Consumer Behavior

Objectives
Understand Understand

decision making process basic model of CB

Changing Consumers
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Indian consumers: Recent Changes

Emerging middle class Mad for Lifestyle and entertainment Changing values in middle class Freedom of choice Changing role of women Changes in consumer aspiration and expectation Increasing disposable income

Contd..
Proliferation of media and information technology Cross-cultural integration Increasing degree of consumer awareness Emergence of positive mindset towards organized retail environment Transition from rural to urban sector Emergence of rural consumer

Indias Consumer Confidence

Consumer confidence in India is amongst the highest across the globe 77% of Indian consumers expecting their economy to improve Indian Consumers Most Likely to Invest Disposable Income in Apparel, Home Decoration, Holidays and Equities for 50% of Indians, saving money is also a priority
Source: ACNielsen ORG-MARG India

How to react?

To be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition.

Competitive Advantages Through Customer Satisfaction

Customer Satisfaction

Repeat Buying

Higher Prices

Loyalty in Crisis

Word of Mouth

One-Stop shopping

New Product Innovation

Profits

Corporate Performance

Growth

Consumer Buying Behavior

Consumer Buying Behavior refers to the buying behavior of final consumers individuals & households who buy goods and services for personal consumption. The central question for marketers is: How do consumers respond to various marketing efforts the company might use?

Customer Decisions

Decisions customers make in the marketplace as buyers, payers, and users, include:
Whether to purchase? What to purchase? When to purchase? From whom to purchase? How to pay for it?

Types of buying decision behaviour

Routine Response Behaviour Limited problem solving Extensive problem solving Low cost products----------------------more expensive products Frequent purchase----------------------infrequent purchase Low consumer involvement--------high consumer involvement

Familiar product class/brand----unfamiliar product class/brand

Little thought, search & time given to purchase-----extensive thought search & time given to purchase.

Buyers are fully aware of the product class but are not familiar with all the brands & their features

Five - Stage Model of the Buying Process

Problem Recognition
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Information search Personal Friends Family Commercial Public Media, Fairs etc

Evaluation of alternative

Purchase decision

Post purchase behavior

Post purchase Purchase intention satisfaction Post purchase action Handling dissatisfaction Post Purchase Unanticipated use and Disposal situational variables

Experimental
Examining)

Attitudes of others

(Handling,Using,

Buying Decision
Initiator

User

Influencer

Buying Decision

Buyer

Decider

Components of Consumer Behavior

The Affective System:

Five basic characteristics of the affective system
The

system is reactive Lack of direct control over affective responses ..\cbad\LEHAR.DAT

Affective

responses are felt physically in the

body..\cb-ad\Tv Ad - Axe Dark Temptation Chocolate Man_vcd0.mpg The system can respond to virtually any type of stimulus ..\cb-ad\axe.jpg Most affective responses are learned

Cognition as Psychological Responses:

What is cognition?
Understanding Evaluating Planning Deciding Thinking

Major function of peoples cognitive system is to interpret, make sense of, and understand significant aspects of their personal experiences Second function of cognitive system is to process interpretations or meanings in carrying out cognitive tasks
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Relationship between AFFECT and COGNITION

ENVIRONMENT

AFFECTIVE SYSTEM Affective Responses: Emotions

COGNITIVE SYSTEM Cognitive Responses: Knowledge Meanings Beliefs

Feelings
Moods Evaluations

Model of Buyer Behaviour

Outside Stimuli
Marketing Product Price Place Promotion Environmental Economics Technological Political Cultural Cultural Social Personal Psychological Buyer Black Box
Buyers Characteristics
Buyers Decision Process

Buyers Purchase Decisions

Product choice Brand choice Dealer choice

Problem

Recognition
Information Search Evaluation of Alternatives Purchase Decision Post purchase Behaviour

Purchase
timing Purchase

amount

Factors Influencing Consumer Behavior

Cultural Social Personal
Culture
Subculture Social class Reference groups Family Roles and status

Age and life-cycle Occupation Economic situation Lifestyle Personality and self-concept

Psychological
Motivation Perception Learning Beliefs and attitudes

Buyer

Factors Affecting Consumer Behavior:

Culture
Culture

Most basic cause of a person's wants and behavior. Values, Perceptions, Wants & Behavior
Societys relatively permanent & ordered divisions whose members share similar values, interests, and behaviors. Measured by: Occupation, Income, Education, Wealth and Other Variables.

..\cb-ad\itchguard_22012003.jpg ..\cb-ad\Permanent Markers Advertising Indian Culture Rudali Best Wor.avi Social Class

Subculture
Groups of people with shared value systems based on common life experiences.
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Factors Affecting Consumer Behavior:

Social
Groups Membership Reference
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Family Husband, wife, kids Influencer, buyer, user

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Social Factors

Roles and Status

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Factors Affecting Consumer Behavior:

Personal
Personal Influences
Age and Life Cycle Stage Economic Situation Occupation

Personality & Self-Concept

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Lifestyle Identification
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Activities

Opinions

Interests

Factors Affecting Consumer Behavior: Psychological

Motivation

Beliefs and Attitudes

Psychological Factors

Perception

Learning

The Dynamic Nature of Motivation

Needs are never fully satisfied New needs emerge as old needs are satisfied People who achieve their goals set new and higher goals for themselves

Maslows Need Hierarchy (1954)

Physiological needs (hunger, thirst) Safety and security needs (security, protection)..\cb-ad\TataIndica_152261_E_Pr.mpg Belongingness and love needs (social needs)..\cb-ad\ChevroletOptra_116002_E.mpg Esteem and ego needs (self-esteem, recognition, status) ..\cb-ad\MahindraScorpio_194227_E.mpg Need for self-actualization (self-development, realization)..\cb-ad\Fiesta_180627_HE.mpg

Atma (Sprit)

Intellect
Mind Senses Body

Perception
The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world.

Some Marketing Variables Influencing Consumer Perception

Nature of Product Country of origin effect Physical Attributes of Product Package Design Brand Name Corporate Name Price Advertisements & Commercials ..\cb-ad\Funny award winning Indian ad for Heinz Housewife_vcd0.mpg Position of Ad Editorial Environment

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Elements of Learning:

Motivation Cues Response Reinforcement

A

positive or negative outcome that influences the likelihood that a specific behavior will be repeated in the future in response to a particular cue or stimulus.

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A learned predisposition to behave in a consistently favorable or unfavorable manner with respect to a given object.
The attitude object Attitudes are a learned predisposition Attitudes have consistency Attitudes occur within a situation Beliefs: Strongly held convictions. Value: Concepts about desirable end states or behaviors that transcend specific situations, guide the selection or evaluation of behavior and events, and are ordered by relative importance
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Attitudes:

Strategies of Attitude Change

Changing the Basic Motivational Function ..\cb-ad\chickletsattitude.DAT

Associating the Product With a Special Group, Event, or Cause ..\cb-ad\ponds_29112006.jpg Resolving Two Conflicting Attitudes Changing the Relative Evaluation of Attributes ..\cbad\ponds_age_miracle_05012007.jpg

Changing Brand Beliefs ..\cb-ad\tea_board_of_india_01112006.jpg Adding an Attribute Changing the Overall Brand Rating Changing Beliefs About Competitors Brands

Customer Personality
Personality refers to a persons consistent ways of responding to the environment in which he or she lives Customer personality is a function of two factors:

Genetic makeup Environmental conditioning

Personality = Genetics x Environment

Mrs. Urban India:

Source: Study of Lowe Faces: studied over 10,000 married women who responded to Pathfinders P:SNAP (Study of Nations Attitudes and Psychographics) :2005

Mrs Hasmukh Popular: 27% :popular, role model , Independent-minded , not self-sacrificing , perfect all
TataTea Gold,Lifebuoy, Saffola, Whirlpool

Mrs Pataka Cool: 12%:cool metro woman, still young, goes out the most, consulted by her husband,optimistic
Femina, Livon, Moods Cadburys Bournvita, Catch Masala, Clinic Plus

Mrs Gharelu Homepride: 18%:sacrificing maa, would save rather than splurge, husband relies heavily on her wisdom

Mrs Hey Bhagwan! Moaner: 12%: cooks, cleans, saves, hoards and dresses plainly, husband takes major decisions, having gold jewellery, belongs to the lower middle class
Moov, Mortein Coils

Mrs Meri Awaaz Suno Attention Seeker: 31%: family is not modern ,

doesnt like the idea of staying in a joint family , dresses up even when she goes to the market Everest Pav Bhaji Masala, Active Wheel, Nilkamal Furniture

Self-Concept/Image

Actual Self-Image

The image that an individual has of himself or herself as a certain kind of person, with certain characteristic traits, habits, possessions, relationships, and behavior How individuals would like to perceive themselves (as opposed to Actual Self-Image--the way they do perceive themselves)

Ideal Self-Image Social Self-Image

How consumers feel others see them.

Ideal Social Self-Image

How consumers would like others to see them

Expected Self-Image
How consumers expect to see themselves at some specified future time

Thank You