CONSUMER BEHAVIOUR

What influences consumer behaviour? Key psychological processes The buying decision process: 5-stage model Other theories of consumer decision making

THE AIM OF MARKETING IS TO MEET & SATISFY TARGET CONSUMERS NEEDS & WANTS BETTER THAN COMPETITORS. CONSUMER BEHAVIOUR IS THE STUDY OF HOW INDIVIDUALS, GROUPS, & ORGANISATIONS SELECT, BUY, USE & DISPOSE GOODS, SERVICES, IDEAS, OR EXPERIENCES TO SATISFY THEIR NEEDS & WANTS. .

STUDYING CONSUMERS PROVIDES CLUES FOR IMPROVING OR INTRODUCING PRODUCTS OR SERVICES, SETTING PRICES, DEVISING CHANNELS, CRAFTING MESSAGES, & DEVELOPING OTHER MARKETING ACTIVITIES.

MARKETERS ARE ALWAYS LOOKING FOR EMERGING TRENDS THAT SUGGEST NEW MARKETING OPPORTUNITIES

WHAT INFLUENCES CONSUMER BEHAVIOUR ?

Cultural factors Social factors Personal factors

Model of buyer behaviour

Marketing stimuli other stimuli Buyer characteristics Cultural Social Personal Psychological Buyers decision process Problem recogitionInformation search Evaluation of alternatives Purchase decision Post-purchase behaviour Buyers decisions

Product Price Place Promotion

Economic Technological Political Cultural

& W.O.M.

Product choice Brand choice Dealer choice Purchase timing Purchase amount

Input

Information processing

Decision process Need recognition

Variables influencing decision process

Exposure Stimuli: Marketing dominated Others Attention

internal search

Search

Environmentael influences Beliefs

Comprehension

Memory

Alternative Attitude evaluation

Acceptance Retention External External Search Outcomes Purchase

Intention Individual differences

Disstisfaction

Satisfaction

Factors affecting consumer behaviour

Cultural: Culture, sub-culture, social class Social: Reference group, family, roles & status Personal: Age & lifecycle, occupation, economic situation, lifestyle, personality, self-concept Psychological: Motivation, perception, learning, beliefs & attitudes

Cultural factors
Culture

Subculture

Social stratification

Social factors
Reference groups: reference groups - membership groups: *primary groups *secondary groups Family: - family of orientation - family of procreation Roles & statuses:

Personal factors
Age & stage in life cycle: - family life cycle - psychological life-cycle - critical life events & transitions Occupation & economic circumstances

Personality & self concept: Stanfords Jennifer Aaker conducted research into brand personalities & identified following 5 traits: 1. Sincerity (down-to-earth, honest, wholesome, & cheerful) 2. Excitement (daring, spirited, imaginative, & up-todate) 3. Competence (reliable, intelligent, & successful) 4. Sophistication (upper-class & charming) 5. Ruggedness (outdoorsey & tough)
Lifestyle & values: - shaped partly by whether consumers are constrained or time-constrained - multitasking those who are time-constrained

money-

KEY PSYCHOLOGICAL PROCESSES

Motivation: Freuds theory Maslows theory Herzbergs theory Perception is the process by which an individual selects, organises, & interprets information inputs to create a meaningful picture of the world Selective attention 1. People are more likely to notice stimuli that relate to a current need 2. People are more likely to notice stimuli that they anticipate 3. People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli

Selective distortion

Selective retention subliminal perception

Learning: involves changes in an individuals behaviour arising from experience. Thru interplay of drives, stimuli, cues, responses, & reinforcements: - drive is a strong internal stimulus impelling action - cues are minor stimuli that determine when, where, & how a person responds - generalisation & discrimination

 Memory short-term memory long-term memory associative network memory brand association memory processes: encoding. Memory encoding refers to how & where information gets into memory. Memory encoding can be characterised according to amount or quantity of processing that information receives at encoding:

memory processes: retrieval. According to associative network model, strength of a brand association increases both the likelihood that the information will be accessible & the ease with which it can be recalled by spreading activation Apart from strength 3 othe r important factors: 1. Interfernce with presence of other product information 2. Longer the time delay, weaker the association 3. available but not accessible

THE BUYING DECISION

Problem recognition: internal & external stimulation can trigger need can develop marketing strategies that trigger consumer interest, particularly important for luxury goods, vacation packages, & entertainment options Information search; 2 levels of arousal: 1. Heightened attention 2. Active information search 4 groups of information searches: 1. Personal 2. Commercial 3. Public 4. Experiential Total set (8) awareness set (6) consideration set (4) choice set (3) decision (?)

 Evaluation of alternatives: multiple processes: 1. Consumer trying to satisfy a need 2. Looking for certain benefits from from the product solution 3. Sees each bundle of attributes with varying abilities for delivering benefits sought to satisfy this need Beliefs & attitudes Expectancy-value model

 Purchase decisions; consumer may make upto 5 decisions: 1. Brand 2. Dealer 3. Quantity 4. Timing 5. Payment method In some cases, consumers may decide not to formally evaluate each brand; in other cases, intervening factors may afect the final decision Non-compensatory models of consumer choice: 1. Conjunctive heuristic 2. Lexicographic heuristic 3. Elimination-by-aspects heuristic Consumers do not necessarily adopt only one type of choice rule in making purchase decisions. Insome cases , they adopt phased decision strategy that combines two or more decision rules

- Intervening factors: * Attitude of others

* Unanticipated situation factors

Purchase decision heavily influenced by perceived risk: 1. Functional risk 2. Physical risk 3. Social risk 4. Psychological risk 5. Time risk

 Post-purchase behaviour: - Post-purchase satisfaction -

Post-purchase actions
Post-purchase use & recall

OTHER THEORIES OF CONMSUMER DECISION MAKING

Level of consumer involvement: - Elaboration likely-hood model Low involvement marketing strategies

Variety seeking behaviour

 Decision heuristics & biasis: Rule of thumb or or mental shortcuts in decision process: 1. Available heuristics
2. Representative heuristics

3. Anchoring & adjustment heuristic

 Mental accounting; THE TENDENCY TO CATEGORISE FUNDS OR ITEMS OF VALUE EVEN THOUGH THERE IS NO LOGICAL BASIS FOR CATEGORISATION , e.g.., INDIVIDUALS OFTEN SEGGREGATE THEIR SAVINGS INTO SEPARATE ACCOUNTS TO MEET DIFFERENT GOALS EVEN THOUGH FUNDS FROM ANY OF THE ACCOUNTS CAN BE APPLIED TO ANY OF THE GOALS Mental accounting is based on a set of core principles: 1. Consumers tend to segregate gains 2. 3. 4. Consumers tend to integrate losses Consumers tend to integrate smaller losses with larger gains Consumers tend to segregate small gains from large losses