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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.

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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…..

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What we need to understand?

1. Why consumers make the purchases that they make?

2. What factors influence consumer purchases?

3. The changing factors in our society….

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Consumer Behaviour?

Consumer

4PsMarketing

EnvironmentBuyer

CharacteristicsBuyer

Decision ProcessBuyer

Decision

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Marketing Stimuli

4 Ps

Product Price Place Promotion

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Other Stimuli

MarketingEnvironment

Economic Technological Political Cultural

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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 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 and Attitudes….

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Psychological Influences on the Buying Decision Process (cont’d)

Maslow’s Hierarchy of Needs– The five levels of needs that humans are motivated

to seek and satisfy, from least to most important arePhysiological needs—food, water, clothing,

shelterSafety needs—security, freedomSocial needs—love, affection, belongingEsteem needs—respect, recognition, self-worthSelf-actualization needs—personal growth

needs….

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Maslow’s Hierarchy of Needs

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

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Buying Roles

Initiator Influencer Decider Buyer User….

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Buyer Behavior & Buying Role

• 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

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).

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

Postpurchase Behavior

Postpurchase Behavior

PurchasePurchase

Evaluation of Alternatives

Evaluation of Alternatives

Information SearchInformation Search

Need RecognitionNeed Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

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1. Need Recognition

Preferred State

Marketing helps consumers recognize

(or create) an imbalance between present status

and preferred state

• When a current product isn’t

performing properly

• When the consumer is running out of an product

• 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 set: a group of brands from which the buyer can choose

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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 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….

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Can minimize through:•Effective Communication

•Follow-up•GuaranteesWarranties

•Under promise & •Over deliver

Cognitive DissonanceCognitive Dissonance

??Did I make a good decision?Did I make a good decision?

Did I buy the right product?Did I buy the right product?

Did I get a good value?Did I get a good value?

5. Post Purchase Behaviour

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Post - Purchase Behaviour

Satisfaction Actions Use and Disposal….

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1. How do you know when to shop? What are the triggers that initiate an awareness & search?

2. 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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