Consumer behavior

1. Consumer Behaviour

3. “Remember
Me?”
I'm the fellow who goes into a restaurant, sits down and patiently
waits while the waitresses do everything but take my order. I'm
the fellow who goes into a department store and stands quietly
while the sales clerks finish their little chitchat. I'm the man who
drives into a gasoline station and never blows his horn, but waits
patiently while the attendant finishes reading his comic book.
"Yes, you might say, I'm a good guy. But do you know who else I
am? I am the fellow who never comes back, and it assumes me to
see you spending thousands of dollars every year to get me back
into your store, when I was there in the first place, and all you had
to do to keep me was to give me a little service; show me a little
courtesy.“

4. Defining Consumer Behavior
Consumer Behavior is the Process
I nvolved W hen I ndividuals or G roups
Select, Use, or Dispose of Products,
Services, Ideas or Experiences
(E xchange) to Satisfy N eeds and
Desires.

5. Implications of our Definition
• Totality of Decisions (all decisions)
– Whether?
– What?
– Why?
– How?
– When?
– Where?
– How much?
– How often?

6. The Buyer Decision Process
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior

7. The Buyer Decision Process
External Stimuli
• TV advertising
• Magazine ad
• Radio slogan
•Stimuli in the
environment
Internal Stimuli
• Hunger
• Thirst
• A person’s normal
needs
Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state

8. The Buyer Decision Process
Step 2. Information Search
•Family, friends, neighbors
•Most influential source of
information
•Advertising, salespeople
•Receives most information
from these sources
•Mass Media
•Consumer-rating groups
•Handling the product
•Examining the product
•Using the product
Personal Sources
Commercial Sources
Public Sources
Experiential Sources

9. The Buyer Decision Process
Step 3. Evaluation of Alternatives
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.

10. The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand
Purchase Decision
Attitudes
of others
Unexpected
situational
factors

11. The Buyer Decision Process
Step 5. Postpurchase Behavior
Consumer’s Expectations of
Product’s Performance
Dissatisfied
Customer
Satisfied
Customer!
Product’s Perceived
Performance

14. 1. FAMILY
• Role of the family members
❑Initiator
❑Influencer
❑Decider
❑User

15. 2. REFERENCE GROUPS
• Primary group – interact with on regular
basis
❑Friends
❑Family members
❑Relatives
❑Co workers
Example: Avneet wanted to purchase a laptop. She
went to the nearby store and purchased a dell
laptop. The reason why she purchased because
all her friends were using the same model.

16. STAGES SHOWDIFFERNT BUYING
NEEDS
• Bachelorhood : bike ,smart phones ( spend
lavishly).
• Newly married : purchase a new house, car,
household furnishing (spends sensibly).
• Family with children : purchase products to
secure his as well as family future.
• Empty nest : medicines, health , necessary
items.

17. SECONDARY GROUPS
• Religious groups
• Associations
• Political parties
• Clubs

19. Example
• McDonald’s is a brilliant example of adaptation to the
specificities of each culture and each market. Well
awareof theimportance tohave an offer withspecific
products tomeettheneeds and tastesof consumers
from different cultures, thefast-food gianthas for
example: a McBaguette in France (with french baguette
and Dijon mustard), a Chicken Maharaja Mac and a
Masala Grill Chicken in India (with Indian spices) as
well asaMega Teriyaki Burger (with teriyaki sauce) or
Gurakoro (with macaroni gratin and croquettes) in
Japan

22. PSYCHOLOGICAL FACTORS
Perception
✓perception and communication
✓Product and brand perception
✓Price perception
✓Store perception
✓Perceived risk

24. Contd.
• Attitude
• Personality
• Learning : For example, if you are sick after
drinking milk, you had a negative experience,
you associate the milk with this state of
discomfort and you “learn” that you should
not drink milk. Therefore, you don’t buy milk
anymore

26. LEARNING M ODEL

27. Learning Model of Buyer
Behavior

28. ECONOMIC M O DEL
•
•
•
•
In this model, consumers follow the principle of maximum
utility based on the law of diminishing marginal utility.
Economic man model is based on the following effects −
Price E ffect −L ower the price of the product more will be
the quantity purchase.
Substitution E ffect −L ower the price of the substitute
product, lower will be the utility of the original product
purchase.
I ncome E ffect −When more income is earned, or more
money is available, quantity purchased will be more. The
economic theory of buyer’s decision-making was based on the
following assumptions:

29. Chapter 21 - Consumer Choice 29
Utility Theory
• Utility
– The want-satisfying power of a good or service
Utility Analysis
– The analysis of consumer decision making based on utility
maximization
•
• Util
– A representative unit by which utility is measured

30. Chapter 21 - Consumer Choice 30
Utility Theory
• Marginal Utility
– The change in total utility due to a one-unit
change in the quantity of a good or service
consumed
Marginal utility =
Change in total utility
Change in number of units consumed

31. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
0 1 2 3 4 5 6 7
Units consumed per meal
10
8
6
4
2
0
-2
1 2 3 4 5 6 7
Units consumed per meal

32. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
10
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
0 1 2 3 4 5 6 7
Units consumed per meal
10
8
6
4
2
0
-2
1 2 3 4 5 6 7
Units consumed per meal

33. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
10
8
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
0 1 2 3 4 5 6 7
Units consumed per meal
10
8
6
4
2
0
-2
1 2 3 4 5 6 7
Units consumed per meal

34. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
3 24
10
8
6 0 1 2 3 4 5 6 7
Units consumed per meal
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
10
8
6
4
2
0
-2
1 2 3 4 5 6 7
Units consumed per meal

35. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
3 24
4 28
10
8
6
4
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
10
8
6
4
2
0
-2
0 1 2 3 4 5 6 7
Units consumed per meal
1 2 3 4 5 6 7
Units consumed per meal

36. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
3 24
4 28
5 30
10
8
6
4
2
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
10
8
6
4
2
0
-2
0 1 2 3 4 5 6 7
Units consumed per meal
1 2 3 4 5 6 7
Units consumed per meal

37. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
3 24
4 28
5 30
6 30
10
8
6
4
2
0
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
10
8
6
4
2
0
-2
0 1 2 3 4 5 6 7
Units consumed per meal
1 2 3 4 5 6 7
Units consumed per meal

38. TOTAL AND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
3 24
4 28
5 30
6 30
7 28
10
8
6
4
2
0
-2
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
10
8
6
4
2
0
-2
TU
MU
0 1 2 3 4 5 6 7
Units consumed per meal
1 2 3 4 5 6 7
Units consumed per meal

39. TOTALAND MARGINAL UTILITY
Tacos Total
consumed Utility,
per meal Utils
Marginal
Utility,
Utils
0 0
1 10
2 18
3 24
4 28
5 30
6 30
7 28
10
8
6
4
2
0
-2
Units consumed per meal
30
20
10
Total
Utility
(utils)
Marginal
Utility
(utils)
10
8
6
4
2
0
-2
TU
MU
7
1 2 3 4 5 6 7
Units consumed per meal
Observe
Diminishing
Marginal
0 1 2
U
3
t4
ili5
ty
6

40. • As consumer resources are limited, he would allocate the
available money which will maximize the satisfaction of his
needs & wants.
Consumers have complete knowledge about the utility of
each product and service, i.e., they are capable of completing
the accurate satisfaction that each item is likely to produce.
As more units of thesame item are purchase themarginal
utility or satisfaction provided by the next unit of the item will
keep on decreasing, according tothelawof diminishing
marginal utility.
Price is used as a measure of sacrifice in obtaining the goods
or services. The overall objective of the buyer is to maximize
his satisfaction out of the act of purchase
•
•
•

41. THE PSYCHOANALYTICA L
MODEL
ID :
PERSUADER
S
SUPER EGO :
DISSUADERS
EGO
MODERATED ACTION