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    Consumer Behaviour

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    Mohit Arora
    The document discusses consumer buying behavior and how marketers can understand it by examining the cultural, social, personal, psychological and environmental factors that influence consumers at each stage of the buying decision process, which includes problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. It also analyzes buyer roles, types of buying decisions, and a five stage model of the consumer buying process.

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    Consumer Behaviour

    Uploaded by

    Mohit Arora
    130 views43 pages
    The document discusses consumer buying behavior and how marketers can understand it by examining the cultural, social, personal, psychological and environmental factors that influence consumers at each stage of the buying decision process, which includes problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. It also analyzes buyer roles, types of buying decisions, and a five stage model of the consumer buying process.

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    The document discusses consumer buying behavior and how marketers can understand it by examining the cultural, social, personal, psychological and environmental factors that influence consumers at each stage of the buying decision process, which includes problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. It also analyzes buyer roles, types of buying decisions, and a five stage model of the consumer buying process.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    130 views43 pages

    Consumer Behaviour

    Uploaded by

    Mohit Arora
    The document discusses consumer buying behavior and how marketers can understand it by examining the cultural, social, personal, psychological and environmental factors that influence consumers at each stage of the buying decision process, which includes problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. It also analyzes buyer roles, types of buying decisions, and a five stage model of the consumer buying process.

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    of 43

    Understanding

    Consumer
    Buying Behavior
    The most important thing is to forecast
    where customers are moving, & to be in front of them.

    ……..Kotler

    Arvind Kumar Jain


    Objective:
    • How do the buyer’s characteristics
    – cultural, social, personal &
    psychological-influence buying
    behavior.

    • How does the buyer make


    purchasing decisions?
    Case Study:
    Harley-Davidson – Devoted Consumers
    Building Success Measuring Success
    • Offers good bikes, • Currently has 23% of all
    upgraded showrooms U.S. bike sales and 50%
    and sales tactics. of heavyweight segment.
    • Research has helped to • Demand above supply
    understand customers’ with waiting lists up to 2
    emotions and years.
    motivation. • Sales doubled in the
    • Consumer emotions, past six years while
    motivations, and earnings have tripled.
    lifestyle have been • 2005: 19th straight year
    translated into effective of record sales and
    advertising. income.
    Understanding Buyer
    Behavior: Concept.
    • The aim of marketing is to meet &
    satisfy target customers’ needs &
    wants.

    • The field of consumer behavior


    studies how individuals, groups &
    organizations select, buy, use &
    dispose of goods, services, ideas
    or experiences to satisfy their
    needs & desire.
    Understanding Buyer
    Behavior: Concept.
    • Understanding consumer behavior
    & “Knowing Customers” is never
    simple.
    • They may respond to influences
    that change their minds at the last
    minute.
    • It is necessary for the company’s to
    understand HOW & WHY their
    customer buy.
    Definitions:
    •Consumer Buying Behavior:
    Buying Behavior of an individuals &
    households that buy products for
    personal consumption.

    •Consumer Market:
    All individuals / Households who buy
    products for personal consumptions
    Understanding Customers:
    Model of Consumer
    Behavior:
    Stimulus Response Model:
    • Marketing & other Stimuli enter the
    buyer’s “Black Box” & produce
    certain choice / Purchase or
    responses.

    • Marketers must figure out what is


    inside of the buyer’s “Black Box” &
    how stimuli are changed to
    response.
    Consumer Buying
    Behavior:
    • Factors influencing consumer behavior:
    – Cultural factors:
    • Culture, subculture, social class
    – Social factors:
    • Reference groups, family, roles and
    status
    – Personal factors:
    • Age/life-cycle, occupation, economic
    situation, lifestyle, personality and self-
    concept
    – Psychological factors:
    • Motivation, perception, learning, beliefs,
    and attitudes
    Cultural Factors:
    •Culture
    –Basic cause of person’s wants and behaviour
    –Human behaviour is predominantly learned behaviour
    from family and other important institutions
    •Subculture
    –Group sharing similar value systems based upon life
    experiences and situations
    •Social class
    –Relatively permanent and ordered divisions in a
    society whose members share similar values interests
    and behaviours.
    –Class systems differ in size and constituents
    –Lower social classes are more culture-bound
    –Young people of all classes are less so
    Social Factors:
    •Membership groups
    –Primary groups
    »family, friends, neighbours
    –Secondary groups
    »religious groups and professional associations
    –Reference groups
    »direct or indirect influence on the person’s behaviour
    or attitudes
    –Aspirational groups
    »reference group to which we want to belong
    •Roles and Status:
    –Role = Expected activities
    –Status = Esteem given to role by society
    Personal Factors:
    •Age and Life-Cycle Stage
    –People change the goods they buy over their lifetimes.
    •Occupation
    –Occupation influences the purchase of clothing and other
    goods.
    •Economic Situation
    –Some goods and services are especially income-
    sensitive.
    •Lifestyle:
    –Pattern of living as expressed in
    psychographics
    • Activities
    • Interests
    • Opinions
    Personal Factors:
    •Personality
    -Refers to the unique psychological characteristics that
    lead to relatively consistent and lasting responses to one’s
    own environment.

    •Generally defined in terms of traits.

    •Self-concept
    -Suggests that people’s possessions contribute to and
    reflect their identities.
    Psychological Factors:
    Motives and Needs
    • A motive (or drive) is • Maslow’s hierarchy of
    a need that is needs implies that
    sufficiently pressing to lower level needs
    direct the person to must be satisfied prior
    to higher level needs.
    seek satisfaction.
    – Physiological needs
    • Maslow’s hierarchy of – Safety needs
    needs explains why – Social needs
    people are driven by – Esteem needs
    needs at particular – Self-Actualization
    times.
    Maslow’s Hierarchy of
    Needs:

    Self-
    Actualizations
    (Self Development
    & Realization)
    Esteem Needs
    (Recognition, Status)
    Social Needs
    (Sense of Belonging, Love)
    Safety Needs
    (Security, Protection)
    Physiological Needs
    (Food, Water & Shelter)
    Psychological Factors:

    Perception:
    • Process by which people select,
    organize, and interpret information
    to form a meaningful picture of the
    world.
    – Selective attention
    – Selective distortion
    – Selective retention
    Psychological Factors:
    Learning:
    • A relatively permanent change in
    behavior due to experience.
    • Interplay of drives, stimuli, cues,
    responses, and reinforcement.
    • Strongly influenced by the
    consequences of an individual’s
    behavior
    – Behaviors with satisfying results tend to be
    repeated.
    – Behaviors with unsatisfying results tend not
    to be repeated.
    Psychological Factors:
    Beliefs & Attitudes:
    • A belief is a descriptive thought that
    a person holds about something.
    • An attitude is a person’s
    consistently favorable or
    unfavorable evaluations, feelings,
    and tendencies toward an object or
    idea.
    Environmental Influences on
    Consumers’ Buying Behaviour:
    • Socio-cultural - e.g. the need for individuals
    to conform with norms of social groups, etc.
    • Technological - e.g. technological innovation
    allowing cheaper production of products,
    database technology allowing companies to
    create personal relationships with their
    customers.
    • Economic and competitive influences -
    e.g. during a recession consumers may be more
    reticent about purchasing more expensive items.
    • Political and regulatory - e.g. the backing
    of a regulatory body can provide reassurance to
    consumers.
    Model of Buyer Behavior:
    Buying Decision Process:

    Marketers Must Identify and


    Understand:

    Who Makes the Buying Decision

    Types of Buying Decisions

    Stages in the Buying Process


    Buying Roles:

    Understand
    • Buying roles • Initiator
    • Buying • Influencer
    behavior • Decider
    • Buying • Buyer
    decision • User
    process
    The Family as a Decision-
    Making Unit:
    Buying Behavior:

    Understand • Complex buying


    behavior
    • Buying roles • Dissonance-reducing
    • Buying buying behavior
    behavior • Habitual buying
    behavior
    • Buying • Variety-seeking
    decision buying behavior
    process
    Buying Behavior: Types

    Beliefs Attitudes Low Involvement


    Significant Brand Difference
    Thoughtful Choice Brand Switching Frequent
    Involvement
    Difference Between

    HIGH Low
    Significant
    Complex Buying Variety-Seeking
    Brands

    Differences Behavior Buying Behavior


    Dissonance-Reducing Habitual Buying
    Few Buying Behavior Behavior
    Differences
    Consumer First Acted Out of Habit
    Acquired New Beliefs
    End-up with a set of Attitudes Not strong Brand Loyalty
    Buying Decision Process:

    • Understand • Five stages in


    • Buying roles the consumer
    • Buying behavior buying process
    • Buying decision • The amount of
    process time spent in
    each stage
    varies according
    to several
    factors
    Stages In Buying Process:

    Five-Stage Model of the Consumer


    Buying Process
    Problem Recognition:

    • Consumers can identify or


    recognise a problem independently
    from the marketer and look for a
    solution.

    • Marketers can use the marketing


    mix to bring a problem to
    consumers’ attention.
    Information Search:
    Questions consumers seek to answer
    by their information search
    •What kind of purchase will solve the
    problem?
    •Where and how can the purchase be
    obtained?
    •What information is needed to arrive at a
    decision?
    •Where can that information be obtained?
    •What are the pressures of gaining this
    information?
    Information Search:

    •Internal search:
    Remembering previous experiences.

    •External search:
    Shopping around, reading suppliers’
    literature, talking to friends.
    Information Search:
    •Where do we seek information about
    need-satisfying solutions?
    –Personal experience
    –Word-of-mouth recommendation from
    friends
    –Various reference groups may guide us
    –Newspaper editorial content and
    directories (e.g. "Which?" magazine/
    buy.co.uk)
    –Advertisements
    Information Evaluation:
    • Consumers construct a list of performance
    criteria, then assess each supplier or available
    brand against it.

    • This reduces the potential options (wide list of


    potential products/services which might satisfy
    needs) to an evoked set (a shortlist for serious
    appraisal).

    • Marketers influence this stage via


    communications campaigns which implant
    images of products/services or emphasise the
    importance of product/service attributes in
    consumers’ minds.
    Evaluating Alternatives:
    Evaluating Alternatives:

    Typical Consumer Evaluation Process

    Steps between evaluation of alternatives and a purchase decision


    PEER GROUP EFFECTS:

    • How do you get


    young people to
    change their
    attitudes about
    Clarks shoes from
    “Shoes their
    parents would
    wear” to “Cool and
    modern”?
    POST-PURCHASE
    EVALUATION:

    • Did our purchase live up to


    expectations?
    • If not, we could:
    – Return the product
    – Tell others
    – Rationalise our thoughts to overcome
    "cognitive dissonance"
    Impact of Dissatisfied
    Customers:

    • Dissatisfied customers can tell up


    to eleven other people about their
    bad experiences, which is two to
    three times more people than a
    satisfied customer will talk to.

    Smith, 1993
    Cognitive Dissonance:

    A buyer’s doubts shortly after a


    purchase about whether it was the
    right decision.
    Stages for the Use /
    Dispose of Product:
    Stages in the Adoption
    Process:
    1.Awareness: Consumer becomes
    aware of the new product, but lacks
    information about it.
    2.Interest: Consumer seeks information
    about new product.
    3.Evaluation: Consumer considers
    whether trying the new product makes
    sense.
    4.Trial: Consumer tries new product on a
    small scale to improve his or her estimate
    of its value.
    5.Adoption: Consumer decides to make
    full and regular use of the new product.
    Product Characteristics
    That Influence the Rate of
    Adoption:
    • Relative Advantage: Is the innovation
    superior to existing products?
    • Compatibility: Does the innovation fit
    the values and experience of the target
    market?
    • Complexity: Is the innovation difficult to
    understand or use?
    • Divisibility: Can the innovation be used
    on a limited basis?
    • Communicability: Can results be easily
    observed or described to others?
    Discussion Scenario:
    Think about the Internet . . .
    How can marketers capitalize on
    the Internet to influence or monitor
    post-purchase behavior?
    Identify and discuss the different
    means by which the Internet has
    impacted how consumers use or
    dispose of products.
    THANKS

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