3.1 Understanding Consumer Markets and Buying Behavior

Consumer buying behavior shapes how people choose and purchase products. It's influenced by cultural, social, personal, and psychological factors that marketers must understand to effectively reach their target audience.

The consumer decision-making process involves five stages: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. Different types of buying behavior exist, from complex to habitual, each requiring unique marketing strategies.

Consumer Buying Behavior

Factors in consumer buying decisions

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• Cultural factors significantly shape consumer wants and behavior
  • Culture encompasses values, perceptions, preferences, and behaviors acquired from family and societal institutions (schools, religious organizations)
  • Subculture includes nationalities, religions, racial groups, and geographic regions that provide specific identity and socialization for members
  • Social class divides society into stratified groups whose members share similar socioeconomic status, values, interests, and buying behavior (upper, middle, lower classes)
• Social factors influence consumer behavior through social interactions and relationships
  • Reference groups serve as direct (face-to-face) or indirect points of comparison and influence attitudes and behavior (membership, aspirational, dissociative groups)
  • Family is the most important consumer buying organization in society and strongly influences buying behavior (nuclear family, extended family)
  • Roles (parent, spouse) and status (social rank) guide appropriate behavior and product/brand choices to communicate desired image
• Personal factors impact consumer decisions based on unique individual characteristics and circumstances
  • Age and life-cycle stage affect product needs and preferences as people mature and enter different phases (bachelor, newlywed, full nest, empty nest)
  • Occupation guides work-related product needs (blue-collar, white-collar) while economic situation determines affordable product categories and brands (income level, savings, assets)
  • Lifestyle reflects a person's pattern of living expressed through activities (work, hobbies, shopping), interests (food, fashion, recreation), and opinions (social issues, business, products)
  • Personality distinguishes individuals through traits like self-confidence, dominance, autonomy, and adaptability that influence brand choices and loyalty
• Psychological factors drive consumer behavior based on motivation, perception, learning, and attitudes
  • Motivation directs behavior to satisfy pressing needs (physiological, safety, social, esteem, self-actualization)
  • Perception is the process of selecting, organizing, and interpreting information to create meaning (selective attention, selective distortion, selective retention)
  • Learning describes changes in behavior caused by information and experience, often through interplay of drives, stimuli, cues, responses, and reinforcement
  • Beliefs (descriptive ideas about something) and attitudes (consistent favorable/unfavorable evaluations and feelings) guide product and brand choices

Consumer Decision-Making Process and Behavior Models

1. Need recognition occurs when the buyer identifies a problem or need triggered by internal (hunger, thirst) or external stimuli (advertisements, friend's suggestion)
2. Information search involves heightened attention (becoming more receptive) or active search (looking for information) to learn about satisfying the need
3. Evaluation of alternatives uses criteria to compare and assess product attributes and narrow the field of options to make a purchase decision (price, quality, style)
4. Purchase decision is the buyer's choice to acquire the preferred brand or a close substitute influenced by attitudes of others (family, friends) and unexpected situations (income, expected price)
   • Impulse buying can occur at this stage, where consumers make unplanned purchases based on sudden urges or emotions
5. Post-purchase behavior is the buyer's satisfaction or dissatisfaction determined by the gap between expectations and perceived product performance, which informs future decisions
   • Cognitive dissonance may arise when consumers experience doubt or anxiety about their purchase decision
   • Positive experiences can lead to brand loyalty, where consumers consistently repurchase from the same brand
   • Word-of-mouth marketing plays a crucial role as satisfied customers share their experiences with others

Types of consumer buying behavior

• Complex buying behavior occurs when consumers are highly involved due to expensive, risky, self-expressive products and perceive major differences between brands (cars, homes, computers)
  • Marketers should inform and persuade buyers by differentiating product features, using media to describe benefits, and leveraging salespeople to sway final choice
• Dissonance-reducing buying behavior happens when consumers are highly involved but see few differences between brands for expensive, risky, infrequent purchases (carpet, tile)
  • Marketers should supply belief-reinforcing information and support to help consumers feel positive post-purchase
• Habitual buying behavior is characterized by low consumer involvement and few perceived brand differences for frequently purchased, low-cost products (salt, gum)
  • Marketers should use price and promotion to stimulate trial, and symbols and imagery to build brand recognition and recall
• Variety-seeking buying behavior occurs under low involvement but significant perceived brand differences, leading consumers to switch for the sake of variety rather than dissatisfaction (cookies, cereal)
  • Marketers should offer deals, coupons, and samples to encourage switching; ensure stock; and create memorable advertising and packaging as brand recognition prompts

Market Segmentation

• Dividing the market into distinct groups of buyers with different needs, characteristics, or behaviors that might require separate marketing strategies or mixes
• Helps companies tailor their offerings to better meet the specific needs of different consumer segments