Consumer Behaviour

The aim of marketing is to meet and satisfy target customers needs and wants better than

competitors. Marketers are always looking for emerging customer trends that suggest new marketing

opportunities. Successful marketing requires that companies fully connect with their customers.

Adopting a holistic marketing orientation means understanding customers gaining a 360-degree

view of both their daily lives and the changes that occur during their lifetimes so that the right

products are marketed to the right customers in the right way.

WHAT INFLUENCES CONSUMER BEHAVIOR?

A consumers buying behavior is influenced by cultural, social, and personal factors. Cultural factors

exert the broadest and deepest influence.

Cultural Factors

Culture is the fundamental determinant of a persons wants and behaviors.

Each culture consists of smaller subcultures that provide more specific identification and socialization

for their members.

A) Subcultures include nationalities, religions, racial groups, and geographic regions.

B) Multicultural marketing grew out of careful marketing research that revealed that different ethic and demographic niches did not always respond favorable to mass-market advertising.

C) Virtually all human societies exhibit social stratification. Social stratification sometimes takes the form of a caste system where members of different castes are reared for certain roles and

cannot change their caste membership.

D) More frequently, it takes the form of social classes, relatively homogeneous and enduring divisions in a society that are hierarchically ordered and whose members share similar values,

interests, and behavior.

E) One class depiction of social classes in India defined descending levels:

A1, A2, B1, B2, C, D, E1, E2 for urban areas and R1, R2, R3, R4 for rural areas

F) Social classes have several characteristics:

1) Those within a class tend to behave more alike than persons from two different social classes

2) Persons are perceived as occupying inferior or superior positions according to social class.

3) Social class is indicated by a cluster of variables (occupation, income, etc.) rather than by any single variable.

Important Note : This is a summary of few of the aspects discussed in class. It is not exhaustive nor covers the entire syllabus. Please treat this note as supporting study material along with other necessary things.

4) Individuals can move up or down the social-class ladder.

G) Social classes show distinct product and brand preferences in many areas.

H) Social classes differ in media preferences.

I) There are language differences among the social classes.

Social Factors

In addition to cultural factors, a consumers behavior is influenced by such social factors as reference

groups, family, and social roles and statuses.

A) A persons reference groups consists of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior.

1) Groups having a direct influence on a person are called membership groups.

a. Some memberships groups are primary groups such as family, friends, neighbors, and co-workers with whom the person interacts fairly continuously and informally.

b. Some membership groups are secondary groups such as religious, professional groups that tend to be more formal.

2) Reference groups expose an individual to new behaviors and lifestyles, influencing attitudes and self-concept.

3) They create pressures for conformity that may affect actual product and brand choices.

4) People are also influenced by groups to which they do no belong:

a. Aspiration groups are those a person hopes to join.

b. Dissociative groups are those whose values or behavior an individual rejects. The buyer evaluates these elements together with the monetary cost to form a total

customer cost.

C) Manufacturers of products and brands where group influence is strong must determine how

to reach and influence opinion leaders in these reference groups.

D) An opinion leader is the person in informal, product-related communications who offers advice

or information about a specific product or product category.

E) Marketers try to reach opinion leaders by identifying demographic and psychographic characteristics associated with opinion leadership, identifying the media read by opinion

leaders, and directing messages at opinion leaders.

Family

The family is the most important consumer-buying organization in society, and family members

constitute the most influential primary reference group.

A) We can distinguish between two families in the buyers life.

1) The family of orientation consists of parents and siblings.

2) A more direct influence on everyday buying behavior is the family of procreation namely, ones spouse and children.

B) The makeup of the Indian family has changed dramatically.

C) Marketers are interested in the roles and relative influence of family members in the purchase of a large variety of products and services.

D) With expensive products and services, the vast majority of husbands and wives engage in more joint decision-making.

E) Men and women may respond differently to marketing messages.

F) Another shift in buying patterns is an increase in the amount of money spent and the direct and indirect influence wielded by children and teens.

Roles and Statuses

A) A person participates in many groups and a persons position in each group can be defined in terms of role and status.

B) Each role carries a status.

C) Marketers must be aware of the status symbol potential of products and brands.

Personal Factors

A buyers decisions are also influenced by personal characteristics. These include the buyers age and

stage in the life cycle; occupation and economic circumstances; personality and self-concept; and

lifestyle and values.

Age and Stage in the Life Cycle

People buy different goods and services over a lifetime. Adults experience certain passages or

transformations as they go through life.

A) Critical life events or transitions give rise to new needs.

Occupation and Economic Circumstances

Occupation influences consumption patterns and economic circumstances influence product.

Product choice is greatly affected by economic circumstances including:

A) Spendable income (level, stability, and time pattern)

B) Savings and assets

C) Debts

D) Borrowing power

E) Attitudes toward spending and saving

Personality and Self-Concept

Each person has personality characteristics that influence his or her buying behavior.

Personality: A set of distinguishing human psychological traits that lead to relatively consistent and

enduring responses to environmental stimuli.

A) The idea is that brands have personalities and consumers are likely to choose brands whose personalities match their own.

B) We define brand personality as the specific mix of human traits that may be attributed to a particular brand. Jennifer Aaker identified the following five traits:

1) Sincerity (down-to-earth)

2) Excitement (daring)

3) Competence (reliable)

4) Sophistication (upper-class)

5) Ruggedness (outdoorsy)

C) Consumers also choose and use brand that have a brand personality consistent with their own actual self-concept (how one views themselves).

D) Although in some cases, the match may be based on the consumers ideal self-concept (how we would like to view ourselves).

E) Others self-concept (how we think others see us).

Lifestyles and Value

A) People from the same subculture, social class, and occupation may lead quite different

lifestyles. A lifestyle is a persons pattern of living in the world as expressed in activities,

interests, and opinions. Lifestyle portrays the whole person interacting with his or her

environment.

B) Marketers search for relationships between their products and lifestyle groups.

C) Lifestyle is a persons pattern of living in the world as expressed in activities, interests, and opinions.

D) LOHAS is an acronym standing for: Lifestyles of health and sustainability

E) Lifestyles are shaped partly by whether consumers are money-constrained or time-constrained.

F) Consumers who experience time famine are pront to multitasking, doing two or more things at the same time.

THE BUYING DECISION PROCESS: THE FIVE-STAGE MODEL

These basic psychological processes play an important role in understanding how consumers actually

make their buying decisions. Marketers must understand every facet of consumer behavior.

Marketing scholars have developed a stage model of the buying-decision process.

The consumer passes through five stages:

A) Problem recognition

B) Information search

C) Evaluation of alternatives

D) Purchase decision

F) Postpurchase behavior

Problem Recognition

A) The buying process starts when the buyer recognizes a problem or need.

B) The need can be triggered by internal or external stimuli.

C) Marketers need to identify the circumstances that trigger a particular need so that they can develop marketing strategies that trigger consumer interest.

Information Search

A) An aroused consumer will be inclined to search for more information. We can distinguish between two types of arousal.

B) The milder state is called heightened attention where a person simply becomes more receptive to information about a product.

C) The second level is active information search where a person looks for reading material, going online, etc. to learn about the product.

Information Sources

1) Personal (family, friends)

2) Commercial (advertising, Web sites, salespeople)

3) Public (mass media, consumer organizations)

4) Experiential (handling, examining, using the product)

D) Generally speaking the consumer receives the most information about a product from commercial sources.

E) The most effective information often comes from personal sources or public sources that are independent authorities.

Search Dynamics

A) Total set

B) Awareness set

C) Consideration set

H) Market partitioning

Evaluation of Alternatives

No single process is used by all consumers or by one consumer in all buying situations. The most

current models see the process as cognitively orientated.

A) First, the consumer is trying to satisfy a need.

B) Second, the consumer is looking for certain benefits from the product solution.

C) Third, the consumer sees each product as a bundle of attributes with varying abilities for delivering the benefits sought to satisfy this need.

Beliefs and Attitudes

Evaluations often reflect beliefs and attitudes. Through experience and learning, people acquire

beliefs and attitudes. These in turn influence buying behavior.

A) Belief a descriptive thought that a person holds about something.

B) Attitudea persons enduring favorable or unfavorable evaluation, emotional feeling, and action tendencies toward some object or idea.

C) Attitudes put people into a frame of mind.

D) Attitudes lead people to behave in a fairly consistent way toward similar objects.

E) Attitudes can be very difficult to change.

Expectancy-Value Model

The expectancy-value model of attitude formation posits that consumers evaluate products and

services by combining their brand beliefsthe positives and negatives according to importance.

Most consumers consider several attributes in their purchase decisions.

Purchase Decisions

In the evaluation stage, the consumer forms preferences among the brands in the choice set. The

consumer may also form an intention to buy the most preferred brand. In executing a purchase

intention, the consumer may make up to five sub-decisions:

A) Brand

B) Dealer

C) Quantity

D) Timing

E) Payment-method

Purchase Decision

In executing a purchase intention, the consumer may make up to five subdecisions:

A) Brand (brand A)

B) Dealer (dealer 2)

C) Quantity (one)

D) Timing (weekend)

F) Payment method (credit card)

Intervening Factors

Even if consumers form brand evaluations, two general factors can intervene between the purchase

intention and the purchase decision.

A) The first factor is the attitudes of others. The extent to which another persons attitude reduces the preference for an alternative depends on two things:

1) The intensity of the other persons negative attitude toward the consumers preferred alternative.

2) The consumers motivation to comply with the other persons wishes

B) The second factor is unanticipated situational factors that may erupt to change the purchase intention.

C) A consumers decision to modify, postpone, or avoid a purchase decision is heavily influenced by perceived risk. There are many types of risks that consumers may perceive in buying and

consuming a product:

1) Functional risk

2) Physical risk

3) Financial risk

4) Social risk

5) Psychological risk

6) Time risk

D) Marketers must understand the factors that provoke a feeling of risk in consumers and provide information and support to reduce perceived risk.

Post-Purchase Behavior

After the purchase, the consumer might experience dissonance about their purchase and be alert to

information that supports their decision. Marketing communications should supply beliefs and

evaluations that reinforce the consumers choice and help him or her feel good about the brand.

A) Marketers must monitor post-purchase satisfaction, post-purchase actions, and post-purchase uses.

Post-Purchase Satisfaction

Satisfaction is a function of the closeness between expectations and the products perceived

performance.

A) If the performance fall short of expectations the consumer is disappointed.

B) If the performance meets expectations the consumer is satisfied.

C) If the performance exceeds expectations the consumer is delighted.

D) Consumer form their expectations on the basis of messages received from sellers, friends, and other information sources.

E) The importance of post-purchase satisfaction suggests that a product claim must truthfully represent the products likely performance.

Post-Purchase Actions

Satisfaction or dissatisfaction with the product will influence subsequent behavior. A dissatisfied

consumer may abandon or return the product.

Post-Purchase Use and Disposal

Marketers should also monitor how buyers use and dispose of the product. A key driver of sales

frequency is product consumption rate.

A) One potential opportunity to increase frequency of product use is when consumers perceptions of their usage differ from reality.

B) Marketers must also need to know how the consumer disposes of the product once it is used.