Consumer Behavior

1. Consumer Behavior

2. Customer vs. Consumer Behavior Customer behavior: a broad term that covers both individual consumers who buy goods and services for their own use and organizational buyers who purchase business products Consumer behavior: the process through which the ultimate buyer makes purchase decisions

3. UNIT: 4. CONSUMER BEHAVIOUR Factors Influencing Buyer Behavior Buyer Decision Process Consumer Psychology Industrial Buyer Behavior Vs. domestic Buyer Behavior Customer Satisfaction Vs. Customer Delight

4. Consumer Behavior • Consumer behavior consists of the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.

5. Importance of understanding Consumer Behavior Understand Predict Influence

6. Factors affecting Consumer Behavior Model of Consumer Behavior Factors affecting Buyer Behavior Types of Buying Decisions

7. Marketing and Other Stimuli Model of Consumer Behavior Product Price Place Promotion Economic Technological Political Cultural Buyer’s Black Box Factors Affecting Consumer Behavior Buyer’s Decision Process Buyer’s Response Purchase Timing Purchase Amount Product Choice Brand Choice Dealer Choice

8. Factors Affecting Consumer Behavior Cultural Social Personal Psychological Buyer

9. Factors Affecting Consumer Behavior:Cultural Culture Subculture Social class

10. Culture is a whole set of values, traditions, beliefs, attitudes and ways of doing things of a reasonably homogeneous set of people. Culture

11. Cultural Influences Culture: values, beliefs, perceptions, preferences, and tastes handed down from one generation to the next. Indian Culture: Children feel the responsibility of taking care of aged parents. A father owning the responsibility of getting his Daughter married in a well to do family.

12. Core Values in the Culture While some cultural values change over time, basic core values do not Examples of core values include: Importance of family and home life The way of dressing Working habits Values are shared beliefs formed through Socialization & Acculturisation process

13. Subcultures • Subculturesare subgroups within the larger, or national culture with unique values, ideas, and attitudes, based on common life experiences.

14. Subcultures: subgroup of culture with its own, distinct modes of behavior Cultures are not homogeneous entities with universal values. Subcultures can differ by: Religion Place of residence Subculture influences food preferences, clothing choices, recreation & career aspirations.

15. A group of people who have approximately equal social position as viewed by others in society. It can be related to occupation, education, & community participation where a person lives. Social class

16. It comprises of relatively homogeneous & enduring divisions in a society which are hierarchically ordered & whose members share similar values, interests and behavior. E.g. Caste-system in India

17. Social classes: groups whose rankings are determined by occupation, income, education, family background, and residence location W. Lloyd Warner identifiedsix classes: • Lower class • Upper-upper • Lower-upper • Upper-middle • Lower-middle • Working class

18. Social classes show distinct product & brand preferences in many areas such as clothing, furnishings, leisure etc.

19. Factors Affecting Consumer Behavior:Social • Reference Groups Family Social Factors Roles and Status

20. Reference Groups • Reference groupsare people to whom an individual looks as a basis forself-appraisal or as a source of personal standards.

21. Reference groups: groups whose value structures and standards influence a person’s behavior Requires two conditions: The purchased product must be one that others can see and identify The purchased item must be conspicuous; it must stand out as something unusual, a brand or product that not everyone owns

22. Reference Groups • Membership Group ( primary, secondary) • Aspiration Group (like to belong) • Dissociative Group (like not to belong)

23. Reference groups influence in at least three ways. 1.Expose individual to new behavior & lifestyle 2.Influence a persons attitude & self-concept. 3.Create pressures for conformity-actual product/brand choice.

24. Personal Influence • Opinion Leadership • Opinion Leaders • Word of Mouth

25. Opinion Leaders • Opinion leadersare individuals who exert direct or indirect social influence over others.

26. Opinion leaders: trendsetters who purchase new products before others in a group and then influence others in their purchases

27. Pierce Brosnan and Anna Kournikova Why use celebrity spokespersons?

28. Word of Mouth • Word of mouthis the influencing of people during conversations.

29. Family • Family Influence • Consumer Socialization • Family Life Cycle • Family Decision Making • Information Gatherer • Purchaser • Influencer • User • Decision Maker

30. Family Life Cycle • Thefamily life cycle describes the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors.

31. Haggar Clothing What role do women play in this purchase?

32. Family Influences Husband-dominant role is when the husband makes most of the decisions. Wife-dominant role is when the wife makes most of the decisions. Syncratic role is when both partners jointly make most decisions.

33. Children and Teenagers in Family Purchases Growing numbers are assuming responsibility for family shopping They also influence what parents buy

34. Roles define behavior that members of a group expect of individuals who hold specific positions within the group Status: is the relative position of any individual member in a group. Each role carries a Status Roles & Status

35. Roles influence Buyer behavior. People choose products that communicate their role & status in society. Marketers should be aware of the status symbol potential of products & brands.

36. Personal Influences Factors Affecting Consumer Behavior:Personal Lifestyle Identification Occupation Age and Life Cycle Stage Personality & Self-Concept Economic Situation Activities Opinions Interests

37. Affects choice of food, clothes, furniture, recreation etc. Age & life-cycle stage

38. Affects consumption pattern . e.g. Purchasing patterns of white collar workers will be different from those of blue collar workers. Occupation

39. Spendable income Savings & assets Debts Borrowing power Attitude towards spending & savings Economic circumstances

40. A person’s distinguishing psychological characteristics that lead to relatively consistent & enduring responses to environment Personality

41. Based on traits people can be described as Confident Warm Loving Caring Outgoing Introvert Extrovert Aggressive Not Responsible

42. Personality types affect product/brand choices. A Marketer should adapt his selling style to suit the customer’s personality.

43. Self-concept (Self-image) Marketers try to develop brand images that match the target market’s self-image. Self-concept

44. Actual self-concept Ideal self- concept Other’s self -concept It sometimes may become difficult to answer which self will one try to satisfy while choosing a product.

45. It is the person’s pattern of living as expressed in the person’s activities , interests & opinions. Lifestyle portrays whole person interacting with the environment. Lifestyle

46. Achievement-oriented Belongingness-oriented

47. Factors Affecting Consumer Behavior:Psychological Motivation Psychological Factors Perception Beliefs and Attitudes Learning

48. Types of Buying Decisions Involvement Differences between brands

49. Involvement • Involvement consists of the personal, social, and economic significance of the purchase to the consumer.

50. Types of Buying Decisions Complex Buying Behavior Variety- Seeking Behavior High Involvement Low Involvement Dissonance- Reducing Buying Behavior Habitual Buying Behavior Significant differences between brands Few differences between brands