Chapter 5 Understanding the consumer market

The consumer market Ultimate consumers who buy goods and services for their own personal or household use.

Population People constitute a market. Marketers analyse the population and its geographic and demographic distribution as the first steps to understanding the consumer market.

The consumer market age gender family life cycle education Geographic distribution—frequently divided into rural, urban and suburban. Demographics—the vital statistics that describe a population. In particular: age gender family life cycle education income distribution ethnicity.

Relevance of consumer demographics Infant market (0–4 yrs). Child market (5–9 yrs). Tweens market (10–12 yrs). Teenage market(s) (13–18 yrs) The Generation Y market (late teens–30 yrs) The Generation X market (30s–40s) Baby Boomer market (45–60 yrs). Mature-age market (60–80s and above).

Gender Buying habits are traditionally breaking down: Traditionally, in a two-parent family, the mother did almost all the grocery shopping for the family, and the father bought the products and services needed for the car. Rapid growth of women workers in the workforce means women are also strong buyers of insurance and travel. Traditional gender roles have changed due to a growth in single-parent households.

Family life cycle Family life cycle will determine the purchase behaviour of individuals and their reason for purchasing. – single parent and two-parent families – young couples with no children – family (usually 2 adults, 2 young children) – family with teenagers – multicultural (or mixed) family.

The family life cycle

Consumers go through a five stage buying decision process Stage 1—Need recognition, when an unsatisfied need (motive) creates tension or discomfort in the consumer. Stage 2—Identification of alternatives, including both products and brands. Stage 3—Evaluation of alternatives, including establishing criteria to make the evaluation. Stage 4—Purchase decision, which is actually a series of decisions, including the actual purchase. Stage 5—Post-purchase behaviour, or cognitive dissonance.

What do Australians spend their money on?

Social influences culture changing gender roles social class reference groups families and other households core values, attitudes and beliefs the family as a buying unit.

Culture A culture is the complex set of symbols created by a society, which is handed down from generation to generation. These symbols set standards and limits on the behaviour of people within the cultural group. The symbols may be tangible, for example tools, works of art or housing. The symbols may be intangible, for example attitudes, beliefs, language, values and religion.

Psychological influences Buying motives: Buyer recognises motives for purchase. Buyer aware of reason for purchase but does not admit it to themselves. Buyer does not know the real motivating factor.

Motivation Behaviour is stimulated by a need. Motives trigger behaviour to satisfy need. Two broad categories of motivation: 1. Biogenic needs (need for food and bodily comfort). 2. Psychogenic needs (need for affection and self-respect).

Maslow’s hierarchy of needs SELF-ACTUALISATION need for self-fulfilment ESTEEM needs for self-respect, reputation, prestige and status BELONGING AND LOVE needs for affection, belonging to a group, and acceptance SAFETY needs for security, protection and order PHYSIOLOGICAL needs for food, drink, sex and shelter

Perception Perception is the process whereby we receive stimuli (information) through our five senses, we recognise this information, and we then assign a meaning to it.

Perception The limitations to perception are due to our selective approach to stimuli: Selective exposure—we perceive only part of what we are exposed to. Selective distortion—we alter stimuli based on our attitudes and beliefs. Selective retention—we retain only part of what we selectively perceive. Selective action—we act upon part of what we retain.

Learning Learning—changes in behaviour resulting from observation and previous experience. Learning occurs when a person: responds to stimuli is rewarded for the correct response is penalised for the incorrect response repeats a response forms a habitual response.

Personality Broadly speaking, personality is an individual’s pattern of traits that influence behavioural responses, for example, self confidence, aggressiveness, shyness, friendliness and stubbornness.

Attitudes and beliefs Attitude—a person’s enduring tendency to evaluate, feel about, or act in relation to some object or idea. Attitudes are formed by the information individuals acquire through their learning experiences and influenced by personality traits.

Situational influences Temporary forces associated with the immediate purchase environment that affect behaviour. When consumers buy—the time influences behaviour (day, week, season). Where consumers buy—the place where a decision is made (home, point of purchase). How consumers buy—the way in which consumers buy (bulk etc.).