CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE
PART 1:
CHAPTER 2
Determinants of Customer Behavior:
Personal Factors
and Market Environment
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Framework
Customer Behavior: A Managerial Perspective
PART 1
•
•
•
•
Personal Context
Culture
Groups and Institutions
Personal Worth
Social Class
CHAPTER 2
Personal Traits
• Genetics
• Biogenics
• Personality
Buyer
User
Payer
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Market Context
• Economy
• Government Policy
• Technology
Market Traits
• Climate
• Topography
• Ecology
Copyright © 1999 by Thomas Southwestern. All rights reserved.
2
Two Broad Classes
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Personal traits

Those biological and physiological features a person
is born with and those that develop as a person grows
but whose origin derives from biological heredity.


Individual traits
Group traits
Personal context

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The characteristics of the socio-econocultural
environment in which we have lived and are living,
which has intimately influenced our resources, tastes,
and preferences
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Personal Factors
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Personal Traits
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Genetics
Biogenics
Race
Gender
Age
Personality
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5
Genetics: The Cards We Are
Dealt at Birth
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
DNA (deoxyribonucleic acid)

Chemicals in cell nuclei that form the
molecular basis of heredity in organisms
 Genes (segments of DNA) provide the code
that determines our characteristics
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Research
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Research is in progress on genetics and DNA, seeking to
discover secrets of the human condition and behavior
Advances in neurology are uncovering various chemicals
that regulate human emotions and behavior
 These discoveries support the idea of biological
determinism – the belief that human behavior is
determined by biological factors such as genetics and
DNA
 Other non-biological factors such as culture,
perception, learning, and individual motivation,
determine much of adult behavior as well
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Genetics Affect Customer
Needs and Behavior
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Four Factors

Physiological differences
 Diseases and mental disorder
 Circadian rhythm
 Emotions and behavior
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Direct Effects of Genetics
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Physical features and physiological
characteristics

Height, weight, skin color and tone, color of
eyes, color and texture of hair, and bodily
reactions to variations in temperature and
other environmental changes (i.e., allergies)
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Daily Cycle of Activity
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Circadian Rhythm – biological “clock” governs
rhythms like sleep-wake cycles
People’s rhythms affect,, when shoppers like to
shop, among other things
Research is also examining whether consumers
might process advertisements differently at
different times of the day according to their
circadian rhythm
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Human Behavior
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Nature (biological factors)

Behavior is determined by a person’s upbringing, by
family life, by parental values, by peer group
influences, by school, and by church groups
Nurture (the familial and social environment)

Behavior is determined by a person’s genetic makeup:
our emotions, our sexual preference, tribalism, love of
status, notions of beauty, our sociability, creativity,
and morality itself
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Birth Order Matters
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Birth order is the sequence among all
siblings born of the same mother

Older children are control freaks, aspiring,
ambitious and driven
 Younger siblings, in contrast, take themselves
much less seriously, are more sociable and less
judgmental, more risk taking and more open to
new things and change
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Biogenics
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Three biogenic characteristics that
influence customer behavior:

Race
 Gender
 Age
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Race
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
In the United States, the Bureau of the
Census specifies the following four race
categories:
Caucasian
2. African American
3. American Indian and Alaskan Eskimos
4. Asian and Pacific Islanders
1.
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Gender
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Gender is a biogenic group trait that
divides customers into two groups

males and females
This group trait remains constant through a
person’s life, and it influences customer
values and preferences
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Age
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Age is perhaps the most pervasive influence on
customer behavior
Both needs and wants vary immensely by age
Age helps determine the lifetime revenue from a
customer

Lifetime revenue is the estimated revenue a firm may
expect to receive from a customer over the customer’s
lifetime
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Chronological Age-based
Grouping
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
The GI Generation (born from 1901 to 1924)
Silent Generation (born between 1925)
Baby Boomers (born between 1946 to 19640
Generation X (Post 1964)
Generation Y (born between 1977 and 1995)
Children
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Distribution of Online Buyers
By Age
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
All households
Online Buyers
65+
16%
21%
29%
27%
50-64
25%
25%
40-49
17%
20%
30*39
Under 30
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0%
8%
11%
10%
20%
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30%
18
Customer Personality
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Personality refers to a person’s consistent
ways of responding to the environment in
which he or she lives
Customer personality is a function of two
factors:

Genetic makeup
 Environmental conditioning
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Personality = Genetics x Environment
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19
Behaviorism Theory
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
A person develops a pattern of behavioral
responses because of the rewards and
punishments offered by his or her
environment
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Freudian Theory
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Human personality is driven by both conscious
and unconscious motives
Three divisions of the human psyche:

id


ego


the basic source of inner energy directed at avoiding pain and
obtaining pleasure and represents the unconscious drives and
urges
between the unconscious and impulsive desires of the id and
the societal ideals internalized by the superego
superego
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the moral side of the psyche, reflecting societal ideals
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Unconscious Tactics of the Ego
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Aggression
Rationalization
Projection
Repression
Withdrawal
Regression
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Trait Theory
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
A person is viewed as a composite of
several personality traits
A personality trait is a consistent,
characteristic way of behaving
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Personality of the Business
Customer
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Two personality traits of the “social styles”
classification

Assertiveness
 Responsiveness
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Classification of Personality Into Social Styles
RESPONSIVENESS
LOW
Analytical
• Slow reaction
• Maximum effort to organize
• Minimum concern for
relationships
• Historical time frame
• Cautious action
• Tends to reject involvement
Driving
• Swift reaction
• Maximum effort to control
• Minimum concern for caution
in relationships
• Present time frame
• Direct action
• Tends to reject inaction
Amiable
• Unhurried reaction
• Maximum effort to relate
• Minimum concern for effecting
change
• Present time frame
• Supportive action
• Tends to reject conflict
Expressive
• Rapid reaction
• Maximum effort to involve
• Minimum concern for routine
• Future time frame
• Impulsive action
• Tends to reject isolation
HIGH
RESPONSIVENESS
HIGH
ASSERTIVENESS
ASSERTIVENESS
LOW
Personal Context
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Culture
Institutions and groups
Personal worth
Social class
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Culture
Customer Behavior: A Managerial Perspective
PART 1
Enculturation
Elements of
Culture
Values
Norms
Rituals
Myths
CHAPTER 2
Acculturation
Characteristics of Culture
Culture is learned
Culture regulates society
Culture makes living more
efficient
Culture is adaptive
Culture is environmental
Multiple cultures are nested
hierarchically
Dimensions of
Cross-cultural Values
Individual vs. collectivism
Large vs. small power distance
Strong vs. weak uncertainty
avoidance
Masculinity vs.femininity
Abstract vs. associative
thinking
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Institutions and Groups
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Institutions

More permanent groups with pervasive and
universal presence in society
Groups

Two or more persons sharing a common
purpose
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Types of Groups
Customer Behavior: A Managerial Perspective
PART 1
MEMBERSHIP
•
•
•
•
SYMBOLIC
PRIMARY
• Personal role model
• A significant other
• The person one “secretly
admires”
Family
Work organization
Church groups
Fraternities/sororities
CHAPTER 2
SECONDARY
•
•
•
•
Professional associations
Credit unions
Political campaign volunteers
YMCA
• Celebrities
• Fortune 500 companies
• Other artists (for an artist)
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Classification of Groups for
Household Customers
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
TYPE OF INSTITUTIONS/GROUPS
INFORMAL
CHOICE
Volunteer groups
Community
Friendship groups
Cultural heroes
FORMAL
School
Workplace
Fraternities/sororities
TYPE OF MEMBERSHIP
ASCRIBED OR ASSIGNED
Family
Relatives
Tribes
Religion
Prison
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30
Private-Public, Luxury-Necessity,
Product-Brand Influences
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
PUBLIC
NECESSITY
BRAND
STRONG REFERENCE
GROUP INFLUENCE (+)
WEAK REFERENCE
GROUP INFLUENCE (-)
WEAK REFERENCE
GROUP INFLUENCE (-)
STRONG REFERENCE
GROUP INFLUENCE (+)
Public Necessities
Influence: weak product and
brand
Examples: Wristwatch,
automobile, man’s suit
Public Luxuries
Influence: Strong product and
weak brand
Examples: TV game, trash
compactor, icemaker
Private Necessities
Influence: Weak product
and brand
Examples: Mattress, floor
lamp, refrigerator
Private Luxuries
Influence: Strong product and
weak brand
Examples: TV game, trash
compactor, icemaker
LUXURY
PRODUCT
PRIVATE
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Personal Worth
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Three components of personal worth

Income
 Wealth
 Borrowing power
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Social Class Characteristics
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Rank ordering
Relative permanence
Intergenerational class mobility
Internal homogeneity
Distinct from income
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33
Market Environment
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Two Broad Classes
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Market traits

The physical characteristics of the surroundings in
which consumers select, use, and pay for products and
services in both household and business markets
Market context

The man-made market forces (as opposed to the
nature-made forces) of the market as a physical place
that affects customer needs and wants
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Market Traits
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Climate
Topography
Ecology
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Climate
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Climate is the first major component of the
geophysical market environment, which consists of
temperature, wind, humidity, and rainfall in the area
Homeostasis

Influences consumer behaviors





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Food consumption
Use of clothing
Housing patterns
Geographical distribution of population
Climate also affects business customers’ needs and
purchases
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37
Topography
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Topography is another major component of the
geophysical environment which is the terrain,
altitude, and soil conditions of the market where
customers buy and use the product or service


Consumption varies across different regions of the
world
Geographical variation


Different patterns of consumption in different regions
Regional marketing

Adapting marketing programs according to segmentation
based on geographic differences among customers
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38
Ecology
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Ecology refers to the natural resources and the
delicate balance and interdependence among
vegetation, animals and humans
Ecology affects customer behavior by making certain
market options less convenient or less attractive, and
by customers exercising their environmental values,
which then bear upon their market choices


Green consumer
Environmentally conscious consumer
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Market Context
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Economy
Government policy
Technology
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40
Economy
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
The economic climate affects customer
behavior by:

Encouraging or constraining customer
purchases at the individual household levels as
well as for business customers
 Influencing customer sentiment
 Driving business cycles
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41
Government Policy
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Government policy comprises:

Monetary policy
 Fiscal policy
 Public policy
 Facilitative infrastructure
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42
Technology
Customer Behavior: A Managerial Perspective
PART 1
CHAPTER 2
Technological breakthroughs can
significantly change market behaviors and
customer expectations
Avenues of impact

Increased access to information
 Product innovation: new options
 More flexibility and control
 Customized products and services
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43