Elements of Consumer Behavior,
and Defining the Market
Hierarchy
BA396 Supplement
Consumer Behavior
 EKB
Model
Need Recognition
Information Search
Information Evaluation
Purchase Decision
Post-purchase
Attitude Formation
Consumer Behavior
 EKB
Model
Need Recognition
Information Search
Information Evaluation
Purchase Decision
Post-purchase
Attitude Formation
Needs:
* Functional
- product related
* Psychological
- stimulation
- social
- status/power
- self-reward
Information:
* Amount of information
* Sources
- internal/external
* Reduce search?
Consumer Behavior
 Buying
Process and Decision Making
Need Recognition
Information Search
Information Evaluation & Trial
Adoption
Purchase Decision
Post-purchase
Attitude Formation
Consumer Behavior
 Buying
Process and Decision Making
Need Recognition
Habitual Decision Making
Limited Problem Solving
Information Search
Extended Problem Solving
Information Evaluation & Trial
Adoption
Purchase Decision
Post-purchase
Attitude Formation
Consumer Behavior
 Who
are your competitors, and how do customers
end up selecting your product?
 Hierarchy of Markets
» Competition at different ‘levels’
» Try to understand consumer’s decision process
» Within a household competition regarding the
importance of different generic markets

this will increase when resources are limited -- transportation
will compete with food or housing
Consumer Behavior
 Hierarchy
of Markets
» Desire

all products and services that compete for the consumer’s
dollars
» Generic Level

demand for broadly defined need
» Specific Product Level

car, bicycle, single family dwelling, apt.
» Brand

Honda, Chevrolet, Schwinn, Trek, BikEE
Hierarchy of Markets
 Example
Diet Food
1
prepared
Entrée
frozen
Stouffers
Weight
Watchers
unprepared
Supplement
fresh
Store Deli
frozen fresh
restaurant
Hierarchy of Markets
 Example
2
Food
prepared
Entrée
‘Fast’
American
unprepared
Supplement
E
S
Sit-down
Asian
Mexican
American
Asian
Census Information
 http://www.census.gov/dmd/www/products.html
on “intro to Census 2000 data products” 
United States (PDF)
 Click on the Public Use Presentation Library and
browse through the different presentations
 Click
 About
½ way down the list, there is presentation on the
geographic concepts discussed in class. Look for:

Title: Census 2000: Geographic Concepts and Products (September
2002)
Number of slides: 36
Description: This presentation gives an overview of Census 2000
geographic concepts and products and the various geographic units
for which Census 2000 data are available.
Census Information
 http://www.census.gov/dmd/www/products.html
 Click
on the Public Use Presentation Library and
browse through the different presentations
 About
the sixth presentation on the list, there is presentation
that covers the short form and long form information. Look
for:

Title: Census 2000: and Its Data Products (September 2002)
Number of slides: 41
Description: An overview of the Census 2000 questions, the data
sets, and the products released and the released media.
Segmentation Requirements
 Customers
have different response elasticities
 Salesx1=Advx.5
 Salesx2=Advx.2
 Response
x SalesPrx.2 x Distrx.3
x SalesPrx.4 x Distrx.2
differences can be identified and
matched with customer descriptions
 Knowledge of market segments must be
translatable to retail mix combinations
 Sufficient demand in at least one segment
 Characteristics stable over time
Bases of Segmentation
 Geographic
 Nations,
regions, states
 Demographic
 Age,
gender, family size, income
 Psychographic
 Social
class, lifestyle, personality, AIO inventories
 Behavioral
 Usage
rate, occasion for use, benefits, loyalty