Consumer Behavior & Buying Decisions

Consumer Behavior & Buying Decisions

Why do we need to study consumer behavior…. ??? Because no longer we can take our consumers for GRANTED…….. Consumer market comprises of all the individuals & households who buy or acquire goods & services for personal or commercial consumption.

Indian Consumer Market

Maslow’s Theory of Motivation • Motive: a driving force that causes a person to take action to satisfy specific needs. (Hungry=Eat)

• Maslow’s Hierarchy of Needs: a method of classifying human needs and motivations into 5 categories in ascending order of importance: physiological, safety, social, esteem, and selfactualization.

Maslow’s Theory of Motivation

Consumer Buying Decision process  Buying Roles  Buying Behavior  Buying Decision

Buying Roles are influenced by: • • • • •

Initiator Influencer Decider Buyer User

Importance of women’s decisions in the Indian consumer market

An example: Buying Roles

CHILD = Initiator, Influencer, user MOTHER = Decider, Buyer

Buying Behavior is influenced by: Complex Buying Behavior - High involvement decisions - Risky, infrequent, expensive products - Focus on product’s attributes & brand imp - Expert sales person, extensive use of print media

Buying Behavior is influenced by contd…: • Dissonance – Reducing Buyer Behavior

- Occurs after purchase - Expensive infrequent purchase - Hearing favorable qualities about other products – “dissonance” - To popularize “Feel good factor”

Buying Behavior is influenced by contd…: • -

Habitual Buying Behavior “out of habit” Low involvement decision Insignificant brand differences Low cost household products TV advertisement – a preferred medium

Buying Behavior is influenced by contd…: • Variety – Seeking buying behavior

- Low involvement decision - Frequent “brand switching” - Coke Vs Pepsi, variety of cookies

Consumer Buying Decision Making process Problem Recognition

Purchase Decision

Information Search

Post purchase Evaluation

Evaluation of Alternatives

Need Recognition • Need recognition is the result of an imbalance between actual (internal) & desired (external) states. • Aroused when a consumer is exposed to internal & external stimulus • Thirst, hunger, social recognition – Internal stimulus (an individual’s need) • Flashy colors (red) in Fast food outlets, attractive designing & packaging – external stimulus (to gain consumer attention)

Information Search •

Personal Sources – family, friends & acquaintances

b) Commercial SourcesAdvertising, salesperson, attractive packaging, displays

Information Search •

Public Sources – mass media, consumer organizations

•

Experiential Sources Experience after produce use

Evaluation of attribute • Pick up an attribute (eg price, taste, close location) & eliminate the rest • Rank the attribute in order of importance & then evaluate the products on the most imp attributes

Purchase Decision • Impact of attitude of others / intermediaries - customer reports, websites & other consumer interactive sources • Impact of unanticipated (unexpected) situational factors - danger of perceived risk leads to postpone, modify or avoid a purchase decision

Post –purchase Behavior • Expectations are met – satisfied

• Expectations not met – dissatisfied • Meet the ‘said claims’ & increase product’s performance

Buyer Characteristics are influenced by….. a) b) c) d)

Cultural Factors Social Factors Personal Factors Psychological Factors

Buyer Characteristics are influenced by a) Cultural Factors  is a set of values, norms & attitudes that are passed from one generation to another  influence of caste – social classes  promotional activities varies in countries

Example of promotional activities: Developed nations - low calorie foods - health club memberships - exercise equipment - holidays

Factors Influencing Consumer Buying Decisions contd….. a) Social Factors - combination of occupation, income, education, etc Impact of:  Reference Groups (friends, family, social clubs)  Opinion Leaders (role models)

Buyer Characteristics are influenced by c) Personal Factors  Family Life Cycle – age, family size (single, young couple, middle aged, etc)  Occupation & economic circumstances Income, Savings & assets, Borrowing power  Lifestyle – to search relationships between products & lifestyles  Personality – distinct human personality traits (dominance, confidence)

Buyer Characteristics are influenced by d) Psychological Factors -

Motivation Perception Learning Beliefs & Attitude