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Comsumer behavior and marketing communication

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Consumer Behaviour
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Comsumer behavior and marketing communication

  1. 1. Consumer Behavior and Marketing Communication Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 1
  2. 2. A CUSTOMER IS THE MOST IMPORTANT VISITOR ON OUR PREMISES, HE IS NOT DEPENDENT ON US, WE ARE DEPENDENT ON HIM. HE IS NOT AN INTERRUPTION ON OUR WORK, HE IS THE PURPOSE OF IT. HE IS NOT AN OUTSIDER ON OUR BUSINESS HE IS A PART OF IT. WE ARE NOT DOING HIM A FAVOUR BY SERVING HIM, HE IS DOING US A FAVOUR BY GIVING US THE OPPORTUNITY TO DO SO. MAHATMA GANDHI Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 2
  3. 3. Introduction Study of consumer behaviour is the study of how individuals make decisions to spend their available resources like time, money & effort on consumption related items. It is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas, concepts or experiences to satisfy consumer needs & desires. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 3
  4. 4. Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 4
  5. 5. Authors definition Consumer behavior is defined as the behavior that consumer display in searching for, purchasing, using , evaluating and disposing of products and services that they expect will satisfy their needs - Schiffman The decision process and physical activity individual engage in when evaluating, acquiring, using or disposing of goods and services. - Loudon & Della Bitta Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 5
  6. 6. Consumer behavior roles: Initiator: Individual who determines that some needs or want is not being met and authorizes to rectify the situation. Influencer: Individual who intentionally or unintentionally influence the purchase decision. Buyer: Individual who actually make the purchase transaction. User: Individual who directly consume the product. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 6
  7. 7. Importance of studying consumer behavior •Consumer is the king. •Consumers do not always act or react as the theory suggest. •Consumer preferences are changing and become highly diversified. •Consumer dislikes identical product and prefer differential products. •Segmenting the market to cater the special needs of consumers. •Rapid introduction of new products with technological advancement •To sell products that might not sell easily Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 7
  8. 8. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 8
  9. 9. Methods of studying consumer behavior Observational approach In home observation Interviews and surveys Focus group Field experimentation Consumption research products Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 9
  10. 10. Understanding Consumer A consumer is defined as a person who buys goods and services and makes use of public utilities as well as natural resources like air and water. In its most basic sense, it refers to those who use goods and services for the satisfaction of their personal wants thus excluding buyers who purchase for resale. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 10
  11. 11. Understanding Consumer A person who has indicated his or her willingness to obtain goods and/or services from a supplier with the intention of paying for them. Someone who has purchased goods and/or services for personal consumption Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 11
  12. 12. Principles of consumer behavior Consumer is sovereign Consumer is global Consumers are different Consumer has rights Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 12
  13. 13. Types of consumers •Personal consumers •Organizational consumers Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 13
  14. 14. Personal Consumer The person who buys goods and services for its own use , for use of household or as to gift a friend . The products are brought for final use by individuals who are referred to as end users , ultimate consumers or personal consumers. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 14
  15. 15. Organizational Consumers They include profit and not for profit businesses, govt agencies and institutions which must buy products, equipments and services in order to run their organizations. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 15
  16. 16. Market Segmentation Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 16
  17. 17. The process of dividing a potential market into distinct subsets of consumers and Market selecting one or more Segmentation segments as a target market to be reached with a distinct marketing mix. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 17
  18. 18. Market Segments Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 18
  19. 19. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 19
  20. 20. Geographic segmentation The market is segmented according to geographic criteria i.e. nations, states, regions, countries, cities, neighborhoods, or zip codes Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 20
  21. 21. Demographic Segmentation Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 21
  22. 22. Psychographic Segmentation Psychographics is the science of using psychology and demographics to better understand consumers. According to Psychographic segmentation, consumers are divided according to their lifestyle, personality, values. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 22
  23. 23. Behavioral Segmentation In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product. It is actually based on the behavior of the consumer Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 23
  24. 24. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 24
  25. 25. Why Segment? More precise More accurate Market definition of marketing segmentation customers needs objectives and wants Improved resource allocation Better marketing results Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 25
  26. 26. Consumer purchases are influenced strongly by four factors. Cultural Factor Social Factor Personal Factor Psychological Factor. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 26
  27. 27. Influences on Consumer Behavior Culture Social Personal Psychological Buyer Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 27
  28. 28. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 28
  29. 29. Cultural Factors Cultural factors comprise of set of values and ideologies of a particular community or group of individuals. It is the culture of an individual which decides the way he/she behaves. Cultural factor divided into three sub factors: Culture Sub Culture Social Class Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 29
  30. 30. CULTURE The sum total of learned beliefs,values,and customs that serve to direct the consumer behavior of members of a particular society. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 30
  31. 31. Characteristics of culture Culture is a learned response. Culture includes inculcated values. Culture is a social phenomenon. Culture is gratifying and continues for a long time. Cultures are similar and yet different. Culture prescribes the ideal standards of behavior. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 31
  32. 32. Levels of Culture Level 1:: Cultural differences Group that cross national boundaries or can be seen to be present in more thn 1 country National Level 2:: Unique to a particular country Level 3:: Basically subcultures- Supranational can also be Families, shopping groups, friendship groups Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 32
  33. 33. A THEORETICAL MODEL OF CULTURE’S INFLUENCE ON BEHAVIOR PERSONALITY Cognitive TRAIT Belief (thought process) Attitude SUBJECTIVE CULTURE Practices Behavioral Religious intension Behavior Linguistic National Professional Values Organizational group Social norms Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 33
  34. 34. Cultural factors have a significant effect on an individual’s buying decision. Every individual has different sets of habits, beliefs and principles which he/she develops from his family status and background. What they see from their childhood becomes their culture. The child growing up in a society leans a basic set of values, perceptions, preferences and behaviors through a process of socialization involving the family and other key institutions. Examples Females staying in West Bengal or Assam would prefer buying sarees as compared to Westerns. Similarly a male consumer would prefer a Dhoti Kurta during auspicious ceremonies in Eastern India as this is what their culture is. Girls in South India wear skirts and blouses as compared to girls in north India who are more into Salwar Kameez. Our culture says that we need to wear traditional attire on marriages and this is what we have been following since years. People in North India prefer breads over rice which is a favorite with people in South India and East India Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 34
  35. 35. Sub Culture Sub-culture is defined as a distinct cultural group that exists as an identifiable segment within a larger, more complex society. Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes Nationalities Religions Racial group Geographic regions Many sub culture make up important market segments and marketers often design products. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 35
  36. 36. Divisions of Sub-culture Sub- Nationality subculture: Anglo Indians-A person of mixed English and Indian descent Parsees-The Parsis came to India sometime around the 10th century A.D. to escape Arab persecution in Persia which began in the 7th century Mughals- Muslim empire in India, 1526–1857.The dynasty was founded by Babur . Pathans- Pathans came from Afghanistan as vendors and businessmen. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 36
  37. 37. Divisions of Sub-culture Sub- Religious sub-culture : Based on different faiths and beliefs. Muslims Sikhs Christians Hindus Buddhists Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 37
  38. 38. Divisions of Sub-culture Sub- Geographic & Religious sub-culture; Ex. South Indians, North Indians, North-east Indians. Racial sub-culture: In Caucasians, Africans, Asian, American & American Indians. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 38
  39. 39. ◦ Social Class:- Almost every society has some form of social structure, social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests and behavior. Social Classes have several characteristics:- 1) Person with in each social class tend to behave more alike than persons from two different social classes. 2) Persons are perceived as occupying inferior or superior positions according to their social class. 3) Person’s social class is indicated by a number of variables, such as occupation, income, wealth, education , and value orientation, rather than by any single variable 4) Individuals are able to move from one social class to another up or down during their lifetime. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 39
  40. 40. Factors Affecting Consumer Behavior: Social Groups Family Social Factors Roles and Status Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 40
  41. 41. Social Factors A consumer’s behaviour also is influenced by social factors such as the (I) Groups (II) Family (III) Roles and status Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 41
  42. 42. What is a Group? Group: ◦ Is defined as two or more persons who share a set of norms, values or beliefs and have certain implicit or explicit defined relationships to one another such that their behavior are interdependent Reference Group: ◦ Is a Group whose presumed perspective or values are being used by an individual as the basis for current behavior Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 42
  43. 43. Types of Groups Classification of Groups: ◦ Regularity of Contact Primary Group: Interaction on a regular basis Secondary Group: Occasional Contact like religious groups, professional association and trade unions ◦ Extent of Formality: Formal Group: Well defined structure, roles and authority levels Informal Group: Loosely defined structure ◦ Membership Status: Membership Group: Qualifies certain norms / standards to be a member Symbolic Group: Aspires to be a member of the group Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 43
  44. 44. Types of Groups (1)Primary: Daily interaction (2)Secondary: Less regular interaction a. Direct Ex: religious groups, professional association Types of and trade unions Groups (1) Aspirational (+ve) “Want-to-Be” b. Indirect (2) Non-inspirational (-ve) “DON’T Want to Be” Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 44
  45. 45. Family:- Family members can strongly influence buyer behavior. Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services. The family of orientation consists of one’s parents. From parents a persons acquires an orientation towards religious, politics, economics and a sense of personal ambitions, self worth and love. In case of expensive products and services, husband and wives engage in more joint decision making. The market needs to determine which member normally has the greater influence in the purchase of a particular products or services. either the husband or the wife , or they have equal influence . Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 45
  46. 46. Family consists of:- Influencer- the person who sense the need for purchase. Decider- the person who takes final buying decision. User- the person who uses the product. For example Husband -dominant: life insurance, automobiles, television Wife - dominant: washing machines, carpeting, non-living room furniture, kitchenware Equal: Living -room furniture, vacation, Housing, outside entertainment. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 46
  47. 47. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 47
  48. 48. ◦ Roles and Status :- A person belongs to many groups, family, clubs, organizations. The person’s position in each group can be defined in terms of both role and status. For example. M & “X” plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 48
  49. 49. Factors Affecting Consumer Behavior: Personal Personal Influences Age and Family Life Cycle Occupation Stage Economic Situation Personality & Self-Concept Lifestyle Identification Activities Opinions Interests Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 49
  50. 50. Personal Factors (I) Age and life cycle stage (II) Occupation (III) Economic situation (IV) Life Style (V) Personality and self concept. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 50
  51. 51. ◦ Age and Life cycle Stage:- People changes the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 51
  52. 52. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 52
  53. 53. The Bachelor Stage (Young and single) In the bachelor stage of the life cycle, income is low relative to future earnings, since most bachelors are just beginning their careers. However, there are few financial burdens. They therefore have relatively high discretionary incomes. They tend to spend substantial amounts on personal consumption items, food, clothing, transportation, certain luxury goods entertainment, vacations, and possibly even a car Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 53
  54. 54. The Newly Married Couples (Young, no children) With marriage, the requirements and resources change. Household requirements increase. In addition, in some cases, both partners may be working. This stage therefore represents a high expenditure period. Purchases include durable goods such as refrigerators and other appliances, inexpensive durable furniture, home entertainment items such as TV sets. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 54
  55. 55. Full Nest 1 (Young, married, with child) The arrival of a child creates major changes. Some wives may stop working and they suffer a reduction in income. The financial resources thus change significantly. Child rearing and educational responsibilities increase. Money is now directed to baby furniture, toys, chest rubs, vitamins, baby foods and baby medicines. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 55
  56. 56. Full Nest 2 (Older, married, with children) The family's financial position starts to improve because of career progress and also because many wives return to work. They present an active market for a wide variety of food products, bicycles, music lessons, magazines and also educational services as children are growing up. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 56
  57. 57. Full Nest 3 (Older, married, with dependent children) Income is high for the family at this stage. However, they now represent experienced buyers and tend to be less interested in new product purchases. Expenditures continue to be high due to replacement buying in the later phases of the stage. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 57
  58. 58. Empty Nest (Older, married, with no children living with them) With no children living at home, the financial position stabilizes.Savings accumulate. There may be a resurgence in self-education. Hobbies also become an important source of satisfaction. More is spent on luxury appliances, magazines. and health products. Major expenditures are on home ownership, home improvements and also on medical care. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 58
  59. 59. Solitary Survivor (Older, single, retired people) More economical lifestyle is observed at this stage. A lower income due to retirement may be a restrictive factor. Health care and other services become important. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 59
  60. 60. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 60
  61. 61. Stage Consumption Pattern Older ( married or single) Divorced Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 61
  62. 62. ◦ Economic situation :- A person’s economic situation( rich, poor, middle class, lower middle, upper middle etc) will affect product choice ◦ Life Style :- Life Style is a person’s Pattern of living. Understanding these forces involves measuring consumer’s major AIO dimensions. Activities (Work, hobbies, shopping, support) Interest (Food, fashion, family recreation) Opinions (about themselves, Business, Products) Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 62
  63. 63. ◦ Personality and Self concept :- Each person’s distinct personality influence his or her buying behavior. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Freudian Psychoanalysis Freud thought of human personality as being in three parts. The Id, the ego and the superego. ◦ Occupation :- A person’s occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suit Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 63
  64. 64. Factors Affecting Consumer Behavior: Psychological Motivation Psychological Beliefs and Psychological Factors Perception Attitudes Factors Learning Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 64
  65. 65. Motivation Motivation Motive or (drive) is need that is sufficiently pressing to direct the Perception person to seek Psychological satisfaction of the need. Factors Learning Beliefs & Attitudes Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 65
  66. 66. Perception Motivation The process by which people select, organize and interpret Perception information to from a Psychological meaningful picture of Factors world. Learning Beliefs & Attitudes Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 66
  67. 67. Learning Motivation Changes in an individual’s behavior arising from experience. Perception Psychological Factors Learning Beliefs and attitudes Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 67
  68. 68. Beliefs Motivation A descriptive thought or conviction that a person holds about something. Perception Psychological Factors Learning Beliefs and attitude Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 68
  69. 69. Motivation The motivation is the drive that leads the consumer towards buying a product or service. If the motivation is high, meaning the need or perception of need is high, the individual will actively seek to satisfy that need. This results in the consumer deciding to buy the product or service. This factor is directly related to "Maslow's Hierarchy of Needs" which states that every individual will actively seek to satisfy physiological needs first, followed by safety, social, esteem and finally, self- actualization needs. Businesses that successfully leverage these needs will motivate consumers to buy their products. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 69
  70. 70. Maslow’s Hierarchy of Needs Self Actualization (Self-development) Esteem Needs (self-esteem, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 70
  71. 71. PERCEPTION ◦ Process by which people select, organize, and interpret information to form a meaningful picture of the world. ◦ Perception can be influenced by: Selective attention Selective distortion Selective retention Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – 5-71 http://drakanshajain.blogspot.in
  72. 72. Perception Information about the environment is conveyed to the brain from eyes, ears and other organs.It is the range and co-ordination of the human senses together with the sensitivity, that provide us with a unique quality and quantity of information about theenvironment. Five sets of senses includes Vision Hearing Touch Taste Smell Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 72
  73. 73. LEARNING ◦ Defined as a relatively permanent change in behavior due to experience. ◦ Occurs due to an interplay of drives, stimuli, cues, responses, and reinforcement. ◦ Is strongly influenced by the consequences of an individual’s behavior. Behaviors with satisfying results tend to be repeated. Behaviors with unsatisfying results tend not to be repeated. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – 5-73 http://drakanshajain.blogspot.in
  74. 74. Beliefs and attitudes :- ◦ Belief is a descriptive thought that a person holds about something ◦ Attitude, a Person’s consistently favorable or unfavorable evaluations, feelings and tendencies towards an object or idea Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 74
  75. 75. SIMPLE MODEL FOR CONSUMER BEHAVIOUR Motives Attitudes Needs Consumer Purchase Business Decision Learning Family Perception Personality Economic Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 75
  76. 76. Diffusion of Innovations Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 76
  77. 77. Diffusion Process The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 77
  78. 78. Adoption Process The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 78
  79. 79. Diffusion of Innovations: Meaning The concept of diffusion of innovations usually refers to the spread of ideas from one society to another or from a focus or institution within a society to other parts of that society. Diffusion of innovations between societies is one of the most important processes in cultural evolution. The diffusion of innovations is important because it is relatively hard to invent (or develop) many kinds of useful knowledge. It is usually difficult to invent all the requisite parts in the right order, foresee the advantage of nascent new technology etc. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 79
  80. 80. Factors That Affect the Diffusion of Innovations The Innovation The Channels of Communication The Social System Time Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 80
  81. 81. Product Characteristics That Influence Diffusion Relative Advantage Compatibility Complexity Trialability Observability Felt Need Risk Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 81
  82. 82. Adopter Categories A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 82
  83. 83. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 83
  84. 84. Innovators: Description • 2.5% of population • Venturesome • Very eager to try new ideas • Acceptable if risk is daring • Communicates with other innovators Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 84
  85. 85. Early Adopters: Description • 13.5% of population • Respected • More integrated into the local social system • The persons to check with before adopting a new idea • Category contains greatest number of opinion leaders • Are role models Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 85
  86. 86. Early Majority: Description • 34% of population • Deliberate • Adopt new ideas just prior to the average time • Seldom hold leadership positions • Deliberate for some time before adopting Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 86
  87. 87. Late Majority: Description • 34% of population • Skeptical • Adopt new ideas just after the average time • Adopting may be both an economic necessity and a reaction to peer pressures • Innovations approached cautiously Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 87
  88. 88. Laggards: Description • 16% of population • Traditional • The last people to adopt an innovation • Oriented to the past Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 88
  89. 89. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 89
  90. 90. Diffusion Process and Marketing Strategy Identify diffusion inhibitors and find ways to compensate for these Identify innovators and early adopters and cater to them Move consumers from awareness to adoption Make effective use of word-of-mouth communications Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 90
  91. 91. Consumer Decision Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Post purchase Behavior email: Dr. Akansha Jain dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 91
  92. 92. Need Recognition The first stage of the buyer decision in which the consumer recognizes a problem or need. Need recognition is •Triggered by internal or external stimuli •Must reach an intensity high enough to becomes drive Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 92
  93. 93. Information Search The stage of the buyer decision process in which the consumer aroused to search for more information; the consumer may simply have heightened attention or may go into active information search. Information search includes •Memory (internal) search •External search: personal, commercial, public, experiential sources of information •Word-of-mouth sources are most influential Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – 93 http://drakanshajain.blogspot.in
  94. 94. The consumer can obtain information from any of several sources Personal Sources: (family, friends, neighbors etc) Commercial Sources: (Advertising, Sales people, Dealers etc) Public Sources: (Mass Media, Consumer Rating Organization) Experimental Sources: (Handling, Examining, Using the product) Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 94
  95. 95. Evaluation of Alternatives The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. Evaluation of alternatives consists of •The process of evaluating information to make a decision •Attributes and importance weights are chosen •Alternatives compared against the criteria Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – 95 http://drakanshajain.blogspot.in
  96. 96. Purchase Decision The stage of the buyer decision process in which the consumer actually buys the product. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – 96 http://drakanshajain.blogspot.in
  97. 97. Post- Post- purchase Behaviour The stage of the buyer decision process in which the consumer take further action after the purchase, based on their satisfaction or dissatisfaction. Performance < Expectations ----- Disappointment Performance = Expectations ----- Satisfaction Performance > Expectations ----- Delight Cognitive dissonance: A buyer’s doubts shortly after a purchase about whether it was the right decision. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – 97 http://drakanshajain.blogspot.in
  98. 98. Cognitive dissonance: ◦ Did I make a good decision? ◦ Did I buy the right one? Get a good value? Marketing minimizes through: ◦ Effective communication ◦ Follow up ◦ Guarantees ◦ Warranties Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 98
  99. 99. MODELS OF CONSUMER BEHAVIOUR •Economic Model •Psychological Model •Pavlovian Model •Input, Process Output Model-Gandhi: Philip Kotler •Sociological Model •HowarthSheth Model •Engel-Blackwell-Kollat Model •Model of Family Decision-making •Nicosia Model •A Model of Industrial Buying Behavior. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 99
  100. 100. 1. Economic Model Consumers follow the principle of maximum utility based on the law of diminishing marginal utility. The consumer wants to spend the minimum amount for maximizing his gains. Economic man model is based on: Price effect: Lesser the price of the product, more will be the quantity purchased. Substitution effect: Lesser the price of the substitute product, lesser will be the utility of the original product bought. Income effect: When more income is earned, or more money is available, more will be the quantity purchased. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 100
  101. 101. 2. Psychological Model Psychologists have been investigating the causes which lead to purchases and decision-making. This has been answered by A.H. Maslow in his hierarchy of needs. The behavior of an individual at a particular time is determined by his strongest need at that time. This also shows that needs have a priority. First they satisfy the basic needs and then go on for secondary needs Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 101
  102. 102. Maslow’s Hierarchy of Needs Self Actualization (Self-development) Esteem Needs (self-esteem, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 102
  103. 103. 3. Pavlovian Learning Model This model is named after the Russian Physiologist Ivan Pavlov. He experimented on a dog and observed how it responded on the call of a bell and presenting it with a piece of meat. The responses were measured by the amount of saliva secreted by the dog. Learning is defined as the changes in behavior which occur by practice and, based on previous experience. This is important to marketers as well. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 103
  104. 104. The learning process consists of the following factors: Drive This is a strong internal stimuli which impels action. Because of the drive, a person is stimulated to action to fulfil his desires. Drives Can be innate (in-born) which stem from physiological needs, such as hunger, thirst, pain,cold, etc. Learned drive, such as striving for status or social approval. Cause are weak stimuli that determine when the buyer will respond. We have: Triggering Cues: These activate the decision process for any purchase. Non-triggering Cues: These influence the decision process but do not activate it. These are of two kinds: Product cues are external stimuli received from the product directly, e.g., color of package, weight, style, price, etc. Informational cues are external stimuli which provide information about the product, like advertisement, sales promotion, talking to other people, suggestions of sales personnel, etc. Response is what the buyer does, i.e., buys or does not buy. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 104
  105. 105. Reinforcement Thus, when a person has a need to buy, say clothing, and passes by a showroom and is attracted by the display of clothing, their color and style, which acts as a stimulus, and he makes a purchase. He uses it, and if he likes it, an enforcement takes place and he is happy and satisfied with the purchase. He recommends it to his friends as well, and visits the same shop again. Learning part, thus is an important part of buyer behaviour and the marketer tries to create a good image of the product in the mind of the consumer for repeat purchases through learning. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 105
  106. 106. 4. Input, Process and Output Model Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 106
  107. 107. This is a simple model of consumer behavior, in which the input for the customer is the firm’s marketing effort (the product, price, promotion and place) and the social environment. The social environment consists of the family, reference groups, culture, social class, etc. which influences the decision-making process. Both these factors together constitute the input in the mind of the consumer. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 107
  108. 108. Need recognition When one is aware of a want, tension is created and one chooses a product to satisfy his needs. There is also a possibility that a person may be aware of a product before its need is recognized. This is indicated by the arrows going both ways from the need to the product and vice-versa. Product awareness Product awareness can be had from advertisement or exposure to different types of media or by the social circle. The awareness and the need leads to the building of interest. In some cases, the interest may also breakdown and, the decision process also stops or may be postponed for the time being. Evaluation Evaluation may consist of getting more information about the product and comparing and contrasting it with other products. This can be done theoretically or by taking a trial. Once the evaluation is completed, the consumer’s interest may either build up and he has intentions to buy, or he may lose interest and the decision process may again stop or be postponed. Intention Once there is intention to purchase the product, the consumer goes ahead and acts or purchases the product. Once the product is purchased, it is used to fulfil the need and, the more the product is used, the more the consumer becomes aware of the positive and negative points of the product. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 108
  109. 109. Post-purchase behavior If, after the purchase and use of the product the customer is satisfied, he is happy and goes in for repeat purchases or recommends the same to his friends and acquaintances. If the customer is dissatisfied, he discontinues further purchase of the product and builds a negative attitude towards it, which may be harmful to the company. The post-purchase behavior is very important for the marketer and the company because it leads to proper feedback for improvement and maintaining the quality and features desired by the product. If the customer is very happy with the purchase, he forms a good impression about the product and the company. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 109
  110. 110. Buyer’s Black-box Model Black- This model is based on input-process-output Approach Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 110
  111. 111. Buyer’s Black-box Model Black- The consumer gets the input from the marketing effort of the firm (4 Ps) and the other stimuli. This input is processed in the mind (Black Box), which constitutes the characteristics of the buyer and the process of decision-making. Once the buyer has decided to buy then, he responds in terms of his choice of product, brand, dealer, timing and amount. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 111
  112. 112. 5. Sociological Model This is concerned with the society. A consumer is a part of the society and he may be a member of many groups in a society. His buying behaviour is influenced by these groups. Primary groups of family friends and close associates exert a lot of influence on his buying. A consumer may be a member of a political party where his dress norms are different. As a member of an elite organization, his dress requirements may be different, thus he has to buy things that conform to his lifestyles in different groups. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 112
  113. 113. 6. Howarth Sheth Model This model is slightly complicated and shows that consumer behavior is complex process and concepts of learning, perception and attitudes influence consumer behavior. This model of decision-making is applicable to individuals. It has four sets of variables which are: Input Perceptual and learning constructs Outputs Exogenous or external variables. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 113
  114. 114. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 114
  115. 115. 7. Engel-Blackwell-Kollat Model Engel-Blackwell- It consists of four components: Information processing Central control unit Decision process Environmental influences. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 115
  116. 116. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 116
  117. 117. 8. Model of Family Decision-Decision- making model, it is important to understand how the In a family decision-making family members interact with each other in the context of their consumer decision-making.There are different consumption roles played by various members of the family. These roles are as follows: (i) Influencers The members who influence the purchase of the product by providing information to the family members, the son in a family may inform the members of a new fast food joint. He can influence the family members to visit the joint for food and entertainment. (ii) Gate keepers These members control the flow of information for a product or brand that they favour and influence the family to buy the product of their choice. They provide the information favourable to themselves and, withhold information about other product which they do not favour. (iii) Deciders These are the people who have the power or, money and authority to buy. They play a major role in deciding which product to buy. (iv) Buyers Buyers are the people who actually buy. A mother buying ration for the house etc. Father buying crayons for his children. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 117
  118. 118. 9. Nicosia Model This model is based on four fields Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 118
  119. 119. 10. A Model of Industrial Buyer Behavior The purchases made in an industrial organization involve many more people of different backgrounds and it is more complex. There are three main features in this model: There are different individuals involved who have a different psychological make up. Conditions leading to joint decision-making by these individuals. Differences of opinion on purchases or conflicts that have to be resolved to reach a decision. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 119
  120. 120. Consumerism Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 120
  121. 121. What is consumerism Consumerism refers to wide range of activities of government, business and independent organisations designed to protect rights of the consumers. Consumerism is a process through which the consumers seek remedy for their dissatisfaction and frustration with the help of their all organised or unorganised efforts and activities. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in
  122. 122. Definition “Consumerism is not limited to organized effort only but it is a social movement seeking to augment(increase) the rights and powers of buyers in relation to seller” (Philip Kotler) Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 122
  123. 123. Importance of consumerism:- 1. Stop unfair trade practices 2. Provide complete & latest information 3. Discourage anti-social activities 4. Implementation of consumer protection laws 5. Protect against exploitation Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 123
  124. 124. Rights of consumers:- 1. Right to be informed 2. Right to safety 3. Freedom to choose 4. Right to consumer education 5. Right to claim against seller 6. Right to secure ecological balance and pollution- free environment Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 124
  125. 125. Consumer protection act in India:- 1. Consumer protection act, 1986. A) Replacement of defective goods. B) Repair or removal of defects. C) Repayment of price. D) Compensation for loss etc. 2. Drugs & cosmetics act, 1940. 3. Prevention of food adulteration act, 1954. 4. MRTP(monopolies & restrictive trade practices) act, 1969. 5.Essential commodities act,1955. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 125
  126. 126. Organization buying behavior Organizational buying is a complex process of decision-making and communication. It takes time, involves several members and considerations. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 126
  127. 127. Robinson, Faris and Wind have identified eight steps in organizational behavior- behavior- Need recognition Definition of characteristic and quantity needed Development of specification to guide the procurement Search for and qualification of potential sources Acquisition and analysis of proposals Evaluation of proposals and selection of suppliers Selection of an order routine Performance feedback and evaluation. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 127
  128. 128. FACTORS INFLUENCING ORGANISTAIONAL BUYING Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 128
  129. 129. Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 129
  130. 130. DECISION MAKING PROCESSES EXTERNAL INFLUENCES Experiences and Acquisitions SITUATIONS Culture Problem Subculture Recognition Demographics Social Status Information Reference Groups Search Family Marketing Activities SELF-CONCEPT Alternative Evaluation Desire and and Selection s LIFESTYLE Needs INTERNAL INFLUENCES Outlet Selection Perception and Purchases Learning Memory Post-purchase Motives Processes Personality SITUATIONS Emotions Experiences and Acquisitions Attitudes Dr. Akansha Jain email: dr.akanshajain@gmail.com blog – http://drakanshajain.blogspot.in 130

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