Consumer behavior by Santanu Mukherjee (musan007@gmail.com)

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It is a Lucid description and simple presentation on Consumer psyche for making purchase decisions.

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Consumer behavior by Santanu Mukherjee (musan007@gmail.com)

  1. 1. CONSUM R B H E E AVIOUR ? ?CIMS
  2. 2. • WHY PEOPLE BUY ? WHAT IS THE PSYCHOLOGICAL PROCESS OF BUYING ?• HOW PEOPLE BUY?• WHY PEOPLE CHOOSE A PARTICULAR BRAND OVER OTHER?• HOW THEY BEHAVE AFTER A PURCHASE?• WHERE THEY BUY?CIMS
  3. 3. What is Consumer Behaviour? Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and follow these actionsCIMS
  4. 4. This study draws on concepts from various other disciplines• Psychology• Sociology• Economics• MarketingCIMS
  5. 5. APPLICATION OF Consumer Behavior Studies• MARKET SEGMENTATION• BRAND POSITIONING• MARKETING COMMUNICATIONCIMS
  6. 6. Evolution of Marketing Concept Evolution of Marketing ConceptProduction Concept Product Concept Product ConceptI have produced something , Let me add few newCustomers will accept it features to my product Selling Concept Selling Concept Push the products in the market by sales promotion methods Marketing Concept Marketing Concept Focus on what consumers need or wantCIMS
  7. 7. FACTORS WHICH AFFECT CONSUMER DECISIONCIMS
  8. 8. • DEMOGRAPHIC VARIABLES• PSYCHOGRAPHIC VARIABLES• CULTURAL FACTORS• SOCIAL FACTORS like INFLUENCE OF REFERENCE GROUPSCIMS
  9. 9. PSYCHOGRAPHIC FACTORS PSYCHOGRAPHIC FACTORSCIMS
  10. 10. HIGH vs. LOW Involvement GOODS or SERVICES• LOW INVOLVEMENT Repeat PurchaseFELT NEED Purchase +/-EXPERIENCE (learn) Attitude• HIGH INVOLVEMENT PSYCHOLOGICAL AND OTHER FACTORS Need Information Evaluation of Recognition Search alternatives Post purchase Purchase Decision behaviousCIMS
  11. 11. CONSUMER MOTIVATION Perception, Social Factors, Personal factors, Cultural factors Marketers Try to stimulate Marketers Try to stimulate this need this needUnsatisfied need /unfulfilled NeedUnsatisfied need /unfulfilled Need Desire Desire Physiological Physiological Psychological Psychological Motive MotiveKnown or Known or Expressed or Expressed orunknown Hidden ACTION ACTION unknown Hidden CIMS SATISFACTION DISSATISFACTION
  12. 12. We Are Governed By Our Perceptions We Are Governed By Our PerceptionsWe use our perceptions to minimize load on our Brain because we are unable to process a huge load of information that we receive everyday. CIMS
  13. 13. DEVELOPING Consumer Perception Perception Perception ACTION ACTIONCIMS
  14. 14. ATTITUDE ATTITUDE R E A PERCEPTION PERCEPTION LEARNING PERCEPTION PERCEPTION LEARNING L W BELIEF BELIEF O ROTHER FACTORS LOTHER FACTORS DCIMS
  15. 15. ELEMENTS of PERCEPTION ELEMENTS of PERCEPTION• SELECTIVE ATTENTION – NEED BASED ATTENTION• SELECTIVE DISTORTION – PERCEPTUAL BLOCKING• SELECTIVE RETENTION – ONLY REMEMBERING THAT WHAT WE NEED TO REMEMBER• JUST NOTICEABLE DIFFERENCE(JND)• HALO EFFECT• PERCEPTION OF COLOR , DESIGN etcCIMS
  16. 16. How we perceive things or persons that depends on our attitude , Interest , experience, expectation and on certain attributes of the things . itself We usually notice things which we have interest in “ Oh ! This is like my own car !!!”‘We are influenced by our experiences and experience forms our attitudes ‘- “Kolkata Traffic is bad”. badOur Expectations influence our perception towords something. ”The food quality of five star hotel must be good , because we expect high service from them “CIMS
  17. 17. Something that is golden in color seems “precious“.“ Foreign “ means High quality.“ Japanese“ means “Highly technical and good quality ”“ Horse” means speed.“ Fragrance/Perfume “ elicits a feeling of “wellbeing’.“Bright Colors” means ‘exuberance’ or ‘Fun’.“Green” means fresh or young.“ fair complex means beautiful”“ Sony makes good quality Television , their Mobile Phones should be also good”“ Made in India “ confers to compromised quality.“ Athletes make good sales people”“ Anything that is Diamond Shaped evokes a feeling of “preciousness”. “ Anything natural has low side effects”“ Bengalis are sweet lovers”“ South Indians have not much varieties in their food ”“ Bombay is a costly city ” CIMS
  18. 18. MEMORY(EXPERIENCE) EXPERIENCE RehearsalSensory inputs Short Term Long Term Sensory Memory Memory Memory Forgotten Material CIMS
  19. 19. Consumer LearningBeheavioral Learning TheoriesBeheavioral Learning Theories• Classical Conditioning - PavlovCIMS
  20. 20. APPLICATION OF CLASSICAL CONDITIONINGNatural Stimulus -- Natural ResponseArtificial stimulus -- Natural responseFragrance of Natural Jasmine elicit pleasant feelingPerfume of Jasmine elicit same pleasant feeling, Picture of Jasmine brings the same feelingCIMS
  21. 21. Consumer Learning• Operant Conditioning – B. F Skinner Behaviour elicited Behaviour elicited Likelyhood of increase or Decrease in response probability Reward or Punishment Reward or PunishmentCIMS
  22. 22. • Positive ( + feeling) Reinforcement –• “Buy one , get one free”• Negative (- feeling) Reinforcement –“ buy Colgate, get rid of bad breath “CIMS
  23. 23. COMBINATION OF Classical Conditioning AND OperantCIMS Conditioning
  24. 24. RISK PERCEPTION• PHYSICAL RISK• PERFORMANCE RISK• FINANCIAL RISK• SOCIAL RISK• Psychological RiskRisk takers try new productsRisk – avoiders are brand loyalCIMS
  25. 25. Culture• Cultural influence on purchase• Sub cultural influence• Mixed cultural Influence Subculture• BENGALI,GUJRATI ,Punjabi etc Mixed CultureCIMS
  26. 26. PERSONAL FACTORS• AGE• FAMILY LIFE CYCLE• INCOME• PERSONALITY AND LIFE STYLE MARRIED WITH KID JUST MARRIEDYOUNG AND SINGLE MARRIED WITHOUT KID MIDDLE AGED KIDS OLDCIMS
  27. 27. PERSONAL FACTORS PERSONAL FACTORS• CONSUMPTION IS DOMINATED BY THE SOCIAL CLASSES AND THEIR INCOMES PREVIOUS SOCIAL CLASS STRUCTURES> UPPER CLASS MIDDLE CLASS LOWER CLASS MODERN CLASS STRUCTURE Globals (Expats) ( More than Rs. 20 Lakh /annum) Strivers ( Rs 5- 15L / annum) MIDDLE CLASS Seekers ( Rs 2- 5L /annum) Aspirers ( Rs 90,000 – 2L/annum ) Deprived ( Less 90,000 / annum)CIMS
  28. 28. CONSUMPTION PATTERN IN INDIA FOR MIDDLE CLASS• GROWTH IN YOUNG WORK FORCE• WORKING COUPLES WITH NO KIDS• WORKING COUPLES WITH ONE KID• INCREASE IN WHITE COLLAR PROFESSIONALS LIKE DOCTORS ,IT PEOPLE , ARCHITECTS, FASION DESIGNERS ,BANKERS ,LAWERS etc. THIS CLASS GOES FOR EXPENSIVE ITEMS,EATING OUTS ,WANTS TO SHOW OFF , ENJOYS A LOT OF CREDIT FACILITIES –INDULGE IN ASPIRATIONAL PURCHASES CIMS
  29. 29. Highest Spending segment DEMOGRAPHIC SEGMENTATION – Source : Mint , March 16 ,2012 , kolkata N=2000 , Citi emerging India Research CIMS
  30. 30. REFERENCE GROUPS• PRIMARY GROUP or Family of Procreation or family of orientation• ASSOCIATIVE OR SECONDARY GROUP• CELEBRITIES• OPINION LEADERSCIMS
  31. 31. Consumer’s Behavioural Decision Process FIVE STAGE MODEL Need Information Evaluation ofRecognition Search alternatives CONSIDERATION AWARENESS TOTAL SET SET SET CHOICE SET DECISION SET Post purchase behaviours purchase DecisionCIMS
  32. 32. Post Purchase BehaviourPerformance Performance Performance Cognitive below Dissonance matches exceedsexpectation expectation expectation Negative Neutral Exit Complain Word of MouthCIMS
  33. 33. MODELS OF CONSUMER BEHAVIOUR:1. The Nicosia Model2. The Howard – Sheth Model3. The EBM ModelCIMS
  34. 34. The Nicosia Model CIMSRefer to page -374 ,S S kazmi , Batra book
  35. 35. The Howard – Sheth Model CIMSRefer to page -375 ,S S kazmi , Batra book
  36. 36. ENGEL,BLACKWELL,MINIARD MODEL ENGEL,BLACKWELL,MINIARD MODEL CIMSRefer to page -376 ,S S kazmi , Batra book
  37. 37. Diffusion of InnovationCIMS
  38. 38. • SEGMENTATION IS A PROCESS OF DIVIDING ENTIRE HETEREOGENOUS MARKET IN DIFFERENT CATEGORIES DEPENDING ON THEIR HOMOGENIOUS (SIMILAR) CHARACTERISTICS 3-5 lakh /annum 5- 7 lakh /annum 7- 10 lakh /annum >10 lakh /annumCIMS
  39. 39. Bases for Segmentation • Geographic – Location • Demographic – Age, gender, Income • Psychographic – Personality , Lifestyle • Behaviorist – Occasion, Benefits sought • Demographic – Psychographic – Mixture of Demo and PsychoA Product for eastern India, A product for Old people , A product for teenagers , A product for fun loving people, A product for wedding season CIMS
  40. 40. SEGMENTATION VARIABLES SEGMENTATION VARIABLES1.CONSIDER VARIABLES OFSEGMENTATION2. EVALUATION of SEGMENTS3. DEVELOP PROFILE FOR EACHSEMNENTCIMS
  41. 41. MARKET SEGMENATION MARUTI SUZUKI – Segmentation Based on Price and affordability Entry Level Segment Mid Level Segment Upper Segment Premium SegmentCIMS
  42. 42. CIMS

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