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Presented By:
Sanjeev K.C.
• Consumer’s buying decision depends upon several factors but
it is highly influenced by Economic, Demographic,
Psychological and Socio-cultural factors.
• The behavior of the consumer with regard to purchase is
affected by various factors and these factors are uncontrollable.
• These above mention factors affect the consumer behavior
differently. The factors that are identified as determinants to
consumer buying decisions namely:
 Economic factors.
 Demographic factors.
 Psychological factors.
 Socio-cultural factors.
• Psychological factors operating within the individuals determine their
consumption behavior.
• Psychological determinants of consumer behavior include
Personality, Learning, Perception, Motivation and Attitude.
1) Personality:
 The distinctive pattern of behavior, including thoughts and
emotions that characterize each individual’s adaptation to
situation of his/her life.
 It addresses all the internal traits and behaviors that make a
person unique. This uniqueness arrives from a person’s
heredity and personal experience.
 Example: self confidence, friendliness, adaptability, introversion,
extroversion, aggressiveness, competitiveness.
Consumer personality has the following characteristics:
 Consistency: A person’s behavior must show some degree of
consistency.
 Distinctiveness: The person’s behavior must be different from other
people.
 Interaction with the situation: The person’s personality should
interact with the purchase situation reflecting in choice of products.
 Dynamism: Although personality tends to be consistent, it may
change due to major life events such as accidents, death of family
member, career promotion, etc.
I. Freudian Theory.
 The psychoanalytical theory developed by Sigmund Freud believes
that human personality results from a dynamic struggle between
inner physiological drives( sex, hunger, aggression) and social
pressures to follow laws, rules and disciplines, ethical and moral
codes.
 According to Freud, personality is the result of the three forces ID,
Ego and Superego.
II. Neo- Freudian Approach.
 Several Freud’s colleagues disagreed with Freud’s emphasis on the
sexual drives playing dominant role in personality development.
Neo-Freudians believed that social relationships are fundamental to
formation and development of personality.
III. Trait Theory.
 Trait refers to the characteristics in which one person differs from
another in a relatively permanent and consistent way.
 Trait theory attempts to classify people according to the presence of
the dominant characteristics or traits.
 Order, Exhibition, Dominance, Aggression, Achievement,
Affiliation, etc. are the types of personality traits.
2) Learning:
 Learning is considered as the fundamental process in human
behavior including consumer behavior.
 Learning refers to a more or less permanent change in behavior
which occurs as a result of practice or experience.
 Most of the consumers overt behavior is learned.
 Learned behavior can be classified into following categories:
 Physical Learning:
Most of the human being’s physical behavior such as
walking, talking, running, and interacting with others is learned.
Consumers also learn to respond different purchase decision.
 Symbolic Learning:
Consumers learn to use symbols such as brand names,
logos, slogans to differentiate one product from the others.
 Problem solving learning:
Consumers face numerous problems in their daily lives and
undertake physical and mental activities to solve those
problems. As they consume and use products, they learn as what
product or brand solves their problems and which ones don’t.
 Affective Learning:
Consumers learn to develop positive and negative attitudes
towards product, services, and people. Affective learning is
formed by a consumer’s experience (satisfaction and
dissatisfaction) with a product as well as by social influences.
 The Major marketing implications of consumer learning:
 Brand Loyalty:
It refers to the tendency of consumers to continue buying the
same brand of goods rather than competing brands.
 Brand Equity:
It refers to the monetary value of a well-known brand. It is
the major intangible asset of a firm. Brand equity generates value
to customers and can be rented or sold to another firm.
 Store Patronage/ Store Loyalty:
It refers to a consumer’s inclination to purchase from a particular
store over a period of time.
I. Associative Learning:
 This approach is based on the idea that people learn by making
connection between stimulus and some response to it.
 Advertisers believe that repetition of advertisement develops
several S-R bonds between exposure of the advertisement
(stimulus) and consumer’s reaction (response), which results in
higher brand awareness and enforcement.
 There are four elements proposed by this approach namely Drive,
Cue, Response, and Reinforcement.
 Drive:
Drive/motive is a strong stimulus internal to the individual
which results into action. Drives can be primary as well as learned.
 Primary or physiological drives: Hunger, thirst, sleep, sex, avoid
pain.
 Learned or social drives: Love, hate, fear, associativeness,
cooperation.
 Cue:
 Cue is the minor stimuli present in the environment. It
determines when, where, and how a person responds the drive
towards the products .
 Thus, cues determines how an individual responds when a drive
arises. The advertisement of a cold-drink or the product itself can
work as a cue for a thirsty person.
 Response:
The response is the reaction of the person to the cues in relation
to certain drive. Response can be positive as well as negative.
 Reinforcement:
Reinforcement is associated to the positive response to a
product. Reinforced response has a tendency to be repeated when the
same drive arise and is supported by the same set of cues.
II. Cognitive Learning:
Cognitive learning is the part of the mental process rather than
simple repetition.
Consumers learn through the thinking and problem solving.
Consumers process information on product attributes and brands.
Consumers are capable of comparing attributes and brands of
different manufacturers.
They gather information from internal and external sources.
Through information processing they clarify their attribute and
brand preferences.
III. Social/Observational Learning:
This approach points out that learning can take place without
personal experience of an individual.
Individuals can learn many things through the experience of other
people.
Consumers simply imitate the behavior of the spokesperson to
respond a stimuli.
Perception refers to the process of receiving and
interpreting stimuli by the individual and translating into
response. It is the process through which individuals are
exposed to information, attend to information and
comprehend the information. The perceptions
have of a business and its product or service have a
dramatic effect on buying behavior. There are three types
of perception:
3) Perception:
Perception refers to the process of receiving and interpreting stimuli
by the individual and translating into a response.
It is the process through which individuals are exposed to
information, attend to information and comprehend the information.
The perceptions consumers have of a business and its product or
service have a dramatic effect on buying behavior. There are three
types of perception:
 Selective attention:
Individuals are selective as to which stimuli they recognize.
Selective attention screens the selected notice which are important to
fulfill the current needs with compare to other.
 Selective retention:
It means retain only that information which support their
attitude, personal feelings, and belief.
 Selective distortion:
Selective distortion means twist information that fits our
perception. They hear what they want to hear.
4) Motivation:
 Motivation is the reason for behavior. A motive is why an individual
does something.
 When buyer’s need is raised to a particular level they become the
motives, which affect the consumer buying behavior.
 A motive is an energizing force that directs an individual towards a
goal.
 Consumer consists major motivators and they are :
 Motivation to fulfill needs(Maslow).
Maslow Hierarchy of Needs explain how consumer needs work
as a source of motive. According to Maslow human needs are arranged in
a hierarchy, from the most pressing to the least pressing. He has listed
five categories of needs:
 Physiological Needs:
Basic motives related to survival and normal body function.
 Safety Needs:
Motives for physical, economic, and social security, protection, and
stability.
 Social Needs:
Motives towards affection, relations between individuals, and a
place in the family and society.
 Esteem Needs:
Motives towards achievement, status, self-confidence and
includes need for reputation, prestige, and high social image.
 Self-actualization:
Motive to achieve the highest point of one’s capabilities and
includes a desire to travel, know and understand.
 Motivation to avoid risk.
Motivation avoids different types of perceived risks such as
financial, physical, functional, social, psychological, time and
opportunity risk. Such risk can be reduced through:
 Information search:
Consumers seek information about the product through word of
mouth communication, salespeople, and mass communication.
Brand loyalty:
Consumers avoid risk by remaining loyal to a brand rather than
trying new brand.
Store loyalty:
Consumer avoid risk by buying a product a product from
reputable store.
Seek reassurance:
Consumers avoid risk by buying products that offer money-back
guarantees, warranties and pre-purchase trials.
 Motivation maintain behavioral freedom.
If the consumers’ freedom to select a product is impeded,
consumers respond with negative reaction. This concept of behavior
freedom is termed as psychological reactance i.e. behavioral freedom
has been threatened. For example if a child is prohibited from certain
product, the child shows stronger desire for the product.
 Motivation from subconscious(Sigmund Freud).
Under this theory his psychology views the motivation factors
present in sub-conscious and unconscious part of human mind. He
believed that a person is controlled and driven more by unseen forces
than by conscious and rational thought. This theory is based on three
principles: ID, Superego, Ego.
 The ID, which represents the unconscious mind, is the biologically
determined instincts that someone possesses since birth. People need
immediate satisfaction so it is known as hedonistic/pleasure seeking
principle. People have life instinct or sex drive (Libido).
 The Superego, comes from traditional values and learned from
society and family during middle childhood through coping behavior
of other people. It works as moralistic principle.
 The Ego, the representation of the conscious mind, is made up of
thoughts, memories, perceptions, and feelings that give a person their
sense of identity and personality. It begins to develop as the childhood
begins.
5) Attitudes & Beliefs:
 Attitude is a emotional feeling regarding the product like favorable
and unfavorable or positive and negative.
 Belief is a description a person holds about something.
 Attitude formation is possible through repeated exposure with a
stimulus (advertisement).
Determinants of consumer buying decisions.

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Determinants of consumer buying decisions.

  • 2. • Consumer’s buying decision depends upon several factors but it is highly influenced by Economic, Demographic, Psychological and Socio-cultural factors. • The behavior of the consumer with regard to purchase is affected by various factors and these factors are uncontrollable. • These above mention factors affect the consumer behavior differently. The factors that are identified as determinants to consumer buying decisions namely:  Economic factors.  Demographic factors.  Psychological factors.  Socio-cultural factors.
  • 3. • Psychological factors operating within the individuals determine their consumption behavior. • Psychological determinants of consumer behavior include Personality, Learning, Perception, Motivation and Attitude. 1) Personality:  The distinctive pattern of behavior, including thoughts and emotions that characterize each individual’s adaptation to situation of his/her life.  It addresses all the internal traits and behaviors that make a person unique. This uniqueness arrives from a person’s heredity and personal experience.
  • 4.  Example: self confidence, friendliness, adaptability, introversion, extroversion, aggressiveness, competitiveness. Consumer personality has the following characteristics:  Consistency: A person’s behavior must show some degree of consistency.  Distinctiveness: The person’s behavior must be different from other people.  Interaction with the situation: The person’s personality should interact with the purchase situation reflecting in choice of products.  Dynamism: Although personality tends to be consistent, it may change due to major life events such as accidents, death of family member, career promotion, etc.
  • 5. I. Freudian Theory.  The psychoanalytical theory developed by Sigmund Freud believes that human personality results from a dynamic struggle between inner physiological drives( sex, hunger, aggression) and social pressures to follow laws, rules and disciplines, ethical and moral codes.  According to Freud, personality is the result of the three forces ID, Ego and Superego. II. Neo- Freudian Approach.  Several Freud’s colleagues disagreed with Freud’s emphasis on the sexual drives playing dominant role in personality development.
  • 6. Neo-Freudians believed that social relationships are fundamental to formation and development of personality. III. Trait Theory.  Trait refers to the characteristics in which one person differs from another in a relatively permanent and consistent way.  Trait theory attempts to classify people according to the presence of the dominant characteristics or traits.  Order, Exhibition, Dominance, Aggression, Achievement, Affiliation, etc. are the types of personality traits.
  • 7. 2) Learning:  Learning is considered as the fundamental process in human behavior including consumer behavior.  Learning refers to a more or less permanent change in behavior which occurs as a result of practice or experience.  Most of the consumers overt behavior is learned.  Learned behavior can be classified into following categories:  Physical Learning: Most of the human being’s physical behavior such as walking, talking, running, and interacting with others is learned. Consumers also learn to respond different purchase decision.
  • 8.  Symbolic Learning: Consumers learn to use symbols such as brand names, logos, slogans to differentiate one product from the others.  Problem solving learning: Consumers face numerous problems in their daily lives and undertake physical and mental activities to solve those problems. As they consume and use products, they learn as what product or brand solves their problems and which ones don’t.  Affective Learning: Consumers learn to develop positive and negative attitudes towards product, services, and people. Affective learning is formed by a consumer’s experience (satisfaction and dissatisfaction) with a product as well as by social influences.
  • 9.  The Major marketing implications of consumer learning:  Brand Loyalty: It refers to the tendency of consumers to continue buying the same brand of goods rather than competing brands.  Brand Equity: It refers to the monetary value of a well-known brand. It is the major intangible asset of a firm. Brand equity generates value to customers and can be rented or sold to another firm.  Store Patronage/ Store Loyalty: It refers to a consumer’s inclination to purchase from a particular store over a period of time.
  • 10. I. Associative Learning:  This approach is based on the idea that people learn by making connection between stimulus and some response to it.  Advertisers believe that repetition of advertisement develops several S-R bonds between exposure of the advertisement (stimulus) and consumer’s reaction (response), which results in higher brand awareness and enforcement.  There are four elements proposed by this approach namely Drive, Cue, Response, and Reinforcement.
  • 11.  Drive: Drive/motive is a strong stimulus internal to the individual which results into action. Drives can be primary as well as learned.  Primary or physiological drives: Hunger, thirst, sleep, sex, avoid pain.  Learned or social drives: Love, hate, fear, associativeness, cooperation.  Cue:  Cue is the minor stimuli present in the environment. It determines when, where, and how a person responds the drive towards the products .
  • 12.  Thus, cues determines how an individual responds when a drive arises. The advertisement of a cold-drink or the product itself can work as a cue for a thirsty person.  Response: The response is the reaction of the person to the cues in relation to certain drive. Response can be positive as well as negative.  Reinforcement: Reinforcement is associated to the positive response to a product. Reinforced response has a tendency to be repeated when the same drive arise and is supported by the same set of cues.
  • 13. II. Cognitive Learning: Cognitive learning is the part of the mental process rather than simple repetition. Consumers learn through the thinking and problem solving. Consumers process information on product attributes and brands. Consumers are capable of comparing attributes and brands of different manufacturers. They gather information from internal and external sources. Through information processing they clarify their attribute and brand preferences.
  • 14. III. Social/Observational Learning: This approach points out that learning can take place without personal experience of an individual. Individuals can learn many things through the experience of other people. Consumers simply imitate the behavior of the spokesperson to respond a stimuli.
  • 15. Perception refers to the process of receiving and interpreting stimuli by the individual and translating into response. It is the process through which individuals are exposed to information, attend to information and comprehend the information. The perceptions have of a business and its product or service have a dramatic effect on buying behavior. There are three types of perception: 3) Perception: Perception refers to the process of receiving and interpreting stimuli by the individual and translating into a response. It is the process through which individuals are exposed to information, attend to information and comprehend the information. The perceptions consumers have of a business and its product or service have a dramatic effect on buying behavior. There are three types of perception:  Selective attention: Individuals are selective as to which stimuli they recognize. Selective attention screens the selected notice which are important to fulfill the current needs with compare to other.
  • 16.  Selective retention: It means retain only that information which support their attitude, personal feelings, and belief.  Selective distortion: Selective distortion means twist information that fits our perception. They hear what they want to hear. 4) Motivation:  Motivation is the reason for behavior. A motive is why an individual does something.  When buyer’s need is raised to a particular level they become the motives, which affect the consumer buying behavior.  A motive is an energizing force that directs an individual towards a goal.
  • 17.  Consumer consists major motivators and they are :  Motivation to fulfill needs(Maslow). Maslow Hierarchy of Needs explain how consumer needs work as a source of motive. According to Maslow human needs are arranged in a hierarchy, from the most pressing to the least pressing. He has listed five categories of needs:  Physiological Needs: Basic motives related to survival and normal body function.  Safety Needs: Motives for physical, economic, and social security, protection, and stability.  Social Needs: Motives towards affection, relations between individuals, and a place in the family and society.
  • 18.  Esteem Needs: Motives towards achievement, status, self-confidence and includes need for reputation, prestige, and high social image.  Self-actualization: Motive to achieve the highest point of one’s capabilities and includes a desire to travel, know and understand.  Motivation to avoid risk. Motivation avoids different types of perceived risks such as financial, physical, functional, social, psychological, time and opportunity risk. Such risk can be reduced through:  Information search: Consumers seek information about the product through word of mouth communication, salespeople, and mass communication.
  • 19. Brand loyalty: Consumers avoid risk by remaining loyal to a brand rather than trying new brand. Store loyalty: Consumer avoid risk by buying a product a product from reputable store. Seek reassurance: Consumers avoid risk by buying products that offer money-back guarantees, warranties and pre-purchase trials.  Motivation maintain behavioral freedom. If the consumers’ freedom to select a product is impeded, consumers respond with negative reaction. This concept of behavior freedom is termed as psychological reactance i.e. behavioral freedom has been threatened. For example if a child is prohibited from certain product, the child shows stronger desire for the product.
  • 20.  Motivation from subconscious(Sigmund Freud). Under this theory his psychology views the motivation factors present in sub-conscious and unconscious part of human mind. He believed that a person is controlled and driven more by unseen forces than by conscious and rational thought. This theory is based on three principles: ID, Superego, Ego.  The ID, which represents the unconscious mind, is the biologically determined instincts that someone possesses since birth. People need immediate satisfaction so it is known as hedonistic/pleasure seeking principle. People have life instinct or sex drive (Libido).  The Superego, comes from traditional values and learned from society and family during middle childhood through coping behavior of other people. It works as moralistic principle.
  • 21.  The Ego, the representation of the conscious mind, is made up of thoughts, memories, perceptions, and feelings that give a person their sense of identity and personality. It begins to develop as the childhood begins. 5) Attitudes & Beliefs:  Attitude is a emotional feeling regarding the product like favorable and unfavorable or positive and negative.  Belief is a description a person holds about something.  Attitude formation is possible through repeated exposure with a stimulus (advertisement).