CONSUMER BEHAVIOUR• Behaviors that consumers display in searching for, purchasing, using, evaluating and disposing of products and services.• Focused on how an individual consumers or households make decisions to spend their available resources ( Time, Money, Effort ) on consumption related items.• Study of When, Why, How and Where people do or do not buy a product.• A blend of psychology, Sociology, Social anthropology and economics.
• Marketing is the art and science of influencing consumer behaviour.• Every aspect of marketing is tied to consumer behaviour.• Marketer need to understand the psychology of the consumers.• Customer value is the difference between all the benefits derived from a total product and all the costs of acquiring those benefits.• Customer value requires the organisation to do a better job of anticipating and reacting to customer needs than the competitor.
• Buying behaviour includes Recognition of the problem (need to be met)search for informationconsideration of alternativespurchase, consumption, disposal• Marketers must be aware of the buying process and consumer influences to be effective in appealing to, and meeting consumer needs• Marketers should also aim to create value in the mind of the consumer by understanding what the consumer values
MARKET SEGMENTATION• Finding out what kind of consumers with different needs exist.• Consumers grouped according to their similar needs and characteristics.• These market segments are described in terms of demographic, geographic location and media preferences.
TARGETING• Preferred segment based on ability to meet the needs of this group.• Choice depends on• How well the segment is served by other manufacturers ?• How large is the segment• Do the organisation has the strength to appeal to a particular group of consumers.
POSITIONING• How consumers perceive your product in relation to others in the market• Achieved through understanding the customers and applying relevant marketing mix strategies
MARKETING STRATEGY• How an organisation will provide superior customer value to a target market• This requires the formulation of consistent marketing mix which includes Product Price Promotions Place Service
THE PRODUCT• Product is anything a consumer acquires or might acquire to meet a perceived need• Consumers generally buy for need satisfaction not for physical product attributes.
PRICE• Price is the amount of money paid to obtain the right to use the product.• Price sometimes serves as a signals of quality.
PROMOTION• Marketing promotions includes advertising, sales force, public relations packaging and any other signals that the firm provides about itself and the product.
DISTRIBUTION• Distribution means having the product available where target customers can buy it. This is essential to the product’s success.• Good channel decision requires a sound knowledge of where target customers shop for the product.
Factors affecting consumer behavior• Cultural and social • Psychological influences influences – Culture – Perception – Social Class – Learning – Reference groups – Motives – Family – Attitudes – Demographics – Lifestyles – Geography
Cultural and social influences• Culture – Based on norms and values • Norms – boundaries a culture establishes for behavior • Values - broad preferences concerning appropriate courses of action or outcomes – Directly influences buying behavior
Cultural and social influences• Social Class – Determined by factors like income , wealth, education, occupation, family prestige, value of home, and neighborhood – It is assumed that people in one class buy different products for different reasons.
Cultural and social influences• Reference Groups – Collection of people used as a guide for behavior in specific situations. – Reference groups have three functions • They provide information • They serve as comparison • They offer guidance
Cultural and social influences• Family – Family consists of two or more people who are related by blood, marriage or adoption and live in the same household. – Family helps develop a lifestyle (how you spend time and money and the kinds of activities you value)
Cultural and social influences• Demographics – Are statistical, personal, social and economic characteristics of a population including • Age • Gender • Education • Income • Occupation • Race/ ethnicity
Cultural and social influences• Geographic location – Difference in buying behavior exists between different regions – Buying behavior also differs urban areas and rural areas.
Psychological Influences• Perception – The process by which we receive information through our five senses and assign meaning to it. • 3 sets of influences shape perception – The physical characteristics of the stimuli – The relationship of the stimuli to the surroundings – The person’s state of mind. • Some stimuli are selected over others • Selective perception – Screening out some information that does not interest us and retaining that information that interests us.
Psychological Influences• Selective exposure – Seeking information that is in line with our beliefs, values, experiences, biases, attitudes.• Selective distortion – Changing the meaning of information that is conflicting with our beliefs• Selective retention – The process we go through to retain information
Activity - Perception• Write down the ads which you remember.• Write the reason for remembering every add.• Discuss in class.
Psychological Influences• Learning – Perceptions lead to learning – We learn something that we perceive and attach meaning to it. – Cognitive learning • Perception -> Problem solving -> Insight – Behavioral conditioning • Classic conditioning – Pairing one stimulus with another that already is associated with a response – e.g. associating sound of bell with end of school day • Operant conditioning – Voluntary occurrences of behavior that are then rewarded , ignored or punished.
When you use a mobile while you drive, your head is somewhere else
Psychological Influences• Motivation and Needs – Motive • An internal force that forces you to behave in a particular way. • Advertisers study buying motives. – Need • Basic forces that motivate us to do something • Primary needs: requirements to maintain life • Secondary: Acquired needs in response to our culture and environment. • Needs change over time.
Psychological Influences• Attitudes – A learned feeling you hold towards an object, a person or an idea that leads to a particular behavior. – Attitudes are resistant to change. – Attitudes are learned, hence can be changed or replaced. – Attitudes may be positive or negative, weak or strong.
Psychological Influence• Lifestyle – The way a person spends his time and money and the activities he likes to perform.
Role of consumer Behavior in Advertising• Advertisements play an essential role in creating an image of a product in the minds of consumers.• Advertising is basically a type of communication.• It attempts to persuade potential customers to purchase or consume a product or service.• It is designed in such a way that it creates and reinforces brand image and brand loyalty.• Advertisements must be catchy and communicate relevant information to consumers.
Contd…• Understanding the needs of the consumer is really important when it comes to creating the right advertisement for the right audience.• Advertising is usually important for triggering the first time purchase of the product.• it is only through advertisements; individuals are able to connect with your brand.• Identify your target audience. The advertisement in some way must touch the hearts of the end-users for them to buy the product.• The advertisement must show what the product is all about. It should, in a way give some kind of information about its price, benefits, usage, availability.
• Mercedes, I phone advertisement ought to be classy for people to recognize these products as status symbols.• Advertisements meant for younger people (college goers, young professionals) ought to be colourful and trendy for them to be able to relate themselves with the product.• Advertisements for insurance plans, medical benefits, hospitals ought to be sensible as they convey much serious information and target a mature segment of individuals altogether.