitudes of others and unanticipated situational factors can intervene between the purchase intention and the purchase decision. A consumer's decision to modify, postpone, or avoid a purchase decision is heavily influenced by one or more types of perceived risk. The degree of perceived risk varies with the amount of money at stake, the amount of attribute uncertainty, and the level of consumer self-confidence. Marketers must understand the factors that provoke a feeling of risk in consumers and then provide information and support to reduce perceived risk.

Postpurchase Behavior

After the purchase, the consumer might experience dissonance from noticing certain disquieting features or hearing favorable things about other brands and will be alert to information that supports his or her decision. The marketer's job doesn't end with the purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses and disposal. A satisfied consumer is more likely to purchase the product again and will tend to say good things about the brand to others.

         
 

**Consumers don't always make buying decisions in a deliberate, rational manner.**

SUMMARY

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must fully understand both the theory and reality of consumer behavior. A consumer's buying behavior is influenced by cultural, social, and personal factors. Among them, cultural factors exert the broadest and deepest influence.

Smart companies try to fully understand customers' buying decision process - all the experiences in learning, choosing, using, and even disposing of a product. The Five-Stage Model process includes: problem recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. Customers don't always pass through all five stages - they may skip or reverse some. 

The buying process starts when the buyer recognizes a problem or need triggered by internal stimuli (such as hunger or thirst) or external stimuli (such as seeing an ad). Information sources for consumers fall into four groups: personal (family, friends, neighbors, acquaintances), commercial (advertising, Web sites, salespersons, dealers, packaging, displays), public (mass media, consumer-rating organizations), and experiential (handling, examining, using the product). The consumer sees each product as a bundle of attributes with varying abilities to deliver the benefits. The attributes of interest to buyers vary by product. In the evaluation stage, the consumer forms preferences among the brands in the choice set and may also form an intention to buy the most preferred brand. Even if consumers form brand evaluations, two general factors such as the attitudes of others and unanticipated situational factors can intervene between the purchase intention and the purchase decision. After the purchase, the consumer might experience dissonance from noticing certain disquieting features or hearing favorable things about other brands and will be alert to information that supports his or her decision. The marketer's job doesn't end with the purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses and disposal. A satisfied consumer is more likely to purchase the product again and will tend to say good things about the brand to others.