An Introduction To Consumer Behaviour

An Introduction to Consumer Behaviour

From the desk of :Dr. Harjit Singh

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Books for Consume Behavior

Consumer Behavior By:  Schiffman and Kanuk, Prentice Hall.  Laudan & Bitta, Tata Mcgraw Hill  Shainesh G & Sheth, Jagdish N, (CRM)  CRM by Boehm, Thomas P. 2

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Introduction: Key Terms Buying

Behavior

– The

decision processes and acts of people involved in buying and using products

Consumer

Buying Behavior

– Buying

behavior of people who purchase products for personal use and not for business purposes…

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Why do we need to study Consumer Behaviour?

The simple answer to this question is that no longer can we take the customer for granted…

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Failure rates of new products introduced  Out

of 11000 new products introduced by 77 companies, only 56% are present 5 years later.  Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives….. 5

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What we need to understand? 1. 2. 3.

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Why consumers make the purchases that they make? What factors influence consumer purchases? The changing factors in our society….

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Consumer Behaviour?

Consumer

4Ps

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Marketing Environment

Buyer Characteristics

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Buyer Decision Process

Buyer Decision

Marketing Stimuli

4 Ps Product

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Price

Place

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Promotion

Other Stimuli

Marketing Environment Economic

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Technological

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Political

Cultural

Students’ Activity:1 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?....

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Factors Affecting Consumer Purchases…  Cultural  Social  Personal  Psychological….

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Cultural factors

 Culture  Sub

- culture  Social Class…

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Social factors  Reference

Groups

 Family  Roles

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and Status….

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Personal Factors  Family

Life Cycle  Occupation and Economic circumstances  Lifestyle  Personality and self - concept

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Psychological Factors  Motivation  Perception  Learning  Beliefs

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and Attitudes….

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Psychological Influences on the Buying Decision Process (cont’d) Maslow’s Hierarchy of Needs – The

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five levels of needs that humans are motivated to seek and satisfy, from least to most important are Physiological needs—food, water, clothing, shelter Safety needs—security, freedom Social needs—love, affection, belonging Esteem needs—respect, recognition, self-worth Self-actualization needs—personal growth T-30

Maslow believed that people seek to fulfill five categories of needs.

Maslow’s Hierarchy of Needs

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Buying Roles

 Initiator  Influencer  Decider  Buyer  User….

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Buyer Behavior & Buying Role Other people often influence a consumers purchase decision. The marketer needs to know which people are involved in the buying decision and what role each person plays, so that marketing strategies can also be aimed at these people. (Kotler et al, 1994).

• Initiator: the person who first suggests or thinks of the idea of buying a particular product or service.

• Influencer: a person whose views or advice carry weight in making the final buying decision

• Decider: the person who ultimately makes the final buying decision or any part of it

• Buyer: the person who makes the actual purchase • User: the person who consumes the product or service Note: teens are increasingly assuming more of these roles

Think about your past purchase– who was in which role?

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Consumer Decision-Making Process Need Recognition Information Search

Cultural, Social, Individual and Psychological Factors affect all steps

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Evaluation of Alternatives Purchase Postpurchase Behavior T-30

1. Need Recognition Marketing helps consumers recognize (or create) an imbalance between present status and preferred state

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When a current product isn’t performing properly

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When the consumer is running out of an product

•

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Preferred State When another product seems superior to the one currently used….

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2. The information search stage

An internal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem-- often sufficient for frequently purchased products. An external search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low.

Personal sources (friends and family) Public sources (rating services like Consumer Reports) Marketer-dominated sources (advertising or sales people)

The evoked

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set: a group of

brands from which the buyer can choose

Determinants of External Search

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3. Evaluation of Alternatives  Product

Choice  Brand Choice  Dealer Choice  Purchase Timing  Purchase Amount….

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4. Purchase – Choosing

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the product or brand to be bought based on the outcome of the evaluation stage – The choice of seller may affect the final product selection. – Factors such as terms of sale, price, delivery, and warranties may affect the sale…. T-30

5. Post Purchase Behaviour

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Cognitive Dissonance Can minimize through:

Did I make a good decision? Did I buy the right product? Did I get a good value?

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•Effective Communication •Follow-up •Guarantees Warranties •Under promise & •Over deliver

Post - Purchase Behaviour  Satisfaction  Actions  Use

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and Disposal….

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3. How do you know when to shop? What are the triggers that initiate an awareness & search? 5. What are the internal & external sources of these triggers?....

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• Quickly list 10 items you have purchased in the past month • Reexamine how long it took you to make a decision on each • Why did such a difference in decision occur?...

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Decision Processing

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