Consumer b. b.

7/28/2019 Consumer b. b.

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Consumer BuyingBehavior

“Consumers are individuals andhouseholds who buy services and

products for personal consumption”



What is Consumer Behaviour?

Those activities directlyinvolved in obtaining ,

consuming and disposing of

products and services,including the decision

processes that precede and

follow these actions



Not for circulation : forinternal use only

5



6



If packaged tender coconut water is made available by a

leader in FMCG sector to the mass India, will people adopt?

Why ? / Why not ?

Electric razor :

Indian shaving skill is incompatible with the dry shaving

concept mooted by the product.

Can marketer’s create an attitudinal shift towardsToilet roll paperin Indian market ?



odel of Consumer Behavior Marketing andOther Stimuli

Buyer’s Black Box

Buyer’s Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

CharacteristicsAffectingConsumer Behavior

Buyer’sDecisionProcess

Product Choice

Brand Choice

Dealer Choice

PurchaseTiming

PurchaseAmount



haracteristics Affecting

Consumer Behavior

Buyer

Psychological

Personal

Social

Culture



Social

Referencegroups

Family

Rolesandstatus

Personal

Age andlife-cycle

Occupation

Economicsituation

LifestylePersonalityandself-concept

Psycho-logical

MotivationPerceptionLearning

Beliefs andattitudes

Buyer

Culture

Sub-culture

Social class

Cultural

Factors Influencing

Consumer Behavior



Cultural Factors

Culture is the most basic determinant of a person’swants and behavior.

Culture is expressed through tangible items, such

as food, architecture, clothing and art.

Culture is an integral part of the hospitality and

travel business.

Culture is dynamic and adopting to the environment

Subculture is smaller groups’ culture of a major culture

Subcultures include, nationalities, religions, racial

groups, geographic regions (African, Americans,

Asian, Mongolian)



Cultural Factors

International cultures: the values, attitudes, andbehaviors can vary dramatically by country.

• India

• Germany

• United Kingdom• Saudi Arabia

• Japan

International restaurant chains modify their products

Social class: relatively permanent and ordered

divisions in a society whose members share similar

values, interests, and behaviors.



Factors Affecting Consumer Behavior:

Social

Groups

•Membership

•Reference

Family•Husband, wife, kids

•Influencer, buyer, user

Roles and Status

Social Factors



Social Factors

Strongly affect consumer responses, companies

must take them into account when designing

marketing strategies

Reference Groups

Membership groups

Aspirational groups

Opinion leaders

Family

Roles and status



actors Affecting Consumer Behavior:

Personal

Personal Influences

Age and Family Life CycleStage

Occupation

Economic Situation

Lifestyle Identification

Activities Opinions

Interests

Personality & Self-Concept



Factors A ffect ing Consumer Behavior :

Psychological

PsychologicalFactors

Motivation

Perception

Learning

Beliefs andAttitudes



Psychological - Motivation

Biological needs: arising from hunger, thirst,

and discomfort

Psychological needs: arising from states of

tension, such as recognition, esteem, or

belonging

A motive is a need that has a sufficient level of

intensity. Creating a tension state that drives theperson to act.

Satisfying the need reduces the felt tension.



Psychological -

MotivationTwo of the Most Popular Motivation Theories

Maslow’s Theory of Motivation

• Human needs are arranged in a hierarchy, from

the most pressing to the least pressing.

Herzberg’s Theory-Two Factor Theory

• Dissatisfiers

Factors that cause dissatisfaction• Satisfiers

Factors that cause satisfaction

l ’ Hi h f N d



aslow’s Hierarchy of Needs

Esteem Needs(self-esteem, status)

Social Needs(sense of belonging, love)

Safety Needs(security, protection)

Physiological Needs(hunger, thirst)

Self

Actualization(Self-development)



Psychological-

PerceptionPerception

How a person acts is influenced by his/her

perception of the situation.

Why do people have different perceptions on the

same situation?? Interpretation is individual!!

Select ive Attent io n

Current need, anticipation, size of deviation

Select ive Distort io n

Tendency to twist information

Selective Retention

Retain information that support attitudes and beliefs

P h l i l



Psychological-

PerceptionLearning

Learning describes changing behaviors arising

from experience.

Site selection committee members visit hotels,

examine the hotel’s features.

Hotels should help guests to learn about the

quality of their facilities and services

Tours to first-time guests



Influencer(s): The person who influences thealternatives evaluated, the criteria considered,and the final choice.

Decision maker(s): The individual who makesthe final decision .Of course, joint decisions

also are likely to occur.

Purchaser(s): The family member who

actually purchases the product. This is typicallyan adult or teenager.

User(s): The user of the product .For many

products there are multiple users

f B i D i i



ypes of Buying Decisions

Complex

BuyingBehavior

Dissonance-

Reducing Buying

Behavior

Variety-

SeekingBehavior

Habitual

Buying

Behavior

HighInvolvement

Significant

differencesbetweenbrands

Fewdifferences

between

brands

LowInvolvement



Types of Buying

Decision Behavior Complex

• Highly involved, significant brand differences• Example – computer

Dissonance-reducing• Highly involved, little brand differences• Example – carpeting

Habitual• Low involvement, little brand differences• Example – salt

Variety-seeking• Low involvement, significant perceived brand differences• Example – cookies

Goal 3: Understand types of buying decisions and stages in the process



h B D i i P



he Buyer Decision Process

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior



CONSUMER DECISIONS: Theory and Reality in Consumer Buying

INFORMATIONSEARCH

PROBLEM

RECOGNITION

EVALUATION OF

ALTERNATIVES

PURCHASE

POSTPURCHASE

EVALUATION/

BEHAVIORSTheory

Complications



Approaches to Search for

Problem Solutions

INTERNAL

EXTERNAL

Memory

Thinking

Word of mouth, media,

store visits, trialCATALOG

Th B D i i P



The Buyer Decis ion Process

Step 1. Need Recogn it ion

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the

environment

Internal Stimuli

• Hunger

• Thirst

• A person’s normalneeds

Need RecognitionDifference between an actual state and a desired state



Need Recognition

•The buying process starts when the buyer recognizes

a problem or need.

• Actual state ~ desired state

• The need can be triggered by internal stimuli

• The need can also be triggered by external stimuli

• Gift certificates

he B er Decision Process



he Buyer Decision ProcessStep 2. Information Search

•Family, friends, neighbors•Most influential source of

information

•Advertising, salespeople•Receives most information

from these sources

•Mass Media•Consumer-rating groups

•Handling the product•Examining the product•Using the product

Personal Sources

Commercial Sources

Public Sources

Experiential Sources

Th B D i i P




Step 3. Evaluat ion o f A lternatives

Product A tt r ibutes Evaluation of Quality, Price, & Features

Degree of Impo rtance Which attributes matter most to me?

Brand Bel iefs What do I believe about each available brand?

Total Produ ct Satisfact ion

Based on what I’m looking for, how satisfied would I be with each product?

Evaluat ion Procedures Choosing a product (and brand) based on one

or more attributes.



Evaluation Type

• Compensatory: Decision based onoverall value of alternatives (goodattribute can outweigh bad ones)

• Non-compensatory: Absolutelymust meet at least one importantcriterion (e.g., car must haveautomatic transmission)

• Hybrid: Combination of the two

(e.g., one non-compensatorymeasure, then compensatorytradeoffs on other attributes

• Abandoned strategy: Consumerfinds initial criteria unrealistic and

proceeds to less desirable solution

IMPORTANT

LESS

IMPORTANT

he Buyer Decision Process



he Buyer Decision ProcessStep 4. Purchase Decision

Purchase IntentionDesire to buy the most preferred brand

Purchase Decision

Attitudes

of others

Unexpectedsituational

factors





Step 5. Pos tpu rchase Behavio r

Consumer’s Expectations of Product’s Performance

Dissatisfied

Customer Satisfied

Customer!

Product’s Perceived

Performance

Cognitive Dissonance

tages in the Adoption Process



tages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

doption of Innovations



doption of Innovations

P e r c e n t a g e o f A d o p t e r s

Time of Adoption

Early Late

I n n o v a t o r s

EarlyAdopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority

fluences on the Rate of Adoption



fluences on the Rate of Adoption

of New Products

DivisibilityCan the innovation

be used on atrial basis?

CompatibilityDoes the innovation

fit the values andexperience of the

target market?ComplexityIs the innovation

difficult tounderstand or use?

Relative AdvantageIs the innovation

superior to existingproducts?

CommunicabilityCan results be easily

observed or describedto others?

ProductCharacteristics



Stages in the Adoption Process

Buyer Decision Process for

New Products

Awareness

Evaluation Interest

Trial

Adoption

Goal 4: Comprehend the diffusion & adoption process for new products

B D i i P f N



Buyer Decision Process for New

Products International Consumer Behavior

• Values, attitudes and behaviors differ greatlyin other countries.

• Physical differences exist which requirechanges in the marketing mix.

• Customs vary from country to country.

• Marketers must decide the degree to which

they will adapt their marketing efforts.

Goal 4: Comprehend the diffusion & adoption process for new products



• Think of a recent important purchase – briefly draw a

flowchart of the steps you recall moving through from

the awareness of need to post purchase

• What influenced you at each step?



Buyer Behavior

• Initiator : the person who first suggests or thinks of the idea of buying a

particular product or service.

• Influencer : a person whose views or advice carry weight in making thefinal buying decision

• Decider : the person who ultimately makes the final buying decision or

any part of it

• Buyer : the person who makes the actual purchase

• User : the person who consumes the product or service

Other people often influence a consumers purchase decision.

The marketer needs to know which people are involved in the

buying decision and what role each person plays, so thatmarketing strategies can also be aimed at these people.

(Kotler et al, 1994).

Note: teens are increasingly assuming more of these roles

Think about your past purchase – who was in which role?



Consumer decision making

varies with the level of involvement in

the purchasing decision

• Extensive: problem solving occurs when

buyers purchase more expensive, less

frequently purchased products in an

unfamiliar product category requiring

information search & evaluation; may

experience cognitive dissonance.

• Limited: problem solving occurs when buyers are

confronted with an unfamiliar brand in a familiar product

category

• Routine: response behavior occurs

when buyers purchase low cost, low risk, brand loyal,

frequently purchased, low personal identification or

relevance, items with which they are familiar.

Increase in

Consumer

evaluationprocesses



Factors affecting

Consumer involvement

• Previous experience: low level involvement

• Interest: high involvement

• Perceived risk of negative consequences: high involvement

• Situation: low to high due to risk

• Social visibility: involvement increases with product visibility

• Offer extensive information on high involvement products

• In-store promotion & placement is important for low involvement products

• Linking low-involvement product to high-involvement issue can increase sales

So…



Types of consumer involvement

and decision making

Routine Limited Extensive

Involvement Short Low to

moderate

High

Time Low Short to

moderate

Long

Cost Short Low to

moderate

High

Information

Search

Internal only Mostly

internal

Internal &

external

Number of

alternatives

one few many



Postpurchase Behavior

Can m inimize through : Effective Communication

Follow-upGuaranteesWarranties

Underpromise &overdeliver


?Did I make a good decision?

Did I buy the right product?

Did I get a good value?



Sour Grapes –

a story of cognitive

dissonance

…after being unable to reach the grapes the fox said, “these

grapes are probably sour, and if I had them I would not eat

them.”--Aesop




• psychological discomfort caused by inconsistencies

among a person’s beliefs, attitudes, and actions

• varies in intensity based on importance of issue and

degree of inconsistency

• induces a “drive state” to avoid or reduce dissonance

by changing beliefs, attitudes, or behaviors and

thereby restore consistency

Tendency to avoid information can be countered by eliciting interest,

norm of fairness, or perceive usefulness of information

Post-decision “buyer’s remorse” may be increased by importance or

difficulty or irreversibility of decision

Counter-attitudinal action, freely chosen with little incentive or

justification, leads to attitude change (e.g., new product at special low

price)

Applications:

Consumer b. b.

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