5 Consumer Behavior

Consumer Markets & Consumer
Buying Behavior
LECTURE
Consumer Markets & Consumer Buying Behavior
 Consumer Buying Behavior : It involves the

psychological processes that consumers go through in
recognizing needs, finding ways to solves these needs,
making purchase decisions (whether or not to purchase a
product and, if so, which brand and where), interpret
information, make plans and implement these plan (e.g.
by engaging in comparison shopping or actually
purchasing a product)
 Consumer Behaviour or the Buyer Behaviour is referred

to the behaviour that is displayed by the individual while
they are buying, consuming or disposing any particular
product or services.
Consumer Markets & Consumer Buying Behavior
 Consumers make many buying decisions every day, and

the buying decision is the focal point of the marketer’s
effort.
 Consumers around the world vary tremendously in age,
income, education level and tastes. They also buy an
incredible variety of goods and services.
 How these diverse consumers relate with each other and
with other elements of the world around them impacts
their choices among various products, services, and
companies.
 Most large companies research consumer buying
decisions in great detail to answer questions about what
consumers buy, where they buy, how and how much they
buy, when they buy, and why they buy.
Importance of Consumer Behavior to Business
Managers
 To design the best possible product or service that fully

satisfies consumer's needs and demands.
 To decide where the service or product would be made
available for easy access of consumers.
 To decide the price at which the consumers would be
ready to buy that product or service.
 To find out the best method of promotion that will prove
to be effective to attract customers to buy a product.
 To create and retain customers
 To Understand the factors influencing Consumer's
buying Behaviour
 To understand why, when, how, what and other factors
that influence buying decision of the consumers.
The Paradox of Choice
 As consumers we assume that more choice means better

options and greater satisfaction
 But beware of excessive choice: choice overload can make you

question the decisions you make before you even make them,
it can set you up for unrealistically high expectations, and it
can make you blame yourself for any and all failures.
 In the long run, this can lead to decision-making paralysis.

And in a culture that tells us that there is no excuse for falling
short of perfection when your options are limitless, too much
choice can lead to clinical depression.
Types of Decision Buying Behavior
The Buyer’s Decision Process
Characteristics Affecting Consumer Behavior
 Consumer purchases are influenced strongly by

cultural, social, personal and psychological
characteristics.
1. Cultural
2. Social
3. Personal
4. Psychological
 Culture : is the most basic cause of a person’s wants and

behavior. Human behavior is largely learned. Growing up
in a society, a child learns basic values, perception,
wants, and behavior.
 “The set of basic values, perceptions, wants and
behaviors learned by a member of society from family
and other important institutions. “
 Every group or society has a culture, and cultural
influences on buying behavior may vary greatly from
country to country.
 Failure to adjust to these differences can result in
ineffective marketing or embarrassing mistakes.
 Fair & Lovely Foundation : Welcome to the Fair

& Lovely Foundation - our initiative to economically
empower women like yourselves pursue your dreams
and reach your true potential. We aim to inspire an
attitude of self-reliance and independence among
young women by providing scholarships in the areas
of higher education, vocational training and start up
business capital.
 Marketers are always trying to spot cultural shifts in

order to discover new products that might be
wanted.
 For example, the cultural shift towards greater
concern about health and fitness, especially among
young urban women, has created a huge industry for
health and fitness services, exercise equipment and
clothing, organic foods and a variety of diets.
 Kellogg, the world's leading
producer of ready-to-eat cereals, is
re-launching Kellogg's Chocos,
which now is made with Whole
Grain. The new Kellogg's Chocos
comes with the wholesome
goodness of essential nutrients like
fibre as well as 11 essential
vitamins and minerals to help
assure mothers that their children
will get a nutritious breakfast.
 "Kellogg's Chocos with Whole

Grain gives me a sense of
reassurance about my daughter's
breakfast as it provides a vital
balance of key nutrients and
yummy chocolaty taste," said
Karisma Kapur, Kellogg's Chocos
Brand Ambassador.
 How every product now

has to have some
'medical benefit' in
order to be sold. our
beloved tea, the all time
favorite beverage of
Pakistan, isn’t allowed to
be tea anymore – it has to
clean your arteries, act as a
weight loss supplement,
regulate your bowel
movements and generally
keep you out of hospital.
 In the recently released

TVC of Nestlé's newly
introduced yogurt Acti
Plus, Sanam Saeed has
appeared as a tired girl
who is worried for her
health issues. But just
after using Acti Plus
Yogurt, she has
recovered from the
tiredness and become
active.
 Go natural: Organic food in Lahore and

where to buy it. Lahore has also recently caught
onto the fad of eating right, with many experts
suggesting organically grown and produced
ingredients as a necessity to good health.
 However, finding organic food — cultivated without
the use of chemical fertilizer, pesticides and/or other
artificial substances — can be a mission if you don’t
know where to look.
Farmers Markets
 Farmers markets are some of the best places to find
home-grown and organic foods especially if you are
looking for variety. The Haryali Market and
the Khalis Food Market are good places to start.
 The Shaukat Khanum Fitness Fiesta promises to host
a farmers market as well.
 Subculture : Each culture contains smaller

subcultures, or groups of people with shared value
systems based on common life experiences and
situations.
 Subcultures include nationalities, religions, racial
groups etc.
 Many subcultures make up important market
segments, and marketers often design products and
marketing programs tailored to their needs.
 If you visit iconic British
brand Burberry's website,
you'll find a doe-eyed
Pakistani girl peering at
you, looking adorable in a
tan trench coat.
 This is Laila Naim, the first
Pakistani to model for the
brand.
 Laila joins the ranks of
supermodels like Kate Moss
and Cara Delevingne, who
have also featured in
Burberry's campaigns. Actress
Emma Watson of Harry
Potter fame also starred in a
recent campaign.
 Social Factors : A consumer’s behavior also is

influenced by social factors, such as the consumer’s
small groups, family, and social roles and status.
 Humans are inherently social animals, and
individuals greatly influence each other.
 A useful framework of analysis of group influence on
the individual is the so called reference group—the
term comes about because an individual uses a
relevant group as a standard of reference against
which oneself is compared.
 A reference group is a group to which an

individual or another group is compared.
 Sociologists call any group that individuals use as a
standard for evaluating themselves and their own
behavior a reference group.
 Reference groups come in several different forms.
1. Aspirational reference group
2. Associative reference groups
3. Dissociative reference groups
 The aspirational reference group refers to those

others against whom one would like to compare
oneself. For example, many firms use athletes as
spokespeople, and these represent what many people
would ideally like to be.
 This is a group with which the individual would like
to be associated or identified.
 An aspirational group is one to which the individual
wishes to belong, as when a young cricket player
hopes to someday emulate cricket stars like Sachin
Tendulkar or Wasim Akram and play test cricket.
 British actor Emma Watson was
appointed UN Women Goodwill
Ambassador in July 2014. The
accomplished actor, humanitarian
and recent graduate of Brown
University will dedicate her efforts
towards the empowerment of
young women and will serve as an
advocate for UN
Women’s HeForShe campaign in
promoting gender equality.
 At just 24 years of age, Emma has
already been involved in the
promotion of girls’ education for
several years and previously visited
Bangladesh and Zambia as part of
her humanitarian efforts. She has
worked to promote fair trade and
organic clothing and served as an
ambassador for Camfed
International, a movement to
educate girls in rural Africa.
Marketers of brands subjected to strong group influence -

must figure out how to reach opinion leaders people within
a reference group who, because of special skills,
knowledge, personality, or other characteristics, exert
social influence on others.
 Marketers often try to identify opinion leaders
for their products and direct marketing efforts
toward them. They use buzz marketing by enlisting or
even creating opinion leaders to serve as “brand
ambassadors” who spread the word about their products.
Many companies are now creating brand ambassador
programs in an attempt to turn influential but everyday
customers into brand evangelists.
 Buzz marketing is a viral marketing technique that

is focused on maximizing the word-of-mouth
potential of a particular campaign or product,
whether that is through conversations among
consumers' family and friends or larger scale
discussions on social media platforms.
 Buzz Marketing involves cultivating opinion leaders
and getting them to spread information about a
product or service to others in their communities.
STUDENT BRAND
MANAGER
 Red Bull Student Brand
Managers are a part of the most
dynamic and empowered student
ambassador program in the
world. Our SBM's are passionate
about Red Bull and share their
love for the brand with their
peers. They are responsible for
driving the brand image on
campus, building belief in the
product benefits and ensuring
long term loyalty starting with
the college experience. The goals
of the Student Brand Manager
program are to reach new
students, excite students,
increase sales and manage the
Red Bull brand on a collegiate
level.
 Associative reference groups include people who

more realistically represent the individuals’ current
equals or near-equals—e.g., coworkers, neighbors, or
members of clubs, and organizations.
 Many small groups influence a person’s behavior.
Groups that have a direct influence and which a
person belongs are called membership groups.
 The individual is currently a member of this type of
group.
 Finally, the dissociative reference group includes

people that the individual would not like to be like.
 Marketers try to identify the reference groups of their

target markets.
 Reference groups expose a person to new behaviors and
lifestyles, influence the person’s attitudes and self-
concept, and create pressures to conform that may affect
the person’s product and brand choices.
 Before you launch a campaign based on reference
groups, it will be important to test it with representatives
of the target market. Testing will ensure a match with the
values, tastes, opinions, and behaviors of the group.
 Family : Family members strongly influence buying

behavior. Marketers are interested in the roles and influence
of the husband, wife, and children on the purchase of different
products and services.
 Husband-wife involvement varies widely by product category
and by stage in the buying process. Buying roles change with
evolving consumer lifestyles. In the subcontinent, the wife
traditionally has been the main purchasing influence for the
family in the areas of food, household products, and clothing.
But with more and more women holding jobs outside the
home and the willingness of husbands to do more of the
family’s purchasing, all this changing.
 Such changes suggest that marketers in industries that have
sold products to only men or only women are now courting
the opposite gender.
 Children may also have a strong influence on family’s

buying decisions. Especially in a social scenario where
more and more families are becoming nuclear and have
only one or two children, and when, in most families,
both parents work (referred to as Double Income Single
Kids DISK) , parents pamper their kids with a number of
products and listen to them while making purchase
decisions.
 In the United Kingdom, Greece, Denmark,
and Belgium advertising to children is restricted.
In Quebec, Sweden and Norway advertising to children
under the age of 12 is illegal.
 Marketing and selling to children is
not a new concept.
When Aurora published a cover
story on the subject in 2008, we
found (based on a research study
by Oasis International) that
Pakistani children have access to
10 billion rupees every year.
Considering this substantial sum of
money and Pakistan’s very young
population, it made sense for
banks to target young people.
 In 2008, Bank Al-Habib launched

its Young Savers account with a
significant media campaign. Then
for the next two years there was no
visible action on this front, until
April this year when two more
banks entered the arena: Allied
Bank with Allied Rising Star; and
UBL with UBL First.
 A more obvious reason for
branding and actively promoting
minor savings accounts is that
young people (under 25) constitute
60% of the population, and as
Ahmad says, “developing a loyalty-
based relationship with young
people would be beneficial for any
bank.”
 The idea (as is with all that
involves selling to children) is
that if you get them young,
chances are that you will keep
them for life.
 For Nadia Sami, Assistant
Marketing Manager, Allied Bank,
another reason for the heightened
activity in this area is that banks
have started to appreciate the fact
that children are influencers and
have a lot of input in their parents’
purchasing decisions.
 According to Bilal Sadiq Ali,
Account Manager, Spectrum Y&R
(Allied’s creative agency), “While
the kids are the influencers, it is
the parents who make the
decisions, so we have two
messages; one aimed at the
children, the other at the parents.”
 Bank Al-Habib Young Savers ATL
campaign ‘start early, save wisely’
with its colorful graphics and
cartoon-like feel specifically caters
to children. The communication is
extremely simple and obviously
designed keeping in mind the
lower end of the age spectrum.
 While Bank Al-Habib and Allied
are keeping children at the
forefront, UBL is very clear on the
fact that its main target is the
parents.
 Ahmad says, “Our primary audience is parents who

will invest in their children’s future. Children as
minor account holders are technically the secondary
target as they do not deposit the savings.”
 As such the communication with the ‘pehla account,
pehli bachat’ tagline uses conservative colors and
shows parents and children.
 Personal factors. A buyers decisions are also

influenced by personal characteristics such as the
buyer’s age and life-cycle stage, occupations,
economic situation, lifestyle, and personality and self
concept.
 Age and Life-Cycle Stage. People change the goods

and services they buy over their lifetimes. Taste in food,
clothes, furniture, and recreation are often age related.
 Buying is also shaped by the stages of the family life cycle
– the stages through which families might pass as they
mature overtime.
 Traditional family cycle stages include young singles and
married couples with children. Today, however,
marketers are increasing catering to a growing number of
alternative, nontraditional stages such as unmarried
couples, single marrying later in life, childless couples,
same-sex couples, single parents and others.
Why Do Mothers Care More About Their

Children Than Fathers?
 I will be the first to admit that “Why do mothers care
more about their children than fathers?” is not a very
pretty question. But, before you answer with an
angry “They don’t!”, note that it has been
consistently shown that money given to mothers is
far more likely to be spent in a way that benefits their
children than is money given to fathers.
De Beers 'Raise Your Right Hand' Campaign
"Nowadays, the road to marriage is no longer linear, and true love can happen more than
once with love stories coming in a variety of forms," said the spokeswoman.
 RBC Royal Bank has identified five life-stage segments.

 The Youth segment includes customers younger than 18.
 Getting Started consists of customers aged 18 to 35 who are
going through first experiences, such as their graduation, first
credit card, first car, first loan, marriage and first child.
 Builders, customers aged 35 to 50, are in their peak earning
years. As they build careers and family, they tend to borrow
more than they invest.
 Accumulators, aged 50 to 60, worry about saving for
retirement and investing wisely.
 Preserves, customers over 60, want to maximize their
retirement income to maintain a desired lifestyle.
 Occupation. A persons occupation affects the

goods and services bought. Blue-collar workers tend
to buy more rugged work clothes, whereas executives
buy more business suits.
 A company can even specialize in making products
needed by a given occupational group. For example,
supplying surgical instruments to surgeons.
 In English-speaking countries, a blue-collar
worker is a working class person who
performs manual labor.
 Economic situation. A person’s economic

situation affect the product choice.
 Some marketers target consumers who have lots of
money and resources, charging prices to match.
Rolex positions its luxury watches as a tribute to
elegance
 Other marketers target consumers with modest
means. Timex makes more affordable watches
 Lifestyle. People coming from the same subculture,

social class, and occupation may have quite different
lifestyles.
 Lifestyle is a person’s pattern of living as expressed in his
or her psychographics. It involves measuring consumers’
major AIO dimensions – activities (work, hobbies,
shopping, sports, social events), interests (food,
fashion, family, recreation), and opinions (about
themselves, social issues, business, products).
 Lifestyle captures something more than the person’s
social class or personality. It profiles a person’s whole
pattern of acting and interacting in the world.
 Personality Each person distinct personality

influences his or her buying behavior.
 Personality refers to the unique psychological
characteristics that lead to relatively consistent and
lasting responses to one’s own environment.
 Personality is usually described in terms traits such
as self-confidence, dominance, sociability,
adaptability and aggressiveness.
 The idea is that brands also have personalities, and that

consumers are likely to choose brands with personalities
that match their own.
 A brand personality is the specific mix of human traits
that may be attributed to a particular brand. One
researcher identified five personality traits.
 Sincerity (down to earth, honest, wholesome and
cheerful)
 Excitement (daring, spirited, imaginative and up-to-
date)
 Competence (reliable, intelligent, and successful)
 Sophistication (upper class and charming)
 Ruggedness (outdoorsy and tough)
Sincerity (down to earth, honest, wholesome and cheerful)
Excitement (daring, spirited, imaginative and up-to-date)
Competence (reliable, intelligent, and successful)
Sophistication (upper class and charming)
Ruggedness (outdoorsy and tough)
 Most well-known brands are strongly associated with

one particular trait : Jeep with “ruggedness”, Apple
with “excitement”, CNN with “competence”, and
Dove with “Sincerity”.
 Psychological Factors: A person’s buying choices

are further influenced by four major psychological
factors : motivation, perception, learning, and beliefs
and attitude.
 Motivation. A person has many needs at any given
time.
 A motive is a need that is sufficiently pressing to
direct the person to seek satisfaction. A need
becomes a motive when it is aroused to a sufficient
level of intensity. A motive is a need that is
sufficiently pressing to drive the person to act.
 There can be of types of needs:

 Some are biological, arising from states of tension
such as hunger, thirst, or discomfort. (Biogenic
needs)
 Others are psychological, arising from the need for
recognition, esteem, or belonging. (Psychogenic
needs)
 In the words of William J Stanton, “A motive can be

defined as a drive or an urge for which an individual
seeks satisfaction. It becomes a buying motive when
the individual seeks satisfaction through the
purchase of something”. A motive is an inner urge
(or need) that moves a person to take purchase
action to satisfy two kinds of wants viz. core wants
and secondary wants. Let us take two examples:
 Example of core and secondary want :

 Glasses (Core want : Protection to eyes, Secondary
want : It should look good)
 Motivation acts as a driving force that impels an
individual to take action to satisfy his needs.
 Psychologists have developed theories of human

motivation.
 Abraham Maslow sought to explain why people are
driven by particular needs at particular times. Why does
one person spend much time and energy on personal
safety and another on gaining the esteem of others?
 Maslow’s answer is that human needs are arranged in
hierarchy, from the most pressing at the bottom to the
least pressing at the top.
 They include physiological needs, safety needs, social
needs, esteem needs, and self-actualization needs.
Maslow’s Theory of Motivation
Maslow’s Theory of Motivation
 1. Biological and Physiological needs - air, food, drink,

shelter, warmth, sex, sleep.
 2. Safety needs - protection from elements, security, order,
law, stability, freedom from fear.
 3. Love and belongingness needs - friendship, intimacy,

affection and love, - from work group, family, friends,
romantic relationships.
 4. Esteem needs - achievement, mastery, independence,

status, dominance, prestige, self-respect, respect from others.
 5. Self-Actualization needs - realizing personal potential, self-

fulfillment, seeking personal growth and peak experiences.
 Learning. When people act, they learn. Learning

describes changes in an individual’s behavior arising
from experience.
 If a customer buys a Nikon camera and he/she finds
the experience rewarding then the next time she/he
has to make a camera purcase or recommendation
the probability is high that he/she will refer Nikon.
Beliefs and Attitudes

 A belief is a descriptive thought that a person has about
something. Beliefs may be based on real knowledge,
opinion, or faith and may or may not carry an emotional
charge.
 Marketers are interested in the beliefs that people
formulate about specific products and services, because
these beliefs make up product and brand images that
affect buying behavior. If some of the beliefs are wrong
and prevent purchase, the marketer will want to launch
a campaign to correct them.
 "People in Pakistan often assume that British

lifestyle (dress pattern, etc.), French fashion or
Japanese electronic devices (TV, tape recorders,
mobile set, washing machines, etc.) and Swiss
watches are superior to their own."
Types of Consumers- for New Products
 Innovators
 Early Adopters
 Early majority
 Late Majority
 Laggards
Innovators
 This group of buyers read journals and magazines

extensively to keep themselves updated with innovative
ideas, latest technologies, and new products.
 They like to experiment with anything new representing
the latest technologies.
 They may influence other buyers in their same group, but
they are the smallest group of early buyers.
 They represent about 2 percent of any market.
Early Adopters
 They are individuals or businesses who uses new
product or technology after innovators and before
others.
 This group of buyers represents true opinion leaders
who set examples by their decisions.
 They are likely to pay more for new product that
improve their life-style, raise their social status, or
improve their business efficiency or reduce cost.
 They represent about 14 percent of any market.
Early majority
 This group of people adopt a new product after
seeing it used successfully by innovators and
adopters.
 They are more conservative but open to new ideas,
active in community, less technology-driven than
innovators and early adopters.
 They represent 34 percent of any market.
Late Majority
 This group of people adopt a new product only after
seeing that the majority of the population already
has.
 They wait until prices fall and product is universally
accepted.
 People of this group are typically old, less
affluent, less educated, fairly conservative, and less
socially active than innovators, adopters, and early
majority.
 They also represent 34 percent of any market.
Laggards
 The people of this group are excessive traditionalists.
 They adopt product when the price is at its bottom,
competition is intense, or product become an
absolute need.
 They are very conservative, oldest, and least
educated.
 They represent 16 percent of any market.
General classification of consumers
 Personal Consumers
 Organisational Consumers
 Impulse Consumers
 Need-based Consumers
 Discount Driven Consumers
 Habitual Consumers
Personal Consumers
This type of consumer is an individual consumer who
buy products or services for own use, or for family, or
for household use. Finished products are purchased by
personal consumer and the purchases are done in
small quantities.
 Organisational Consumers
This type of consumer can be a business, government,
profit or non-profit organisation, or agency who
purchases goods or services for organisation to
function or for resale purpose. Purchases are done in
the form of raw-materials that are processed to
finished goods and offered for sale to other consumers.
Impulse Consumers
 This type of consumer do unplanned purchases.
Purchasing a particular product was not a priority,
but when the consumer encounter that product, he
makes swift buying decision. Impulse consumer
purchase what seems good at the time.
Need-based Consumers
This type of consumer has a specific intention to
purchase a particular type of product. Need-based
Consumer is driven by a specific need. He makes
buying decision when he actually need that product
and not any other time.
 Discount Driven Consumers

This type of consumers do purchases when they get
some lucrative offer or discount. Their buying
decision is highly based on offers or discounts.
 Habitual Consumers
Person who is habitual to the usage or consumption
of a kind of product is called habitual consumer. For
example - person who smoke.

5 Consumer Behavior

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5 Consumer Behavior

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Consumer Markets & Consumer

 Consumer Buying Behavior : It involves the

 Consumer Behaviour or the Buyer Behaviour is referred

 Consumers make many buying decisions every day, and

 To design the best possible product or service that fully

 As consumers we assume that more choice means better

 But beware of excessive choice: choice overload can make you

 In the long run, this can lead to decision-making paralysis.

 Consumer purchases are influenced strongly by

 Culture : is the most basic cause of a person’s wants and

 Fair & Lovely Foundation : Welcome to the Fair

 Marketers are always trying to spot cultural shifts in

 "Kellogg's Chocos with Whole

 How every product now

 In the recently released

 Go natural: Organic food in Lahore and

 Subculture : Each culture contains smaller

 Social Factors : A consumer’s behavior also is

 A reference group is a group to which an

 The aspirational reference group refers to those

Marketers of brands subjected to strong group influence -

 Buzz marketing is a viral marketing technique that

 Associative reference groups include people who

 Finally, the dissociative reference group includes

 Marketers try to identify the reference groups of their

 Family : Family members strongly influence buying

 Children may also have a strong influence on family’s

 In 2008, Bank Al-Habib launched

 Ahmad says, “Our primary audience is parents who

 Personal factors. A buyers decisions are also

 Age and Life-Cycle Stage. People change the goods

Why Do Mothers Care More About Their

 RBC Royal Bank has identified five life-stage segments.

 Occupation. A persons occupation affects the

 Economic situation. A person’s economic

 Lifestyle. People coming from the same subculture,

 Personality Each person distinct personality

 The idea is that brands also have personalities, and that

 Most well-known brands are strongly associated with

 Psychological Factors: A person’s buying choices

 There can be of types of needs:

 In the words of William J Stanton, “A motive can be

 Example of core and secondary want :

 Psychologists have developed theories of human

 1. Biological and Physiological needs - air, food, drink,

 3. Love and belongingness needs - friendship, intimacy,

 4. Esteem needs - achievement, mastery, independence,

 5. Self-Actualization needs - realizing personal potential, self-

 Learning. When people act, they learn. Learning

Beliefs and Attitudes

 "People in Pakistan often assume that British

 This group of buyers read journals and magazines

 Discount Driven Consumers

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