CHAPTER 6: ANALYZING CUSTOMER MARKETS

Question 1

What Influences Consumer Behavior?

Answer 1

Consumer behavior is influenced by multiple interrelated factors categorized mainly as cultural, social, and personal influences:

1. Cultural Factors

• Culture is the fundamental determinant of a person’s wants and behavior, providing the basic values and norms that guide behavior.
• Subcultures, including nationalities, religions, racial groups, and geographic regions, create diversity in consumer needs and behaviors.
• Social classes, which are relatively homogeneous and enduring divisions in society, influence consumer values, interests, and purchasing patterns.

1. Social Factors

• Reference groups such as family, friends, and social networks shape consumers’ attitudes and buying behavior. These groups provide points of comparison or sources of information that influence choices.
• Family roles and status within social groups also affect buying decisions.

1. Personal Factors

• These include age, occupation, economic circumstances, personality traits, self-concept, lifestyle, and values, all influencing preferences and decision-making patterns,.

1. Psychological Processes

• Learning, motivation, perception, beliefs, and attitudes shape how consumers respond to marketing stimuli and make decisions.

Thus, consumer behavior reflects a complex interaction of cultural background, social environment, personal characteristics, and psychological processes, all driving how consumers select, purchase, use, and dispose of products to satisfy their needs and wants.

Question 2

How do consumer characteristics influence buying behavior?

Answer 2

Consumer characteristics influence buying behavior through several key personal factors including age, life stage, occupation, economic circumstances, personality, self-concept, lifestyle, and values. These factors shape preferences, needs, and buying decisions as follows:

1. Age and Stage in Life Cycle — Taste in products like food, clothes, and recreation changes with age. Life-cycle stages (e.g., marriage, childbirth) and critical life events impact consumption patterns. Marketers consider these to target consumers effectively.
2. Occupation and Economic Circumstances — Different occupational groups may show greater interest in certain products; also, economic conditions like recession affect buying behavior, prompting marketers to adjust offerings accordingly.
3. Personality and Self-Concept — A consumer’s unique psychological traits influence consistent buying behavior. Consumers often prefer brands whose personalities align with their own or their ideal self-concept, which affects brand choice.
4. Lifestyle and Values — Patterns of living expressed through activities, interests, and opinions guide buying decisions. Lifestyles can be influenced by constraints like time or money. For example, consumers experiencing time scarcity may multitask and seek convenience.

Overall, these consumer characteristics drive how individuals evaluate needs, form attitudes, and make purchasing decisions, shaping their behavior in the marketplace.

Question 3

What major psychological processes influence consumer responses to the marketing
program?

Answer 3

The major psychological processes that influence consumer responses to marketing programs include perception, learning, and emotions:

1. Perception

• It is the process by which consumers select, organize, and interpret information to create a meaningful picture of the world.
• Perception involves selective attention (focusing on certain stimuli), selective distortion (interpreting information to fit existing beliefs), and selective retention (remembering information selectively).
• Consumers perceive information not only based on physical stimuli but also contextual factors and internal conditions, leading different consumers to have different perceptions of the same marketing message or product,.

1. Learning

• Learning leads to changes in behavior arising from experience. It involves concepts such as drives (internal stimuli motivating action), cues (minor stimuli influencing when and how people respond), and processes like generalization and discrimination.
• Consumers develop knowledge about products and brands through learning, which shapes their future purchasing behavior.
• The hedonic bias means consumers tend to blame products rather than themselves for failure, so marketers must clearly communicate product functions through design, advertisements, and instructions.

1. Emotions

• Emotional responses to brands or advertising can be diverse, ranging from pride, excitement, and confidence to amusement, disgust, or wonder.
• Brands that evoke strong emotions tend to engage consumers more deeply and motivate them to share brand experiences through word of mouth or online sharing.
• Emotionally charged brand stories effectively trigger consumers’ desires to propagate brand messages.

Together, these psychological processes determine how consumers interpret and respond to marketing efforts, influencing their attitudes, preferences, and ultimately their buying decisions.

Question 4

How do consumers make purchasing decisions?

Answer 4

Consumers make purchasing decisions through a structured process often described as the Five-Stage Buying Decision Process:

1. Problem Recognition

• The consumer recognizes a need or problem, triggered by internal stimuli (e.g., hunger) or external stimuli (e.g., seeing an ad). This recognition initiates the buying process,.

1. Information Search

• Consumers engage at two levels: heightened attention (being more receptive to product information) and active information search (seeking information via reading, friends, internet, or stores).
• Sources include personal (family, friends), commercial (ads, salespeople), public (mass media, social media), and experiential (handling or using the product).

1. Evaluation of Alternatives

• Consumers evaluate the products by combining their beliefs about brands (both positive and negative attributes) weighted by importance, aiming to find a product that best satisfies their need.
• They see products as bundles of attributes and form attitudes based on beliefs and emotional evaluations.

1. Purchase Decision

• The consumer decides on brand, dealer, quantity, timing, and payment method.
• Decision models can be compensatory (where positive attributes can offset negatives) or non-compensatory (heuristics or rules of thumb like conjunctive, lexicographic, or elimination-by-aspects heuristics are used to simplify choice).

1. Post-purchase Behavior

• After the purchase, consumers evaluate their satisfaction, which can influence future decisions and brand loyalty.

This process reflects how consumers move from recognizing a need to acting on it, balancing cognitive evaluation with psychological influences.

Question 5

In what ways do consumers stray from a deliberative, rational decision process?

Answer 5

Consumers stray from a deliberative, rational decision process in several ways, as explained by Behavioral Decision Theory and Behavioral Economics:

1. Decision Heuristics (Mental Shortcuts)

• Consumers often use heuristics to simplify complex decisions rather than undertaking a full rational analysis. Examples include:
• Availability heuristic: Judging the likelihood of events based on how easily examples come to mind.
• Representativeness heuristic: Making judgments based on how closely something matches a stereotype or category rather than on objective probabilities.
• Anchoring and adjustment heuristic: Relying heavily on an initial piece of information (anchor) and making insufficient adjustments from it.

1. Framing Effects

• The way choices are presented or framed influences decisions. For example, consumers evaluate options differently depending on whether they are framed as gains or losses.
• Mental accounting leads consumers to categorize and evaluate financial outcomes in non-rational ways, sometimes treating money differently depending on its source or intended use rather than its objective value.

1. Emotional and Psychological Influences

• Emotions can heavily influence consumer choices, prompting impulsive or biased decisions rather than rational evaluations.
• Brand stories that evoke emotional responses can shape preferences beyond logical assessment.

These factors mean that instead of purely logical cost-benefit analysis, consumers rely on cognitive biases, emotional reactions, and contextual framing that lead to seemingly irrational or inconsistent choices.