Analyzing Consumer Markets

Models of Consumer Behavior

Consumer

Psychology

Motivation
Perception
Marketing Learning Buying Decision
Stimuli Other Stimuli Memory Process Purchase
Products and Economic Problem recognition
Decision
services Technological Information Search Product choice
Price Political Evaluation of Brand Choice
Distribution Cultural alternatives Dealer choice
Communication Purchase decision Purchase amount
Purchase timing
Post purchase
Payment method
evaluation
Consumer
Characteristics

Cultural
Social
Personal
 What influences
Consumer Behavior
• Cultural
• Social
• Personal
 Cultural Factors
• Culture : Encompasses habits, skills, art,
institutions and value of people at a
particular place.
• Subculture : National Origin, Race,
religion, region
• Social Class : Determined by education,
occupation and neighborhood of
residence
 Social Factors
• Reference Groups (Reference groups,
membership groups, primary groups,
secondary groups, aspirational groups,
dissociative groups, opinion leader)
• Cliques
• Family (Family of orientation, family of
procreation)
• Roles and Status
 Personal Factors
• Age and stage in life cycle
• Occupation and Economic
Circumstances
• Personality and Self-concept
• Lifestyle and Values
 Key Psychological
Processes

• Motivation
• Perception
• Learning
• Memory
 Motivation
• Freud’s theory (psychological
forces shaping people’s behavior
are largely unconscious)
• Maslow’s theory (Physiological
needs, safety needs, social
needs, esteem needs, self
actualization)
• Herzberg’s theory (Dissatisfiers,
Satisfiers)
 Perception
• Selective Attention (current need,
anticipate, large deviation)
• Selective Distortion (interpret information
that fits preconceptions)
• Selective retention (retention depends on
attitude and beliefs)
• Subliminal Perception (Consumers are
consciously unaware, yet they affect
behavior)
 Learning
• Learning
• Drive
• Cues
• Discrimination
• Hedonic bias
 Memory
• Short term memory
• Long term memory
• Associative network memory model
• Brand Associations
• Memory encoding
• Memory retrieval
 Buying Decision Process
• Problem Recognition
• Information Search (Information sources, search
dynamics, successive sets in consumer decision
making)
• Evaluation of Alternatives (Beliefs and attitudes,
expectancy value model)
• Purchase Decision (intervening factors, perceived risk
– functional risk, physical risk, financial risk, social
risk, psychological risk, time risk)
• Post-purchase behavior (Post purchase satisfaction,
post purchase actions, post purchase actions – get rid
temporarily (rent, lend), get rid permanently (get it
away, trade, sell, throw), Keep it (original purpose,
new purpose, store it)
Moderating effects on consumer
decision making
• Low involvement consumer decision making
(Elaboration likelihood model – central route,
peripheral route)
• Variety seeking behavior
Behavioral Decision Theory and Behavioral
Economics

• Decision Heuristics (Availability heuristic,

representative heuristic, anchoring and
adjustment heuristic)
• Framing
• Mental Accounting (segregate gains, integrate
losses, integrate smaller losses with larger
gains, segregate small gains with large loss,
Prospect theory)