Transcript Consumer behavior

CONSUMER
BEHAVIOUR
Prepared By:
Mrs. Gurpreet K Chhabra
Astt. Prof. MERI
Overview
of
Consumer Behavior
2
Learning Objectives
1.
2.
3.
4.
To Understand What Consumer Behavior Is and the
Different Types of Consumers.
To Understand the Relationship Between Consumer
Behavior and the Marketing Concept, the Societal
Marketing Concept, as Well as Segmentation, Targeting,
and Positioning.
To Understand the Relationship Between Consumer
Behavior and Customer Value, Satisfaction, Trust, and
Retention.
To Understand How New Technologies Are Enabling
Marketers to Better Satisfy the Needs and Wants of
Consumers.
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Chapter One Slide
Overview of Consumer Behavior
Definition 1: Consumer behavior:
The study of how individuals make
decisions:
On how to spend their:
 Available resources( time, money effort)
On various consumption- related items.
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Overview of Consumer Behavior
Definition 2: Consumer behavior

The behavior that consumers
display in :
 Searching for,
 Purchasing,
 Using,
 Evaluating,
 And disposing of products and
services
 That they expect will satisfy their
needs.
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Type of Consumers
Personal Consumer :
The individual who buys goods and services for his
or her own use, for household use, for the use of a
family member, or for a friend.
Organizational Consumer :
A business, government agency, or other
institution (profit or nonprofit) that buys the goods,
services, and/or equipment necessary for the
organization to function.
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Why do we need to study
Consumer Behavior?
Because no longer can we take
the customer/consumer for
granted.
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Relevance of Consumer Behavior
The study of consumer behavior is very
relevant for marketers because:
Information and knowledge of buyer
motives and habits will enable them to draft
suitable marketing programmes
accordingly.

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Consumer Behavior & Decision
Making interdisciplinary
Consumer behavior as a new discipline
borrowed concepts from other scientific
disciplines such as:
Anthropology
Psychology
Economics
History and geography
Socio-psychology
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Anthropology

The influence of the
culture (within and across)
& society on the
individuals.

Emphasis on crosscultural differences
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Psychology

Study of human thinking
and behavior
 Some issues





Personality
Personal development
Cognition (thinking),
perception
Attention and its limitations
“Learning”—e.g., acquired
tastes
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Economics

Basic economic issues



Supply and demand
Rational decision making
Perfect information

Emphasis on predicting behavior
 Complications in real life
 Behavioral economics—e.g.,
“mental accounting”
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History and Geography


Origins of behavior,
perspectives, and
traditions
Impact of geography on
individuals




Isolation
Language development
Climate
Geographic determinism
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Socio- Psychology

Is the study of how persons
are influenced by groups.
 Cultural and interpersonal
influences on
consumption—e.g.,



Fads, fashions
Diffusion of innovation
Popular culture
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Dynamic Consumer Behavior

Thinking, feelings, and actions of individual
consumers, targeted consumer groups, and
society at large are constantly changing.
 Requires ongoing consumer research and
analysis of important trends.
 Makes development of marketing strategies
difficult and exciting

Shorter product life-cycle increases importance of
constant innovation
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Marketing concepts
Production concept
Product concept
Selling concept
Marketing concept
Societal concept
Shift of focus to better serve
consumers for major reasons


Increased consumer interest in world markets.
Dramatic increase in the quality of consumer and
marketing research.
• Use of technology to identify and know customers personally
• Ability to track consumer reactions

Development of the Internet as a marketing tool.
• E-marketing potential
• Increased importance of consumer behavior research
• Ability to conduct marketing research studies
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Successful Relationships
Customer
Value
Customer
Satisfaction
Customer
Retention
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Impact of Digital Technologies

Consumers have more power and access to
information.
 Marketers can gather more information about
consumers .
 The exchange between marketer and customers
is interactive and instantaneous and goes
beyond the PC.
 Marketers must offer more products and
services.
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Consumer Research
 Consumer
research has developed as an
extension to the field of marketing
research with emphasis on consumer
behavioral aspects.
 The initial thrust on studying CB by
marketers was done for two reasons:


To determine as to why consumers made the
purchase decisions.
To understand how consumers would react to
promotional messages.
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Model of Consumer Behavior
Product
Price
Marketing and
Other Stimuli
Economic
Technological
Place
Political
Promotion
Cultural
Buyer’s
Decision
Process
Product Choice
Brand Choice
Dealer Choice
Buyer’s Black Box
Buyer’s Response
Characteristics
Affecting
Consumer
Behavior
Purchase
Timing
Purchase
Amount
The Buyer Decision Process
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
The Buyer Decision Process
Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state
Internal Stimuli
External Stimuli
• Hunger
• TV advertising
• Thirst
• Magazine ad
• A person’s normal
needs
• Radio slogan
•Stimuli in the
environment
The Buyer Decision Process
Step 2. Information Search
Personal Sources
•Family, friends, neighbors
•Most influential source of
information
Commercial Sources
•Advertising, salespeople
•Receives most information
from these sources
Public Sources
Experiential Sources
•Mass Media
•Consumer-rating groups
•Handling the product
•Examining the product
•Using the product
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand?
Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand
Attitudes
of others
Unexpected
situational
factors
Purchase Decision
The Buyer Decision Process
Step 5. Postpurchase Behavior
Consumer’s Expectations of
Product’s Performance
Product’s Perceived
Performance
Satisfied
Customer!
Dissatisfied
Customer
Cognitive Dissonance
CONSUMER DECISION
RULES

Compensatory decision rule- On the basis of
this decision rule, a shopper evaluates store or
brand alternatives in respect of each salient
attribute and assigns weight for each store or
brand in a consideration set .The computed
value reflects the store’s relative edge as a
potential purchase choice . The proposition is
that the shopper will select the store or brand
that scores the highest among the options
evaluated. This rule is characterized by allowing
a positive evaluation of a store or brand on one
attribute to compensate or make for a negative
evaluation on some other attribute.

Non- compensatory decision rule - on the basis of this rules
consumers do not balance positive assessment of store on one
dimension against a negative evaluation on other dimensions:
~ Conjunctive rule - Here the shopper establishes a specific, minimal
acceptable level as a cut off point for each dimension. If a
particular prospective store falls below the cut off point on any
dimension (evaluative criteria), it is dropped from the consideration
set.
~ Disjunctive rule – Here a shopper sets up a specific ,minimal
acceptable level as a cut off point for each dimension .
Acceptability of a store depends if the store meets or exceeds the
limit established for any one dimension considered most important
by the customer.
~ Lexicographic decision rule – Here the shopper first ranks the
dimensions in terms of their perceived salience or importance .The
shopper then compares the various brand alternatives in terms of a
single attribute that is considered most important. If one brand
scores sufficiently high on this top-ranked dimension (regardless of
the scores on any other attributes) ,it is selected & process ends ,
else process continues with next highest alternative.
FISK’S CONCEPTUAL MODEL OF
DEPARTMENT STORE IMAGE
DIMENSION
DETERMINANTS
Locational convenience
1) Access route
2) Traffic barrier
3) Travelling time
4) Parking availability
Merchandise suitability
1) Number of brands stocked
2) Quality of line
3) Breadth of assortment
4) Depth of assortment
5) Number of outstanding
departments in the store
Value for price
1) Price of a particular item in a particular
store
2) Price of same item in another store
3) Price of another item in the same store
4) Price of same item in the substitute
store
5) Trading stamps & discounts
Sales effort and store
services
1)
2)
3)
4)
5)
6)
7)
Courtesy of sales clerks
Helpfulness of sales clerks
Reliability and usefulness of
advertising
Billing procedures
Adequacy of credit arrangements
Delivery promptness and care
Eating facilities
1)
Congeniality
2)
3)
4)
5)
Post-transaction
satisfaction
1)
2)
3)
4)
Store layout
Store décor
Merchandise displays
Class of customers
Store traffic and congestion
Satisfaction with good in use
Satisfaction with returns and
adjustments
Satisfaction with price paid
Satisfaction with accessibility to
store
CUSTOMER VALUE
Customers are value maximisers,and they tend to take
rational purchase decisions
Concept of customer Delivered value/customer perceived
value-it is the difference between prospective custmer’s
evaluation of all the costs of an offering and the
alternatives.
Customer delivered value=total customer value-total
customer cost.
Total customer value-is the percieved monetary value of
the bundle of the bundle of economic,functional &
psychological benefits that customer expect from a given
market offering.
Total customer cost-is the bundle of costs,customers
expect to incur in evaluating,obtaining,using&disposing
off,the given market offering.
Customer satisfaction-S=P-E
S=SATISFACTION LEVEL
P=PERFORMANCE AS PERCIEVED BY CUSTOMER
E=PERFORMANCE AS ALREADY EXPECTED BY THE CUSTOMER.
Therefore,P<E, P=E, P>E.
Consumer Buying Decision Process
Marketers Must Identify and Understand:
Who Makes the Buying Decision
Types of Buying Decisions
Stages in the Buying Process
CONSUMER BUYING
BEHAVIOR

BUYING ROLES:
 initiator--a person who first suggests the idea of
buying the product or service
 influencer--a
person whose views or advice
influences the decision
 decider--a person who decides on any component of
a buying decision
 buyer--the person who makes the actual purchase
 user--a person who consumes the product/service.
Types of Buying Decisions
High
Involvement
Low
Involvement
Significant
differences
between
brands
Complex
Buying
Behavior
VarietySeeking
Behavior
Few
differences
between
brands
DissonanceReducing Buying
Behavior
Habitual
Buying
Behavior
VARIOUS TYPES OF BUYING
SITUATIONS




Complex buying situation-purchasing a car, computer, house
etc.stress is on pre-purchase councelling.Involvement on marketer’s
part is very high because brands differ widely.
Habitual buying situation-purchasing grocery items, low involvement
because brands differ marginally marketers job is to make it
available easily.
Dissonance-reducing buying situation-purchasing carpets, I-tech
electric devices, personal computers etc.High involment is required
at post purchase level so as to reduce post purchase dissonance of
customers.
Variety-seeking buying situation-purchasing
cookies,perfumes,cosmetics products,clothes,shoes etc.Low
involvement.stress is on attracting retailers& customers through
attractive offers, prompting them to ‘switch’ brands.
Levels of Consumer Decision
Making
Extensive Problem
Solving
Limited Problem
Solving
Routine Response
Behavior
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Levels of Consumer Decision
Making
 Extensive


A lot of information needed
Must establish a set of criteria for
evaluation
 Limited


Problem Solving
Problem Solving
Criteria for evaluation established
Fine tuning with additional information
 Routinized

Response Behavior
Usually review what they already know
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Chapter Fifteen Slide
•A search by the consumer to establish
the necessary product criteria to evaluate
knowledgeably the most suitable product
to fulfill a need.
Extensive
Problem
Solving
•Problem solving occurs when
•buyers purchase more expensive
important or technically complicated
product/service for the first time.
•less frequently purchased products
in an unfamiliar product category
requiring information search &
evaluation
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•A limited search by a consumer for a
product that will satisfy his or her
basic criteria from among a selected
group of brands.
Limited
Problem
Solving
•Problem solving occurs when buyers
are confronted with an unfamiliar
brand in a familiar product category.
•Often occurs when consumer
purchasing new, updated version of
something already purchased before.
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Routinized
Response
Behavior
•At this level, consumers have
experience with the product
category and a well-established
set of criteria to evaluate the
brands is considered.
•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.
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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
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