factors influencing the consumer behavior, consumer decision making process, business buying behavior etc.

1. Consumer Behaviour
Atul Fegade

2. True or False?
1. If you have bad breath, you cannot
smell it yourself.
2. If you eat a balanced diet, you do not
need vitamin supplements.
3. Using a razor with five blades will
reduce the likelihood of cutting
yourself and will result in less skin
irritation.
4. Dell Computers tend to be of higher
quality than those made by HP and
Sony.
5. Rust stains on clothes can be removed
with the use of lemon juice. Bleach
actually makes these stains worse.

3. Questions Faced By Consumers
• Are veggie burgers actually healthy?
• What makeup should you use to get an
“even” skin tone?
• Do I get any useful benefits from
spending more than Rs 20000 on a
digital camera?
• Should I get a “make-over?” What am I
looking for? What should I do?
• Is my mechanic honest?
• Which tie should I wear for a job
interview?
• Should I give my girlfriend roses,
chocolate, or software?

4. Maslow’s Hierarchy of Needs
Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst, food, water)
Self
Actualization
(Self-development)

5. Definition of Consumer Behavior
• Individuals or groups acquiring, using and disposing of products,
services, ideas, or experiences
• Includes search for information and actual purchase
• Includes an understanding of consumer thoughts, feelings, and actions
• “The decision making process and physical activity involved in
acquiring, evaluating, using and disposing of goods and
services so as to satisfy their needs & desires”.
• “The study of how individuals, groups, and organizations
select, buy, use and dispose of goods, services, ideas, or
experiences to satisfy their needs and wants.”

6. Consumer Behaviour
• What the consumer thinks of the company’s
products and those of its competitors?
• How can the product be improved in their opinion?
• How the consumers use the product?
• What is the customer’s attitude towards the product
and its advertising?
• What is the role of the customer in his family?

7. Discuss Consumer Behavior across
Products & Services
• Car / Motor Bike
• Toilet Soap
• Casual Shirt
• Formal Shoes
• Refrigerator
• House
• Career choice
• Insurance
• Music System
• Eating Out
• Vacation

8. Acquisition, Consumption and Disposal
• Acquisition
▫ Receiving
▫ Finding
▫ Inheriting
▫ Producing
▫ purchasing
• Consumption
▫ Collecting
▫ Nurturing
▫ Cleaning
▫ Preparing
▫ Displaying
▫ Storing
▫ Wearing
▫ Sharing
• Disposal
▫ Giving
▫ Throwing away
▫ Recycling
▫ depleting

10. INFLUENCES ON CONSUMER BEHAVIOR
• Cultural Factors
▫ Fundamental determinant of a person’s wants & behavior
▫ Exposure to values –
 America - achievement, success, activity, efficiency, progress, material
comfort, individualism, freedom, practicality, external comfort,
humanitarianism & youthfulness.
 India - respect & care for elders, honesty, integrity, hardwork, achievement &
success, humanitarianism, & sacrifice etc
▫ Subcultures – nationalities, religions, racial groups and geographic
regions (multicultural marketing)
▫ Social classification (based on income, area, occupation, wealth,
education & value orientation etc)
 Lower, upper, working, middle etc.
 Socio economic classification in India.
 Urban (A1, A2, B1, B2, C, D, E1, E2)
 Rural (R1, R2, R3, R4)
 Different Dress, Speech patterns, diff. recreational preferences etc.

11. • Social Factors
▫ Reference groups – direct or indirect influence
 Membership groups (direct influence)–
 Primary groups like family, friends, neighbors, co workers etc
 Secondary groups like religious, professional, trade union groups
 Aspirational Groups – a person hopes to join
 Dissociative groups – a person rejects the ideas of.
 Group’s Opinion leaders – offers informal advice or
information to select a particular brand (celebrities)
 Family – family of orientation & family of procreation.
 Family structures – Joint Family, Nuclear Family.
 Roles & Status.
 A person participates in a group like family, clubs, organizations.
 Role – activities a person is expected to perform.
 Status – Each role carries a status.
 E.g. A vice president in a company has more status than a
sales manager.

12. INFLUENCES ON CONSUMER BEHAVIOR
 Personal Factors
 Age & Stage in the life Cycle
 Critical life events & transitions – marriage, childbirth, illness, relocation, divorce, career
change etc.
 Occupation & Economic circumstances
 Economic - Blue collar worker will buy work cloths, work shoes & lunch boxes etc whereas a
company president will buy dress suits, air travel, country club etc
 Occupation – computer software companies give different product for brand managers,
engineers, lawyers, physicians, accountants etc.
 Personality & Self-concept
 Self confidence, dominance, autonomy, deference, sociability, defensiveness & adaptability
 Lifestyle & Values
 Money constrained
 Time constrained
 Multitasking
 Core values

13. Consumer Market
• Consumer markets are the markets for products and services bought
by individuals for their own or family use. Goods bought in
consumer markets can be categorized in several ways:
• Fast-moving consumer goods (“FMCG's”)
▫ These are high volume, low unit value, fast repurchase
Examples include: Ready meals; Baked Snacks; Newspapers
• Consumer durables
▫ These have low volume but high unit value. Consumer durables are often
further divided into:
▫ White goods (e.g. fridge-freezers; cookers; dishwashers; microwaves)
▫ Brown goods (e.g. DVD players; games consoles; personal computers)
• Soft goods
▫ Soft goods are similar to consumer durables, except that they wear out
more quickly and therefore have a shorter replacement cycle
Examples include clothes, shoes
• Services (e.g. hairdressing, dentists, childcare)

14. Organizational/Business Market
• Business markets involve the sale of goods between businesses. These are goods
that are not aimed directly at consumers.
• Business markets include
▫ Selling finished goods
– Examples include office furniture, computer systems
▫ Selling raw materials or components
– Examples include steel, coal, gas, timber
▫ Selling services to businesses
– Examples include waste disposal, security, accounting & legal services
• Business markets often require a slightly different marketing strategy and mix.
In particular, a business may have to focus on a relatively small number of
potential buyers (e.g. the IT Director responsible for ordering computer
equipment in a multinational group).

15. Consumer Buying
• Larger, smaller buyers
• Distant relationship
• Less Complex
• Less risk involved
• Non professional purchasing
• Individual buying influences
• Less sales calls per deal
• Primary demand
• Elastic demand
• Fluctuating or may not
• Geographically dispersed buyers
• No direct purchasing
• Less bargaining
Business Buying
• Fewer, larger buyers
• Close but long term supplier-customer
relationship
• More complex
• More risky
• Professional purchasing
• Multiple buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Geographically concentrated buyers
• Direct purchasing
• More focus on Negotiations

16. Different buyer roles
• Initiator: suggests or thinks of buying, child & chocolate
• Influencer: explicit or implicit influence on final decision,
mother is influencer for buying chocolate
• Gatekeeper: Allow certain information to flow & restricts flow of
some information, Parents decide channel for children
• Decider: the individual with the power and/or financial
authority to make the ultimate choice regarding which product to
buy. Head of the family.
• Buyer: the person who conducts the transaction: who calls the
supplier, visits the store, makes the payment and effects delivery.
• User: the actual consumer/user of the product
• Preparer: converts product to usable form for consumption, e.g.
Mother
• Maintainer: repair or service the product
• Disposer: dispose the used or package of the product

17. Buyer decision process

18. Five-stage model of consumer
buying process

19. • Problem/Need Recognition
• Caused by a difference between the consumer’s
ideal state and actual state.
• Internal factors – normal needs, thirst etc.
• External stimuli – family, friends, neighbors etc
• Out of stock, Dissatisfaction, New needs & wants,
related product purchases, market induced need
recognition, New products.
• When you admire a friend’s new car
• Vacation ad

20. • Identify circumstances that trigger a need
• Develop marketing strategies that sparks
consumer needs
• Increase consumer motivation

21. • Information Search
• To search for information needed to make a purchase
decision.
• Heightened attention – more receptive to information.
• Active information search – reading material, phoning
friends, going online, & visiting stores etc.
• Sources of Information:
• Personal sources – family, friends, neighbors, acquaintances
etc
• Marketer-controlled sources (commercial) – Advertising,
Web sites, salespersons, dealers, packaging, displays.
• Public sources – Mass media, consumer-rating organizations.
• Personal experiences – Handling, Examining, using the
product.
• How a Doctor learns about new drug?

22. • Information Search
• Search Dynamics
• Identify the hierarchy of attributes that guide
consumer in decision making
• Market Partitioning – the process of identifying the
hierarchy
• Brand-dominant hierarchy – car manufacturer
• Nation-dominant hierarchy – Made in “country”
• Brand/Price/Type dominant and Quality/Service buyers
• Ask consumer how they first heard about the brand?

23. Shop no -1

24. Shop no -2

25. • Evaluation of Alternatives –
▫ 1 ) Satisfy the need, 2)look for certain benefits & 3)then
product as a bundle of attributes
 Hotels – Location, cleanliness, atmosphere, price
 Mouthwash – colour, effectiveness, germ-killing capacity,
taste, price
 Tires – safety, tread life, ride quality, price.
▫ Comparison of the various brands identified as being
capable of solving the consumption problem and
satisfying the needs or motives.

26. • Evaluation of Alternatives –
▫ Beliefs & Attitudes
 Belief – a descriptive thought that a person holds about
something
 Attitude - liking or disliking, negative or positive
▫ Expectancy-Value Model
 Laptop – memory capacity, graphics capability, size & weight,
price

27. • Evaluation of Alternatives –
▫ Functional benefits - The taste of a soft
drink or a potato chip, the acceleration of a car,
and the clarity of a fax transmission.
▫ Experiential benefits - car ads illustrating
consumers enjoying the drive in a particular
brand
▫ Psychological benefits – association with
brand.

28. • Purchase Decision
▫ the consumer may develop a purchase intention or
predisposition to buy a certain brand.
▫ Subdecisions – Brand, Dealer, Quantity, Timing, &
Payment method.
▫ Additional decisions like when to buy, where to buy, and
how much money to spend.
▫ Non compensatory model
 Conjunctive heuristics – minimum acceptable cutoff
level for each attribute & chooses first alternative that meets
minimum standard for all attributes.
 Lexicographic heuristics – chooses the best brand on the
basis of its perceived most important attribute.
 Elimination-by-aspects heuristics – compare brands on
an attribute selected probabilistically.

29. • Purchase Decision
▫ Intervening Factors
 Attitude of others – intensity of negative attitudes,
our motivation to comply.
 Online reviews, reports, ratings
 Unanticipated situational factors – bad sales
person,
 Perceived risk - Functional risk, Physical risk, Financial
risk, social risk, Psychological risk, time risk.

30. • Post purchase evaluations
▫ After consumption, the consumer assesses the level of
performance of the product or service
▫ Seek out reassurance and opinions from others to confirm the
wisdom of their purchase decision.
▫ Postpurchase satisfaction
 Disappointed, satisfied, delighted.
▫ Postpurchase actions
 Satisfied – more likely to purchase the product
 Dissatisfied – abandon or return the product.
 Public action or private actions (Exit or voice option).
▫ Postpurchase product use & disposal
 A key driver of sales frequency
 Batteries have built in gauges, toothbrushes have colour indicators
etc.
 How consumers dispose of the product like batteries, beverage
containers, electronic equipments, disposable diapers etc,

31. How Consumers dispose of the
products

32. Business Buyer Behavior
The Buying Process
1. Problem recognition
2. General need description
3. Product specification
4. Value analysis
5. Supplier search
6. Proposal solicitation
7. Supplier selection
8. Order-routine specifications
9. Performance review

33. Business Buyer Behavior
Problem recognition occurs when someone in
the company recognizes a problem or need
• Internal stimuli
• Need for new product or production equipment
• Machine breaks down & requires new parts
• Current unsatisfactory purchase
• External stimuli
• Idea from a trade show or advertising
• Call from sales representative
• By direct mail, telemarketing and by calling on prospects

34. Business Buyer Behavior
• General need description describes the
characteristics and quantity of the needed item
▫ Standard Items & Complex Items
• Product specification describes the technical
criteria
▫ Technical specifications
• Value analysis is an approach to cost reduction
where components are studied to determined if they
can be redesigned, standardized, or made with less
costly methods of production

35. Business Buyer Behavior
• Supplier search involves compiling a list of
qualified suppliers
▫ Catalog sites, vertical markets, websites, spot or
exchange markets etc
▫ E- Procurement
▫ Lead Generation
• Proposal solicitation is the process of
requesting proposals from qualified suppliers
▫ Detailed written proposal

36. Business Buyer Behavior
• Supplier selection is the process when the buying
center creates a list of desired supplier attributes and
negotiates with preferred suppliers for favorable terms
and conditions
▫ Type & number of suppliers
• Order-routine specifications is the final order with
the chosen supplier and lists all of the specifications
and terms of the purchase
▫ Negotiate the final order

37. Business Buyer Behavior
• Performance review involves a critique of
supplier performance to the purchase terms

38. Consumer Decision Making Process
• For Formal Shoes
• Leather bag
• Home Furniture
• Tablet
• Gaming Console