CONSUMER BEHAVIORAN

INTRODUCTION

The purpose of a business is to create a customer. Peter Drucker

The purpose of business is to create and keep a customer. Peter Drucker

In the factory we make cosmetics; in the drugstore we sell hope. - Charles Revson

No theater could sanely flourish until there was an umbilical connection between what was happening on the stage and what was happening in the world. - Kenneth Tynan

Consumer Behavior

What products do consumers buy?

What Brand do they buy?

Why do they buy it?

Where do they buy?

How often do they buy it?

Consumer Behavior - Definitions

Process a person goes thru when purchasing and using products and services, including the mental and social processes that precede and follow these actions.

It not only involves specific actions taken by individuals when buying and using products and services, ----

but also all the social and psychological factors that affect the same.

Consumer Behavior - Definitions American Marketing Associations (AMA)

Consumer behavior is the dynamic interactions between affect and cognition, behavior and the environment by which human beings conduct the exchange aspects of their lives.

CB is Dynamic Involves interactions Its about Exchanges.

Consumer Behavior Is Dynamic Because the thinking, feelings and actions of individual consumers, targeted consumer groups and society at large are constantly changing.

Consumers and their environments are constantly changing.

Internet has changed the way people search for information, products and services.

PLC’s have shortened. Companies will have to constantly innovate.

C B Involves Interactions Interactions among people’s thinking, feelings

and actions and the environment. Thus marketers need to understand what

products and services mean to customers, what consumers do to purchase them & use

them and what influences, shopping, purchase and consumption.

Knowledge about how these interactions individuals / target markets will help marketers to better satisfy them.

CB involves Exchanges People give up something of value to others and

receive something in return. Mostly involves people giving up something of

value to obtain products and services. This is the exchange between buyers and

sellers. Role of marketing in society is to help create

exchanges between buyers (consumers) and sellers (marketers).

Response Hierarchy Model

Different Stages

AIDA Model

Hierarchy of Effects Model

Innovation – Adoption model

Communications Model

Cognitive Stage

Attention

Affective Stage

Interest

Desire

Behavior Stage Action

Awareness

Knowledge

Liking

Preference

Purchase

Awareness

Interest

Evaluation

Trial

Adoption

Exposure

Reception

Cognitive response

Attitude

Intention

Behavior

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Approaches To Study Of Consumer Behavior

Interpretative

Anthropology

Understanding consumption and its meaning

TraditionalPsychology

Sociology

Marketing (as a) Science

Economics

Statistics

Explain consumer decision making behavior

Depth Interviews

Focus Groups

Experiments

Surveys

Predict Consumer choice & behavior

Math modeling

Simulation

APPROACHES DOMAINS OBJECTIVES PRIMARY METHODS

Factors Influencing C.B.

CulturalCulture

Sub CultureSocial Class

SocialReference Groups

FamilyRole & Status

PersonalAge & Life Cycle Stage

OccupationLife Style

Personality & self conceptEconomic Circumstances

PsychologicalMotivationLearning

PerceptionAttitudes

Buyer

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TYPES OF BUYING BEHAVIOR

Significant Differences Between Brands

Few

Many

Buyer InvolvementLow High

Habitual Buying Behavior

Dissonance Reducing Buying Behavior

Variety seeking Buying Behavior

Complex Buying Behavior

Stimulus-Response Model of Buyer Behavior

External Stimuli

Environmental factors

Marketing factors

Economic Social

Political Technological

Product Price

Advertising Distribution

The Buyer’s Black Box

Buyer Characteristics

Buyer Decision Process

Cultural

Social

Personal

Psychological

Problem recognition

Information search

Evaluation

Decision

Post Purchase Behavior

Buy Decision

Product

Brand

Dealer

Quantity

Purchase Timing

Input

Output

OVERALL MODEL OF CONSUMER BEHAVIOUR

PerceptionLearningMemoryMotives

PersonalityEmotionsAttitudes

ProblemRecognition

InformationSearch

Alternative EvaluationAnd Selection

Outlet SelectionAnd Purchase

PostpurchaseProcesses

External Influences

CultureSubculture

DemographicsSocial Status

Reference GroupsFamily

Marketing Activities

Internal Influences

Self-Concept And

Lifestyle

Decision process

NeedsDesires

Experiences and Acquisitions

Experiences and Acquisitions

CONSUMER BEHAVIOR – FRAME WORK

Culture

Sub - culture

Social Class

Reference Groups

Family

Personal Influences

Problem recognition

Information Search

Evaluation

Buying Process

Post Buy Behavior.

Motivation & Involvement

Attitudes

Information processing

Learning & memory

Personality & Self concept

Consumer move from Total Set

Choice Set

Consideration set

Awareness Set

Total Set

Buying Decision

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CONSUMER BEHAVIOR

Factors Influencing Buyer Behavior &

Stages Of The Buying Decision Process

Consumer Behavior

What products do consumers buy?

What Brands do they buy?

Why do they buy it?

Where do they buy?

How often do they buy it?

Consumer Behavior - Definitions

Process a person goes thru when purchasing and using products and services, including the mental and social processes that precede and follow these actions.

It not only involves specific actions taken by individuals when buying and using products and services, ----

but also all the social and psychological factors that affect the same.

Consumer Behavior - Definitions American Marketing Associations (AMA)

Consumer behavior is the dynamic interactions between affect and cognition, behavior and the environment by which human beings conduct the exchange aspects of their lives.

CB is Dynamic Involves interactions Its about Exchanges.

Stimulus-Response Model of Buyer Behavior

External Stimuli

Environmental factors

Marketing factors

Economic Social

Political Technological

Product Price

Advertising Distribution

The Buyer’s Black Box

Buyer Characteristics

Buyer Decision Process

Cultural

Social

Personal

Psychological

Problem recognition

Information search

Evaluation

Decision

Post Purchase Behavior

Buy Decision

Product

Brand

Dealer

Quantity

Purchase Timing

Input

Output

Factors Influencing C.B.

Cultural

Culture

Sub Culture

Social Class

Social

Reference Groups

Family

Role & Social Status

Personal

Age & Life Cycle Stage

Occupation

Life Style

Personality & Self Concept

Economic Circumstances

Buyer

Psychological

Motivation

Learning

Perception

Attitudes

Culture & Sub Culture (Cultural factors)

Culture is the fundamental determinant of a persons wants and behavior.

Factors picked up from childhood – values, beliefs from family, religion and educational institution, society etc.

Sub Culture: Provide more direct identification and a strong socialization parameter.

Include geographic groups, racial groups, nationalities, religion.

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Cultural Factors - Social Class Social stratification exists in almost all societies.

Earlier it used to take the rigid dimension of caste system.

But now it’s the more liberal socio-economic class system.

They are hierarchical and persons within the same class tend to behave similarly.

Upper class, middle class, working class, poor Occupation, Income & Education (determinants)

Social Factors – Reference Groups

Membership Groups Primary groups -informal group Secondary Groups- formal group Aspirational Groups – a person hope to join Dissociative Groups- a person rejects

Opinion leader is the person is the one who provide informal advice in the factors related to buying

Social Factors – Family and Role & Status

Family is the most important consumer buying organization (most influential primary reference group)

Family of Orientation- parents and sibling Family of Procreation-one’s spouse, children Marketers are interested in roles and relative

influences played by husband, wife and children in purchase decisions.

Roles & Statuses

Personal Factors Age & Stage in Life Cycle

Occupation & Economic Circumstances

Personality & self Concept

Psychographics – Life style

V.A.L.’s Segmentation Actualizers: successful, sophisticated, active and take

charge of people. Buys niche oriented products Fulfilleds: Mature, satisfied, comfortable, reflective – looks

for durability and functionality in products. Achievers: successful, career and work oriented – favor

established brands, seeks prestige products. Experiencers: Young, vital, enthusiastic, impulsive – high

spenders on clothing, fast food, music movies etc. Believers: Conservative, traditional - buys popular brands Strivers: Insecure, uncertain – favor stylish imitations Makers: Practical, self-sufficient – functional products, tools Strugglers: elderly, resigned, passsive

Psychological factors Motivation Freud’s Theory (ulterior motives) Maslow’s theory (need hierarchy) Herzbersg’s theory (satisfiers & dissatisfiers)

Perception Selective attention, selective distortion & selective

retention – meaning making process. Learning (Classical conditioning and Operant

Learning)

Beliefs & Attitudes

TYPES OF BUYING BEHAVIOR

Significant Differences Between Brands

Few

Many

Buyer InvolvementLow High

Habitual Buying Behavior

Dissonance Reducing Buying Behavior

Variety seeking Buying Behavior

Complex Buying Behavior

Five Buying Roles

Initiator: person suggesting the purchase of the product.

Influencer: The person whose views or advices affect the buying decision.

Decider (Payer): The person who decides on the entire buying decision or aspects of it – what, when, where and how to - buy

Buyer: The person making the purchase. User: The person who actually uses the product

Consumer Move From Total Set Towards Purchase

Choice Set

Consideration set

Awareness Set

Total Set

Buying Decision

Evaluation Of Alternatives

Alternative Evaluation

PurchaseIntention

Attitude ofOthers

UnanticipatedSituational

Factors

Purchase Decision

Five Stages Of Consumer Buying Process

Problem recognition

Informationsearch

AlternativeEvaluation

PurchaseDecision

Post PurchaseBehavior

1. Problem recognition: stage when the need is recognized and the trigger can be due to an internal or external stimuli.

2. Information search: Customer is likely to search for alternatives that will solve his/her problem. – about Product categories ---- about product attributes ----about different brand.

3. Evaluation Of Alternatives: Starts with basic need gratification. He then evaluates certain product attributes that can maximize his benefits (wants). Hence its more of a comparison of attributes/benefits.

Evaluation Of Alternatives

Two factors affecting during this juncture are 1. Attitude of others i) depends on the intensity of the negative

reactions from others ii) the motivation of the customer to listen to them

2. Unanticipated Situational Factors These are typically unexpected factors such as

financial problems, price rises, losing job etc.

Purchase Decision Customer after attribute based evaluation would

have moved to the choice set / final buy. Five sub decisions prior to purchase intention – Brand decision Retailer / Vendor decision Quantity to be bought Timing – now or later Payment method – cash or credit (Credit

Card/EMI)

Post Purchase Behavior Purchase satisfaction Based on the buyer’s expectations and his

perceived performance by the product. If its below expected levels, consumer will be

dissatisfied – Negative word of mouth No repeat buying

Post purchase dissonance: Especially in case of high involvement product

purchase.

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