Customer behavior & market segmentation

Lidia Briquets
November 2019
CONSUMER-BUYER BEHAVIOUR
 TABLE OF CONTENTS
CONSUKER-BUYER BEHAVIOUR

• Models of consumer behaviour

• Key factors and characteristics
• Consumer decision process
1. MODELS OF CONSUMER BEHAVIOUR

In a global market, with a lot of products and offer, it is a must to understand consumer and buyer behaviour.

When do they How do they Why do they buy?

buy? buy?

Who Where do they

buys? buy?
1. MODELS OF COSNUMER BEHAVIOUR

Marketing stimuli: it consists of the 4 (or 7) «P’s» + other events in the buyer environment.

Marketing Other
Characteristics Buyer’s responses
Stimuli stimuli
Economic Product choice
Technological Brand choice
4 (or 7) «P’s»
Political Decision process Dealer choice
Cultural Purchase timming
Purchase amount

Marketer want and needs to understand how the stimuli are changed into responses inside consumers’ black box:

• Buyer’s characteristics influence how he/she perceives and reacts

• The buyer’s decision process itself affects the buyer’s behaviour

It is not possible to know 100% what is inside the black box, but the models can help us understand consumers.
2. KEY FACTORS AND CHARACTERISTICS Personal
Age and life-cycle stage
Cultural
Occupation & Economics
Culture Lifestyle
Subculture Personality and self-concept
Social Class

Psychological
Social
Motivation
Reference groups
Perception & learning
Family
Beliefs and attitudes
Roles and status
 2. KEY FACTORS AND CHARACTERISTICS

Lifestyle – SINUS GmbH study classification:

• Basic orientation: traditional. TO PRESERVE

• Basic orientation: materialist. TO HAVE
• Changing values: hedonism. TO INDULGE
• Changing values: postmaterialism. TO BR
Lifestyle – RISC agency París:
• Changing values: postmodernism. HAVE+BE+INDULGE
• Traditionalist: culture, social influenced

• Homebody: needs to feel in touch with her/his roots

• Pleasurist: emotiona experiences, self-regulation

• Rationalist: complex situations, take risks with info

• Utriver: autonomous behaviour, wants full explosion

• Trendsetter: spontaneous
3. CONSUMER DECISION PROCESS

High involvement Low involvement

Significant differences Variety-seeking buying

Complex buying behaviour
between brands behaviour

Few differences Dissonance-reducing buying

between brands
Habitual buying behaviour
behaviour
3.1 Complex buying behaviour

• Highly involved in a purchase.

• They perceive significant differences among brands

• Product/service is risky, expensive, purchased infrequently and highly self-expressive

Marketer functions / actions:

• Help buyers learn about product-class attributes

• Inform buyers about what the company’s brand offers

• Differentiate brands’ features by describing benefits

3.2 Dissonance-Reducing Buying Behaviour

• Highly involved in a purchase.

• Product/serviceis risky, expensive, purchased infrequently and highly self- expressive

• They DO NOT perceive significant differences among brands

• They may respond primarily to a good price or after purchase dissonance.

Marketer functions / actions:

• The marketer’s after-sale communications should provide evidence and support to help customers feel good both before
and after their brand choice.
3.3 Variety Seeking Buying decision

• Low consumer involvement but BIG significant brand difference

• Consumer holds some beliefs: brand evaluation is not before purchasing, is after

• / during consumption (for example, yogurts).

• Brand switching causes: variety seeking more than dissatisfaction

Marketer functions / actions:

• Strategy is very different if you are a leading brand or minor brand.

• Leader: try to encourage habitual buying by dominating space and avoiding out-stock

• Challengers: encourage variety-seeking by offering lower prices, deals, free samples…

4. BUYING DECISION PROCESS

Need recognition: difference between his or her actual state and some desired state.

Info. Search: most information about a product from commercial sources.

Evaluation of alternatives:

1. Each consumer tries to satisfy 1 need and is looking for certain benefits. 1 product = bundle of attributes.

2. Consumer attaches degrees of importance to each attribute

3. Consumer develops a set of brand beliefs about each bran or attribute.

4. Consumer is assumed to have a utility function for each attribute

5. Consumer arrives at attitudes towards the different brands though evaluation procedure
4. BUYING DECISION PROCESS
4. BUYING DECISION PROCESS

✓ Consumers base their expectations on messages they receive from sellers

✓ The larger the gap between expectations and performance, the greater the consumer's dissatisfaction.

✓Satisfaction is important because a company's sales come from two basic groups - new

customers and repeat customers.

4. BUYING DECISION PROCESS - NEW PRODUCTS ADOPTION PROCESS

•Aware new product

Awareness
•Lacks of information about it

•Think whether trying the new product makes sense

Interest •Information seeking

•Small scale
Trial •Moment to work on consumer estimate of product value

•Decision
Adoption •Repetition or not