Consumer Markets And Buyer Behaviour
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Consumer Markets And Buyer Behaviour

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Consumer Markets And Buyer Behaviour Consumer Markets And Buyer Behaviour Document Transcript

  • Consumer markets and buyer behavior Model of consumer behavior: Marketing and environmental stimuli enter the buyers consciousness. The buyer’s characteristics and decision process lead to certain purchase decisions. The marketer’s task is to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyers purchase decision. A consumer buying behavior is influenced by cultural, social, personal and psychological factors. CULTURAL FACTORS: Culture, sub culture and social class are important in buying behavior. Culture: Culture is the most fundamental determinant of a person’s wants and behavior. The growing child acquires a set of values, perception, preferences and other key institution. Sub cultural: Each culture consist of smaller sub cultures that provide more specific identification and socialization for their members. Sub culture includes nationalities, religions, racial, groups and geographic regions. Many sub culture make up important market segments and marketers often design products and marketing programs tailored to their needs. Social class: Virtually all human societies’ exhibit social satisfaction some times takes the form of a caste system. Where the members of different caste are reared for certain roles and cannot change their caste membership. Social classes are relatively homogenous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behavior. SOCIAL FACTORS: In addition to cultural factors, a consumers behavior is influenced by such social factors as reference groups, family and social roles and statuses. Example: Taj Residency target at upper class where as fast foods target at middle class.
  • Reference groups: A persons reference groups consists of all the groups that have a direct or indirect influence on the person’s attitudes or behavior. Grouped having a direct influences on a persons are called membership groups. Some membership groups are primary groups such as family, friends, neighbor and co workers, with whom the persons interact fairly continuously and informally. Family: The family is the most important consumer buying organization in society, and it has been researched extensively. Family members constitute the most influential primary reference group. Marketers are interested in the roles and relationship influencing the husband, wife, children’s and others in making a purchase. Roles and status: A person participates in many groups – family, clubs, organization then person’s position in each group can be defined in terms of role and status’s role consists of the activates that a persons is expected to perform. Each role carries a status. Example: Supreme Court judge as more status than a sales manager. PERSONAL FACTORS: A buyers decisions are also influenced by personal characteristics. These include the buyer’s age and stages in life cycle, occupation, economic circumstances, lifestyle, personality and self concept. Age and stages in life cycle: people buy different goods and services over a life time. They eat baby food in the early years, most foods in the growing and mature years and special diets in later years. Taste in clothes, furniture is also age related. Consumption is shaped by the family life cycle. Occupation and economic circumstances: occupation also influences a person’s consumption pattern. A blue collar worker will buy work clothes, work shoes and lunch boxes. A company chair man will buy expensive suit, air travel etc. Marketers try to identify the occupational groups that have above average interest in there products and services.
  • Products choice is greatly affected by economic circumstances. Economic indicators point to a decision. Marketers can take steps to redesign, re position and re price their products so they continue to offer value to target customer. Life style: people from same sub culture, social class, and occupation may lead quite different life style. Marketers search for relation ship between their products and life style groups. There are 9 stages in life style. Example: A computer manufactures might find that most computer buyers are achievement oriented. The marketers may than aim the brand more closely at the achievers life style. Personality and self concept: each person as distinct personality that influences buyers’ behavior. Personality is usually described in terms of such traits as self confidence, dominance, autonomy, deference, sociability etc. PSYCOLOGICAL FACTORS: A persons buying behavior are influenced by 4 major psychological factors. MOTIVATION: A persons has many needs at any given time. Some needs are bio genet i.e., they arise from physiological states of tension such as hunger, thirst, discomfort other needs are psychogenic. They arise from psychological states of tension such as the need for recognition, esteem or belonging. PERCEPTION: Perception is the process by which an individual selects, organizes and interprets in formations inputs to create a meaningful picture of the world. People can emerge with different perceptions of the same because of 3 perpetual processes. They are Selective attention: It means that marketers have to work hard to attract consumers’ attention. Selective distortion: it is the tendency to twist information in to personal meaning and interpret information in a way that will fit our perceptions. View slide
  • Selective retention: In this we are likely remember good points mentioned about a product. We like and forget good points about competing products. LEARNING: Learning involves changes in an individual’s behavior arising from experience. Most human behavior is learning. Learning theorist believe that learning is produced through interplay of drives, stimuli, cues, response and reinforcement. Learning theory teaches marketers that they can build up demand for a product by associating it with strong drives, using motivating cues and providing positive reinforcement. BELIFES AND ATTITUDES: through doing a learning, people acquire beliefs and attitudes. There is an influence on buying behavior. A belief is a descriptive thought that a person holds about something. An attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings and actions tendencies towards some object or idea. View slide
  • THE BUYING DECISION PROCESS Marketers have to go beyond the various influences on buyers and develop an understanding of how consumers actually make there buying decisions. Specifically marketers must identify who makes the buying decisions and the steps in the buying process. BUYING ROLES: IT is easy to identify the buyer for many products. In United States men usually choose their shaving equipment and women choose there cosmetics marketers must be carefully in making their targeting decisions, because buying roles changes. We can Distinguish 5 roles people may play. Initiator: A person who first suggest the idea of buying the product or service. Influencer: A persons whose view or advice influences the decision. Decides: A person who decides on any component of a buying decision whether to buy, what to buy, how to buy or where to buy. Buyer: The person who makes actual purchase. User: A person who consumes or uses the products or services.
  • BUYING BEHAVIOUR: Consumers decisions making vary with the type of buying decision. The decision to buy tooth paste, a tennis racket, and a new car are all very different. Assail distinguished 4 types of consumer buying behavior based on the degree of buyer involvement and degree of difference among brands. COMPLEX BUYING BEHAVIOR: It involves a 3 step process. First the buyer develops belief about the product. Second he or she develops attitudes about the product. Third he or she make a thought full choice. DISSONANCE- REDUCING BUYER BEHAVIOR: Some times the consumer is highly involved in a purchase but sees little difference in brands. The high involvement is based on the facts that the purchase is expensive, infrequent and risky. Example: Car buying is a high involvement decision because it is expensive. HABITUAL BUYING BEHAVIOR: Many products are brought under conditions of low involvement and absence of significant brand differs. Consider salt, consumers have little involvement in this category, they go to store and reach for the brand there is a good evidence that consumers have low involvement when the product is of low cost an d frequently purchased. VARIETY SEEKING BUYING BEHAVIOR: Some buying situations are characterized by low involvement but significant brand differs. Here consumers often do a lot of brand switching .Think about cookies. The consumers has some belifies about cookies; choose a brand of cookies without much evaluation.
  • THE STAGES OF BUYING DECISION PROCESS The smart companies research the buying decision process involved in their product category. The consumers’ passes through 5 stages:  Problem recognition  Information search  Evaluation of alternatives  Purchase decision and  Post purchase behavior 1 Positioning Having identified the potential segments and selected one or more to target, the marketer must next decide what position to pursue. A position is the way a firm’s product, brand, or organization is viewed relative to the competition by current and prospective customers. If a position is how a product is viewed, then positioning is a firm’s use of all the elements at its disposal to create and maintain in the minds of a target market a particular image relative to competing products When positioning a product, the marketer wants to convey the benefit most desired by the target market. A classic example of successful positioning is the original Head and shoulders shampoo. As the first shampoo positioned as a dandruff remedy, the product’s name implied the benefit, the medicinal fragrance suggested its potency, and the color and consistency, and the color (blue-green) and consistency (a paste rather than a liquid) indicated that it wasn’t an ordinary shampoo . There are three steps in a positioning strategy: 1. Select the positioning concept To position a product or an organization, a marketer needs to first determine what is important to the target market.. Marketers can then conduct positioning studies to see how members of a target market view competing products or stores on the important dimensions. The results of this research can be portrayed in a perceptual map that locates the brand or organization relative to alternatives on the dimensions of interest. 2. Design the dimension or feature that most effectively the position A position can be communicated with a brand name, a slogan, the appearance or other features of the product, the place where it is sold, the appearance of employees, and in
  • many other ways. However, some features are more effective than others. It is important to not overlook details. According to a consultant, chairs for customers are vital in upscale retail environments because they signal that5 the seller “cares.” Because the marketer has limited resources, decisions have to be mad4 on how best to convey the desired positioning concept. 3. Coordinate the marketing mix components to convey a consistent position. Even though one or two dimensions may be the primary position communicators, all the elements of the marketing mix- the product, price, promotion, and distribution-should complement the intended position. Many product failures are the result of inconsistent positioning that confuses consumers. For example, a compact car with a high price tag (Cadillac Cimarron), and Tetley Instant Iced Tea (in Britain, where the people take great pride in brewing tea) both flopped. Over time a position may erode because of lack of attention, become less attractive to the market as needs or tastes change, or be usurped by a competitor. Hence positions must be regularly monitored and sometimes adjusted MARKETING TARGETING Once the firm has identified its market segment opportunities in t has to decide how many and which once to target. 1) EVALUATING THE MARKET SEGMENTS : In evaluating different market segments, the firm must look at two factors the segments overall attractiveness I.e. size, growth, profitability scale economics. Second the firm must consider whether investing in the segment makes since given the firms objectives and resources. 2) SELLING THE MARKET SEGMENTS: Hearing evaluated different segments, the company can consider five patterns of target market selection. a) Single Segment Concentration: the company may select a single segment vockswagen concentrates on the small company market and Porsche on the sports can market. Through concentrated market the firms gains a strong knowledge of the segments needs and achieves a strong market presence. b) Selective Specialization: here the firm selects a no of segments, each objectively attractive and appropriative there may be little or number if synergy among segments but each segment premises to be a money market this multi segment coverage strategy has the advantage of diversifying the firms risk.
  • c) Product Specialization : here the firm specializes in making a certain product that it sells to several segments. Eg: could be microscope manufactures increases scopes to universities laboratories govt laboratories commercial laboratories. Through a product specialization strategy , the firm builds a strong reputation in the specific product area. d) Market Specialization : Here the firm concentrates on serving any needs of a particular customer group. Eg is firm that sell an assortment of products only to university laboratories, including microscopes, oscilloscope, Bunsen, because and chemical flasks. The firm gains a strong reputations in saving this customer group and becomes a channels for feather products that the customer group could use. e) Full market coverage: here a firm attempts to save all customer groups, unit all the products they might need. Only very lounge fives can undertake a full market coverage strategy. Eg. IBM, general motors, coca cola etc I,e large firms can ever a whole market in two broad ways. Through underestimated marketing or differentiated market. 3) ADDITIONAL CONSIDERATION: fore other consideration must be taken in to ale in valuating and selecting segments. a) Ethical choice of market target: market targeting sometimes generates public controversy. The public is concerned when marketers take unifies advantage of *****groups or disadvantaged groups. b) Segment interrelationships and super segments: in selecting more than one segment to serve, the company should pay attention to segment inter relationships on the cost, performance and technology side. Companies should try to operate in super segments rather than in is dated segment. A super segment is a set of segments shaving some exploitable similarly.
  • c) Segment by segment incision plans: a company would be wise to enter one segment at a time uitanont revealing its total expansions plans. The competitors must not know to what segment the firm will move d) Inter segment co-operation: the but way to manage segments is to appoint segment managers with sufficient authority and responsibility for building their segments brinier at the some time, segment managers. Should not be so segment forced as to co-operation with other company personnel SEGMENTING CONSUMER AND BUSINESS MARKETS Whenever a market for a product are service canvases of two or more buyers. The market is capable of being segmented i.e divided in to meaningful buyers groups. The propose of segmentation is to determine only among buyers which may be consequent in choosing away them or making to them. Bases for segmenting consumer markets: two brood group of variables are used to segment consumer markets. Some researches try to form segments by looking at consumer characteristic and other researches try to firm segments by looking at consumer response. The major segmentation variables are 1) Geographic segmentation: geographic segmentation call for dividing the market in to different geographic units such as nations, states, regions, countries, cities. The company can operates in one or a few geographic areas or operates in all but pay attention to local variations.
  • 2) Demographic segmentation: in demographic segmentation the market is divided in to groups on the basis of variable such as age, family, size, family life cycle, gender, income etc. demographic variable are the most popular basis for distinguishing customer groups. Here is how certain demographic variables have been used to segment market. a. Age and life cycle stage: consumer wants and abilities change with age. b. Gender: gender segmentation has long been applied in clothing havistyling, cosmetics, and magazines. Occasionally other marketers notice an opportunity for gender segmentation. c. Income: income segmentation is a long standing practice in such product and service categories as automobiles, boats, clothing, cosmetics and travel. How ever income does not always predict the but customer for a given product. e.g. blue collar workers was among the first purchase of colors television sets, it was cheaper for then to buy there sets than to go to movies and restaurants d. Generation: many recovers are now turning to generation segmentation. Each generation is profoundly influenced by the times in which it grower up the music, movies, polities, and events of that period. e. Social class : social class has a strong influence on prefere the car clothing home furnishings, deisure activities, and retailers, money companies design products and services for specific social classes. 3) Psychographic segmentation: in this segmentation buyers are divided in to different groups on the basis of life style or personality and values a. life style: people exhibit many more lifestyles than are suggested by the seven social classes, the goods they consume express their lifestyles companies making cosmetics alcoholic beverages, and fruiture are always seeking opportune on life style segmentation.
  • b. Personality: marketers have personality variables to segment ,markets. They endow their products with brand personalities that correspond to consumer personalities. c. Values: some marketers segment by core values, the belief systems that under lie consumer attitudes and behaviors, core value go much deeper than behavior or attitude and deter mite, at a basic level and derive oral the long term. d. Personality: marketers have personality variables to segment markets. They endow their product with brand personalities that correspond to consumer personalities. e. Values: some marketers segment by core values, the belief systems that under lie consumer attitudes and behaviors, core values go much deeper than behavior or attitude and determinate at a basic level and desire orel the long term. 4) Behavioral segmentation : many marketers believe that behavioral variables occasions, behefils, user states, usage uati loyalty states one the best starting points for constructing market segments. a. Occasions: buyers can be distinguished according to the occasions they develop a need, purchase a product, or use a product and occasions segmentation can help firms expend product usage. Eg. Orange juice is usually consumed at breakfast. A orange juice consumer can try to promote drinking orange juice unable occasions level, dinner, midday b. Benefits: buyer can be clarified according to the benefits they seek Eg. Haley reported true benfit segmentation of the toothpaste market. He found four benefits segments; economy medicinal, cosmetic and c. User states: markets can be segmented in to consumers, Eg. user potential user, first time user, and regular uses of a product.
  • d. loyal states: consumers have buying degree of loyalty to specific brands, stores and other entitir. e. Buyer readiness stage: a market consists of people in different stages of readiness to buy a product. Some all universe of the product, some all avaus, some all informet and some derive the product. f. Attitude: five attitude groups can be ford in a market enthusiastic, positive, indifferent, negative and 5). Multi: attribute segmentation: one of the most promising developments in multi attribute segmentations called geo-destering geo-destering yields richer descriptions of consumers and neighbor goods than traditional demographic. BUSINESS MARKET Business market consist of all organization that acquire of all goods and services used in the production of other products or services that are sold, rented, or supplied to others. the major industries making up the business market agriculture, forestry and fisheries mining, manufacturing, construction, transportation, communication, public utility, banking finance and insurance distribution and services. BUSINESS MARKET HAVE SEVERAL CHARACTERISTICS  Fewer buyer: The business marketer normally deals with for fewer buyer than the consumer marketers does.  Larger buyer: A few larger buyer do most of the purchasing in such industries as aircraft engines and defines weapon.
  •  Close supplier-customer relationship: Because of the smaller customer base and the importance and power of the larger customers, suppliers are frequently expected to customize their offering to individual business customer needs .