CONSUMER BEHAVIOR

By Balachandar K.

Why study Consumer Behavior?

The Consumer is King. Only the Customer Can Fire Us All. People are different. Consumer behavior educates and protects consumers. Consumer behavior helps formulate public policy. Consumer behavior affects personal policy.
Reference Book:- Consumer Behavior by Blackwell, Miniard and Engel

 Its helpful in understanding needs. Helps in defining markets and identifying threats and opportunities of a brand. Segmentation becomes easy.

What is consumer behavior?

Consumer Behavior is the study of the process involved when
individuals or groups select, purchase, dispose of products or services to satisfy needs and desires
Its a combination of five disciplines Psychology Sociology Anthropology Economics Marketing Management

Who influence a consumer?

Obtaining
The activity that leading up to and including purchase or receipt of a product.
How they get information? How they decide what to buy? Where you buy? How you pay for it? How you take it to their home?

Meaning of Consumption
People dont buy products for what they do but for what they mean Different types of relationship:Self concept users self image. Nostalgic attachment past self Interdependence part of users daily routine. Love emotional bonds with the user.
Reference book:- Consumer behavior buying, having and being. Author:- Solomon, Fifth edition.

 How they use the product?

How they store they product in their home?

Who use the product? How much they consume?

How they compare with expectations?

Disposing
How they get rid of remaining product?

How much they throw away after use?

How they recycle the product?

Dark side of consumer behavior

Addictive consumption Gambling, Alcohol, Drugs.
Compulsive consumption Shopaholics, not by choice.

Consumed consumption Consumers who are exploited. Eg) Adopting a baby, organ donors, blood donors.
Illegal activities Theft. Anti-consumption People who create aversion towards a product eg) Burned lungs image, V-care shampoo ad.

Mr. Bloomberg Story Xerox Story Videos Resume tip #2

Consumer Behavior Models

Traditional Models: Economic Model Contemporary Models: Consumer Decision Process Model Black Box Model Psychoanalytic Model Learning Model Sociological Model Nicosia Model (1966) Howard Sheth Model Andreason Model (1965) Engel Kollat Blackwell Model (1972) Sheth Newman Gross Model (1991)

Economic Model
Micro economic model: Alfred Marshall

ASSUMPTIONS:- its not possible to satisfy customers, they have unlimited needs and wants - Customer allot budget to maximize the utility - No external influence, preference dont change - Customers know the utility of a product hence they know the level of satisfaction. - Price determines the purchase. - Law of Diminishing Marginal Utility.

Economic Model
Macro Economic Model: Based on Monetary Value of the Goods.
James Duesenberry peoples consumption is primarily governed by peers and social groups. When people move up in the social class the consumption varies. Milton Friedman (1957), people love to have a standard living.

Stimulus Response Model or Buyer Black box model

Andreason Model (1965)

Message reaches consumer through Five basic sense. Filtered by perception and attitude determines the purchase.

Psychoanalytic Model
ID
Its related to the Pleasure Principle. Needs should be satisfied else it will lead to tension and anxiety. Its satisfied by the Primary Process.

Ego
It works with Reality Principle, tries to satisfy the needs in realistic and socially appropriate ways. It satisfies the need through Secondary Process

Super Ego
It hold all our moral acquired from the society and parents. It provides guidelines to make judgments. Ego Ideal rules and standards for good behavior. The Conscience - information viewed as bad by parents and society.

LEARNING MODEL

SOCIOLOGICAL MODEL

NICOSIA MODEL 1966

Engel Kollat Blackwell Model

By 1990s this model got modification and it got named as Engel Kollat Miniard model.
Decision Process Stage
Five stage decision process

Information input
Internal search and external search.

Information processing
Exposure Attention Perception Acceptance Retention

Variables influencing the decision process

External influences

Howard Sheth Model

 Inputs
Significative stimuli Price, Quality and availability. Symbolic stimuli Verbal and Visual traits Social stimuli family, reference group

Processing of Inputs
Stimulus Ambiguity Perceptual Bias Overt Search Learning Constructs Brand comprehension, choice.

Perceptual Constructs
All the information that is received may not merit `attention' and the intake is subject to perceived uncertainty and lack of meaningfulness of information received (stimulus ambiguity). This ambiguity may lead to an overt search for information about the product.

Sheth Newman Gross Model of Consumption Values

Functional Value Social Value Emotional Value Epistemic Value Conditional Value

 Functional Value
Utilitarian function Perceived satisfaction or dissatisfaction (Benefit) - happiness Value Expressive function use of the product (society) Ego defensive function consumers buy to defend their ego Knowledge function consumer get clarity with peers when they are in ambiguous situation.

 Emotional value
Emotions play a role in buying a product.

Social value
Social image induces a person to buy a product.

Epistemic Value
Set of values that satisfies their perceived satisfaction and dissatisfaction. Novelty of the product helps to sell the product

Conditional Value
Situational factors induce the customer to buy the product