16 - 20.pdf

Session
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Syllabus
► Consumer Behavior
■ Consumer Product
■ Categories of Consumer Products
■ Consumer Buying Decision Process
■ Factors Influncing Consumer Buying Decision
■ Influence of Consumer Buying Behavior on MM
vasantkothari@gmail.com 3
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Consumer Product
► A product is anything
that can be offered to a
market to satisfy a want
or need.
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Consumer Product
► Products include
■ Physical goods
■ Services
■ Experiences
■ Events
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Consumer Product
■ Persons
■ Places
■ Properties
■ Organizations
■ Information &
■ Ideas
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Consumer Product
► The customer will judge the offering by three
basic elements:
■ product features and quality,
■ services mix and quality, and
■ price appropriateness
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Product Levels
► Marketers plan their market offering at five
levels
► Each level adds more customer value, and
together the five levels constitute a customer
value hierarchy.
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Product Levels
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Core Benefit
► The most fundamental level is the CORE
BENEFIT: the fundamental service or benefit
that the customer is really buying.
► A hotel guest is buying “rest and sleep”; the
purchaser of a drill is buying “holes.”
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Generic Product
► At the second level, the marketer has to turn
the core benefit into a basic product.
► Thus, a hotel room includes a bed, bathroom,
towels, and closet.
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Expected Product
► At the third level, the marketer prepares an
expected product, a set of attributes and
conditions that buyers normally expect when
they buy the product.
► Hotel guests expect a clean bed, fresh towels,
and so on.
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Augmented Product
► At the fourth level, the marketer prepares an
augmented product that exceeds customer
expectations.
► A hotel might include a remote-control
television set, fresh flowers, and express check-
in and checkout.
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Potential Product
► At the fifth level stands the potential product,
which encompasses all of the possible
augmentations and transformations the product
might undergo in the future.
► Here, a company searches for entirely new
ways to satisfy its customers & distinguish its offer
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Product Levels
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Product Hierarchy
► Each product is related to certain other
products.
► The product hierarchy stretches from basic
needs to particular items that satisfy those
needs.
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Product Hierarchy
► There are seven levels of the product
hierarchy.
► It is explained in the below slides with the
example of Life Insurance.
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Need Family
► The core need that underlies the existence of
a product family.
► Example : Security
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Product Family
► All the product classes that can satisfy a core
need with reasonable effectiveness.
► Example : Savings and Income
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Product Class
► A group of products within the product family
recognized as having a certain functional
coherence.
► Example : Financial
Instrument.
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Product Line
► A group of products within a product class
that are closely related because they perform
the similar function, are sold to the same
customer groups, are marked through the same
channels, or fall within given price ranges.
► Example : Life Insurance.
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Product Type
► A group of items within product line that
share one of several possible forms of the
product
► Example : Term Life
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Brand
► The name, associated with one or more items
in the product line, that is used to identify the
source or character of the item.
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Item
► A distinct unit within a brand or product line
distinguishable by size, price, appearance, or
some other attribute.
► Example : Renewable term life insurance.
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Product Classifications
► In addition to understanding a product’s
position in the hierarchy, the marketer also must
understand how to classify the product on the
basis of three characteristics:
■ durability, tangibility, and
■ consumer or
■ industrial use.
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Durability and Tangibility
► Products can be classified into three groups,
■ Durable Products
■ Nondurable Products and
■ Service Products
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Durable Products
► Last long and for many uses before having to
be replaced, e.g. fridge, cars etc
► Durable products normally require more
personal selling and service, command a higher
margin, and require more seller guarantees.
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Non-Durable Products
► Can be used once or a few times before being
replaced, e.g. FMCG or office consumables
► Because these goods are consumed quickly &
purchased frequently, appropriate strategy is to
make them available in many locations, charge
only a small markup, and advertise heavily to
induce trial and build preference.
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Service Products
► Intangible products entailing activities or
benefits that are not part of the physical
products, e.g. financial services, etc
► Services are intangible, inseparable, variable
and perishable products, so they normally
require more quality control, supplier credibility,
and adaptability.
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Consumer Goods/Services
► The vast array of goods consumers buy can be
classified on the basis of shopping habits.
► Consumer goods can be distinguish as
■ Convenience Goods
■ Shopping Goods
■ Speciality Goods
■ Unsought Goods
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Convenience Goods
► Convenience goods that are usually
purchased frequently, immediately, and with a
minimum of effort, such as newspapers;
► Convenience goods are relatively inexpensive,
which respond to routine response buying
situations
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Shopping Goods
► Shopping goods that the customer, in the
process of selection & purchase
characteristically compares on the basis of
suitability, quality, price, and style, such as
furniture.
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Specialty Goods
► Specialty goods with unique characteristics or
brand identification, such as cars, for which a
sufficient number of buyers are willing to make
a special purchasing effort.
► High risk, expensive and infrequently
purchased products
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Unsought Goods
► Unsought goods that consumers do not know
about or do not normally think of buying, such
as smoke detectors.
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Consumer Goods/Services
► Dealers that sell specialty goods need not be
conveniently located but must communicate
their locations to buyers; unsought goods
require more advertising and personal sales
support.
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Industrial Goods
► Industrial goods can be classifieds in terms of
how they enter the production process and their
relative costliness.
► Industrial goods can be distinguish as
■ Material and Parts
■ Capital Items and Supplies &
■ Business Services
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Material and Parts
► Materials and parts are goods that enter the
manufacturer’s product completely.
► They fall into two classes
■ Raw materials and
■ Manufactured Materials and Parts.
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Material and Parts
► Raw materials can be either farm products
(e.g., wheat) or natural products (e.g., fish).
► Farm products are sold through
intermediaries; natural products are generally
sold through long-term supply contracts, for
which price and delivery reliability are key
purchase factors.
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Material and Parts
► Manufactured materials and parts fall into
two categories: component materials (iron) and
component parts (small motors); again, price
and supplier reliability are important
considerations.
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Capital Items
► Capital items are long-lasting goods that
facilitate developing or managing the finished
product.
► They include two groups: installations (such
as factories) and equipment (such as trucks and
computers), both sold through personal selling.
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Supplies & Business Services
► Supplies and business services are short-
lasting goods and services that facilitate
developing or managing the finished product.
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Product Mix
► A product mix (also called product
assortment) is the set of all products and items
that a particular marketer offers for sale.
► At Kodak, the product mix consists of two
strong product lines: information products and
image products.
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Product Mix
► The product mix of an individual company can
be described in terms of width, length depth,
and consistency.
► The width refers to how many different
product lines the company carries.
► The length refers to the total number of items
in the mix.
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Product Mix
► The depth of a product mix refers to how
many variants of each product are offered.
► The consistency of the product mix refers to
how closely related the various product lines are
in end use, production requirements
distribution channels, or some other way.
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Product Mix
► These four product-mix dimensions permit
the company to expand its business by
■ adding new product lines, thus widening its
product mix;
■ lengthening each product line;
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Product Mix
► These four product-mix dimensions permit
the company to expand its business by
■ deepening the product mix by adding more
variants; and
■ pursuing more product-line consistency.
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Buying Decision Process
► Marketers have to go beyond the various
influences on buyers and develop an indepth
understanding of how consumers actually make
their buying decisions.

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Buying Decision Process
► Specifically, marketers must identify
■ who makes the buying decision,
■ the types of buying decisions, and
■ the stages in the buying
process.

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Buying Role
► It is easy to identify the buyer for many
products easily.
► Men normally choose their shaving
equipment, and women choose their pantyhose.
► Still, marketers must be careful, because
buying roles can change.
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Buying Role
► We can distinguish five roles that people
might play in a buying decision.
■ An INITIATOR first suggests the idea of
buying the product or service.
■ An INFLUENCER is the person whose
view or advice influences the decision.
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Buying Role
■ A DECIDER actually decides whether to
buy, what to buy, how to buy, or where to
buy.
■ A BUYER makes the actual purchase.
■ A USER consumes or uses the product or
service.
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Buying Behavior
► Consumer decision making varies with the
type of buying decision.
► The decisions to buy toothpaste , a tennis
racket, a personnel computer, and a new car are
all very different.
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Buying Behavior
► In general, complex and expensive purchases
are likely to involve more buyer deliberation and
more participants.
► Assael distinguished four types of consumer
buying behavior, based on the degree of buyer
involvement & the degree of differences among
brands:
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Buying Behavior
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Complex buying behavior
Complex buying behavior
Dissonance-reducing buyer behavior
Dissonance-reducing buyer behavior
Variety-seeking buying behavior
Variety-seeking buying behavior
Habitual buying behavior
Habitual buying behavior

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Buying Behavior
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Types of Buying Situation
► Routine problem
solving: A buying
situation where brands
and products are
purchased habitually,
e.g. daily necessities
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► Limited problem solving: A buying situation
where buying occurs less frequently. Products will
be more expensive.
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► Extended problem solving: A buying situation
where buying occurs very infrequently and
extremely expensive.
e.g. premium goods
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The Decision Making process
► Five stages in the buying decision process
■ Need recognition
■ Information search
■ Evaluation of alternatives
■ Purchase decision
■ Post-purchase behavior
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Problem
Recognition
Problem
Recognition
Information
Search
Information
Search
Evaluation
of
Alternatives
Evaluation
of
Alternatives
Purchase
Decision
Purchase
Decision
Post
Purchase
Behavior
Post
Purchase
Behavior

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Need Recognition
► Occurs when the buyer recognizes a
problem/need made responsible by internal and
external stimulus (factors)
► e.g. a problem with moving houses
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Information Search
► Information search is the amount of
information gathered. Depending on motivation,
ease of obtaining the information, the value of
the information, information alternatives.
► Think of information sources from personal;
commercial; and public
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Evaluation of Alternatives
► How the consumer selects information and
arrive at different choices
► e.g. use grades and weightings to measure
choices
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The Purchase Decision
► The act of buying the most preferred
product/brand. The purchase decision can be
affected by:
■ Unexpected factors (credit, installment) and
attitudes of others
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Post Purchase
► Post-purchase is the customer satisfaction or
discomfort (dissonance) about the purchase
► Satisfaction happens when consumer’s
perceived expectations meet performance.
Otherwise dissonance happens.
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Introduction
► The aim of marketing is to meet and satisfy
target customers’ needs and wants.
► The field of consumer behavior studies how
individuals, groups, & organizations select, buy,
use, & dispose of goods, services, ideas, or
experiences to satisfy their needs and desires.
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Introduction
► Understanding consumer behavior is never
simple, because customers may say one thing
but do another.
► They may not be in touch with their deeper
motivations, & they may respond to influences
and change their minds at the last minute.
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Introduction
► Still, all marketers can profit from
understanding how and why consumers buy.
► For example, Whirlpool’s staff anthropologists
go into people’s homes, observe how they use
appliances, and talk with household members.
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Introduction
► Whirlpool has found
that in busy families,
women are not the only
ones doing the laundry.
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Introduction
► Knowing this, the company’s engineers
developed color-coded washer and dryer
controls to make it easier for kids and men to
pitch in.
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Introduction
© 2009
► Studying customers provides clues for
developing new products, product features,
prices, channels,
messages, and other
marketing-mix elements.

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Terms of Consumer Behavior
► Consumer market refers to customers
consumption in the market
► Consumer buyer behavior refers to the
buying behavior of consumers—individuals and
groups that buy goods and services for personal
consumption
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Model of Consumer Behavior
► The starting point for understanding
consumer buying behavior is the stimulus
response model
► As this model shows, both marketing and
environmental stimuli enter the buyer’s
consciousness.
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► In turn, the buyer’s characteristics and
decision process lead to certain purchase
decisions.
► The marketer’s task is to understand what
happens in the buyer’s consciousness between
the arrival of outside stimuli and the buyer’s
purchase decisions.
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► As this model indicates, a consumer’s buying
behavior is influenced by
■ cultural,
■ social,
■ personal, and
■ psychological factors.
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Cultural Factors
► Involve attitudes, beliefs, values, artifacts
within a society that makes meaning.
► Culture, subculture, and social class are
particularly important influences on consumer
buying behavior.
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Cultural
► Culture is the most
fundamental
determinant of a
person’s wants and
behavior.
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Subculture
► Each culture consists of smaller subcultures
that provide more specific identification and
socialization for their members.
► Subcultures include nationalities, religions,
racial groups, and geographic regions.
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Cultural & Subculture
► Culture and subculture – includes sports,
beauty, religion, technology, leisure, language,
law, education,
social values etc.
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Social Class
► Social classes are relatively homogeneous and
enduring divisions in a society.
► They are hierarchically ordered and their
members share similar values, interests, and
behavior
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Social Class
■ Social classes reflect
income as well as
occupation, education,
and other indicators.
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Social Class
■ Those within each social class tend to
behave more alike than do persons from
different social classes.
■ e.g. upper middle; middle-middle; lower-
middle; skilled; working; low
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Social Factors
► In addition to cultural factors, a consumer’s
behavior is influenced by such social factors as
■ reference groups,
■ family, and
■ social roles and statuses.
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Reference Groups
► Reference groups consist of all of the groups
that have a direct (face-to-face) or indirect
influence on a person’s
attitudes or behavior.
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Reference Groups
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► Some primary membership groups are family,
friends, neighbors, and co-workers, with whom
individuals interact fairly continuously and
informally.

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Reference Groups
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► Secondary groups, such as professional and
trade-union groups, tend to be more formal &
require less continuous
interaction.

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Reference Groups
© 2009
► Reference groups expose people to new
behaviors and lifestyles, influence attitudes and
self-concept, and create pressures for
conformity that may affect product and brand
choices.

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Family
► The family is the most important consumer-
buying organization in society, and it has been
researched extensively.
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Family
© 2009
► The family of orientation consists of one’s
parents and siblings.
► From parents, a person acquires an
orientation toward religion, politics, and
economics as well as a sense of personal
ambition, self-worth, and love.

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Family
© 2009
► A more direct influence
on the everyday buying
behavior of adults is the
family of procreation—
namely, one’s spouse and
children.

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Family
© 2009
► Marketers are interested in the roles and
relative influence of the husband, wife, and
children in the purchase of a large variety of
products and services.
► These roles vary widely in different cultures
and social classes

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Roles
► A person participates in many groups, such as
family, clubs, or organizations.
► The person’s position in each group can be
defined in terms of role and status.
► A role consists of the activities that a person
is expected to perform
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Roles
© 2009
► Each role carries a status.
► In general, people choose products that
communicate their role and status in society.
► Thus, company presidents often drive
Mercedes, wear expensive suits, and drink
Chivas Regal scotch.

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Personal Factors
► The third factor is personal characteristics,
including
■ The buyer’s age, stage in the life cycle,
■ Occupation, economic circumstances,
■ Lifestyle,
■ Personality, and self-concept.
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Age and Stage in the Life Cycle
► People buy different goods and services over
a lifetime.
► They eat baby food in the early years, most
foods in the growing and mature years, and
special diets in the later years.
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© 2009
► Similarly, consumption is shaped by the family
life cycle.
► The traditional family life cycle covers stages in
adult lives, starting with independence from
parents and continuing into marriage, child-
rearing, empty-nest years, retirement, & later life.

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Circumstances
► A blue-collar worker will
buy work clothes and
lunchboxes, while a
company president will
buy expensive suits & a
country club membership.
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Circumstances
© 2009
► For this reason, marketers should identify the
occupational groups that are more interested in
their products and services, and consider
specializing their products for certain
occupations.

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Circumstances
© 2009
► In addition, product choice is greatly affected
by a consumer’s economic circumstances:
spendable income (level, stability, and time
pattern), savings and assets (including the
percentage that is liquid), debts, borrowing
power, & attitude toward spending versus saving.

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Lifestyle
► People from the same subculture, social class,
and occupation may actually lead quite different
lifestyles.
► A lifestyle is the person’s pattern of living in
the world as expressed in activities, interests, &
opinions.
© 2009

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Personality and Self-Concept
► Each person has a distinct personality that
influences buying behavior.
► Personality refers to the distinguishing
psychological characteristics that lead to
relatively consistent and enduring responses to
environment.
© 2009

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Personality
© 2009
► Personality is usually
described in terms of such
traits as self-confidence,
dominance, autonomy,
deference, sociability,
defensiveness, and
adaptability.

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Personality
© 2009
► Self-concept (or self-image) is related to
personality.
► Marketers often try to
develop brand images that
match the target market’s
self-image.

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Psychological Factors
► In general, a person’s buying choices are
influenced by the psychological factors of
■ motivation,
■ perception,
■ learning,
■ beliefs and attitudes.
© 2009

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Motivation
► Some needs are
biogenic; they arise from
physiological states of
tension such as hunger,
thirst, discomfort.
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Motivation
► Other needs are psychogenic; they arise from
psychological states of tension such as the need
for recognition, esteem, or
belonging.
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Motivation
► A need becomes a
motive when it is aroused
to a sufficient level of
intensity.
► A motive is a need that
is sufficiently pressing to
drive the person to act.
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Motivation
► Psychologists have developed theories of
human motivation.
►Three of the best known—the theories of
■ Sigmund Freud,
■ Abraham Maslow, and
■ Frederick Herzberg
© 2009

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Perception
► A motivated
person is ready to
act, yet how that
person actually acts
is influenced by his
or her perception of
the situation.
© 2009

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Perception
► Perception is the process by which an
individual selects, organizes, and interprets
information inputs to create a meaningful
picture of the world.
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Perception
► Perception depends not only on physical
stimuli, but also on the stimuli’s relation to the
surrounding field and on conditions within the
individual.
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Learning
► Learning involves changes in an individual’s
behavior that arise from experience.
► Most human behavior is learned.
► Theorists believe that learning is produced
through the interplay of drives, stimuli, cues,
responses, and reinforcement.
© 2009

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Learning
► A drive is a strong internal stimulus that
impels action.
► Cues are minor stimuli that determine when,
where, and how a person responds.
© 2009

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Beliefs and Attitudes
► Through doing and learning, people acquire
beliefs and attitudes that, in turn, influence
buying behavior.
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Beliefs
► A belief is a descriptive thought that a person
holds about something.
► Beliefs may be based on knowledge, opinion,
or faith, and they may or may not carry an
emotional charge.
© 2009

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Beliefs
► Of course, manufacturers are very interested
in the beliefs that people have about their
products and services.
► These beliefs make up product and brand
images, and people act on their images.
© 2009

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Attitudes
► An attitude is a person’s enduring favorable
or unfavorable evaluations, emotional feelings,
and action tendencies toward some object or
idea
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Attitudes
► People have attitudes toward almost
everything: religion, politics, clothes, music,
food.
► Attitudes put them into a frame of mind of
liking or disliking an object, moving toward or
away from it.
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Attitudes
► Attitudes lead people to behave in a fairly
consistent way toward similar objects.
► Because attitudes economize on energy and
thought, they are very difficult to change; to
change a single attitude may require major
adjustments in other attitudes.
© 2009

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Attitudes
► A company would be
well advised to fit its
product into existing
attitudes rather than to
try to change people’s
attitudes.
© 2009

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