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Customer Buying Behavior
1
Consumer Behavior……..what is it?
 Consumer behavior is the study of how individual
customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy their
needs and wants. It refers to the actions of the
consumers in the marketplace and the underlying
motives for those actions.
 By understanding what causes the consumers to buy
particular goods and services, Marketer will be able
to determine—which products are needed in the
marketplace, which are obsolete, and how best to
present the goods to the consumers to capture the
market share. 2
Definition
 Consumer Behavior is the decision process and
physical activity, which individuals engage in when
evaluating, acquiring, using or disposing of goods and
services’.
Louden and Bitta
 ‘Consumer Behavior is the actions and decision
processes of people who purchase goods and services
for personal consumption’.
Engel, Blackwell and Mansard
3
Features of Consumer Behavior
 Complex and Dynamic in nature
 Influenced by several factors
 Varies from person to person
 Varied from Region to region
 Systematic Process
 Vital for marketers
 Improves standard of living
 Help to reflect the status of buyer
4
Application of Consumer Behavior
 Analyzing market opportunity
 Identify and choose the target market
 Demand Forecasting
 For Social and NGO’s Marketing
 Marketing Decisions
5
Importance of Studying Consumer behavior
 To explore market opportunities
 To study diversified customer preferences
 To decide about whether new product launch or not
 Implementation of marketing concept.
 Product policies
 Pricing Policies
 Promotion policies
 Distribution policies
 Decide about sales promotion tools and techniques
6
Types of Buyer Behavior
7
Complex
Buying
Behavior like
Computers,
Car
Variety Seeking
Behavior like
Chocolates,
Cold drink
Dissonance
Reducing
Behavior like
Insurance
Policy
Habitual
Buying
Behavior like
Tea, Sugar,
Toothpaste
High Involvement Low Involvement
Significant
Differences
between brands
Few Differences
between brands
8
Types of
Buying
Roles
Initiator
Influencer
DeciderBuyer
User
Consumer Buying Behavior Model
9
MarketingStimuli
Product
Price
Place
Promotion
OtherStimuli
Economic
Political
Cultural
Technological
BuyerCharacteristics
Cultural
Social
Personal
Psychological
BuyingDecisionProcess
Need
Recognition
Information
Search
Evaluation of
Alternatives
Purchase
Post Purchase
Behavior
PurchaseDecision
Product Choice
Brand Choice
Dealer choice
Purchase
Amount
Purchase Timing
Payment Method
Buyer Characteristics – Cultural Factors
 Culture is the basic fundamental determinant of a
person’s wants and behavior.
 Each culture consists of sub group considered as sub-
culture that provides more specific identification and
socialization for their members.
 Social class are relatively homogenous and enduring
variables which are hierarchically ordered and whose
members share similar belief, values, interest and
behavior. Social class reflect income, education,
occupation , area of residence etc.
10
11
Factors Affecting Consumer Behavior: Social
Reference Groups
Family
Roles and Status
Social Factors
Buyer Characteristics – Social Factors
 Reference Group- all the groups that make direct and
indirect influence on the person’s attitudes or behavior.
 Opinion leader is a person in informal group who has
product related information, and offers this information like
which brand is having better service, economic price, after
sales service etc.
 Family is an important factor which influence the buying
behavior; family is further classified as family of procreation
(Nuclear family – One’s spouse and children) and family of
orientation (Joint family).
 A person participates in various social group and play
different role. Each role carries a status. People choose those
products which can convey their role and status in a society
easily. 12
Reference Group
13
Reference Group
Group to which a
person is the member
of the group
Primary Group –
includes those persons
with whom the person
interacts informally
and continuously
Secondary Group –
which are tend to be
more formal and
require less regular
interaction
Group to which a
person is not member
of the group
Aspirational Group-
are those which a
person wants to join
Dissociative Group- are
those whose values an
individual rejects.
Personal factors
 Occupation and Economic circumstances: A company’s president
consumption pattern is different from the peon of the same company
and the reason behind is their occupation and associated with it
disposable income.
 Lifestyle: is a person’s pattern of living in the world as expressed in
Activities, Interests and Opinions(AIO). By lifecycle segmentation, the
marketer search relationship between their products and consumer’s
lifestyle.
 Personality and Self Concept: Personality is a collection of
distinguishing human psychological traits that lead to consistent and
enduring responses to environmental stimuli. Individual personality
helps to define brand personality like Roadster is different from
Raymond's and John player .
Self concept is used to refer to how someone thinks about, evaluates or
perceives themselves
 Age and Stage in the Family Life Cycle ( Please refer next slide)
14
Stages in Family Life Cycle
15
Bachelor Stage – Young, Single, Not living at home, Recreation oriented
Newly Married Couples- Young , No Children, Highest Purchase rate, for consumer durables,
cars, flat, furniture, vacations, electronic appliances.
Full Nest I- Youngest child under six, Home purchasing at peak, Interested in new products.
Likely to buy washers, dryers, Television, Baby foods, Dolls, Vitamins, Chest rubs and cough
Medicines
Full Nest II- Youngest child under six, better financial position, Buy large size packages, Less
influenced by Advertising, prefer to buy cleaning materials, bicycles, musical instruments
Full Nest III- Older married couples with dependent children, Children get employment, High
purchase of durables, hard to influence by advertising, Better financial position. Prefer to buy
dental services, magazines, trendy furniture, unnecessary appliances.
Empty Nest I- Older married Couples, No children living with them, Satisfied with financial
position and money saved, Make Gifts and contributions, Prefer vacation trips, luxuries, home
renovation
Empty Nest II- Older married, No children at home, Head Retied, drastic cut in Income, Buy
products related with medical care
Solitary Survivor- Retired, Medical and product needs as other retired people, cut in income,
special needs for security, love and affection
16
Psychological
Factors
Motivation
Perception
Learning
Beliefs and
Attitudes
Factors Affecting Consumer Behavior:
Psychological
MOTIVATION
•Freud’s Theory
•Maslow’s Theory
•Herzberg Theory
Maslow’s Hierarchy of Needs 17
Esteem Needs
(self-esteem, love, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Self
Actualization
(Self-development &
realization)
Perception
• Sensation
Input
• Selecting
• Organizing
• Interpreting
Processing
• Values
• Attitudes
• Behavior
Output
Learning: brings permanent change in behavior as a result of
experience or practice and the acquisition of knowledge by which
marketer can also change buying behavior
19
Stimulus(Source
of Motivation)
Response
(Reaction of
learner towards
the stimulus)
Motivation
(Drive to
encourage
Individual to
learn)
Rewards (Transparent
and predictive
incentive to satisfy the
motive)
Belief and Attitudes
 Beliefs are descriptive thoughts which a person hold
for something which exists in consumer’s memory and
influence his/her buying decisions.
 Attitude is a person’s enduring favorable or
unfavorable evaluation or feelings associated with
some object/people or idea, which are difficult to
change. People have different attitude and companies
need to put a lots of efforts to change a single attitude.
20
21
Consumer Decision-Making
Process
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Post purchase Behavior
22
Starts when the buyer recognizes a problem or need
triggered by
Internal stimuli – one of
the person’s normal needs.
External stimuli-
circumstances triggering a
particular need.
23
Heightened attention – Milder information search state
Active information search state- Searching for reading
materials, calling friends and visiting stores to know about
the product.
Information sources
Personal- Family, friends, neighbours, acquiantances
Commercial-Advertising, Web sites, salespersons,
display, packaging, dealers
Public- Mass media, consumer-rating organizations
Experimental- Handling, examining, using the product
24
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand?
Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.
25
Degree of
Importance
Criteria OnePlus Samsung Micromax
Vivo
5 Brand Name 4 4 2 5
4
Picture
Quality
4 4 2 5
3 Looks/Design 5 5 3 4
2 Price 3 4 5 2
1
After Sales
Service
5 5 3 2
OnePlus 4x5 + 4x4 + 5x3 + 3x2 + 5x1 = 62
SAMSUNG 4x5 + 4x4 + 5x3 + 4x2 + 5x1 = 64
Micromax 2x5 + 2x4 + 3x3 + 5x2 + 3x1 = 40
Vivo 5x5 + 5x4 + 4x3 + 2x2 + 2x1 = 63
Choosing a Brand on the basis of degree of importance
of the determinant attributes
Purchase Decision
26
Purchase decision is influenced by
attitude of others as well as
unanticipated situational factors.
A brand preference will increase if
someone else like it or he will share
some positive experience
associated with that brand. Like
online shopping portals share
customer review below each
product to influence the buyer
mind-set.
Certain time circumstances also
influence buying preference and
choices.
Customer buying decision is also
influenced by perceived risk.
related with money and product
performance.
The purchase intention is
influenced by attitude of
others and unanticipated
situational factors. During
purchase intention stage, the
customer has to make five
purchase decisions like brand
decision, vendor decision,
quantity decision, timing
decision and payment-related
decision.
In evaluation stage,
Consumer forms
preferences regarding
the brand he wants to
purchase
Evaluation of
Alternatives
Purchase
Intention
Attitude of
Others
Unanticipated
Situational
factors
27
Consumer’s Expectations of
Product’s Performance
Dissatisfied Customer
Satisfied
Customer!
Product’s Perceived
Performance
Cognitive Dissonance
28
How Customers Use or Dispose of
Products
Product
Rent it
Direct to
consumer
Lend it
To
intermediary
Get rid of it
temporarily
Get rid of it
permanently
Keep it
Through
middleman
Trade it
Give it away
Sell it
Throw
it away
Store it
Use it to serve
Original purpose
Convert it to serve
a new purpose
To be
used
To be
(re)sold
29
Thank you

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Consumer behaviour :Basic Presentation

  • 2. Consumer Behavior……..what is it?  Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.  By understanding what causes the consumers to buy particular goods and services, Marketer will be able to determine—which products are needed in the marketplace, which are obsolete, and how best to present the goods to the consumers to capture the market share. 2
  • 3. Definition  Consumer Behavior is the decision process and physical activity, which individuals engage in when evaluating, acquiring, using or disposing of goods and services’. Louden and Bitta  ‘Consumer Behavior is the actions and decision processes of people who purchase goods and services for personal consumption’. Engel, Blackwell and Mansard 3
  • 4. Features of Consumer Behavior  Complex and Dynamic in nature  Influenced by several factors  Varies from person to person  Varied from Region to region  Systematic Process  Vital for marketers  Improves standard of living  Help to reflect the status of buyer 4
  • 5. Application of Consumer Behavior  Analyzing market opportunity  Identify and choose the target market  Demand Forecasting  For Social and NGO’s Marketing  Marketing Decisions 5
  • 6. Importance of Studying Consumer behavior  To explore market opportunities  To study diversified customer preferences  To decide about whether new product launch or not  Implementation of marketing concept.  Product policies  Pricing Policies  Promotion policies  Distribution policies  Decide about sales promotion tools and techniques 6
  • 7. Types of Buyer Behavior 7 Complex Buying Behavior like Computers, Car Variety Seeking Behavior like Chocolates, Cold drink Dissonance Reducing Behavior like Insurance Policy Habitual Buying Behavior like Tea, Sugar, Toothpaste High Involvement Low Involvement Significant Differences between brands Few Differences between brands
  • 9. Consumer Buying Behavior Model 9 MarketingStimuli Product Price Place Promotion OtherStimuli Economic Political Cultural Technological BuyerCharacteristics Cultural Social Personal Psychological BuyingDecisionProcess Need Recognition Information Search Evaluation of Alternatives Purchase Post Purchase Behavior PurchaseDecision Product Choice Brand Choice Dealer choice Purchase Amount Purchase Timing Payment Method
  • 10. Buyer Characteristics – Cultural Factors  Culture is the basic fundamental determinant of a person’s wants and behavior.  Each culture consists of sub group considered as sub- culture that provides more specific identification and socialization for their members.  Social class are relatively homogenous and enduring variables which are hierarchically ordered and whose members share similar belief, values, interest and behavior. Social class reflect income, education, occupation , area of residence etc. 10
  • 11. 11 Factors Affecting Consumer Behavior: Social Reference Groups Family Roles and Status Social Factors
  • 12. Buyer Characteristics – Social Factors  Reference Group- all the groups that make direct and indirect influence on the person’s attitudes or behavior.  Opinion leader is a person in informal group who has product related information, and offers this information like which brand is having better service, economic price, after sales service etc.  Family is an important factor which influence the buying behavior; family is further classified as family of procreation (Nuclear family – One’s spouse and children) and family of orientation (Joint family).  A person participates in various social group and play different role. Each role carries a status. People choose those products which can convey their role and status in a society easily. 12
  • 13. Reference Group 13 Reference Group Group to which a person is the member of the group Primary Group – includes those persons with whom the person interacts informally and continuously Secondary Group – which are tend to be more formal and require less regular interaction Group to which a person is not member of the group Aspirational Group- are those which a person wants to join Dissociative Group- are those whose values an individual rejects.
  • 14. Personal factors  Occupation and Economic circumstances: A company’s president consumption pattern is different from the peon of the same company and the reason behind is their occupation and associated with it disposable income.  Lifestyle: is a person’s pattern of living in the world as expressed in Activities, Interests and Opinions(AIO). By lifecycle segmentation, the marketer search relationship between their products and consumer’s lifestyle.  Personality and Self Concept: Personality is a collection of distinguishing human psychological traits that lead to consistent and enduring responses to environmental stimuli. Individual personality helps to define brand personality like Roadster is different from Raymond's and John player . Self concept is used to refer to how someone thinks about, evaluates or perceives themselves  Age and Stage in the Family Life Cycle ( Please refer next slide) 14
  • 15. Stages in Family Life Cycle 15 Bachelor Stage – Young, Single, Not living at home, Recreation oriented Newly Married Couples- Young , No Children, Highest Purchase rate, for consumer durables, cars, flat, furniture, vacations, electronic appliances. Full Nest I- Youngest child under six, Home purchasing at peak, Interested in new products. Likely to buy washers, dryers, Television, Baby foods, Dolls, Vitamins, Chest rubs and cough Medicines Full Nest II- Youngest child under six, better financial position, Buy large size packages, Less influenced by Advertising, prefer to buy cleaning materials, bicycles, musical instruments Full Nest III- Older married couples with dependent children, Children get employment, High purchase of durables, hard to influence by advertising, Better financial position. Prefer to buy dental services, magazines, trendy furniture, unnecessary appliances. Empty Nest I- Older married Couples, No children living with them, Satisfied with financial position and money saved, Make Gifts and contributions, Prefer vacation trips, luxuries, home renovation Empty Nest II- Older married, No children at home, Head Retied, drastic cut in Income, Buy products related with medical care Solitary Survivor- Retired, Medical and product needs as other retired people, cut in income, special needs for security, love and affection
  • 17. MOTIVATION •Freud’s Theory •Maslow’s Theory •Herzberg Theory Maslow’s Hierarchy of Needs 17 Esteem Needs (self-esteem, love, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) Self Actualization (Self-development & realization)
  • 18. Perception • Sensation Input • Selecting • Organizing • Interpreting Processing • Values • Attitudes • Behavior Output
  • 19. Learning: brings permanent change in behavior as a result of experience or practice and the acquisition of knowledge by which marketer can also change buying behavior 19 Stimulus(Source of Motivation) Response (Reaction of learner towards the stimulus) Motivation (Drive to encourage Individual to learn) Rewards (Transparent and predictive incentive to satisfy the motive)
  • 20. Belief and Attitudes  Beliefs are descriptive thoughts which a person hold for something which exists in consumer’s memory and influence his/her buying decisions.  Attitude is a person’s enduring favorable or unfavorable evaluation or feelings associated with some object/people or idea, which are difficult to change. People have different attitude and companies need to put a lots of efforts to change a single attitude. 20
  • 21. 21 Consumer Decision-Making Process Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Post purchase Behavior
  • 22. 22 Starts when the buyer recognizes a problem or need triggered by Internal stimuli – one of the person’s normal needs. External stimuli- circumstances triggering a particular need.
  • 23. 23 Heightened attention – Milder information search state Active information search state- Searching for reading materials, calling friends and visiting stores to know about the product. Information sources Personal- Family, friends, neighbours, acquiantances Commercial-Advertising, Web sites, salespersons, display, packaging, dealers Public- Mass media, consumer-rating organizations Experimental- Handling, examining, using the product
  • 24. 24 Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes.
  • 25. 25 Degree of Importance Criteria OnePlus Samsung Micromax Vivo 5 Brand Name 4 4 2 5 4 Picture Quality 4 4 2 5 3 Looks/Design 5 5 3 4 2 Price 3 4 5 2 1 After Sales Service 5 5 3 2 OnePlus 4x5 + 4x4 + 5x3 + 3x2 + 5x1 = 62 SAMSUNG 4x5 + 4x4 + 5x3 + 4x2 + 5x1 = 64 Micromax 2x5 + 2x4 + 3x3 + 5x2 + 3x1 = 40 Vivo 5x5 + 5x4 + 4x3 + 2x2 + 2x1 = 63 Choosing a Brand on the basis of degree of importance of the determinant attributes
  • 26. Purchase Decision 26 Purchase decision is influenced by attitude of others as well as unanticipated situational factors. A brand preference will increase if someone else like it or he will share some positive experience associated with that brand. Like online shopping portals share customer review below each product to influence the buyer mind-set. Certain time circumstances also influence buying preference and choices. Customer buying decision is also influenced by perceived risk. related with money and product performance. The purchase intention is influenced by attitude of others and unanticipated situational factors. During purchase intention stage, the customer has to make five purchase decisions like brand decision, vendor decision, quantity decision, timing decision and payment-related decision. In evaluation stage, Consumer forms preferences regarding the brand he wants to purchase Evaluation of Alternatives Purchase Intention Attitude of Others Unanticipated Situational factors
  • 27. 27 Consumer’s Expectations of Product’s Performance Dissatisfied Customer Satisfied Customer! Product’s Perceived Performance Cognitive Dissonance
  • 28. 28 How Customers Use or Dispose of Products Product Rent it Direct to consumer Lend it To intermediary Get rid of it temporarily Get rid of it permanently Keep it Through middleman Trade it Give it away Sell it Throw it away Store it Use it to serve Original purpose Convert it to serve a new purpose To be used To be (re)sold