SUPPLEMENTARY

NOTES OF MKT243
(FUNDAMENTALS OF
MARKETING):
FOR STUDENT’S
REVISION PURPOSE

PREPARED BY:
MADAM NURUL SYAQIRAH BT
ZULQERNAIN
Faculty of Business & Management
UiTM Kelantan (Machang Campus)

Source: C.W. Lamb, Hr. J. F. Hair, Jr., & Mc Daniel, C. ‘Marketing’ 12th
Edition, South-Western College Publishing (2018)

0
CHAPTER 2: UNDERSTANDING CONSUMER BEHAVIOUR
Syllabus content:
1. Consumer buying behaviour
2. Factors influencing consumer buying behaviour
3. Consumer buying decision-making process
4. Types of consumer buying decisions
_____________________________________________________________________
The importance of understanding consumer behavior:

Consumers’ product and services preferences are constantly changing. Marketing managers

must understand these desire in order to create a proper marketing mix for a well-defined

market. So it is critical that marketing managers have a thorough knowledge of consumer

behavior.

Consumer behavior describes how consumers make purchase decisions and how they use and

dispose of the purchased goods or services. The study of consumer behavior also includes

factors that influence purchase decisions and product use.

Factors influencing consumer-buying decisions:

1. Cultural factors

 Culture and values

Culture: set of values, norms, attitudes, and other meaningful symbols that

shape human behaviour and the artifacts, or products, of that behaviour as they

are transmitted from one generation to the next.

Value: enduring belief that a specific mode of conduct is personally or socially

preferable to another mode of conduct.

 Subculture

Subculture: a homogeneous group of people who share elements of the overall

culture as well as unique elements of their own group.

1
  Social class

Social class: a group of people in a society who are considered nearly equal in

status or community esteem, who regularly socialize among themselves both

formally and informally, and who share behavioural norms.

2. Social factors

 Reference groups

Reference groups: a group in society that influences an individual’s purchasing

behaviour.

 Opinion leaders

Opinion leaders: an individual who influences the opinion of others.

 Family

Initiators: suggest, initiate, or plant the seed for the purchase process. The

initiator can be any member of the family.

Influencers: are members of the family whose opinions are valued.

Decision makers: is the family member who actually makes the decision to buy

or not to buy.

Purchasers: is the one who actually exchanges money for the product (probably

dad or mom)

Consumers: is the actual user.

3. Individual factors

 Gender

Psychological differences between men and women result in many different

needs, such as with health and beauty products

 Age and family life cycle stage

2
 A consumer’s age and life cycle stage can have a significant impact on his or

her behaviour. How old a consumer is generally indicates what products he or

she may be interested in purchasing. Consumer tastes in food, clothing, cars,

furniture, and recreation are often age related.

 Personality

Personality: a way of organizing and grouping the consistencies of an

individual’s reactions to situations.

 Self-concept

Self-concept: how consumers perceive themselves in terms of attitudes,

perceptions, beliefs, and self-evaluations.

 Lifestyle

4. Psychological factors

 Perception

Perception: the process by which people select, organize, and interpret stimuli

into meaningful and coherent picture.

 Motivation

Motivation: a driving force that cause a person to take action to satisfy specific

needs.

 Learning

Learning: a process that creates changes in behaviour, immediate or expected,

through experience and practice.

 Beliefs

Beliefs: an organized patterns of knowledge that an individual holds as true

about his or her world.

3
  Attitudes

Attitudes: a learned tendency to respond consistency toward a given object.

Consumer decision-making process is a five-step process used by consumers when buying

goods or services. Whwn buying products, particularly new or expensive items, consumers

generally follow the consumer decision-making process as follow:

1. Need recognition

2. Information search

3. Evaluation of alternatives

4. Purchase

5. Post-purchase behavior

Step 1: Need recognition

 Need recognition is the result of an imbalance between actual and desired states. The

imbalance arouses and activates the consumer decision-making process.

 A want is the recognition of unfulfilled need and a product that will satisfy it. Wants

can be viewed in terms of four goals: economizing, sustaining, treating, and rewarding.

The specific goal that a consumer is trying to fulfill influences how he or she allocates

money, time, and effort.

 Need recognition is triggered when a consumer is exposed to either an internal or an

external stimulus, which is any unit of input affecting one or more of the five senses:

sight, smell, taste, tpuch, and hearing.

 Internal stimulus are occurences you experience, such as hunger or thrist.

 External stimulus are influences from an outside source. For example it was YouTube

video created a purchase desire.

4
  For example, a student wants to buy a new lapotop in order to replace an old personal

computer is not functioning-well.

Step 2: Information search

 After recognizing a need or want, consumers search for information about various

alternatives available to satisfy it.

 This type of information search, which can occur internally, externally, or both.

 An internal information search, when a person recalls information stored in memory.

This stored information stems largely from previous experience with a product.

 In contrast, an external information search seeks information in the outside

environment. There are two basic types of external information sources:

 Nonmarketing-controlled information source: ia product information source

that is not associated with marketers promoting a product. These information

sources include personal experiences (trying or observing a new product),

personal sources (family, friends, acquaintances, and coworkers who may

recommend a product or service), and public sources (consumer reports and

reviews)

 Marketing-controlled information source: is biased toward a specific product

because it originates with marketers promoting that product. It include mass

media advertising (radio, newspaper, television and magazine advertising),

sales promotion (contests displays, premiums), salesperson, product labels and

packaging, and digital media.

 The consumer’s information search should yield a group of brands, sometimes called

the buyer’s evoked set (consideration set), which are the consumer’s most preferred

alternatives. From this set, the buyer will further evaluate the alternatives and make a

choice.

5
  For example, a student obtains the information from both internally and externally

information search include asking the information about new alternatives of laptop from

televison advertisement and salesperson during PC Fair.

Step 3: Evaluation of alternatives

 After getting information and conmstructing an evoked set of alternative products, the

consumer is ready to make a decision.

 A consumer will use the information stored in memory and obtained from outside

sources to develop a set of criteria.

 The environment, internal information, and external information help consumers

evaluate and compare alternatives. One way to begin narrowing the number of choices

in the evoked set si to pick a product attribute and the exclude all products in the set

that do not have the attribute.

 For example:

Alternatives/ Lenovo Acer Dell

Criteria (s)

Processor Nvida AMD Intel

Screen display 15” 11” 13”

Design 1/3 2/3 3/3

Price (RM) RM 1600 RM 1500 RM1890

Step 4: Purchase

 Following the evaluation of alternatives, the consumer decides which product to buy or

decides not to buy at all.

6
  If he or she decides to make purchase, then the next step in the process is an evaluation

of the product after the purchase.

 For example, a student decides to buy an Acer laptop with the price is RM 1500.

Step 5: Post-purchase behavior

 When buying products, consumers expert certain outcomes from the purchase.

 How well these expectations are met determines whether the consumer is satisfied or

dissatisfied with the purchase.

 For example: get the 1 years warranty, frre gifts and customer service.

Cognitive dissonance is when consumers tend to feel an inner tension when they recognizing

an inconsistency between behavior and values or opinions.

In order to reduce dissonance:

Consumer can: Marketer can:

 Justify decision  Send postpurchase thank you or letter

 Seek new information  Display product superiority in ads

 Avoid contradictory information  Offer guarantees

 Return product

Types of consumer buying decisions

All consumer buying decisions generally fall along a continuum of three broad categories:

1. Routine response behavior

2. Limited decision making

3. Extensive decision making

7
Routine response behavior

 The type of decision making exhibited by consumers buying frenquently purchased,

low-cost goods and services; requires litte search and decision time.

 These goods and services can be also called low-involvement products because

consumers spend little time on search and decision before making the purchase.

 Usually buyers are familiar with several different brands in the product category but

stick with one brand.

 Example of products include drinking water, bread, sweets, biscuits.

Limited decision making

 They type of decision making that requires a moderate amount of time for gathering

information and deliberating about unfamiliar brand in a familiar product category.

 Limited decision making is also associated with lower levels of involvement (although

higher than routine decisions) because consumers expend only moderate effort in

searching for information or in considering various alternatives.

 Example of products include clothing, accessories, cosmetics.

Extensive decision making

 The most complex type of consumer decision making, used when buying an unfamiliar,

expensive product or infrequently bought item; requires use of several criteria for

evaluating options and much time for seeking information.

 This process resembles the model outlined. These consumers want to make the right

decision, so they want to know as much as they can about the product category and

available brands.

8
 People usually experience the most cognitive dissonance when buying high-

involvement products. Buyers use several criteria for evaluating their opinions and

spend much time seeking information.

 Example, buying a home or a car that requires extensive decision making.