CHAPTER 3: MARKET SEGMENT AND
CONSUMER BEHAVIOR
CONSUMER BEHAVIOR
OBJECTIVES:
At the end of this topic, the student will:
1. Know the factors that affect consumer behavior
2. Understand the different buying roles; and
3. Know the different kinds of buying behavior
FACTORS THAT AFFECT CONSUMER BEHAVIOR
1. CULTURE- culture, sub-cultures, and social classes. This
refers to the general or overall culture of a group of people.
2. SOCIAL FACTORS- reference groups, family, roles, and
status. This is all about the norms of behavior among even
smaller groups, namely the social groups where a consumer
belongs to.
3. PERSONAL FACTORS – age, life cycle stage, occupation, and
economic circumstances. Aside from external social factors,
the demographics of the individual also affect the manner by
which products and services are viewed and treated.
4. PSYCHOLOGICAL FACTORS- motivation, perception,
learning, beliefs, and attitudes. This is how an individual
behaves and behavior is a very intimate thing. It is result of
how we are raised, who we interact with, what our histories
are, and much more.
Culture, for one, can heavily affect product design and marketing.
Often, because we believe so strongly in the wisdom of our crowd,
we do not even bother to step back to assess whether or not our
beliefs are in fact sound.
INCOME VS SOCIO-ECONOMIC CLASS
First of all, there is income, which is personal demographic factor,
and then there is socio-economic class, which is social factor. While
these two may seem to refer to the same thing, they are quite
different. Income is a factual number. It answers the question of
“How much do you earn? or more commonly among researchers.
For instance, those who belong to country’s upper socio-economic
classes may firmly believe that having a car is non-negotiable
necessity. But to those belong to lower income classes; this is not
reality that they see. Instead, a car is perceived to be a luxury.
A PRIME The wealthiest class
AB Upper income class
UPPER C Upper middle class
BROAD C Broad middle class
LOWER C Lower middle class
DE Lower classes
AGE VS LIFECYCLE
Age is just a number; whereas where consumers currently are in
their lifecycle pretty much determine what products and services
they will likely spend on.
The following are the generally accepted lifecycle stages:
Bachelor Stage Young, single, and independent
Newly Married Young, no children, also known as
Couple DINKs (double, income, no kids)
Full Nest I Families with children, with youngest
child below six years
Full Nest II Families with children, youngest child
is six years or older
Full Nest III Families with dependent children
Empty Nest I Older married couples, retired, and no
children living with them
Empty Nest II Older married couples, retired, and no
children living with them
Solitary Survivor I Older, no family and supporting self
Solitary Survivor II Older, no family, and retired
BUYING ROLES
You buy products for yourself. But you also buy products for other
people in which case you are merely functioning as the buyer while
someone else ends up using it.
INITIATOR – This person who first suggests the idea of
buying a particular product or service
INFLUENCERS- These people’s views or advices can
influence the eventual selection of what to buy
DECIDER. The person (or persons) who ultimately has the
final say on what to buy
BUYER – The person who makes the actual purchase
USER- The person or persons who end up actually using
product
The roles, however, become more pronounced as purchase become
more complex or risky. In this context riskiness means expensive
and/or degree of object permanence.
TYPES OF BUYING BEHAVIOR
The act and process of purchase is, in itself, the function of a goal.
The consumer felt a state of deprivation and needed to address it.
So what we now have is a motivated consumer. Motivated
consumers can now proceed to engage in a number of behaviors
that they may deem necessary in order to achieve their goal. This
includes information gathering, information processing, and
generating conclusions about products. The level of motivation,
however, will vary depending on how the consumer relates with the
object of involvement or the product being sought
First, a consumer can perceive a product category be simple,
complex, or somewhere in between. So how does this distinction
affect the buying behavior? A more sophisticated buyer who
understands the differences between the products will be willing to
shop around gather brochures or data, check for specs online, and
generally take time studying and comparing the product in the
market. Likely this consumer will
a. ask an acknowledged expert for advice on what to buy
b. choose brand that seems most familiar compared to all others
c. choose the most attractive looking product among the options
Second, the consumer’s attitude towards the product can affect the
buying relationship as well. In this case, the consumer will spend
more time and attention with the decision-making process. It will
require a lot of involvement something know as high-effort behavior.
COMPLEX BUYING BEHAVIOR – arises for important purchases
where there are so many different features and attributes with each
brand having different manifestations of each feature.
DISSONANCE REDUCING BEHAVIOR – occurs when a consumer
wants to keep life simple, and yet the risk faced with the buying
decision for an important purchase is perceived to be high. The
consumer may therefore resort to decisions that simplify lifelike,
such as buying the brand that most people choose, relying on the
decision of a trusted friend, or relying on the word of the
salesperson
VARIETY-SEEKING BEHAVIOR occurs when the product involves
minimal risk but there are so many choices, each with its own
features and attributes. The consumer may opt to try each product
at least once, leading to the trying of a wide variety of the products.
HABITUAL BUYING BEHAVIOR- happens when consumer feel that
learning about the different competing products is not worth it, so
they would rather select the product that they are most comfortable
with. This is the outcome that is hoped for by many fast-moving
consumer goods, such as personal care products, that seek to make
consumers buy their product out habit.
EMOTIONAL VS LOGICAL DECISIONS
We would like to think that all our purchases are the result of
rational and logical decisions on our part. But this is not necessarily
true.
We have two brains. One is an emotion-driven brain that we have
inherited from our ancestors and it is highly attuned to our sensory
experiences. The other is our logical brain which is rational, very
objective, and with which we hope and assume manages to control
all of our decision-making
