Transcript Consumer Behavior

CONSUMER
BEHAVIOUR
Lalit Tank
Course Outline


Introduction
Consumer Decision Making Process
- Consumer Influence & the diffusion of innovations
- Consumer Decision Making
 Consumer As An Individual
- Consumer Motivation
- Personality & Consumer Behavior
- Consumer Perception
- Consumer Learning
- Consumer Attitude Formation & Change
 Consumer in their Social & Cultural Settings
- Reference Groups & Family Influences
- Social Class & Consumer Behavior
- Influence of Culture & Consumer Behavior
Consumer Behavior
Behavior that consumer display in
searching for , purchasing , using ,
evaluating & disposing of – products &
services , that they expect will satisfy
their needs .
Consumer Behavior is rooted in the
MARKETING CONCEPT
Focuses on the needs of the buyer
CB-Introduction

Defination of CB
The term consumer behavior is defined
as the behavior that consumer display in
searching for, purchasing, using,
evaluating, and disposing of products and
services that they expect will satisfy their
needs.
What is Consumer Buying Behavior?
Definition of Buying Behavior:
Buying Behavior is the decision processes and acts of people
involved in buying and using products.
Need to understand:
•why consumers make the purchases that they make?
•what factors influence consumer purchases?
•the changing factors in our society.
Importance of CB

Enables marketers to understand & predict
consumer behavior
 Not only concerned with why , when , where ,
how & how often they buy it .
 Integral part of strategic market planning
 Calls on marketers to fulfill the needs of their
target markets – in ways that improve society
as a whole
 Providing customer value
 Providing customer satisfaction
 Providing customer retention
A firm needs to analyze buying behavior for:
1. Buyers reactions to a firms marketing strategy has a great impact
on the firms success.
2. The marketing concept stresses that a firm should create a
Marketing Mix (MM) that satisfies (gives utility to) customers,
therefore need to analyze the what, where, when and how
consumers buy.
3. Marketers can better predict how consumers will respond to
marketing strategies.
Stages of the Consumer Buying Process
Note:Six Stages to the Consumer Buying Decision Process (For complex decisions).
Not all decision processes lead to a purchase. All consumer decisions do not always
include all 6 stages, determined by the degree of complexity
6 Stages :-
1.
2.
3.
4.
5.
6.
Problem Recognition (awareness of need)
Information search
Evaluation of Alternatives
Purchase decision
Purchase
Post-Purchase Evaluation--outcome
Stage :-1 Problem Recognition
Problem Recognition (awareness of need)—
Difference between the desired state and the actual
condition. Deficit in assortment of products. Hunger-Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product
information--did not know you were deficient? ex:see a commercial for a new pair of shoes, stimulates
your recognition that you need a new pair of shoes.
Stage 2:- Information Search
Information search- Internal search, memory.
 External search if you need more information. Friends and
relatives (word of mouth). Marketer dominated sources;
comparison shopping; public sources etc.
A successful information search leaves a buyer with possible
alternatives, the evoked set :-
Hungry, want to go out and eat, evoked set is
 Chinese food
 Indian food
 Fast food
 South Indian Food etc
Stage 3:- Evaluation of Alternatives
Need to establish criteria for evaluation, features the
buyer wants or does not want. Rank/weight
alternatives or resume search. May decide that you
want to eat something spicy, Indian gets highest rank
etc.
If not satisfied with your choice then return to the
search phase. Can you think of another restaurant?
Look in the yellow pages etc. Information from
different sources may be treated differently.
Marketers try to influence by "framing" alternatives.
Stage 4 :- Purchase Decision
Choose buying alternative, includes product,
package, store, method of purchase etc
Stage 5:- Purchase
May differ from decision, time lapse between 4
& 5, product availability
Stage 6:- Post-Purchase Evaluation
outcome: Satisfaction or Dissatisfaction.
Cognitive Dissonance, have you made the right
decision.
This can be reduced by warranties, after sales
communication etc.
After eating an indian meal, may think that really
you wanted a chinese meal instead.
Cognitive Dissonance
cognitive dissonance is an uncomfortable
feeling or stress caused by holding two contradictory
ideas simultaneously.
The CB describes two different
kinds of consumer entities
Personal consumer: buys goods and
services for his or her own use for the use
of household. the products brought for
final use by individual who are referred to
as end users or ultimate consumers.
 Organizational consumer include profit
and not for profit business, government
agencies. All of which must buy products,
equipment and services in order to run
their organization.

Development of the marketing
concept and discipline of consumer
behavior
The field of consumer behavior is rooted
in the marketing concept. A business
orientation that involved several
alternative approach towards doing
business respectively as the
 Production concept
 Product concept
 Selling concept

The role of consumer research



Consumer research describes the process and tools used
to study consumer behavior. Two theoretical perspectives
that guide consumer research methodology.
Positivists approach: tend to be objective and
empirical, to seek causes for behavior and to conduct
research studies that can be generalized to large
population. use for strategic managerial decision.
Interpritivists approach: tend to be qualitative and
based on small sample. View each consumption situation
as unique and nonpredectable seek to find common
pattern of operative value, meaning and behavior across
consumption situation.
Consumer Decision
Making and Beyond
Decision
Decision is the selection of an option from
two or more alternative choices.
Levels of Consumer Decision
Making
Not all consumer decision making situation require the same degree
of information search
Extensive Problem
Solving- consumers need a great
deal of information
Limited Problem Solvingsearch for additional information is more
like”fine-tunning”- already have established
basic criteria
Routine Response
Behavior-consumers have
experience with the product
Models of Consumers: Four
Views of Consumer Decision
Making

An Economic View-

A Passive View-
bargaining
consumer has motivation for price
consumer surrenders to self-serving
interests & promotional efforts of marketers .

A Cognitive View-

An Emotional View-
consumer are as a thinking problem
solver- seek & evaluate information
impulsive
Figure : A Model of Consumer Decision Making
External Influences
Input
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial sources
4. Social class
5. Subculture and culture
Consumer Decision Making
Need Recognition
Process
Prepurchase Search
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Evaluation of Alternatives
Experience
Post decision Behavior
Output
Purchase
1. Trial
2. Repeat purchase
Postpurchase Evaluation
Three Stages of Consumer
Decision Making
Need Recognition
 Prepurchase Search
 Evaluation of Alternatives

Factors that are Likely to Increase
Prepurchase Search
PRODUCT FACTORS
-Long interpurchase time (a long-lasting or
infrequently used product)
-Frequent changes in product styling
-Volume purchasing (large number of units)
-High price
-Many alternative brands
-Much variation in features
Table continued
SITUATIONAL FACTORS
Experience
First-time purchase
No past experience because the product is new
Unsatisfactory past experience within the product category
Social Acceptability
The purchase is for a gift
The product is socially visible
Value-Related Considerations
Purchase is discretionary (judgemental) rather than necessary
All alternatives have both desirable and undesirable consequences
Family members disagree on product requirements or evaluation of
alternatives
Product usage deviates from important reference group
The purchase involves ecological considerations
Many sources of conflicting information
Table continued
PERSONAL FACTORS
Demographic Characteristics of Consumer
Well-educated
High-income
White-collar occupation
Under 35 years of age
Personality
Low dogmatic (code of belief)
Low-risk perceiver
Other personal factors, such as high product involvement and
enjoyment of shopping and search
Issues in Evaluation of
Alternatives
Evoked Set (consideration set)
 Criteria Used for Evaluating Brands
 Consumer Decision Rules
 Lifestyles as a Consumer Decision
Strategy
 Incomplete Information and Non
comparable Alternatives
 Series of Decisions
 Decision Rules and Marketing Strategy
 Consumption Vision

The Evoked Set as a Subset of All
Brands in a Product Class
All
Brands
Known
Brands
Unknown
Brands
Evoked Set
Acceptable
Brands
Inept Set
Unacceptable
Brands
(2)
Purchased
Brands
Not Purchased
Brands
(5)
(1)
Inert Set
Indifferent
Brands
(3)
Overlooked
Brands
(4)
Consumer Decision Rules
Compensatory
 Noncompensatory(2 rules)

– Conjunctive Decision Rule
– Disjunctive Decision Rule
– Lexicographic Rule
2 categories
Compensatory
Decision Rules
A type of decision
rule in which a
consumer evaluates
each brand in terms
of each relevant
attribute and then
selects the brand
with the highest
weighted score.
Noncompensatory
Decision
Rules
A type of consumer
decision rule by which
positive evaluation of
a brand attribute does
not compensate for a
negative evaluation of
the same brand on
some other attribute.
Conjunctive
Decision
Rule
A non compensatory
decision rule in which
consumers establish a
minimally acceptable
cutoff point for each
attribute evaluated.
Brands that fall below
the cutoff point on any
one attribute are
eliminated from further
consideration.
-useful in quickly reducing the number of alternatives to be considered
Disjunctive
Rule
A non compensatory
decision rule in which
consumers establish a
minimally acceptable
cutoff point for each
relevant product
attribute.
-mirror image of conjunctive rule. Estb higher level
Lexicographic
Rule
A non compensatory
decision rule consumers first rank
product attributes in
terms of importance,
then compare brands
in terms of the
attribute considered
most important.
Affect
Referral
Decision
Rule
A simplified decision
rule by which consumers
make a product choice
on the basis of their
previously established
overall ratings of the
brands considered, rather
than on specific
attributes.
Table :- Hypothetical Use of Popular Decision
Rules in Making a Decision to Purchase an
Ultra light Laptop
DECISION RULE
Compensatory rule
MENTAL STATEMENT
“I selected the computer that came out best when I
balanced the good ratings against the bad ratings.”
Conjunctive rule
“I selected the computer that had no bad features.”
Disjunctive rule
“I picked the computer that excelled in at least one
attribute.”
Lexicographic rule
“I looked at the feature that was most important to me and
chose the computer that ranked highest on that attribute.”
Affect referral rule
“I bought the brand with the highest overall rating.”
Types of Purchases or
Purchase behavior
Trial
Purchases
Repeat
Purchases
Long-Term
Commitment
Purchases
Outcomes of Postpurchase
Evaluation
Objective of Post Purchase evaluation is to increase
The consumer’s satisfaction with the purchase

Actual Performance Matches
Expectations
– Neutral Feeling

Actual Performance Exceeds
Expectations
– Positive Disconfirmation
Expectations

(validity)
of
Performance is Below Expectations
– Negative Disconfirmation of Expectations
Gifting Behavior
Gifting is an act of symbolic
communication, with explicit (loud & Clear) and
implicit (hidden) meanings ranging from
congratulations and love, to regret,
obligation, and dominance.
Table :- Reported Circumstances and
Motivations for Self-Gift Behavior
CIRCUMSTANCES
MOTIVATIONS
Personal accomplishment
Feeling down
Holiday
Feeling stressed
Have some extra money
Need
Had not bought for self in a while
Attainment of a desired goal
Others
To reward oneself
To be nice to oneself
To cheer up oneself
To fulfill a need
To celebrate
To relieve stress
To maintain a good feeling
To provide an incentive toward a goal
Others
Gifting Subdivisions
Inter group
Gifting
Inter category
Gifting
Intra group
Gifting
Inter personal
Gifting
Intra personal
Gifting
Table :- Gifting Relationships
GIFTING
RELATIONSHIP
DEFINITION
EXAMPLE
Inter group
A group giving a gift to
another group
A Christmas gift from one
family to another family
Inter category
An individual giving a gift to a
group or a group giving a gift
to an individual
A group of friends chips in
to buy a new mother a baby
gift
Intra group
A group giving a gift to itself
or its members
A family buys a VCR for
itself as a Christmas gift
Interpersonal
An individual giving a gift to
another individual
Valentine’s Day chocolates
presented from a boyfriend
to a girlfriend
Intrapersonal
Self-gift
A woman buys herself
jewelry to cheer herself up
Figure A Simple Model of Consumption
Choice or Purchase Decision
Input
Consumption Set
Added to one’s assortment or portfolio
Consuming Style
How the individual fulfills his or her
consumption requirements
Process of
Consuming
and
Possessing
Output
Consuming and Possessing Things and Experiences
Using, Possessing, Collecting, Disposing
Feelings, Moods, Attitudes, Behavior
Altered consumer satisfaction, change in lifestyle and/or
quality of life, learning and knowledge, expressing and
entertaining oneself
Relationship
Marketing
Marketing aimed at
creating strong,
lasting relationships
with a core group of
customers by making
them feel good about
the company and by
giving them some
kind of personal
connection with the
business.
Figure: A Portrayal of the
Characteristics of Relationship
Marketing
The Firm provides
•Products/Services
•Individualized attention
•Continuous information
•Price offers
•Customer services
•Extras and perks, etc.
The Customer provides
Trust and
promises
•Repeat Purchase
•Increased Loyalty
•Goodwill
•Positive word-of-mouth
•Lower costs for the firm
Consumers Are Less Loyal Why?
Abundance of choice  Commoditization (most
products seem to be
 Availability of
similar)
information
 Insecurity (consumers
 Entitlement
financial problems)
(consumer ask “what
have you done for me  Time scarcity
lately”)
