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Consumer Behavior – you are what you buy…!. Think of a recent important purchase– briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase What influenced you at each step? >>Assuming the following:
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Consumer Behavior– you are what you buy…! • Think of a recent important purchase– briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase • What influenced you at each step? • >>Assuming the following: • It Consists of all the individuals and households who buy or acquire goods and services or personal consumption
Consumer Market • Consists of all the individuals and households who buy or acquire goods and services for personal consumption
Consumer Decision-Making Process Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Information Search Evaluation of Alternatives Purchase Postpurchase Behavior
How do you know when to shop? What are the triggers that initiate an awareness & search? • What are the internal & external sources of these triggers?
Factors Influencing Consumer Behavior >> Personal >> Psychological >> Social >> Cultural
Personal Factors • Age • Life-Cycle Stage • Occupation • Economic Circumstances • Life Style
Psychological Factors “Wants” Based on a want or desire to have something. Not a necessity
Psychological Factors Motivation: • Freud • Id ("pleasure principle”) • Ego (“reality principle”) • Super Ego (“Super-ego aims for perfection so called Conscience to kill the mis-behavior/guilt ”) • Maslow • Hierarchy of Needs (survival, comfort, psychological, self- esteem, self- actualization)
Psychological Factors • Perception • The process by which an individual selects, organizes, and interprets inputs to create a meaningful picture of the world. • Selective Exposure: people are only open to messages they want to receive. • Selective Distortion: shows how people change messages to match their self-concept or twist them to match their perception of reality. • Selective Retention: shows that people remember only what they want to remember. • Learning • Changes in an individual’s behavior arising form experience
Beliefs • Descriptive thoughts that a person holds about something • Functional Factors “Needs” Need over wants. Delivers to a real “need” to have something.
Social Class • Relatively homogenous, enduring divisions in a society, hierarchically ordered with members sharing similar values, interests, and behaviors • Upper Upper 1% • Lower Upper 2% • Upper Middle 12% American • Middle 32% Social • Working 38% Classes • Upper Lower 9% • Lower Lower 7%
Group Influences Brand Choice Strong Weak • Strong • Weak Product Choice
Family Influence on Buying Behavior • Husband-Dominant • Wife-Dominant • Equal Culture & Subcultures • Cultures • The accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment • Subcultures • Groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.
Adoption Process • Awareness • Interest • Evaluation • Trial • Decision • Confirmation
Examples of Buying Motives:Psychological or Functional? • A senior wants to impress his date at the prom . His primary motive is …? Psychological
Examples of Buying Motives:Psychological or Functional? • A girl wants to remember her grandmother on her birthday. Her primary motive is…? Psychological
Examples of Buying Motives:Psychological or Functional? • A homemaker needs a new washing machine and has had good experiences with Sears. Her primary motive is …? Functional
Examples of Buying Motives:Psychological or Functional? • A teacher wants to buy a practical car to be used for family transportation. Her/His primary motive is …? Functional
Examples of Buying Motives:Psychological or Functional? • An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is…? Functional
Why is this important? To learn Consumer Behavior • Out of 11000 products launched by 77 companies, only 56% are present five years later – Kuczmaski & Associates • Only 8% of new product concepts offered by 112 leading companies reached the market. Out of this 83% failed to reach marketing objectives – Group EFO Ltd., Marketing News, Feb 1, 1993, Pg2
Dominant forces shaping Consumer Research • Factors that move an economy from Production-driven to Market-driven • Level of sophistication with which human behaviour is understood in psychology and other behavioural sciences
Overall Model of Consumer Behavior Decision Processes External Influences Self-Concept & Learning Culture and Subculture Demographics Social Status Reference Groups Family & Marketing Activities Problem Recognition Information Search Internal Influences Perception Alt Eval & Selection Learning Memory Motives Outlet select & Purchase Personality Emotions Postpurchase Processes Attitudes
The Types of Buying Decisions Complex Buying Behavior Variety- Seeking Behavior High Involvement Low Involvement Reduced Buying Behavior Habitual Buying Behavior Significant differences between brands Few differences between brands
The Short falls:-Telemarketing Fraud • The elderly are vulnerable to fraud by telemarketers. • A program to combat this fraud is the Know Fraud Program. • Many Organizations have to fight this happening.
Negligent Consumer Behavior • Negligent behavior is composed of actions and inactions that may negatively affect the long-term quality of life of individuals and society. • This type of behavior can occur in two different contexts: • Product Misuse • Consumption of Hazardous Products
Many injuries result from misuse of a safe product - not from product defects. • Using a cell phone while driving is being outlawed in some areas. • “The most dangerous component is the consumer, and there’s no way to recall him.”
Corporate Social Responsibility • Firms have become viewed as responsible for more than generating profits. • “Corporate social responsibility” refers to the idea that firms have an obligation to help the larger society by offering some of their resources.
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