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Chapter 1

An Introduction to Consumer Behavior:


Faculty: Dr. Rajiv Sikroria

ReferencesSchiffman. G, Leon Consumer behavior,

Consumer Behavior, 9th edition, eastern economy edition. Banes. Paul, Fill Chris, Marketing, II impression(2010), Oxford University press, New Delhi

Quotes
The only way to know

how customers see your business is to look at it through their eyesDaniel R. Scroggin

Defining Consumer Behavior

Consumer Behavior is the Process Involved When Individuals or Groups Select, Use, or Dispose of Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires.

How do you feel after definition?


Definition (what goes on in consumers

mind) Importance: why is CB important?

Consumer Behavior (CB) dictates Marketing

Tactics Lack of knowledge of CB = big mistakes!


New Coke Marlboro ad in Japan

Knowledge of CB = Successful Marketing

tactics

Pepsi

Consumer behavior: Aspects


Operational Aspect- When a countrys

government tries to squeeze out human desires, those desires to possess and possess the best of what is available and make continue. It is simply purchasing the products on operational ground & cost benefit analysis.

Consumer behavior: Aspects


Socio-psychological: Linked to irrational

buying motives creep out from the buyers social and psychological interpretation of the product and its performance. ( For example buying the music because of how it makes us feel- happy, sad ) or it may be associated to someone near and dear.

Consumers Theories
Rogers Diffusion Theory: Based on

adoption of a new product Phases:


a)Innovators: Well educated & Financially

Strong
b)Early adopters: High percentage of

opinion leaders.
c)Early Majority : They requires

reassurances about the product quality

Rogers diffusion thoery


a) Late Majority ( People are below average

education, social status and income) b) Laggards ( Lowest income, status and education)

Perception, Learning and Memory


Perception: (AMA, 2007) Defines Based on

prior attitudes, beliefs, needs, stimulus and situational determinants, individuals perceive objects, events or people in the world about them. Perception is the cognitive impression that is formed of reality which in turn influences the individuals actions and behavior towards that object.

Selective exposure:
(Dubois, 2000) says it is the process of

screening such a meaningful information from the non- meaningful.


Perceptual mapping( Johnson, 1971,

Mindak, 1961)

Learning
Classical conditioning(Ivan Pavlov) Operant conditioning (B.F. Skinner1954)- Learning through behavioral reinforcement(consequencespunishment or rewards).

Social Learning (Albert Bandura, 1977):

Humans are more thoughtful than animals, hence they can delay gratification and dispense our own rewards or punishments.

Personality theories
Psychoanalytic approach (Freud

Sigmund, 1927) ID, Ego and Superego.


Trait theory( Henry Murray, 1938);

Based on a list of twenty personality based needs. Like - Abasement( need to surrender and submit to others), Achievement, affiliation, aggression, autonomy, counteraction, dominance, order, play, sentience understanding etc.

Motivation needs
Maslow theory of motivation. - Physiological needs - Safety needs - Belongingness needs - Esteem needs - Self actualization

Issues During Stages in the Consumption Process

Consumers Impact on Marketing Strategy


Understanding consumer behavior is good business.
Firms exist to satisfy consumers needs, so Firms must understand consumers needs to satisfy

them.

The Process of Marketing Segmentation

Identifies Groups of Consumers Who are Similar to One

Another in One or More Ways, and Devises Marketing Strategies that Appeal to One or More of These Groups.

Segmenting Consumers by Demographic Dimensions


Demographics are Statistics That Measure Observable Aspects of a Population Such As:
Geography Geography Age Age

Race and Race and Ethnicity Ethnicity

Gender Gender

Social Class Social Class and Income and Income

Family Structure Family Structure

Consumers Impact On Marketing Strategy: Building Bonds With Consumers


Relationship Marketing occurs when a

company makes an effort to interact with customers on a regular basis, and gives them reasons to maintain a bond with the company over time. consumers buying habits very closely, and crafting products and messages tailored precisely to peoples wants and needs based on this information.

Database Marketing involves tracking

Marketings Impact on Consumers:


The Meaning of Consumption
Types of Relationships a Person May Have With a Product:
Self-Concept Attachment
Helps to Establish the Users Identity

Nostalgic Attachment
Serves as a Link With a Past Self

Interdependence
Part of the Users Daily Routine

Love
Elicits Bonds of Warmth, Passion, or Other Strong Emotion

Marketings Impact on Consumers: Consumption Typology


An Emotional or Aesthetic Reaction to Consumption Objects Express Aspects of Self or Society Communicate Their Association With Objects, Both to Self/ Others Consuming as Classification Participate in a Mutual Experience and Merge Self With Group

Consuming as Experience

Consuming as Integration

Consuming as Play

Marketings Impact on Consumers


Marketing and Culture Popular Culture Intangible and Tangible Objects

The Global Consumer


Global Consumer Culture

Virtual Consumption
Business to Consumer Selling (B2C Commerce) Consumer to Consumer Selling (B2B Commerce) Virtual Brand Communities

Blurred Boundaries: Marketing and Reality

The Dark Side of Consumer Behavior


Compulsive Consumption
>Behavior is Not Done by Choice >Gratification is Short-Lived >Strong Feelings of Regret or Guilt Afterwards

Addictive Consumption
> Gambling

Illegal Activities
> Consumer Theft (Shrinkage) >Anti-consumption Culture Jamming Cultural Resistance

Consumed Consumers
> People Who Are Exploited for Commercial Gain in the Marketplace.

Interdisciplinary Influences
Individual Focus Individual Focus

Experimental Psychology Clinical Psychology Developmental Psychology Human Ecology Microeconomics Social Psychology Sociology Macroeconomics Semiotics/Literary Criticism Demography History Cultural Anthropology

Social Focus Social Focus

Two Perspective on Consumer Research Two Perspective on Consumer Research


Positivist Positivist Approach Approach Objective Objective Prediction Prediction Independent Independent Real Cause Real Cause Separation Separation Interpretivist Interpretivist Approach Approach Socially Socially Constructed Constructed Understanding Understanding Contextual Contextual Simultaneous Simultaneous Shaping Shaping Interaction Interaction

The Wheel of Consumer Behavior

Culture

That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man person as a member of society.

Key Points about culture


1.Culture, as a complex whole, is a system of interdependent components. 2. Knowledge and belief are important parts. 3.Art, clothes wearing traditions , Morality 1.Culture is comprehensive. 2.Culture is learned rather than being something we are born with.