Consumer Behaviour Models

CONSUMER BEHAVIOUR

CONCEPT OF CONSUMER BEHAVIOR “The study of consumer behavior is the study of how individuals make decisions to spend of what they buy, why they buy it, when they buy it, where they buy it, where they buy it, how often they buy it, and how often they use it. “the decision process and physical activity individuals engage in when evaluating, acquiring, using, or disposing of goods & services”.

SEVERAL ASPECTS     

Customers and Consumers The Ultimate Consumer Individual buyer The decision process A Subset of Human Behavior

Buying Motives DEFINITION: According to W.J Stanton, “A motive can be defined as a drive or an urge for which an individual seeks satisfaction. It becomes a buying motive when the individual seeks satisfaction through the purchase of something”.

Behavior is a goal directed activity Motive/Need (preparing) (Hungry) Goods (Food) Achievement

Goal

Behavior

Goal (Eating)

CONSUMER GOODS 1.

2. 3. 4.

Used by end user for their own consumption Generally inexpensive Are less complex Are purchase frequently

INDUSTRIAL GOODS 1.

2. 3. 4.

Used for further production of other goods (raw material) Are expensive Are more complex Are one time purchase goods

IMPORTANCE OF CONSUMER BEHAVIOR

The study of consumer behaviour is vital in framing production policies, price policies, decisions regarding channels of distribution and above all decisions regarding sales promotion. 1. Production Policies 2. Price Policies 3. Decision regarding Channels of Distribution 4. Decision regarding Sales Promotion

MODEL OF BUYER BEHAVIOUR MAJOR FACTORS INFLUENCING BUYING BEHAVIOUR MARKETING OTHER STIMULI STIMULI PRODUCT PRICE PLACE PROMOTION

ECONOMIC TECHNOLOGICAL POLITICAL CULTURAL

BUYER’S BUYER’S DECISION CHARACTERISTICSPROCESS CULTURAL SOCIAL PERSONAL PSYCHOLOGICAL

BUYER’S DECISIONS PRODUCT CHOICE BRAND CHOICE DEALER CHOICE PURCHASE TIMING

PROBLEM RECOGNITION INFORMATION SEARCH EVALUATION OF ALTERNATIVES PURCHASE DECISION POST PURCHASE BEHAVIOUR

WHY WE STUDY COUNSUMER BEHAVIOR/ IMPORTANCE OF CONSUMER BEHAVIOR

IMPORTANCE FOR CONSUMER

IMPROTANCE FOR MARKETING

IMPORTANCE OF CONSUMER BEHAVIOR

APPLICATION TO DECISION MAKING

IMPORTANCE FOR STUDENTS

APPLICATION OF CONSUMER BEHAVIOR

APLICATION OF CB

CB AND MKTING MGMT

CB & NONPROFIT &SOCIAL MKTING

CB & GOVT’AL DECISION MAKING

CB & CONSUMER EDUCATIONS

CB & DE-MKTING

CB AND MARKETING MANAGEMENT The process of planning and executing 1. The conception 2. Pricing 3. Promotion 4. Distribution of ideas 5. Goods & services to exchanges 6. Satisfy individual and organizational objectives.

Three interrelated orientations are:

Consumer wants & needs

Company objectives

Integrated strategy

Several major activities can be undertaken by an organization Market opportunity Analysis

needs wants

Target market selection

Marketing mix determinants

Unique market

PRODUCT

Ex: soft drinks

PLACE

income lifestyle

PRICE

Food store segments Vending machine segments The fountain market

PROMOTION

CONSUMER BEHAVIOR & NONPROFIT & SOCIAL MARKETING

A number of writers have suggested that various social and non profit organisations can be viewed as having services or ideas that they are attempting to market to target group of “consumer” or “constituents.

MARKET SEGMENTATION

CONCEPT & DEFINITION The concept of market segmentation is based on the fact that the market of commodities are not homogenous but they are heterogeneous. Market represent a group of customers having common charecteristicesbut two customers are never common in their nature, habits,hobbies, income and purchase techniques.

Definition of segmentation According to Philip Kotler, “whenever a market for a product or service consists of two or more buyers, the market is capable of being segmented, that is divided into meaningful buyer groups. The purpose of segmentation is to determine differences among buyers which may be consequential in choosing away then or marketing to them”.

LEVELS OF MARKET SEGMENTS    

SEGMENT MARKETING NICHE MARKETING LOCAL MARKETING INDIVIDUAL MARKETING

IMPORTANCE OF MARKET SEGMENTATION       

ADJUSTMENT OF PRODUCT AND MARKET APPEALS BETTER POSITION TP SPOT MARKETING OPPORTUNITIES ALLOCATION OF MARKETING BUDGET MAKING THE COMPETITION EFFECTIVELY EVALUATION OF MARKETING PROGRAMME EVALUATION OF MARKETING ACTIVITIES INCREASE IN SALES VOLUME

CONSUMER BEHAVIOUR MODELS

INPUT PROCESS OUTPUT INITIATION: INFLUENCER DECIDER

Decision framework for studying consumer behaviour 

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External environmental variables influencing behavior, Individual determinants of behaviour, The consumer decision process

BUYING ROLES/ PARTICIPANTS IN THE BUYING PROCESS 

INITATORS: The person who first suggest & think of the idea of buying the particular product.

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INFLUENCER: The person who explicitly or implicitly has some influence on the final buying decision of others.

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DECIDER: the decider is a person who ultimately determines any part or whole of the buying decision, i.e., whether to buy, what to buy, how to buy, when to buy, or where to buy.

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BUYER: the buyer is the person who actually purchase. Buyer may be decider or may be other person.

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USER: the person who actually uses or consumes the services or products.

EXTERNAL ENVIRONMENTAL VARIABLE INFLUENCING BEHAVIOUR

INDIVIDUAL DETERMINANTS Information processing Learning and memory Personality and self concepts Attitudes Motivation and involvement

INDIVIDUAL DETERMINANTS OF BEHAVIOUR

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CULTURAL INFUENCES SUBCULTURAL INFLUENCES SOCIAL CLASS INFLUENCES SOCIAL GROUP INFLUENCES FAMILY INFLUENCES PERSONAL INFLUENCES OTHER INFLUENCES

DECISION PROCESS PROBLEM RECOGNITION INFORMATION SEARCH AND EVALUATION PURCHASING POST PURCHASING BEHAVIOUR

Consumer beliefs and attitudes    

Innovators Consumer confidence Buying styles techno graphics

CONSUMER INNOVATOR’S

INNOVATORS SEGMENTATION OF EARLY ADOPTERS OF NEW PRODUCTS AND SERVICES

KEY CONSUMER BELIEFS 

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If a product is made by a company I trust I will buy it even if it is slightly more expensive. I buy based on quality not on price. I am willing to pay more for the product that is environmentally safe. I always check the ingredients and nutritional contents of food products before I buy them.

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I buy the brand I grew up with the one my mother used. I would pay extra for a product that is consistent with the image I want to convey I am influenced by what’s hot and what’s not. I prefer to buy the things by friends and my neighbors would approve of.

Consumer Innovator Segments     

Electronics Leisure Innovators Financial Food Home Appliance

INNOVATION ADOPTION MODEL  

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DEVICED BY “Rogers” Awareness and interest of the audience are created by advertisers, so that the former may evaluate the message of advertisement. The potential purchaser, if satisfied with the attributes advertised, purchases a product on a trial basis. Product Comparision is made to evaluate each and adopt a particular product.

INNOVATION ADOPTION MODEL AWARENESS

INTEREST

EVALUATION

ADOPTION

TRIAL

DEFFUSION OF INNOVATION

DIFFUSION OF INNOVATION 

DEFINITION “The framework for exploring consumer acceptance of new products is drawn from the area of research known as the diffusion of innovation”

PROCESSES OF INNOVATIONS 

DIFFUSION PROCESSES

MACRO PROCESS

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ADOPTION PROCESS

MICRO PROCESS

DIFFUSION PROCESS   

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This is concerned with how innovation spread Assimilation of product with the market It is process of acceptance of an innovation such as a new product, new services, new ideas, or new practices. Mode of communication may be mass media, sales people, informal conversation.

Basic elements of diffusion process

The innovation

The

socal system

The channels of communication

time

INNOVATION  

NO UNIFORM DEFINITON EXIST THERE ARE OTHER FACTORS DEFINE THIS CONCEPT 1. 2. 3. 4. 5.

FIRM ORIENTED DEFINITION PRODUCT ORIENTED DEFINITION MARKET ORIENTED DEFINITION CONSUMER ORIENTED DEFINITION FACTORS INFLUENSING THE RATE OF DIFFUSION

FIRM ORIENTED DEFINITIONS A firm – oriented approach treats the newness of a product from the perspective of the company producing or marketing it. When the product is new to the company, it is considered new. This definition ignores whether or not the product is actually new to the market place.

PRODUCT ORIENTED DEFINITION In contrast to firm oriented definitions, a product- oriented approach focuses on the features inherent in the product itself and on the effects these features are likely to have on consumers established usage patterns.

TYPES OF PRODUCT INNOVATION  

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CONTINUOUS INNOVATION DYNAMICALLY CONTINOUS INNOVATION DISCONTINUOUS INNOVATIONS

MARKET ORIENTED DEFINITIONS It judges the newness of a product in terms of exposures Two definitions  A product is considered new if it has been purchased by a relatively small (fixed) percentage of potential market.  A product is considered new if it has been on the market for a relatively short (specified) period of time.

CONSUMER ORIENTED DEFINITION

In this context, a new product is any product that a potential consumer judges to be new. Newness is based on the consumers perception of the product, rather than on physical features or market realities.

FACTORS INFLUENCING THE RATE OF DIFFUSION Diffusion researchers have identified six products characteristics that seem to influence consumer acceptance of new products:     

Relative advantages Compatibility Trial ability (or divisibility) Observability (or Communicability) Cost

CHANNEL OF COMMUNICATION 

WAYS OF COMMUNICATION 1. 2. 3.

4.

5.

BETWEEN THE MARKET & CONSUMERS AMONG CONSUMERS IMPERSONAL SOURCES SUCH AS ADVERTISING AND EDITORIAL MATTERS INTERPERSONAL SOURCES SUCH AS SALES PEOPLE AND INFORMAL OPINION LEADERS INTERACTIVE MARKETING MESSAGES (NEW CONCEPT)

SOCIAL SYSTEM A social system is a physical, social, or cultural environment to which people belong and with in which they function. Characteristics of modern social system: 1. 2. 3. 4. 5. 6.

A positive attitude towards change An advanced technology and skilled labour force A general respect for education and science. An emphasis on rational and ordered social relationships, rather than an emotional ones. An out reach prospects A system in which members can readily see themselves in quite different roles.

TIME Time is the backbone of the diffusion process. three ways 1. 2. 3.

Purchase time Adopter categories Rate of Adoption

PURCHASE TIME

Purchase time refers to the amount of time that elapse between consumers initial awareness of a new product or service and the point at which they purchase or reject it.

ADOPTER CATEGORIES

It involves a classification scheme that indicates where a consumer stands in relation to other consumers in terms of time

RATE OF ADOPTION

The rate of adoption is concerned with how long it takes a new product or services to be adopted by members of a social system. The general veiw is that the rate of adoption for new products is getting faster or shorter, Ex. fashion

ADOPTON PROCESS Trial

Legitimating

Attitude

Comprehension

Awareness

Adoption

OPINION LEADERSHIP

OPINION LEADERSHIP DEFINITION: “Opinion leaders are those people who are able, in a given situation, to expert personal influence”.

CHARECTERISTICES OF OPINION LEADERS   

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Social class position Greater exposure to mass media Greater interest and knowledge of the areas of influence More gregarious More innovative More familiar and loyal to group standards and values Appear to exhibit the personality trait of public individuation.

MEASUREMENT OF OPINION LEADERSHIP Consumer researches are interested in identifying and measuring the impacts of the opinion leadership process on consumption behavior.

BASIC MEASUREMENT TECHNIQUES  

Self-Designating Methods Sociometric Methods 1.

2.

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The specific individuals to whom they provided advice or information about the product or brand under study The specific individuals who provided them with advice or information about the product or brand under study.

Key informant Methods Objective Methods

USES OF OPINION LEADERS Consumers, generally, do not speak about products or services unless they expect to derive some kind of satisfaction from the activity. 1. 2.

Product- Involvement Self- Involvement        

1. 2.

Gaining attention Showing connoisseurship Feeding like a pioneer Having Inside Information Suggesting Status Spreading the Gospel Seeking Confirmation Asserting Superiority

Other- involvement Message - Involvement

CONSUMER DECISION MAKING MODEL

MEANING A process by which a person is required to make a choice from various alternative options is referred to as decision- making. Providing consumers with other alternative is a good business strategy and can also result in substantial increase in sales. While for the consumer, he or she will be pleased when able to choose and decide on the best from the alternatives available.

LEVELS OF CONSUMER DECISION MAKING SPECIFIC LEVELS OF CONSUMER DECISION MAKING 1. 2. 3. 4.

EXTENSIVE PROBLEM SOLVING LIMITED PROBLEM SOLVING ROUTINIZED RESPONSE BEHAVIOR VARIETY SEEKING

Extensive problem solving The consumer needs a great deal of information to establish a set of criteria on which to judge specific brands and a correspondingly large amount of information concerning each of the brands to be considered.

The marketer has to ensure two tasks 1.

2.

The marketer must continue to provide satisfaction to the existing customers by maintaining quality, service and value. He must try to attract new customers by making use of sales promotion techniques like point of purchase displays, off-price offers, etc., and also introduce new features to the products.

LIMITED PROBLEM SOLVING Consumers already have established the basic criteria for evaluating the product category and the various brands in the category. Their search for additional information is more like “fine – tuning”, they must gather additional brand information to discriminate among the various brands.

ROUTINIZED RESPONSE BEHAVIOUR Consumers have some experience with the product category and a wellestablished set of criteria with which to evaluate the brands they are considering. They may search for the small amount of additional information; they simply review what they already know.

VARIETY SEEKING Some buying situation are characterized by low involvement but significant brand differences, here consumers often do a brand switching.

CHARACTERISTICS OF CONSUMER PROBLEMSOLVING APPROACHES Routine problem solving

Limited problem solving

Extensive problem solving

Purchase involvement level

Low

Medium

High

Problem recognition

Automatic

Semiautomati Complex c

Information search and evaluation

minimal

Limited

Purchasing orientation

Convenience mixed

Post purchase processes

Very limited habit Brand Loyality

extensive

Shopping

Limited Inertia Complex to repurchase loyality if brand satisfied Switching if Complaints if dissatisfaction Dissatisfied

TYPES OF BUYING BEHAVIOR HIGH INVOLVEMENT LOW INVOLVEMENT

Significant differences between Brands

Complex Buying Behavior Variety seeking Buying Behavior

Few Differences between Brands

Dissonance reducing Buying Behavior

Habitual Buying Behavior

TYPES OF CONSUMER DECISIONS     

WHAT TO BUY HOW MUCH TO BUY WHERE TO BUY WHEN TO BUY HOW TO BUY

MODULE OF CONSUMER DECISION MAKING

MODEL OF CONSUMER BEHAVIOUR 

C.B. MODEL BY NICOSIA

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SCHIFFMAN & KANUK MODEL

Field -1 Sub Field One firm Attributes

Sub field one Consumer Attributes

Attributes

Search Evaluate

Field -4

Field -2

Experience Motivation

Consumption or Storage Decision (Action) Feedback Purchase Behaviour

C.B MODEL BY NICOSIA

Field -3

L.G SCHIFFMAN & L.L.KANUK’S MODEL OF CONSUMER DECISION MAKING

INPUT

Firm’s Marketing effort Product Price Place Promotion

Socio cultural environment Family Informal sources Non commercial sources Social class Subculture and culture

CONSUMER DECISION MAKING

Need

PROCESS

Recognition Prepurchase search Evaluation of alternatives

Psychological Field •Motivation •Perception •Learning •Personality •Attitudes

Experience

output

Purchases •Trial •Repeat purchase

Post Purchase evaluation

MARKET MOVERS