C ONSUMER BEHAVIOUR

W HAT IS CONSUMER BEHAVIOUR The buying behavior of final consumers- individuals and households who buy goods and services for personal consumption. It is the study of HOW individuals, groups and organizations select, buy, use and dispose of goods and services, ideas or experiences to satisfy their needs and wants

M ODEL OF C ONSUMER B EHAVIOR

W HAT I NFLUENCES C ONSUMER B EHAVIOR ? Cultural Factors -Culture -Sub culture -Social class Social Factors -Reference group -Family -Roles and status Personal Factors -Age and life cycle stage -Occupation -Economic situation -Lifestyle - Personality and self concept Psychological Factors -Motivation -Perception -Learning -Beliefs and attitudes Buyer

1. C ULTURAL FACTORS 1.1 Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions. C.F exert the broadest and the deepest influence on the behaviour of the consumer 1.2. Subculture: A group of people with shared value systems based on common life experiences and situation : Subcultures include nationalities, religions, racial groups, and geographic regions.

1.3 Social class/social stratification These are homogeneous divisions in the society which share similar values, interests, and behavior Classic depiction of social class Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers Characteristics Within a class, people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Class designation is mobile and changes and over time Implication(difference in preferences like) Clothing Recreational Furnishing automobiles

2. S OCIAL F ACTORS Reference groups Social roles Statuses Family

2.1 R EFERENCE G ROUPS Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups

R EFERENCE GROUP reference groups consists of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior. membership groups They have direct influence on the attitude and behaviour Some memberships groups are primary groups such as family, friends, neighbors, and co-workers with whom the person interacts fairly continuously and informally. Some membership groups are secondary groups such as religious, professional groups that tend to be more formal. Aspiration groups are those a person hopes to join. Dissociative groups are those whose values or behavior an individual rejects. The buyer evaluates these elements together with the monetary cost to form a total customer cost.

Manufacturers of products and brands where reference group influence is strong must determine how to reach and influence opinion leaders in these reference groups. An opinion leader is the person who offers informal advice, product- related communications about a specific product or product category. Teen icons as brand ambassador for clothes. Marketers try to reach opinion leaders by identifying demographic and psychographic characteristics associated with opinion leadership, identifying the media read by opinion leaders, and directing messages at opinion leaders.

2.2 FAMILY (p art f reference primary group also in social factors) family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group. Marketers are interested in the roles and relative influence of family members in the purchase of a large variety of products and services. With expensive products and services, the vast majority of husbands and wives engage in more joint decision-making. Men and women may respond differently to marketing messages. Earlier in traditional families grand parents were decision makers but theses days joint decision making

2.3 R OLES AND STATUS : A person participates in many groups and a person’s position in each group can be defined in terms of role and status. Each role carries a status. Marketers must be aware of the status symbol potential of products and brands. Marketers have status symbol products and brands

3. P ERSONAL F ACTORS Age Values Life cycle stage Occupation Personality Self- concept Wealth Lifestyle

4. P SYCHOLOGICAL FACTORS Motivation Perception Learning Beliefs and attitudes

M OTIVATION Freud’s Theory Behavior is guided by subconscious motivations Maslow’s Hierarchy of Needs Behavior is driven by the lowest, unmet need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene factors

M ASLOW ’ S H IERARCHY OF N EEDS

H ERZBERG ’ S T WO -F ACTOR T HEORY

P ERCEPTION Selective Attention Subliminal Perception not consciously aware yet Ie effects the behaviour Selective Retention Selective Distortion

LEARNING It induces a change in our behaviour arising out of experience Sony lcd-led MEMORY Short term memory Long term memory Brand associations

C ONSUMER B UYING P ROCESS Problem Recognition Information Search Evaluation Purchase Decision Postpurchase Behavior

Problem Recognition The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli. Marketers need to identify the circumstances that trigger a particular need so that they can develop marketing strategies that trigger consumer interest. Information Search An aroused consumer will be inclined to search for more information. We can distinguish between two types of arousal. The milder state is called heightened attention where a person simply becomes more receptive to information about a product. The second level is active information search where a person looks for reading material, going online, etc. to learn about the product.

S OURCES OF I NFORMATION Personal (family, friends) Experiential (handling, examining, using the product ) Public mass media, consumer organizations) Commercial ( advertising, Web sites, salespeople)

Evaluation of alternatives: No single process is used by all consumers or by one consumer in all buying situations It is largely done on conscious and rational basis. Beliefs and Attitudes Evaluations often reflect beliefs and attitudes. Through experience and learning, people acquire beliefs and attitudes. These in turn influence buying behavior. Belief —a descriptive thought that a person holds about something. Attitude—a person’s enduring favorable or unfavorable evaluation, emotional feeling, and action tendencies toward some object or idea. Attitudes put people into a frame of mind. Attitudes lead people to behave in a fairly consistent way toward similar objects. Attitudes can be very difficult to change.

S TAGES BETWEEN E VALUATION OF A LTERNATIVES AND P URCHASE

A consumer’s decision to modify, postpone, or avoid a purchase decision is heavily influenced by perceived risk. Functional risk Physical risk Financial risk Social risk Psychological risk Time risk Marketers must understand the factors that provoke a feeling of risk in consumers and provide information and support to reduce perceived risk.

Post-Purchase Behavior After the purchase, the consumer might experience dissonance about their purchase and be alert to information that supports their decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer’s choice and help him or her feel good about the brand Post-Purchase Satisfaction Satisfaction is a function of the closeness between expectations and the product’s perceived performance. If the performance fall short of expectations the consumer is disappointed. If the performance meets expectations the consumer is satisfied. If the performance exceeds expectations the consumer is delighted. The importance of post-purchase satisfaction suggests that a product claim must truthfully represent the product’s likely performance.

Post-Purchase Actions Satisfaction or dissatisfaction with the product will influence subsequent behavior. A dissatisfied consumer may abandon or return the product. Post-Purchase Use and Disposal Marketers should also monitor how buyers use and dispose of the product. A key driver of sales frequency is product consumption rate. Marketers must also need to know how the consumer disposes of the product once it is used.

B USINESS BUYING BEHAVIOR Business Market: All organizations that buy goods and services for use in production of other products and services that are sold rented or supplied to other. Business buying process: the decision making process by which business buyers establish the need for purchased products and services and identify, evaluate and choose among alternative brands and suppliers

F EATURES OF B USINESS MARKETS Market structure