Consumer Behavior

INTRODUCTION Consumer behavior is 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'.' Consumer behavior(in consumer business context) referred to as the study of when, why, how, where and what people do or do not buy products. It blends elements from psychology, sociology,social psychology, anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer.

Relationship marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. Social functions can be categorized into social choice and welfare functions. Each method for vote counting is assumed as a social function but if Arrow’s possibility theorem is used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonic, unanimity, homogeneity and weak and strong Paretooptimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer.

Internal influences Consumer behavior is influenced by: demographics, psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, and feelings. consumer behavior concern with consumer need consumer actions in the direction of satisfying needs leads to his behavior of every individuals depend on thinking process

External influences Consumer behavior is influenced by: culture,sub-culture, locality, royalty, ethnicity, family, social class, reference groups, lifestyle, and market mix factors.

Consumer Markets

Consumer Buying Behavior

Level of Involvement and Consumer Problem- Solving Processes Level of Involvement –High –Low –Enduring –Situational Routinized Response Behavior Limited Problem Solving Extended Problem Solving Impulse Buying

Consumer Buying Decision Process Problem Recognition

Information Search Consumer Buying Decision Process

Information Search Internal

Information Search Internal External

Problem Recognition Information Search Evaluation of Alternatives Consumer Buying Decision Process

Evaluation of Alternatives Consideration Set (Evoked Set) Evaluative Criteria

Problem Recognition Information Search Evaluation of Alternatives Purchase Consumer Buying Decision Process

Postpurchase Evaluation Problem Recognition Information Search Evaluation of Alternatives Purchase Consumer Buying Decision Process

Postpurchase Evaluation Cognitive Dissonance Did I Do the Right Thing?

SITUATIONAL INFLUENCES SITUATIONAL INFLUENCES Physical Surroundings Physical Surroundings Social Surroundings Social Surroundings Time Time Purchase Reason Purchase Reason Buyer’s Mood and Condition Buyer’s Mood and Condition Consumer Buying Decision Process Possible Influences on Consumer Buying Decisions

SITUATIONAL INFLUENCES SITUATIONAL INFLUENCES Physical Surroundings Physical Surroundings Social Surroundings Social Surroundings Time Time Purchase Reason Purchase Reason Buyer’s Mood and Condition Buyer’s Mood and Condition PSYCHOLOGICAL INFLUENCES INFLUENCES Perception Perception Motives Motives Learning Learning Attitudes Attitudes Personality and Self-concept Personality and Self-concept Lifestyles Lifestyles Consumer Buying Decision Process Possible Influences on Consumer Buying Decisions

Psychological Influences on the Buying Decision Process Perception –Information Inputs –Selective Exposure –Selective Distortion –Selective Retention Motives –Maslow’s Hierarchy of Needs –Patronage Motives

Psychological Influences on the Buying Decision Process Perception –Information Inputs –Selective Exposure –Selective Distortion –Selective Retention Motives –Maslow’s Hierarchy of Needs –Patronage Motives

Maslow’s Hierarchy of Needs

Psychological Influences on the Buying Decision Process Learning Attitudes Personality and Self-Concept Lifestyles

Psychological Influences on the Buying Decision Process Learning Attitudes Personality and Self-Concept Lifestyles

Psychological Influences on the Buying Decision Process Learning Attitudes Personality and Self-Concept Lifestyles

SITUATIONAL INFLUENCES SITUATIONAL INFLUENCES Physical Surroundings Physical Surroundings Social Surroundings Social Surroundings Time Time Purchase Reason Purchase Reason Buyer’s Mood and Condition Buyer’s Mood and Condition SOCIAL INFLUENCES SOCIAL INFLUENCES Roles Roles Family Family Reference Groups and Opinion Leaders Reference Groups and Opinion Leaders Social Classes Social Classes Culture and Subcultures Culture and Subcultures PSYCHOLOGICAL INFLUENCES INFLUENCES Perception Perception Motives Motives Learning Learning Attitudes Attitudes Personality and Self-concept Personality and Self-concept Lifestyles Lifestyles Consumer Buying Decision Process Possible Influences on Consumer Buying Decisions

Social Influences Roles Family Influences –Consumer Socialization Reference Groups and Opinion Leaders Social Classes

Social Influences Roles Family Influences –Consumer Socialization Reference Groups and Opinion Leaders Social Classes

Social Class Behavioral Traits and Purchasing Characteristics Income varies among the groups,Prize quality merchandise but goals are the sameFavor prestigious brands Various lifestyles: preppy, conven-Products purchased must re- tional, intellectual, etc. flect good taste Neighborhood and prestigious Invest in art schooling importantSpend money on travel, theater, books, tennis, golf, and swimming clubs Upper Class (14% of Population) Includes upper-upper, lower-upper, upper-middle Behavioral Traits Buying Characteristics Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp , with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Class Behavioral Traits and Purchasing Characteristics Often in managementLike fashionable items Considered white collarConsult experts via books, Prize good schools articles, etc., before Desire an attractive home in a purchasing nice, well-maintained Spend for experiences they neighborhood consider worthwhile for theirOften emulate the upper class children (e.g., ski trips,college Enjoy travel and physical activity education) Often very involved in children’s Tour packages, weekend trips school and sports activitiesAttractive home furnishings Middle Class (32% of Population) Behavioral Traits Buying Characteristics Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp , with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Class Behavioral Traits and Purchasing Characteristics Emphasis on family, especially forBuy vehicles and equipment economic and emotional support related to recreation, camp- (e.g., job opportunity tips, help in ing, and selected sports times of trouble)Strong sense of value Blue collarShop for best bargains at off-Earn good incomes price and discount stores Enjoy mechanical items and Purchase automotive equip- recreational activities ment for making repairs Enjoy leisure time after working Enjoy local travel, hard recreational parks Working Class (38% of Population) Behavioral Traits Buying Characteristics Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp , with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Class Behavioral Traits and Purchasing Characteristics Often down and out through no Most products purchased are fault of their own (e.g., layoffs, for survival company takeovers)Ability to convert good Can include individuals on discards into useable items welfare and the homeless Often have strong religious beliefs May be forced to live in less desirable neighborhoods In spite of their problems, often good- hearted toward others Enjoy everyday activities when possible Lower Class (16% of Population) Behavioral Traits Buying Characteristics Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp , with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Influences Culture and Subculture –African-American Subculture –Hispanic Subculture –Asian-American Subculture