Free Ebooks Download ! Edhole
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
110
On Slideshare
110
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
3
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. EDUCATION HOLE PRESENTS 2013 Consumer Buying Behaviour Module-IV By:-Management Department W W W . E D H O L E . C O M
  • 2. Contents Consumer Buying Behaviour Types of Consumer Buying Behaviour ................................................................................................4 Industrial buying Behaviour....................................................................................................................5 Buying situations in the industrial marketing.....................................................................................6 Straight rebuy .................................................................................................................................7 Modified rebuy ...............................................................................................................................7 New task..............................................................................................................................................7 5 Stages of consumer buying decision process...................................................................................8 Factors Affecting Consumer Behaviour ..............................................................................................9 1. Cultural Factors...............................................................................................................................9 • Culture........................................................................................................................................10 • Subculture..................................................................................................................................10 • Social Class .................................................................................................................................10 2. Social Factors ................................................................................................................................10 • Reference Groups ......................................................................................................................10 • Family.........................................................................................................................................10 • Roles and Status.........................................................................................................................11 3. Personal Factors............................................................................................................................11 • Age .............................................................................................................................................11 • Occupation.................................................................................................................................11 • Economic Situation ....................................................................................................................11 • Lifestyle ......................................................................................................................................11 • Personality .................................................................................................................................12 4. Psychological Factors ....................................................................................................................12 • Motivation..................................................................................................................................12 • Perception..................................................................................................................................12 • Beliefs and Attitudes..................................................................................................................12 Consumer adoption process in marketing........................................................................................12 Factor influencing the adoption process ......................................................................................13 Personal influence play a key role ................................................................................................14 Characteristics of the innovation affects the rate of adoption ....................................................14
  • 3. Consumer Buying Behaviour Buying Behaviour 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. Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. A firm needs to analyze buying behaviour for: • Buyers’ reactions to a firms marketing strategy has a great impact on the firm’s success. • 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. • Marketers can better predict how consumers will respond to marketing strategies. Stages of the Consumer Buying Process Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next. The 6 stages are: 1. 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? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search-- o Internal search, memory. o External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc.
  • 4. A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is o Chinese food o Indian food o burger king o Klondike skates etc 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 choices 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. 4. Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc. 5. Purchase--May differ from decision, time lapse between 4 & 5, product availability. 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. Handout...Pillsbury 1-800#s 1-800 #s gives the consumer a way of communicating with the marketer after purchase. This helps reduce cognitive dissonance when a marketer can answer any concerns of a new consumer. Types of Consumer Buying Behaviour Types of consumer buying behaviour are determined by: • Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. • Buyers’ level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others. High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk: • Personal risk • Social risk • Economic risk The four type of consumer buying behaviour are:
  • 5. • Routine Response/Programmed Behaviour--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. • Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes-- know product class but not the brand. • Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. • Impulse buying, no conscious planning. The purchase of the same product does not always elicit the same Buying Behaviour. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. Industrial buying Behaviour An organization buying is a process by which company organizations establishes a need for purchasing products and choose among competing brands and suppliers -Reason to buy products • In production of another products • To sell • Rented • Supplied to other
  • 6. Buying situations in the industrial marketing Buying situations varies to the large extent in the industrial marketing compared to the consumer markets. The negotiation process and vendor evaluation stages will not be there if company wants to purchase the same material from the existing suppliers. Therefore in this section we are discussing the different situation involved in the business buying. Industrial marketing usually involves three different types of buying situations. They are 1. Straight rebury 2. Modified rebury 3. New task
  • 7. Straight rebuy In a straight rebuy, the buyer reorders something without any modifications. Purchase Dept. normally handles these kinds of purchase as routine. It’s based on past buying satisfaction, the buyer simply chooses from the various suppliers on its list. "In" suppliers try to maintain product and service quality. They often propose automatic reordering systems so that the purchasing agent will save reordering time. "Out" suppliers try to offer something new or exploit dissatisfaction so that the buyer will consider them. They try to get their foot in the door with a small order and then enlarge their purchase share over time. Modified rebuy The buyer wants to modify product specifications, prices, terms, or suppliers. The modified rebuy usually involves more decision participants than the straight rebuy. The in suppliers may become nervous and feel pressured to put their best foot forward to protect an account. Out suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business. New task
  • 8. A company buying a product or service for the first time faces a new-task situation. In such cases, the greater the cost or risk, the larger the number of decision participants and the greater their efforts to collect information will be. The new-task situation is the marketer's greatest opportunity and challenge. The marketer not only tries to reach as many key buying influences as possible but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new-task decision. In the new-task situation, the buyer must decide on product specifications, suppliers, price limits, payment terms, order quantities, delivery times, and service terms. The order of these decisions varies with each situation, and different decision participants influence each choice. 5 Stages of consumer buying decision process The marketer is responsible for selling the goods in the market so he must have the knowledge how the consumers actually make their buying decisions. For this he must study the consumer buying decision process or model. It involves five stages. 1.) Need recognition: - consumer buying decision process starts with need recognition. The marketer must recognize the needs of the consumer as well as how these needs can be satisfied. For example if a person is hungry then food is desired or if it is a matter of thirst than water is desirable. 2.) Information search: - in consumer buying decision process information search comes at second number. In this stage consumer searches the information about the product either from family, friends, neighbourhood, advertisements, whole seller, retailers, dealers, or by examining or using the product. 3.) Evaluation of alternatives: - after getting the required knowledge about the product the consumer evaluate the various alternatives on the basis of it’s want satisfying power, quality and it’s features. 4.) Purchase decision: - after evaluating the alternatives the buyer buys the suitable product. But there are also the chances to postpone the purchase decision due to some reasons. In that case the marketer must try to find out the reasons and try to remove them either by providing sufficient information to the consumers or by giving them guarantee regarding the product to the consumer.
  • 9. 5.) Post purchase behaviour: - after buying the product consumer will either be satisfied or dissatisfied. If the consumer is not satisfied in that case he will be disappointed otherwise If he is satisfied than he will be delighted. It is usually said that a satisfy consumer tell about the product to 3 people and a dissatisfy consumer tell about the product to 11 people. Therefore it is the duty of the marketer to satisfy the consumer. Thus, these are the five stages of the consumer buying decision process. Factors Affecting Consumer Behaviour Consumer behaviour refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are different processes involved in the consumer behaviour. Initially the consumer tries to find what commodities he would like to consume, then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money which he can spend. Lastly, the consumer analyses the prevailing prices of commodities and takes the decision about the commodities he should consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below. 1. Cultural Factors Consumer behaviour is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
  • 10. • Culture Basically, culture is the part of every society and is the important cause of person wants and behaviour. The influence of culture on buying behaviour varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries. • Subculture Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group. • Social Class Every society possesses some form of social class which is important to the marketers because the buying behaviour of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth, education, occupation etc. 2. Social Factors Social factors also impact the buying behaviour of consumers. The important social factors are: reference groups, family, role and status. • Reference Groups Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics). • Family Buyer behaviour is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women
  • 11. in their advertisement. Here we should note that buying roles change with change in consumer lifestyles. • Roles and Status Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status. 3. Personal Factors Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept. • Age Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage. • Occupation The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged work clothes. • Economic Situation Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products. • Lifestyle Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world.
  • 12. • Personality Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service. 4. Psychological Factors There are four important psychological factors affecting the consumer buying behavior. These are: perception, motivation, learning, beliefs and attitudes. • Motivation The level of motivation also affects the buying behavior of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction. • Perception Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs. • Beliefs and Attitudes Customer possesses specific belief and attitude towards various products. Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard Consumer adoption process in marketing
  • 13. Adoption is an individual’s decision to become a regular user of a product. Sequence of events beginning with consumer awareness of a new product leading to trial usage and culminating in full and regular use of the new product Over time the adoption process resembles a bell curve formed by innovators, early adopters, the majority of consumers, late adopters, and laggards. An innovation is any good, service, or idea that is perceived by someone as new. The idea may have a long history, but it is an innovation to the person who sees it as new. Innovations take time to spread through the social system. Rogers defines the innovation diffusion process as “the spread of a new idea from its source of invention or creation to its ultimate users or adopters.” The consumer-adoption process focuses on the mental process through which an individual passes from first hearing about an innovation to final adoption. Adopters of new products have been observed to move through five stages: 1. Awareness -The consumer becomes aware of the innovation but lacks information about it. 2. Interest-The consumer is stimulated to seek information about the innovation. 3. Evaluation -The consumer considers whether to try the innovation. 4. Trial-The consumer tries the innovation to improve his or her estimate of its value. 5. Adoption -The consumer decides to make full and regular use of the innovation. The new-product marketer should facilitate movement through these stages. A portable electric dishwasher manufacturer might discover that many consumers are stuck in the interest stage; they do not buy because of their uncertainty and the large investment cost. But these same consumers would be willing to use an electric dishwasher on a trial basis for a small monthly fee. The manufacturer should consider offering a trial-use plan with option to buy. Factor influencing the adoption process As said earlier, there is always resistance to change. We all want change but we don’t like it even when the change is for the betterment people differ in readiness to try new products. People differ in their approach towards change. Some differ in adopting new fashion, some in adopting new appliances, some doctors are hesitant to apply new medicines and still some farmers do not apply new implements. This is called adoption culture. After the early
  • 14. adoption, they increase the use and then others follow. Others are late adopters by nature. Let us categorize these customers into three units ? One who are early adopters They are very quick in their response. These people are venture some and willing to try new ideas. In fact they are innovators in life and early adopters. ? Secondly Early Majority They are very careful people and take time to adopt things. They tend to collect information about the change or the product, study carefully and then adopt on the basis of their merits. ? The third ones are late majority and traditionalists. They are the ones who adopt late and then use the product. As marketing managers, we must study the demographics, the psychographics and media characteristics of the product and also keep the theme of advertising message on these lines. We must find the innovators of the product and also opinion leaders and keeping in view the financial stature of the consumers and their category. Then there are certain areas where product change is imminent and quicker while some areas change or innovation in the product is least desired or welcomed. Personal influence play a key role In case of some of the products, depending to which category they belong to , personal influence and selling is very important. Demonstrations, experimentation, and even free use is given to influence the change in product or its innovation. Cosmetic items, food items and items in use of household are subject to personal selling. Characteristics of the innovation affects the rate of adoption Some products are quick in innovation, such as fashion items or the ones that bring a direct change in our status etc. Some product takes long to adoption. Such as technical products or automobiles etc The following things are considered 1 Relative advantage
  • 15. 2. Compatibility 3. Complexity 4. Divisibility Other things, which influence adoption, are: social acceptability, scientific acceptability, cost and certainty.