Course Objectives Explain What is meant by Consumer Behavior Describe the Types of Consumers Explain Why do Consumers Buy Explain the Importance of Consumer Behavior Explain Role of Consumer Behavior in Loyalty Explain the Model of Consumer Behavior Explain Steps of Decision-Making Process Explain How to Reduce Cognitive Dissonance Explain Consumer Involvement in Buying Decisions Explain the Types of Consumer Buying Decisions Explain the Factors Influencing Consumer Behavior Explain Role of Consumer Behavior & Satisfaction Explain Role of Consumer Behavior for Relationship Explain Role of Consumer Behavior & Value Drivers Explain Role of CRM in Consumer Behavior

Introduction

What is meant by Consumer Behavior? ‘Consumer Behavior’ involves studying the processes a consumer uses to make purchase decisions, to dispose of purchased goods or services and study the factors that influence purchase decisions and the use of products.

Consumers can be various types and differentiated based on their ‘age’. Consumers can be segregated into ‘sub-groups’ based on their age such as children, teenagers, young adults, mature adults, senior citizens and so on. Each individual ‘sub-group’ has its own mind set, characteristics, preferred brands, preferred products etc. Age

People Buy for their Needs People buy for their Needs People Buy for their Needs: o A ‘need’ is anything which is necessary but lacking. o Hence, a need has to be fulfilled.

People Buy for their Desires: o On the other hand, a ‘desire’ is very different from a ‘need’. o A ‘desire’ is something that we hope to get or buy but is not a necessity. People Buy for their Desires Hence, when a person ‘desires’ something, he may not actually require that thing or need it, but he has to buy it anyway to satisfy his ‘desire’. There are many things that a person may desire such as a new pair of jeans although he may already have many pairs of jeans, new sneakers, new car in spite of having a car etc. Hence, when a person ‘desires’ something, he may not actually require that thing or need it, but he has to buy it anyway to satisfy his ‘desire’. There are many things that a person may desire such as a new pair of jeans although he may already have many pairs of jeans, new sneakers, new car in spite of having a car etc.

Customer Loyalty Breakers When customers end his relationship with suppliers, he breaks the loyalty with him. Following are the reasons which are responsible for loyalty break ups: Customer Attitude: Customer attitude plays a vital role in breaking up the loyalty with existing supplier. This is because some customers have a habit to try new options and change business tactics. Even if they are fully satisfied with the existing supplier, they would attempt a change for the sake of getting new and better option or because of any change in business rules and tactics. These types of customers are experimental in nature and try to be innovative and creative by taking high business risks. These customers are supposed to be least loyal because they less likely to be attached with any sort of bond with a single supplier. It is very difficult to retain these types of customers and suppliers generally try to change their attitude by inheriting some business tactics in their marketing strategies.

Step 5: Post-purchase Behavior Step 2: Information Search Step 3: Evaluation of Alternatives Step 4: Purchase Decision Step 5: Post-purchase Behavior Step 1: Need Recognition Step 5: Post-purchase Behavior This is the last step of the purchase decision process. A consumer after purchasing the chosen product either reaches a stage of ‘satisfaction’ or ‘dissatisfaction’. This satisfaction or dissatisfaction arises due to the difference and relationship between consumer expectation and perceived performance. So, if a consumer’s expectation from his purchased product is fulfilled, then he is a satisfied customer. Such a satisfied customer is a key to customer loyalty.

Real Life Example Mikhail Lipinskii is the Vice President (Sales) at Globus Inc. Mikhail Lipinskii is the Vice President (Sales) at Globus Inc. He is a very big fan of electronic gadgets. He is a very big fan of electronic gadgets. He always buys different new electronic gadgets whenever they are introduced in the market. He always buys different new electronic gadgets whenever they are introduced in the market. Let us now understand the process that Mikhail uses to reach a purchase decision. Let us now understand the process that Mikhail uses to reach a purchase decision.

Types of Consumer Buying Decisions The given table explains the three types of consumer buying decisions: Routine, Limited and Extensive; as well as the differences between the three of them. RoutineLimitedExtensive Involvementlowlow to moderatehigh Timeshortshort to moderatelong Costlowlow to moderatehigh Information Search internalmostly internal internal and external Number of Alternatives only onefewmany

Cultural Factors The word ‘Culture’ means a set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artefacts, or products, of that behavior as they are transmitted from one generation to the next. It has been found ever since the prehistoric times that culture is: pervasive, functional, learned and dynamic.

Psychological Factors There are various psychological factors that influence consumer behavior or consumer buying decisions such as follows: Let us look at each in detail. Motivation Perception LearningBeliefs and Attitudes

Analysis of Consumer Behavior

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