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Con behav-lecturesession3

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  • 1. Consumer Markets and Consumer Buying Behavior 1
  • 2. Consumer Buying Behavior Consumer Buying Behavior refers to the buying behavior of final consumers -individuals & households who buy goods and services for personal consumption. All these consumers make up the consumer market. The central question for marketers is:  “How do consumers respond to various marketing efforts the company might use?” 2
  • 3. EIGHT O’s OF MARKETING Occupants: Who constitutes the Market Objects: What does the market buy? Objectives: Why does the market buy? Organization: Who participates in buying? Operations: How does the market buy? Occasions: When does the market buy? Outlets: Where does the market buy? Opponents: Whose objects does the market buy? 3
  • 4. Model of Buyer BehaviorMarketing and Buyer’s Black Box Buyer ResponsesOther StimuliMarketing Buyer Characteristics Product ChoiceProduct Buyer Decision Process Brand ChoicePrice Dealer ChoicePlacePromotionOther Purchase TimingEconomic Purchase AmountTechnologicalPoliticalCultural 4
  • 5. Factors Influencing Consumer BehaviorCultural Social Personal Age and Psycho- Culture Reference life-cycle logical groups Occupation Motivation Economic Perception Buyer Sub- culture Family situation Learning Lifestyle Beliefs and Roles Personality attitudes Social and and class status self-concept 5
  • 6. Factors Affecting Consumer Behavior: Culture Culture is the Most Basic Cause of a Persons Wants and Behavior. Subculture• Group of people with shared value systems based on common life experiences. 6
  • 7. Factors Affecting Consumer Behavior: Culture Culture is the Set of Values, Perceptions, Wants & Behavior Learned by a Member of Society from Family. Social Class• Society’s relatively permanent & ordered divisions whose members share similar values, interests, and behaviors.• Measured by: Occupation, Income, Education, Wealth and Other Variables. 7
  • 8. Factors Affecting ConsumerBehavior: Social Groups•Membership•Reference Family (most important)•Husband, wife, kids Social Factors•Influencer, buyer, user Roles and Status 8
  • 9. Factors Affecting Consumer Behavior: Personal Personal Influences Personal Influences Age and Life Age and Life Economic Economic Personality & Personality & Cycle Stage Occupation Occupation Situation Self-Concept Cycle Stage Situation Self-Concept Lifestyle Identification Lifestyle Identification Activities Activities Interests Interests Opinions Opinions 9
  • 10. SRI Values and Lifestyles (VALS) Actualizers High InnovationHigh Resources Fulfillers Achievers Experiencers Believers Strivers Makers Strugglers Low Resources Low Innovation 10
  • 11. Factors Affecting ConsumerBehavior: Psychological Motivation Psychological FactorsBeliefs and Affecting Perception Attitudes Buyers Choices Learning 11
  • 12. Maslow’s Hierarchy of Needs Self Actualization (Self-development) Esteem Needs (self-esteem) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) 12
  • 13. Types of Buying Decision Behavior High Low Involvement InvolvementSignificant Complex Variety-differences Buying Seeking between Behavior Behavior brands Few Dissonance- Habitualdifferences Reducing Buying Buying between Behavior Behavior brands 13
  • 14. Buyer Decision Process Purchase Decision Evaluation Post purchase of Alternatives Behavior Information Search NeedRecognition 14
  • 15. Buyer Decision ProcessStep 1. Need Recognition Buyer Recognizes Needs Arising State Where the From: Buyer’s Needs a are Fulfilled and Problem Internal Stimuli – the Buyer is or a Need. Hunger Satisfied. External Stimuli- Friends 15
  • 16. The Buyer Decision ProcessStep 2. Information Search Personal Sources •Family, friends, neighbors •Most effective source of information Commercial Sources •Advertising, salespeople •Receives most information from these sources Public Sources •Mass Media •Consumer-rating groups •Handling the product Experiential Sources •Examining the product •Using the product 16
  • 17. The Buyer Decision ProcessStep 3. Evaluation of Alternatives Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own. Consumers May Make Buying Decisions Only After Consulting Others. Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives 17
  • 18. The Buyer Decision ProcessStep 4. Purchase Decision Purchase Intention Desire to buy the most preferred brand Attitudes Unexpected of Others Situational Factors Purchase Decision 18
  • 19. The Buyer Decision ProcessStep 5. Post purchase Behavior Satisfied Customer! Cognitive Dissonance Consumer’s Expectations of Product’s Performance. Product’s Perceived Performance. Dissatisfied Customer 19
  • 20. Stages in the Adoption Process Awareness: Consumer is aware of product, but lacks information. Interest: Consumer seeks Information about new product. Evaluation: Consumer considers trying new product. Trial: Consumer tries new product on a small scale. Adoption: Consumer decidesto make regular use of product. 20
  • 21. Adopter CategoriesPercentage of Adopters Early Majority Late Majority Innovators Early 34% 34% Laggards Adopters 13.5% 16% 2.5% Time of Adoption Early Late 21
  • 22. Influence of Product Characteristicson Rate of Adoption Communicability Relative Advantage Can results be easily Is the innovation observed or described to others? superior to existing products? Divisibility Compatibility Can the innovation Does the innovation be used on a fit the values and trial basis? experience of the target market? Complexity Is the innovation difficult to understand or use? 22
  • 23. Business Buying Behavior Business market : organizations that buy goods and services for use in the production of other products and services that are sold rented, or supplied to others Business buying process: the decision making process by which business buyers establish the need for purchased products and services and identify, evaluate and choose among alternative brands and suppliers 23
  • 24. Characteristics of businessmarketsCharacters Characteristics of business marketsMarketing •Business markets contain fewer but larger buyersstructure and •Business customers are more geographically concentrateddemand •Business buyer demand is derived from final consumer demand •Demand is more inelasticNature of the •Business purchases involve more buyersbuying unit •Business buying involves a more professional effortTypes of decisions •Business buyers usually face more complex buyingand decision decisionprocess •The business buying process is more formalized •Buyers and sellers work more closely together and work on long run relationships 24
  • 25. Model of business buyer behaviorThe The buying BuyerEnvironment organization Response The Buying ProductMarketing Other Center /service choicestimuli stimuli Supplier PET Buying Decision Order Cultural Competitive Process quantitiesProduct Delivery timesPricePlace Service termsPromotion Organizational influences Payment 25
  • 26. Major types of buying situationsTypes ExplanationStraight rebuy Buyer routinely reorders something without modificationsModified rebuy Buyer wants to modify product specifications (price, terms)New task Buyer purchases a product or service for the first timeSystems buying Buying a packaged solution to a problem from a single seller 26
  • 27. Participants in the Business buyingprocessParticipantsBuying center The decision making unit of a buying organizationUsers Members of org who will use the product/servicesInfluencers Technical personnel are important influencers , define specificationsDeciders Have formal/informal power to select or approve the final supplierGatekeepers Control the flow of information to others , technical persons, secretary, purchasing agents 27
  • 28. Major influences on businessbuyers Environmental Organizational Economic Interpersonal Developments Objectives Individual Supply Policies Authority Age conditions Education Procedures Status Job Technological responsibility Buyers change Organizational Empathy Personality structure Risk Attitudes Competitive Persuasiveness developments Systems Culture 28
  • 29. The business buying processProblem Recognition Someone in the company finds a problem that can be met by acquiring a good/serviceGeneral need Stage in which company describes general characteristicsdescription and quantity of a needed itemProduct Stage of BP, buying org decides or specifies best technicalspecifications product characteristics for a needed itemSupplier search Buyer tries to find the best vendorProposal Buyers invite qualified suppliers to submit proposalsolicitationsSupplier selection Buyer review proposal and select a supplier or suppliersOrder routine Final order , listing the technical specifications (quantity,specifications delivery, expected time, return policies, and warrantiesPerformance review Buyer rates its satisfaction with suppliers (continue, modify and drop) 29