Consumer Markets and Buyer Behavior

Decision Making in Buying Process

Buyer Behavior and effects of
Family
Social Class, and
Reference Group

Global Marketing
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Buyer Behavior: Decision Making

Marketers need to know consumers decision
process because the following issues have potential
values to the marketing managers:
How consumers collect their product information
What are the possible sources
What are relative influences of these sources
How they form beliefs
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Buyer Behavior: Decision Making

How consumers make their decisions
How they compare brands
What is their decision process
Why they reject one brand or why they are
loyal to another brand
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Buyer Behavior: Decision Making

Then based on those answers,
Companies develop appropriate products with
required attributes

Marketers tailor promotional strategies

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Buyer Behavior: Decision Making

Consumer decision process is not same for
all products
It depends on degree of novelty or risk
associated with decision
Since some purchase decisions are more
important than others, amount of effort we put
into such one differs
Some decision making process is almost
automatic
Sometimes it needs huge efforts and
information
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Buyer Behavior: Decision Making

Four Types of Buying Behavior

Buyer Behavior: Decision Making

Complex Buying Behavior

When products are expensive, risky, purchased

infrequently, and highly self-expressed with
significant differences
Consumers undertake complex buying behavior
when they are highly involved in a purchase
decision and perceive significant differences among
brands
Laptop, a new model car
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Buyer Behavior: Decision Making

Dissonance Reducing Buying Behavior

When products are expensive, risky, and purchased

infrequently
Consumers undertake this buying behavior when
they are highly involved in a purchase decision but
perceive little differences among brands
Gold Ornament, Furniture

Buyer Behavior: Decision Making

Habitual Buying Behavior

When products are inexpensive and purchased

frequently.
Consumers undertake this buying behavior when
they have low involvement in a purchase decision
and perceive little differences among brands
Salt, Flour, Sugar
Since customers are not brand oriented, marketers
often use price and sales promotion to stimulate 9
product

Buyer Behavior: Decision Making

Variety Seeking Buying Behavior

When products are inexpensive and purchased frequently

Consumers undertake this buying behavior when they have
low involvement in purchase decision but perceive significant
differences among brands
Cookies, Tea
Since customers are not brand oriented and
switch from one brand to another for variety
rather than dissatisfaction, market leader try to
implement different advertising strategy to
encourage habitual buying behavior
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Buyer Behavior: Decision Making

A decision is actually composed of a series of
stages that results in selection of one
products over competing options
Process of Decision-making (High Effort):
Problem recognition (your TV sound
system is not working properly)
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Buyer Behavior: Decision Making

Process of Decision-making (High Effort):
Information search (what brands are
available and their comparative merits and
demerits)
Evaluation of alternatives (comparison
among brands)
Product choice (final brand selection)

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Buyer Behavior: Decision Making

Types of consumer Decision-making process
Extended Problem Solving
Corresponds most closely to traditional decisionmaking perspective
When we feel outcome of decision is very important,
we try to collect as much information as possible
both from our memory and outside sources
We consider attributes of one brand at a time, see
how each brands attributes relate to results we
hope to get from our choice.
Buying a Computer, Apartment, Vacuum Cleaner
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Buyer Behavior: Decision Making

Limited Problem Solving
Usually more straightforward and simple
Not interested in searching for all information
and compare each alternative
Use simple decision rules to satisfy our needs
Buying a dress, USB memory drive, a mobile
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set

Buyer Behavior: Decision Making

Habitual Decision-making
Both extended and limited problem-solving
methods involve some degree of information
search
For some products, buying is occurring just
from routine efforts to pick up from shelves
and put it on shopping carts
Without conscious control
Without comparing information
Ball pen, Eraser, Tea (Not bag), Sugar
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Buyer Behavior: Decision Making

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Buyer Behavior: Decision Making

Decision Process
Model
Compensatory Model
Noncompensatory
Model
Evaluative Criteria
Selecting dimensions to judge
merits of competing options
Assigning weights for these
dimensions based on importance
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Buyer Behavior: Decision Making

Noncompensatory Decision Model

We use this rule when we feel that a product with

low standing on one attribute cannot compensate
for this flaw even if it performs above expectation
on other attributes
Simply eliminate all options that do not meet
some basic standards on some attributes
You are looking an apartment for renting less
than 20,000 taka monthly and also have some
other criteria like location, security, quality,
kitchen, room number, owner etc.
If one apartment costs more than 20,000 taka
monthly, you will outright reject it based on the
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noncompensatory decision processing rules

Buyer Behavior: Decision Making

Noncompensatory Decision Model

Lexicographic Model
Consumers order attributes in terms of
importance and compare options one attribute at
a time, starting with most important attribute
Selects brand that perform best on the most
important attribute.
If two or more tie on this attribute, they are
evaluated on second most attribute
I want to get brand that does best on my most
important attribute
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Buyer Behavior: Decision Making

Noncompensatory Decision Modelcontinued

Elimination-by-Aspects Model
Consumers rank evaluative criteria in terms of importance
and establish a cut off for each criterion
All brands first considered on most important criterion.
Those that do not meet or exceed cut off point are
dropped from consideration
If more than one brand remains after first elimination,
process is repeated among remaining brands for second
most important criterion
I will eliminate any brands that do not meet or
exceed cut off point , beginning with the most
important attribute.
I will eliminate any brands that have a value of 3 20
or
below, beginning with the most important attribute.

Buyer Behavior: Decision Making

Noncompensatory Decision Modelcontinued

Conjunctive Model
Consumers set up minimum cutoffs for each
attribute (represent absolute lowest value they
are willing to accept) and selects first or all
brands that meet or exceed these minimum
performance standards
Motive is to rule out unsuitable alternatives as
soon as possible.
Any brand falling below these minimum
standards (cut off point less than 3) would be
eliminated for further consideration.
I will consider all brands that are acceptable on the attributes
I think are important
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Buyer Behavior: Decision Making

Noncompensatory Decision Modelcontinued

Disjunctive Model
Similar to conjunctive, with two exceptions
One, consumer sets up acceptable levels for
cutoffs levels that are more desirable. Two,
evaluations are made on several (rather than all)
of most important attributes.
Consumers set up desirable cutoffs for each
important attribute (not for all) and selects first or
all brands that meet or exceed these desirable
performance standards for those important
attributes
Suppose for price:1, weight: 3, Processor:4,
Battery:4, After Sales:3, Display: 3 are desirable
score)
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Buyer Behavior: Decision Making

Compensatory Decision Model
When consumers highly involved in purchase, they are
willing to exercise and evaluate entire picture
comprehensive way
We feel a product can be evaluated for its aggregate
attributes

Consumer evaluates brand options in terms of

each relevant attribute and computes a weighted
or summated score for each brand
This rule compensates a product for its shortcomings
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Buyer Behavior: Decision Making

Compensatory Decision Model
Looking an apartment for rents around 20,000
taka monthly and also other criteria like
location, security, quality, kitchen, room
number, owner etc.
If one apartment costs more than 20,000 taka
monthly, you will not outright reject it rather
consider all other criteria and get an aggregate
picture to evaluate among different options.
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Buyer Behavior: Decision Making

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Buyer Behavior: Decision Making

Evaluative criteria

Epson

Canon

Compaq

Samsung

IBM

Toshiba

Importance

Price

30

Weight

25

Processor

10

Battery life

05

After-sale support

10

Display quality

20

* evaluations: 1 = very poor; 5 = very good

Or belief strengths: 3= very weak; +3= very strong if stated in terms of attribute level
(e.g., low price, light weight, long battery life, etc.))

Different Choices, Depending on Different Decision Rules

Decision Rule

Brand Choice

Compensatory

Samsung

Conjunctive

Canon

Disjunctive

Toshiba

Lexicographic

Epson

EBA

Samsung

Compensatory Model:
Score for Samsung Score for Epson
30 * 4 = 120
25 * 4 = 100
10 * 2 = 20
05 * 4 = 20
10 * 3 = 30
20 * 5 = 100
____
390

30 * 5 = 150
25 * 3 = 75
10 * 5 = 50
05 * 1 = 05
10 * 3 = 30
20 * 3 = 60
____
370

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Buyer Behavior: Decision Making

Decision rule to purchase an apartment
Compensatory rule
We selected apartment that came out best when we balanced good
ratings against bad ratings

Noncompensatory rule
Conjunctive rule
We picked the apartment that had no bad features

Disjunctive rule
We selected the apartment that excelled in at least one attribute

Lexicographic rule
We looked at feature that was most important to us and chose apartment
that ranked highest on that attribute

Elimination-by-Aspects
We compared apartments based on acceptable standards for features those
were sequentially most important to us and finally chose apartment that
qualified on those attributes which were ranked on their importance
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Buyer Behavior: Decision Making

Multiple models to take decision
Consumers often use a combination of decisionmaking strategies
For example, when there are a large number of
options, first use a noncompensatory strategy
(conjunctive model) to reduce size of consideration
set and get rid of bad ones and then use a more
thorough model (a compensatory strategy) to
evaluate remaining options
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Buyer Behavior: Decision Making

Decisions sometimes made simply because
they feel right rather than they resulted from
a detailed and systematic evaluation
Affective Decision Making
Emotions and feelings
Experience-based (Lux Soap, Philips Bulb)

Imagery
Visualization (Honey bottle, Pulse)
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Buyer Behavior: Decision Making

Decision making when alternatives cannot be compared

Non-comparable Decisions
What to do with this bonus money?
Visiting Coxs Bazar or village home
Buying a large screen HD TV with home theater
or a Laptop
Investing in Share market
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Buyer Behavior: Decision Making

Decision making when alternatives cannot be compared

Alternative-Based Strategy (top-down)

Develop an overall evaluation of each option
(perhaps using compensatory strategy) and
make decision based on this evaluation

Attribute-Based Strategy (bottom-up)

Make comparisons easier by forming abstract
representations of comparable attributes
Thus, the choice is constructed or built-up
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Buyer Behavior: Decision Making

When decision
based on low
consumer effort

Few product
differences
perceived
(flour, mosquito coil)

Routine buying (salt)

Convenience (soft
drinks available
close to home)

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Buyer Behavior: Decision Making

Low-Effort Decision-Making Process
Simplifying Strategies
Satisfice
(flour, salt)

Choice Tactics

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Buyer Behavior: Decision Making

Low-Effort Decision-Making Process

Choice Tactics
Price tactics
Its the cheapest
(Spice: Cumin, Cinnamon)

Affect tactics
I like it
(Lux soap)
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Buyer Behavior: Decision Making

Low-Effort Decision-Making Process

Choice Tactics
Performance tactics
It removes stains better
(Harpics)

Normative tactics
My mother bought it
(Powder Spice)
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Buyer Behavior: Decision Making

Low-Effort Decision-Making Process

Choice Tactics
Habit tactics

I buy the same brand I bought last time

(Basmoti Rice)

Brand loyalty tactics

I buy the same brand for which Ive a strong
preference
(Singer Sewing Machine)
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Buyer Behavior: Decision Making

Low-Effort Decision-Making Process

Choice Tactics

Variety seeking tactics

I need to try something different
(Cookies)

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Buyer Behavior: Decision Making

Low-Effort Decision-Making Processes
How Low-Effort Decision Making Differs from
High-Effort?
Hierarchy of Effects
Passive or Incidental Learning

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Buyer Behavior: Decision Making

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Consumer Markets and Buyer Behavior

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Consumer Markets and Buyer Behavior

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Consumer Markets and Buyer Behavior

Roles of Spouses

Husband-Dominant Decision
Wife-Dominant Decision
Joint Decision
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Consumer Markets and Buyer Behavior

Stages in Family
Life Cycle

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Consumer Markets and Buyer Behavior

Decision-making process for family
Initiator(s): Family member who first
recognizes a need or starts purchase process

Information gatherer(s): Individual who

has expertise and interest in a particular
purchase

Influencer(s): Person who influences

alternatives evaluated, criteria considered,

and final choice
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Consumer Markets and Buyer Behavior

Decision-making process for family
Decision maker(s): Individual who makes
final decision, may be joint decision

Purchaser(s): Family member who actually

purchases the product, typically an adult or
teenager

User(s): User of product, may be single or

multiple.

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Consumer Markets and Buyer Behavior

Decision-making process for Kids Cereal
Influencer
(children)

Communication
targeted at children
(taste, image)

Initiator
(parents,
children)
Communication
targeted at parents
(nutrition)

Decision
maker
(parents,
children)

Purchaser
(parents)

User
(children)

Information
gatherer
(parents)

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Social Class and Consumer Behavior

Social class: An identifiable group of individuals

who tend to share similar values and behavior
patterns different from those of other classes

Concept of social class implies

that some have more power,
wealth, status and opportunity
than others
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Social Class and Consumer Behavior

U.S.

Latin America

Bangladesh

Japan
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Social Class and Consumer Behavior

Upper class (elite families, top business

people, huge land owners, and political
leaders)
View themselves elite. This image leads to an
increase in behaviors such as investment in art,
travel (esp. Europe, North America), donations to
good causes, prestige schooling and membership
in elite private clubs
Self-expression is also important, resulting in
purchase of high-quality, prestige brands with
ideal of spending in good taste
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Social Class and Consumer Behavior

Upper-middle class (top professionals and

medium businesspeople)
View themselves as intellectual, liberal, political
and socially conscious. This image leads to an
increase in behaviors such as theater attendance,
purchases of arts, travel (esp. Thailand, India,
Nepal, Singapore), prestige schooling and
membership in new private clubs.
When items are purchased, conspicuous
consumption is often goal.
For advertising and personal selling messages,
English words and western models are very
appealing
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Social Class and Consumer Behavior

Lower-middle class (General service people and

educated white-collar employees)
Dependence on spouse for both economic and social
support
More cultural minded, and nationality oriented socially,
psychologically and geographically than other classes
More likely to judge product quality on basis of price, shop
in mass merchandise
Want to do the right thing, buy whats popular, do whats
good for the children and be fashionable
Likely to spend on education, shop at somewhat balanced
(price and quality) clothing stores with medium quality
brand names, stick with price sensitive brands
Foreign brands, English words and western models are
very appealing for advertising and personal selling
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messages

Social Class and Consumer Behavior

Lower class (labors and farmers)

Mainly represented by blue-collar workers; heavy
dependence on family members for both
economic and social support
Traditional male dominated buying
Judge product quality on basis of price, shop in
mass merchandise or discount stores, and have
less product information when purchasing
Second-hand consumers
TV advertisement is appealing
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Social Class and Consumer Behavior

Across most societies, upper classes are
more similar more cosmopolitan and
international in orientation
Middle classes are most likely to borrow from
other cultures because this may represent a
means of achieving upward social mobility.
Lower classes are most likely to be culture
bound (unaware of other cultures and
therefore little influenced by them)
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Social Class and Consumer Behavior

Conspicuous Consumption
Acquisition and visible display of luxury goods
and services to demonstrate ones ability to
afford them
Experience facilitators The visibility of these
goods/services is critical because the message
will not be communicated if others cannot see
them!

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Social Class and Consumer Behavior

Status Symbols and Judging Others

Status Symbols (to indicate who they are in the social
hierarchy based on what they own/possess)
Examples: Rolex, Golf, Mercedes

Parody Display (status symbols moving in reverse direction)

Example: tattoo and ripped jeans becoming more acceptable in
upper and upper-middle classes

Fraudulent Symbols (when status symbols are widely

possessed, they lose their status connotations)
Example: cell phones
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Reference Group and Consumer Behavior

A useful framework of analysis of group

influence on individual is 'reference
group'
term comes about because an
individual uses a relevant group as a
standard against which oneself is
compared.
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Reference Group and Consumer Behavior

Exhibit: Sources of Influence

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Reference Group and Consumer Behavior

Reference Group
Aspirational Reference Group
Aspirational reference group
refers to those celebrity whom one
would like to compare oneself
many firms use athletes, actors/
actress, models in advertisement and
these represent what many people
would ideally like to be.
Nike, Adidas etc. uses famous sports
celebrity

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Reference Group and Consumer Behavior

Associative Reference Group
Associative reference
groups include people who
more realistically
associated with individuals'
current status
coworker, neighbor, friend
Your favorite friend is using Nokia
mobile handset
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Reference Group and Consumer Behavior

Dissociative Reference Group
Dissociative reference group
includes people that individual
would not like to be like

Teenage people do not like to

use umbrella because it
resembles old people

Store named 'The Gap' was

created because many younger
people wanted to actively be
distinguished from parents and
other older and 'uncool' people.
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Reference Group and Consumer Behavior

Normative
Example: Your friend

Communicated tells you, you shouldnt

Verbally
wear that outfit again.

Communicated
Non-verbally

Example: Your friend

looks at you in a weird
way whenever you
wear
the outfit.

Informational
Example: Your
friend tells you
there is a discount
package at Grameen
Phone
Example: You see so
many people
Wearing Arong
Panjabi and
decide to buy one

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Global Marketing
Country of origin effects
Consumers use their knowledge of where
products are made in evaluation of their purchase
options
Common associations

France perfumes, wine, clothing

Italy shoes, sports cars, furniture
Japan cameras and consumer electronics
Germany cars, tools and machinery
India spices, textiles, jewellery
US computers, entertainment, fast-food
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Global Marketing
COMMUNICATION STRATEGY
Product
Standardized
Localized
communication Communication
Vs.
Communication

Standardized
product
PRODUCT
STRATEGY Localized
product

GLOBAL
STRATEGY
Laptop

MIXED
STRATEGY
Automobile

MIXED
STRATEGY
French Wine

LOCAL
STRATEGY
McDonalds

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Global Marketing
Standardized or Adaptation???
Standardization is best advocated by

Theodore

Levitt (Levitt, 1983)

According to Levitt, cultural differences may

be compensated by offering better quality at
a lower price
Standardization can offer cost effectiveness,
quality consistency, same product image and
economies of scale
Adaptation Strategy: Marketing mix will be
adjusted to the local situation (NOT entirely)
Localized) when needed
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