This document provides an overview of consumer behavior and the consumer buying decision process. It discusses key concepts such as who consumers and customers are, factors that influence consumer behavior like cultural, social, personal and psychological factors. It also outlines the typical consumer buying decision process from need recognition to post-purchase evaluation. The document examines different types of buying decisions and models of consumer behavior. Finally, it briefly discusses business buyers and the organizational buying process.
As companies are spending large amount of investment on the advertisement because they want to keep their product at the top of the customer’s mind. Advertisement has proven to be a successful tool for the communication but companies are still in the confusion that what kind of ingredients should be there and how do these advertisements will help to change the consumer buying behavior
As companies are spending large amount of investment on the advertisement because they want to keep their product at the top of the customer’s mind. Advertisement has proven to be a successful tool for the communication but companies are still in the confusion that what kind of ingredients should be there and how do these advertisements will help to change the consumer buying behavior
After reading this chapter, students should:
Know how consumer characteristics influence buying behavior
Know what major psychological processes influence consumer responses to the marketing program
Know how consumers make purchasing decisions
Know how marketers analyze consumer decision making
when the product is new to the market it is always difficult for it to be percieved as the good product, therefore Consumer Adoption clearly indicate which steps does conusmer take before He can adopt the product.
This topics is related with consumer behavior. I hope this will be helpful for any business student who are looking for family and its social standing effect in consumer behavior course.
Deviprasad Goenka Management college of Media Studies
http://www.dgmcms.org.in/
Subject:BRAND BUILDING
Lesson : BRAND IDENTITY TRAPS
Faculty Name: Vishal Desai
Strategies Affecting Consumer Behavior:
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are various factors influencing the purchases of consumer such as social, cultural,economic, personal and psychological.
1. Social Factors
Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status.
a)Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc .
b) Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.
c) Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
2. Cultural Factors:
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Culture
Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.
Social Class
Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar.
3. Economic Factors:
Consumer behaviour is influenced largely by economic factors. Economic factors that influence consumer behaviour are as: personal income, family income ,savings ,consumer credit and other economic factors.
a) Personal Income:
The discretionary personal income refers to the balance remaining after meeting basic necessaries of life. This income is available for the purchase of shopping goods, durable goods and luxuries. An increase in the discretionary income leads to an increase in the expenditure on shopping goods, luxuries etc. which improves the standard of living
This slide shows the 4P's of marketing with reference to Cadbury. The marketing mix has been explained with the animation of product, price, place and promotion.
After reading this chapter, students should:
Know how consumer characteristics influence buying behavior
Know what major psychological processes influence consumer responses to the marketing program
Know how consumers make purchasing decisions
Know how marketers analyze consumer decision making
when the product is new to the market it is always difficult for it to be percieved as the good product, therefore Consumer Adoption clearly indicate which steps does conusmer take before He can adopt the product.
This topics is related with consumer behavior. I hope this will be helpful for any business student who are looking for family and its social standing effect in consumer behavior course.
Deviprasad Goenka Management college of Media Studies
http://www.dgmcms.org.in/
Subject:BRAND BUILDING
Lesson : BRAND IDENTITY TRAPS
Faculty Name: Vishal Desai
Strategies Affecting Consumer Behavior:
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are various factors influencing the purchases of consumer such as social, cultural,economic, personal and psychological.
1. Social Factors
Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status.
a)Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc .
b) Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.
c) Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
2. Cultural Factors:
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Culture
Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.
Social Class
Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar.
3. Economic Factors:
Consumer behaviour is influenced largely by economic factors. Economic factors that influence consumer behaviour are as: personal income, family income ,savings ,consumer credit and other economic factors.
a) Personal Income:
The discretionary personal income refers to the balance remaining after meeting basic necessaries of life. This income is available for the purchase of shopping goods, durable goods and luxuries. An increase in the discretionary income leads to an increase in the expenditure on shopping goods, luxuries etc. which improves the standard of living
This slide shows the 4P's of marketing with reference to Cadbury. The marketing mix has been explained with the animation of product, price, place and promotion.
A complete presentation on Consumer Buying Behavior for MBA and BBA students to study importance and features of consumer buying behavior, Buying roles, factors affecting buying decisions and Buying process,
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2. Who are the consumers????
Who is the customer????
Consumer Behavior 2
3. Who is a Consumer/Customer?
•A customer is the one who actually purchases a product
or service from the particular organisation or shop
•Consumer is wider concept consisting of not only the
buyer or customer but also all its users, i.e. consumers.
There are two situations when the distinction between
consumer and customer may occur
• when the service or product is provided free, and
• when the customer is not the actual user of the product
or is only one of the many users.
Consumer Behavior 3
4. •The two vital elements to remember in all
consumer situations are:
•the influence on purchase from other
people and
•the roles taken on by different people in
consumer behaviour situations.
Consumer Behavior 4
7. •“The behavior that consumers display in searching for,
purchasing, using, evaluating and disposing of products
and services that they expect will satisfy their needs.”
-LEON G SCHIFFMAN
•The process whereby individuals decide what, when,
where, how and from whom to purchase goods and
services
•Buyers behavior is all the psychological, social and
physical behavior of the potential customers as they
become aware to evaluate purchase consume and tell
other people about the product and services.
Consumer Behavior 7
8. •Personal Consumer buys goods and services for
personal, household, or for the use of a family
member, or for a friend.
•Organizational Customer: a business,
government agency, or other institution (profit
or nonprofit) that buys the goods, services,
and/or equipment necessary for its function.
11. Types of Buying Decision Behavior
5-34
Complex Buying Behavior
When consumers are highly motivated in a purchase and
perceive significant differences among brands
Purchasers are highly motivated when:
• Product is expensive
• Product is risky
• Product is purchased infrequently
• Product is highly self-expressive
12. Types of Buying Decision Behavior
5-35
Dissonance-reducing buying behavior occurs when
consumers are highly involved with an expensive,
infrequent, or risky purchase, but see little
difference among brands
Post-purchase dissonance occurs when the
consumer notices certain disadvantages of the
product purchased or hears favorable things about
a product not purchased
13. Types of Buying Decision Behavior
5-36
Habitual buying behavior occurs when consumers
have low involvement and there is little significant
brand difference
Variety-seeking buying behavior occurs when
consumers have low involvement and there are
significant brand differences
14. Characteristics Affecting Consumer Behavior
5-6
Cultural Factors
•Buyer’s culture
•Buyer’s subculture
•Buyer’s social class
Social Factors
•Reference groups
•Family
•Roles and status
Personal Factors
•Age and life-cycle stage
•Occupation
•Economic situation
•Lifestyle
•Personality and self-concept
Psychological Factors
•Motivation
•Perception
•Learning
•Beliefs and attitudes
15. Characteristics Affecting Consumer Behavior
5-8
Culture is the learned values, perceptions, wants,
and behavior from family and other important
institutions
Subculture are groups of people within a culture
with shared value systems based on common life
experiences and situations.
For e.g. youth subculture
Eastern and western subculture
16. Characteristics Affecting Consumer Behavior
5-10
Social classes are society’s relatively permanent and ordered
divisions whose members share similar values, interests, and
behaviors
Social class is measured by a combination of occupation, income,
education, wealth, and other variables
• Upper class
• Middle class
• Working class
• Lower class
• On the basis of caste…..
17. Characteristics Affecting Consumer Behavior
5-12
Social Factors Groups
Membership groups have a direct influence and to which a person
belongs. Family group, religious group, professional group, trade
union.
Aspirational groups are groups to which an individual wishes to
belong.
Reference groups are groups that form a comparison or reference
in forming attitudes or behavior
18. Characteristics Affecting Consumer Behavior
5-13
Social Factors Groups
Opinion leaders are people within a reference group with
special skills, knowledge, personality, or other characteristics
that can exert social influence on others
Buzz marketing enlists opinion leaders to spread the word
Social networking is a new form of buzz marketing
MySpace.com
Facebook.com
19. Characteristics Affecting Consumer Behavior
5-14
Social Factor group
Family is the most important consumer-buying
organization in society
Social roles and status are the groups, family, clubs, and
organizations to which a person belongs that can define
role and social status
20. Characteristics Affecting Consumer Behavior
5-15
Personal Factors
•Personal characteristics
•Age and life-cycle stage
•Occupation
•Economic situation
•Lifestyle
•Personality and self-concept
21. Characteristics Affecting Consumer Behavior
5-16
Personal Factors
Age and life-cycle stage
•RBC Royal Band stages:
•Youth—younger than 18
•Getting started—18-35
•Builders—35-50
•Accumulators—50-60
•Preservers—over 60
22. Characteristics Affecting Consumer Behavior
Personal Factors
Occupation affects the goods and services bought by
consumers
Economic situation includes trends in:
•Personal income
•Savings
•Interest rates
5-17
23. Characteristics Affecting Consumer Behavior
5-18
Personal Factors
Lifestyle is a person’s pattern of living as expressed in his or
her psychographics
•Measures a consumer’s AIOs (activities, interests, and opinions) to
capture information about a person’s pattern of acting and
interacting in the environment
24. Characteristics Affecting Consumer Behavior
5-22
Personal Factors
Personality and Self-Concept
Personality refers to the unique psychological
characteristics that lead to consistent and
lasting responses to the consumer’s
environment
25. Characteristics Affecting Consumer Behavior
Personal Factors
Personality and Self-Concept
Brand personality refers to the specific mix of human
traits that may be attributed to a particular brand
• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness
5-23
26. Characteristics Affecting Consumer Behavior
5-24
Personal Factors
Personality and Self-Concept
Self-concept refers to people’s
possessions that contribute to and
reflect their identities
28. Characteristics Affecting Consumer Behavior
5-26
Psychological Factors
Motivation
A motive is a need that is sufficiently pressing to direct
the person to seek satisfaction
Motivation research refers to qualitative research
designed to probe consumers’ hidden, subconscious
motivations
30. Characteristics Affecting Consumer Behavior
5-28
Psychological Factors
Perception is the process by which people select, organize, and
interpret information to form a meaningful picture of the world from
three perceptual processes
• Selective attention
• Selective distortion
• Selective retention
31. Characteristics Affecting Consumer Behavior
5-29
Psychological Factors
Selective attention is the tendency for people to screen
out most of the information to which they are exposed
Selective distortion is the tendency for people to interpret
information in a way that will support what they already
believe
Selective retention is the tendency to remember good
points made about a brand they favor and to forget good
points about competing brands
32. Characteristics Affecting Consumer Behavior
5-30
Psychological Factors
Learning is the changes in an individual’s behavior arising
from experience and occurs through interplay of:
• Drives
• Stimuli
• Cues
• Responses
• Reinforcement
33. Characteristics Affecting Consumer Behavior
5-31
Psychological Factors
Beliefs and Attitudes
Belief is a descriptive thought that a person has about
something based on:
• Knowledge
• Opinion
• Faith
Attitudes describe a person’s relatively consistent evaluations,
feelings, and tendencies toward an object or idea
35. The Buyer Decision Process
Need Recognition
Need recognition occurs when the buyer recognizes
a problem or need triggered by:
• Internal stimuli(hunger, thirst, sex, homes etctra)
• External stimuli( surrounding)
Difference between desired state and actual
condition.
5-38
36. The Buyer Decision Process
5-39
Information Search
Information search is the amount of information
needed in the buying process and depends on the
strength of the drive, the amount of information you
start with, the ease of obtaining the information, the
value placed on the additional information, and the
satisfaction from searching
37. The Buyer Decision Process
5-40
Information Search
Sources of information:
Personal sources—family and friends
Commercial sources—advertising, Internet
Public sources—mass media, consumer organizations
Experiential sources—handling, examining, using the
product
38. The Buyer Decision Process
5-41
Evaluation of Alternatives
• Evaluation of alternatives is how the
consumer processes information to arrive at
brand choices
• Evaluation is done on the basis of product
attributes, degree of importance, brand belief
and satisfaction
39. The Buyer Decision Process
5-42
Purchase Decision
The purchase decision is the act by the consumer to
buy the most preferred brand
The purchase decision can be affected by:
• Attitudes of others
• Unexpected situational factors
40. The Buyer Decision Process
5-43
Post-Purchase Decision
The post-purchase decision is the satisfaction or
dissatisfaction the consumer feels about the purchase
Relationship between:
• Consumer’s expectations
• Product’s perceived performance
41. The Buyer Decision Process
5-44
Post-Purchase Decision
The larger the gap between expectation and
performance, the greater the consumer’s
dissatisfaction
Cognitive dissonance is the discomfort caused by a
post-purchase conflict
42. The Buyer Decision Process
Customer satisfaction is a key to building
profitable relationships with consumers—to
keeping and growing consumers and reaping
their customer lifetime value
5-45
Post-Purchase Decision
44. Business buyer behavior
•The buying behavior of organizations that buy goods
and services for use in the production of other
products and services that are sold, rented, or
supplied to others.
Business buying process
•The decision process by which business buyers
determine which products and services their
organizations need to purchase and then find,
evaluate, and choose among alternative suppliers and
45. Consumer or Organizational Products
Why was the product purchased ?
For personal or
household use
oFor use in the operation of a
business or organization.
oTo manufacture other products
oFor resale to others
Organizational
PRODUCT
CONSUMER
PRODUCT
46. Some Examples of Organizational
Buying
Paper cups by McDonald's
Computer chips by Toshiba
Concrete by Local Authorities
Oil by Electricity Generators
Fertiliser by Farmers
Accountancy services by Ltd. Companies
TV’s by Comet or Dixons
Furniture by LACM
47. Characteristics of Organizational Buying
Derived demand Negotiations
Risks Reciprocal
buying
Nature and size
of customers
Complexity
of buying
Economic
and technical choice
criteria
Buying to
specific
requirements
Organizational
Purchases
48. Factors affecting organizational buying
• Industrial buying are subject to many influences.
• Some marketers assume that the major influences are
economic.
• They think buyers will favor the suppliers who offers
the lowest price or the best product or the most
service. There are some major influences listed below.
49. Major Factors Influencing Industrial Buying
•Environmental
•Organizational
•Interpersonal
•Individual
50. Environmental
• Economic
Developments
• Technological
Changes
• Political and
Regulatory
developments
• Competitive
developments
• Culture and
Customs
Organizational
Factors
• Objectives
• Policies
• Procedures
• Organizational
Structure
• Systems
Interpersonal
• Authority
• Status
• Expertise
• Persuasiveness
Individual
• Age
• Income
• Education
• Job Position
• Personality
• Attitudes
51. Environmental Factors
Business buyers are heavily influenced by
factors in the current and expected economic
environment , such as level of primary demand
, the economic outlook etc. Business buyers are
also affected by technological , political and
competitive developments in the environment
.
The business buyers must watch these factors ,
determine how they will affect the buyer and
try to turn these challenges into opportunities.
52. Organizational Factors
Each buying organization has its own objectives ,
policies , procedures , structure and systems and the
business marketer must understand these factors well.
Questions can arise : how many people are involved in
the buying decision ?; who are they ? What are the
evaluative criteria ?
What are the company’s policies and limits on its
buyers ?
53. Interpersonal Factors
The buying center usually includes many
participants who influence each other , so
interpersonal factors also influence the business
buying process. Participants may influence the
buying decision process because they control
rewards and punishments , are well liked , have a
special relationship with other important
participants. Business marketers must try to
understand these factors and design strategies that
take them into account
54. Individual Factors
Each participants in the business buying
decision process brings in personal motives ,
perceptions and preferences. These individual
factors are affected by personal
characteristics such as age income ,education
, professional identification , personality and
attitudes towards risks.
55. Industrial Buying Decision Process
It is also known as organizational buying process
or business buying process. Industrial purchasing
decision making involves more physical and
observable stages. There are many decision
makers involved in each of the eight stages as
elaborated by the buy grid framework.
56. Phase 1 – Need or Recognition of a problem
The purchasing /buying process begins when
someone in company recognizes a problem or
need that can be met by acquiring goods or
services. The common events that lead to this
phase could be – a machine break down and
require replacement or new parts, company
decides to diversify or expand business, the
company decides to develop new products.
57. Phase 2 – Description of the need
This phase involves determination of the
characteristics and quantity needed of them. The
general characteristics could be reliability , durability ,
price etc. and the marketer along with the purchasing
manager ,engineers and users can describe the needs.
The question can arise like – what type of goods
/services should be considered, what quantities
should be needed, what performance specification
need to be met.
58. Phase 3- prepare Product specification
Obtaining the input from the second phase , the
buying organization has to develop the technical
specifications of the needed items. In this
phase, the product is broken down into items.
The specification about product and items are
listed. Companies do not encourage the supplier
participation at this stage.
59. Phase 4 – Supplier Search
This phase pertains to the search for the qualified
suppliers among the potential sources. The marketer
has to ensure that he is in the list of potential
suppliers. For this to happen , he has to make
periodic visits to all potential companies and create
awareness. Brochures have to be circulated and
advertisements placed in specific media like trade
journals. This phase only involves making a list of
qualified suppliers.
60. Phase 5- Proposal Solicitation
The list of qualified suppliers are now further shortened
based on some critical factors. Than the purchasing
departments ask for proposals to be sent by each supplier.
After evaluations , base on specified criteria , some firms
are asked to come over for formal presentations. The
proposal must include all specification like price , delivery
period , charged taxes, and so on. For technically complex
product and services , a lot of time spent in analyzing
proposals in terms of comparison on product services ,
deliveries and the landed cost.
61. Phase 6- Supplier Selection
Each of the supplier’s presentation are rated
according to certain evaluation models. The buying
organization may also attempt to negotiate with its
preferred suppliers for better prices and terms
before making a final decision. Various parameters
like reliability , delivery ,flexibility, price, service etc.
are used for supplier selection and their rating.
62. Phase 7- placing the purchase Order
After the suppliers have been selected , the
buyer negotiates the final order, listing the
technical specifications , the quantity needed
, the expected time of delivery etc. Buyers
are increasingly moving towards Blanket
contracting rather than periodic purchase
orders.
63. Phase 8- post purchase evaluation
The final phase in the purchasing process consists of
a formal or informal review and feedback regarding
product performance as well as vendor
performance. The buyer may contact the end user
and ask for their evaluations which are in turn given
to the supplier or he may rate the supplier on
several criteria using a weighted score method. The
performance review might lead to the buyer to
continue , improve or drop a supplier
64. Global consumer movements and consumer
protection
• The right to satisfaction of basic needs
• Right to safety
• Right to be informed
• Right to choose
• Right to be heard
• Right to redress
• Right to consumer education
• Right to healthy environment