Consumer behavior

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Consumer behavior

  1. 1. Consumer Buyer Behaviour
  2. 2. Definitions• Cons ume r Buying Be ha vior  Buying be ha vior of individua ls a nd hous e holds tha t buy products for pe rs ona l cons umption.• Cons ume r Ma rke t  All individua ls /hous e holds who buy products for pe rs ona l cons umption. 6-2
  3. 3. Model of Consumer Behavior• S timulus Re s pons e Mode l  Ma rke ting a nd othe r s timuli e nte r the buye r’s “bla ck box” a nd produce ce rta in choice /purcha s e re s pons e s .  Ma rke te rs mus t figure out wha t is ins ide of the buye r’s “bla ck box” a nd how s timuli a re cha nge d to re s pons e s . 6-3
  4. 4. Characteristics Affecting Consumer Behavior Key Factors • Culture • S ubculture• Cultura l  Re ligion• So c ia l  Ethnic• Pe rs o na l • S ocia l Cla s s• Ps y c ho lo g ic a l  S ocio-e conomic cla s s (S EC) 6-4
  5. 5. CultureThe fundamental determinant ofa person’s wants and behaviors acquired through socialization processes with family and other key institutions. 6-5
  6. 6. Fast Facts About American Culture• The a ve ra ge Ame rica n  che ws 300 s ticks of gum a ye a r  goe s to the movie s 9 time s a ye a r  ta ke s 4 trips pe r ye a r  a tte nds a s porting e ve nt 7 time s e a ch ye a r 6-6
  7. 7. Characteristics Affecting Consumer Behavior Key Factors • Groups  Me mbe rs hip• Cultura l  Re fe re nce  A p ira tio na l g ro up s s• So c ia l  Opinion le a de rs• Pe rs o na l • Fa mily  Childre n ca n influe nce• Ps y c ho lo g ic a l • Role s a nd S ta tus 6-7
  8. 8. Characteristics Affecting Consumer Behavior Key Factors • Age a nd life cycle • Occupa tion• Cultura l • Economic s itua tion • Life s tyle• So c ia l  Activitie s , inte re s ts , a nd opinions• Pe rs o na l  Life s tyle s e gme nta tion • P e rs ona lity a nd s e lf-• Ps y c ho lo g ic a l conce pt  Bra nd pe rs ona lity 6-8
  9. 9. Stages in the Family Life Cycle1. Bachelor stage: Few financial burdens. Fashion opinion leaders.Young, single, not living Recreation oriented. Buy: basic home equipment,at home furniture, cars, equipment for the mating game; vacations.2. Newly married Highest purchase rate and highest averagecouples: purchase of durables: cars, appliances, furniture,Young, no children vacations.3. Full nest I: Home purchasing at peak. Liquid assets low.Youngest child under six Interested in new products, advertised products. Buy: washers, dryers, TV, baby food, chest rubs and cough medicines, vitamins, dolls, skates.4. Full nest II: Financial position better. Less influenced byYoungest child six or over advertising. Buy larger-size packages, multiple-unit deals. Buy: many foods, cleaning materials, bicycles, music lessons, pianos. 6-9
  10. 10. Characteristics Affecting Consumer BehaviorBrand Personality Dimensions • S ince rity • Excite me nt • Rugge dne s s • Compe te nce • S ophis tica tion 6 - 10
  11. 11. Characteristics Affecting Consumer Behavior Key Factors • Motiva tion  Ne e ds provide motive s for cons ume r be ha vior• Cultura l  Motiva tion re s e a rch  Ma s low’s hie ra rchy of ne e ds• So c ia l • P e rce ption  S e le ctive a tte ntion, s e le ctive dis tortion, s e le ctive re te ntion• Pe rs o na l • Le a rning  Drive s , s timuli, cue s ,• Ps y c ho lo g ic a l re s pons e s a nd re inforce me nt • Be lie fs a nd a ttitude s 6 - 11
  12. 12. Characteristics Affecting Consumer Behavior Maslow’s Hierarchy of Needs S e lf-a ctua liza tion Es te e m Ne e ds S ocia l Ne e ds S a fe ty Ne e ds P hys iologica l Ne e ds 6 - 12
  13. 13. Types of Buying-Decision Behavior Diffe re nc e I lve m e nt Le ve l nvobe twe e n bra nd s High Low S ignifica nt Com plex Variety-seeking Diffe re nce s buying behavior buying behavior Dissonance- Habitual buying Fe w Diffe re nce s reducing buying behavior behavior 6 - 13
  14. 14. The Buyer Decision Process• Five S ta ge s :  Ne e d re cognition  Informa tion s e a rch  Eva lua tion of a lte rna tive s  P urcha s e de cis ion  P os tpurcha s e be ha vior 6 - 14
  15. 15. The Buyer Decision ProcessProcess Stages • Ne e ds ca n be trigge re d by:• N e d re c o g nitio n e  Inte rna l s timuli• I rm a tio n s e a rc h nfo  N rm a l ne e d s o be c o m e• Ev a lua tio n o f a lte rna tive s s tro ng e no ug h to d riv e be ha vio r• Purc ha s e d e c is io n  Exte rna l s timuli• Po s tp urc ha s e be ha vio r  A v e rtis e m e nts d  Frie nd s o f frie nd s 6 - 15
  16. 16. The Buyer Decision ProcessProcess Stages • Cons ume rs e xhibit he ighte ne d a tte ntion or• N e d re c o g nitio n e a ctive ly s e a rch for• I rm a tio n s e a rc h informa tion. nfo• Ev a lua tio n o f a lte rna tive s • S ource s of informa tion:  P e rs ona l• Purc ha s e d e c is io n  Comme rcia l• Po s tp urc ha s e be ha vio r  P ublic  Expe rie ntia l • Word-of-mouth 6 - 16
  17. 17. Successive Sets Involved in Customer Decision Making 6 - 17
  18. 18. The Buyer Decision ProcessProcess Stages • Eva lua tion proce dure de pe nds on the cons ume r a nd the buying s itua tion.• N e d re c o g nitio n e • Mos t buye rs e va lua te• I rm a tio n s e a rc h nfo multiple a ttribute s , e a ch of• Ev a lua tio n o f a lte rna tive s which is we ighte d• Purc ha s e d e c is io n diffe re ntly.• Po s tp urc ha s e be ha vio r • At the e nd of the e va lua tion s ta ge , purcha s e inte ntions a re forme d. 6 - 18
  19. 19. The Buyer Decision ProcessProcess Stages • Two fa ctors inte rce de be twe e n purcha s e• N e d re c o g nitio n e inte ntions a nd the• I rm a tio n s e a rc h nfo a ctua l de cis ion:• Ev a lua tio n o f a lte rna tive s  Attitude s of othe rs• Purc ha s e d e c is io n  Une xpe cte d• Po s tp urc ha s e be ha vio r s itua tiona l fa ctors 6 - 19
  20. 20. The Buyer Decision ProcessProcess Stages • S a tis fa ction is importa nt:  De lighte d cons ume rs e nga ge in pos itive word-• N e d re c o g nitio n e of-mouth.• I rm a tio n s e a rc h nfo  Unha ppy cus tome rs te ll on a ve ra ge 11 othe r pe ople .• Ev a lua tio n o f a lte rna tive s  It cos ts more to a ttra ct a• Purc ha s e d e c is io n ne w cus tome r tha n it doe s to re ta in a n e xis ting• Po s tp urc ha s e be ha vio r cus tome r. • Cognitive dis s ona nce is common 6 - 20
  21. 21. Buyer Decision Process for New Products• Ne w P roducts  Good, s e rvice or ide a tha t is pe rce ive d by cus tome rs a s ne w.• S ta ge s in the Adoption P roce s s  Ma rke te rs s hould he lp cons ume rs move through the s e s ta ge s . 6 - 21
  22. 22. Buyer Decision Process for New ProductsStages in the Adoption Process • Awa re ne s s • Inte re s t • Eva lua tion • Tria l • Adoption 6 - 22
  23. 23. Buyer Decision Process for New Products• Individua l Diffe re nce s in Innova tive ne s s  Cons ume rs ca n be cla s s ifie d into five a dopte r ca te gorie s , e a ch of which be ha ve s diffe re ntly towa rd ne w products . 6 - 23
  24. 24. Buyer Decision Process for New Products Adopter Categories• Innova tors • Ea rly Adopte rs  Enthus ia s ts  Opinion le a de rs• Ea rly Ma jority • La te Ma jority  P ra gma tis ts  Cons e rva tive s • La gga rds 6 - 24
  25. 25. Business Buyer Behavior
  26. 26. Definition• Bus ine s s Buye r Be ha vior:  The buying be ha vior of orga niza tions tha t buy goods a nd s e rvice s for us e in the production of othe r products a nd s e rvice s or for the purpos e of re s e lling or re nting the m to othe rs a t a profit. 6 - 26
  27. 27. Business Markets• Cha ra cte ris tics of Bus ine s s Ma rke ts  S a le s in the bus ine s s ma rke t fa r e xce e d s a le s in cons ume r ma rke ts .  Bus ine s s ma rke ts diffe r from cons ume r ma rke ts in ma ny wa ys .  M rke ting a s truc ture a nd d e m a nd  N ture o f the buy ing unit a  Ty p e s o f d e c is io ns a nd the d e c is io n p ro c e s s 6 - 27
  28. 28. Business MarketsCharacteristics • Compa re d to cons ume r ma rke ts :• M rke ting Struc ture a  Bus ine s s ma rke ts  ha ve fe we r but la rg e r a nd De m a nd c us to m e rs• N ture o f the a  Bus ine s s cus tome rs  a re m o re g e o g ra p hic a lly Buy ing Unit c o nc e ntra te d• Ty p e s o f De c is io ns  De ma nd is diffe re nt  De m a nd is d e rive d a nd the De c is io n  De m a nd is p ric e ine la s tic Pro c e s s  De m a nd fluc tua te s m o re , a nd c ha ng e s m o re q uic kly 6 - 28
  29. 29. Business MarketsCharacteristics • Compa re d to cons ume r purcha s e s :• M rke ting Struc ture a  Bus ine s s purcha s e s a nd De m a nd involve more buye rs in the de cis ion• N ture o f the a proce s s . Buy ing Unit  P urcha s ing e fforts a re• Ty p e s o f De c is io ns unde rta ke n by a nd the De c is io n profe s s iona l buye rs . Pro c e s s 6 - 29
  30. 30. Business MarketsCharacteristics • Compa re d to cons ume r purcha s e s :• M rke ting Struc ture a  Bus ine s s buye rs fa ce a nd De m a nd more comple x buying de cis ions .• N ture o f the a  The buying proce s s is Buy ing Unit more forma lize d.• Ty p e s o f De c is io ns  Buye rs a nd s e lle rs a nd the De c is io n work more clos e ly Pro c e s s toge the r a nd build long-te rm re la tions hips . 6 - 30
  31. 31. Business Buyer Behavior• Ma jor Type s of Buying S itua tions  S tra ight re buy  Re o rd e ring witho ut m o d ific a tio n  Modifie d re buy  Re q uire s m o d ific a tio n to p rio r p urc ha s e  Ne w ta s k  Firs t-tim e p urc ha s e 6 - 31
  32. 32. Business Buyer Behavior Participants in the Business Buying Process • Initia tors • Influe nce rs • Us e rs • De cide rs • Buye rs • Approve rs • Ga te ke e pe rs 6 - 32
  33. 33. Major Influences on Busi. Buyers’ decisions Key Factors • Economic tre nds • S upply conditions• Enviro nm e nta l • Te chnologica l• O rg a niz a tio na l cha nge • Re gula tory a nd• I rp e rs o na l nte politica l e nvironme nts• I ivid ua l nd • Compe titive de ve lopme nts • Culture a nd cus toms 6 - 33
  34. 34. Major Influences on Busi. Buyers’ decisions Key Factors • Obje ctive s • P olicie s• Enviro nm e nta l • P roce dure s• O rg a niz a tio na l • Orga niza tiona l• I rp e rs o na l nte s tructure• I ivid ua l nd • S ys te ms 6 - 34
  35. 35. Major Influences on Busi. Buyers’ decisions Key Factors • Authority• Enviro nm e nta l • S ta tus• O rg a niz a tio na l • Empa thy• I rp e rs o na l • P e rs ua s ive ne s s nte• I ivid ua l nd 6 - 35
  36. 36. Major Influences on Busi. Buyers’ decisions Key Factors • Authority • Age• Enviro nm e nta l • Educa tion• O rg a niz a tio na l • J ob pos ition• I rp e rs o na l nte • P e rs ona lity• I ivid ua l nd • Ris k a ttitude s 6 - 36
  37. 37. Business Buying Process• Eight S ta ge s :  S ta ge 1: P roble m Re cognition  S ta ge 2: Ge ne ra l Ne e d De s cription  S ta ge 3: P roduct S pe cifica tion  Va lue a na ly s is he lp s to re d uc e c o s ts  S ta ge 4: S upplie r S e a rch  Sup p lie r d e ve lo p m e nt 6 - 37
  38. 38. Business Buying Process• Eight S ta ge s :  S ta ge 5: P ropos a l S olicita tion  S ta ge 6: S upplie r S e le ction  S ta ge 7: Orde r-Routine S pe cifica tion  Bla nke t c o ntra c ts a re o fte n us e d fo r m a inte na nc e , re p a ir a nd o p e ra ting ite m s . 6 - 38
  39. 39. Business Buying Process• Bus ine s s Buying on the Inte rne t  E-procure me nt is growing ra pidly.  Re ve rs e a uctions  E-procure me nt offe rs ma ny be ne fits :  A c e s s to ne w s up p lie rs c  Lo we r p urc ha s ing c o s ts  Quic ke r o rd e r p ro c e s s ing a nd d e live ry 6 - 39
  40. 40. Institutional and Government Markets• Ins titutiona l Ma rke ts  Cons is t of s chools , hos pita ls , a nd othe r ins titutions tha t provide goods a nd s e rvice s to pe ople in the ir ca re . 6 - 40
  41. 41. Institutional and Government Markets• Ins titutiona l Ma rke ts  Ofte n cha ra cte rize d by low budge ts a nd ca ptive pa trons .  Ma rke te rs ma y de ve lop s e pa ra te divis ions a nd ma rke ting mixe s to s e rvice ins titutiona l ma rke ts . 6 - 41
  42. 42. Institutional and Government Markets• Gove rnme nt Ma rke ts  Gove rnme nta l units – ce ntra l, s ta te , a nd loca l – tha t purcha s e or re nt goods a nd s e rvice s for ca rrying out the ma in functions of gove rnme nt. 6 - 42
  43. 43. Institutional and Government Markets• Gove rnme nt Ma rke ts  Gove rnme nt buye rs ofte n fa vor:  De p re s s e d bus ine s s firm s a nd a re a s  Sm a ll bus ine s s e s  M rity -o wne d bus ine s s e s ino  Firm s whic h p ra c tic e no n- d is c rim ina to ry p ra c tic e s 6 - 43
  44. 44. Institutional and Government Markets• Gove rnme nt Ma rke ts  Mos t firms tha t s e ll to gove rnme nt buye rs a re not ma rke ting orie nte d.  S ome compa nie s ha ve s e pa ra te gove rnme nt ma rke ting de pa rtme nts . 6 - 44
  45. 45. Factors considered by Indian Industry• Continuous & re lia ble product pe rforma nce• Gua ra nte e d de live ry• Te chnology fit• P rice• S e rvice• Compa ny s a le s force 6 - 45

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