CONSUMER BEHAVIORCHAPTER # 1

“INTRODUCTION AND OBJECTIVES”

By Aaftab Ullah

IN THIS FIRST CHAPTER, WE ARE GOING TO DISCUSS THREE MAIN AREAS,

DEFINING THE NATURE OF CONSUMER BEHAVIOR

APPRECIATING WHY WE SHOULD STUDY CONSUMER BEHAVIOR

DEVEOLPING A FRAMEWORK FOR STUDYING CONSUMER BEHAVIOR

Consumer BehaviorThe actions a person takes in

purchasing and using products and services.

Including the mental and social processes that precede and follow these actions.

Consumer and behaviorConsumer is a person who consumes or

uses different products, services, etc

Behavior means that how the customer of a particular area behaves towards the product.

Effect of external variables on the Decision Process:

It can be defined as “the actual act of purchase of a product in a series of mental and physical activities that occur during a period of time”.

There are five steps involved in decision making,◦ 1). Need◦ 2). Identification of alternatives◦ 3). Evaluation of alternatives◦ 4). Decision◦ 5). Post purchase

1: CultureThe tastes in art and manners that

are favored by a social group, or All the knowledge and values shared by a society.

Example:Wine (alcohol) the behavior of

non Muslim will be favorable to it. But the behavior of a Muslim will be negative.

2: SubcultureExample Behavior of Christians in USA

towards Christmas is so favorable but the Hindus (subculture) living in USA will never celebrate Christmas.

3: Social ClassLap top of Dell latest model (very

expensive) now the rich people’s behavior towards this product will be favorable but poor peoples behavior toward this product will be negative

4: Social GroupThe behavior of group of

college students will be positive towards latest fashion but the behavior of group of religious minded people will be totally different.

5: Family InfluenceThe behavior of father will be

negative towards purchasing play station but still he purchases.

6: Personal Influence:

Example 6:The behavior of the fans of Shahrukh

khan will be positive towards a product used by Shahrukh khan but the behavior of the people who don’t like Shahrukh khan will be negative towards the same product.

Defining Consumer Behavior

The decision process and physical activity individuals engage in, when evaluating, acquiring, using or disposing of goods and services.

WE NEED TO UNDERSTAND SOME BASIC TERMINOLOGIES, WHICH WE WILL BE USING IN THIS SUBJECT:

COSTUMERA person who regularly purchases products or

hire services from a particular store or service provider.

E.G, you daily or say after 2 days use to fill your car at shell gas station, in this case you will be considered as customer of shell company.

CONSUMER:Traditionally consumers are

defined as the purchasers of products and services offered for sale.

ULTIMATE CONSUMER:Those persons who purchases for

the purpose of individual or house hold consumption.

The consumer behavior Roles:Initiator the individual who determines

that some need or want is not being met.

Influencer A person who by some intentional or unintentional word or action influences the purchase decision.

Buyer the individual who actually makes the purchase transaction.

User the person most directly involved in the consumption of a purchase.

For example:A wife (initiator and

influencer) may ask her husband (buyer) to pick up a box of NIDO on his shopping trip because their child (user) said she wanted it.

Why we study consumer behavior..?

1: Significance in Daily Lives:Much of our time is spent

directly in the marketplace.The goods we purchase and the

manner in which we use them significantly influence how we live our daily lives.

So it plays very basic role in our daily lives.

2: Application to Decision Making:Consumers are often studied

because certain decisions are affected by their behavior or expected actions.

Such applications can exist at two different levels of analysis.

1: Micro perspective: 2: Societal perspective:

1. Micro Perspective:

The micro perspective involves understanding consumers for the purpose of helping a firm or organization accomplish its objectives.

Advertising managers, product designers, etcare interested in understanding

consumers in order to be more effective at their tasks.

2. Societal Perspective: On the macro or aggregate level

consumers collectively influence economic and social conditions within an entire society.

For example Strong desire of consumers for

private auto mobile influenced government to produce latest model cars and infrastructure in USA.

Applying C.B knowledge.1: Market-Opportunity

Analysis:There are some groups of people in a society who have unique needs of products which are not yet satisfied.

For example.Medical machine.Exercise machines.Ferrari cars.

2: Target-Market Selection:The process of finding market

opportunities.

For example:There were labors in different

organizations of USA who were suffering from bad smell an organization produced a new soap by the name of Colgate Palmolive soap specially for them.

3: Marketing-Mix Determination:This stage involves

developing and implementing a strategy for delivering an effective combination of want-satisfying features to consumers within target market.

Product:How should it be packaged?What aspects of services are

most important to consumers?

What types of warranties and service programs should be provided.

What types of accessories and associated products should be offered?

Price:Marketers make decisions

about the price for products or services and any changes to those prices.

How much price reduction is needed to increase the sales during new-product introductions.

What discount should be given to those who pay with cash?

Place:Where should they be

located, and how many should be there?

What arrangements are needed to distribute products to retailers.

Promotion:What are the most effective

means for gaining consumer’ attention?

What methods best convey the intended message?

How often should a given advertisement be repeated?

4: CB and De-marketing: The companies some times

discourage the extra use of products because:

We are facing of shortage natural resources such as oil, natural gas and even water.

Or some products which are harmful for human health is de marketed such as cigarette, alcohol etc.

C B and Government Decision Making:

Government policies that provide services to the public.

Such as health, education, electricity etc.

Making laws for protecting consumers.

Thank You