CONSUMER BEHAVIOR Assistant professor Bojan Georgievski PhD

quickly list 5 items you have purchased in the past month reexamine how long it took you to make a decision on each why did such a difference in decision occur?

Consumer behavior is the study of how people buy, what they buy, when they buy and why they buy. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics, psychographics, and behavioral variables in an attempt to understand people's wants.

STAGES OF THE CONSUMER BUYING PROCESS Problem Recognition Information Search Evaluation of alternatives Purchase Decision Purchase Post-Purchase Evaluation

PROBLEM RECOGNITION Difference between the desired state and the actual condition. Example: By seeing a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. Hunger stimulates your need to eat.

2. INFORMATION SEARCH

Internal Search: --- Memory External Search: --- Friends and Relatives A successful information search leaves a buyer with possible alternatives, the evoked set. Example: Hungry, want to go out and eat, evoked set is Chinese food Indian food Burger king

EVALUATION OF ALTERNATIVES Need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives. Example: If you want to eat something spicy, then Indian food gets the highest rank etc…

For low involvement products, efforts aimed at affecting internal search tend to be more effective—the consumer is usually not willing to expend energy on external search. External search is more likely for higher involvement products

PURCHASE DECISION Choose buying alternative, includes product, package, store, method of purchase etc. PURCHASE May differ from decision, time lapse between purchase decision and the actual purchase, product availability

Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones) Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission) Hybrid: Combination of the two (e.g., one non-compensatory measure, then compensatory tradeoffs on other attributes Abandoned strategy: Consumer finds initial criteria unrealistic and proceeds to less desirable solution

POST-PURCHASE EVALUATION It is the outcome Satisfaction or Dissatisfaction. This can be reduced by warranties, after sales communication etc. Example: After eating an Indian meal, you may think that really you wanted a Chinese meal instead.

TYPES OF CONSUMER BUYING BEHAVIOR : Routine Response/Programmed Behavior Limited Decision Making Extensive Decision Making Impulse buying

ROUTINE RESPONSE/PROGRAMMED BEHAVIOR Buying low involvement, frequently purchased, low cost items. Examples : Soft drinks, snack foods, milk etc.

LIMITED DECISION MAKING Buying product occasionally. That is when you need to obtain information about unfamiliar brand in a familiar product category. Example: Clothes--know product class but not the brand.

EXTENSIVE DECISION MAKING Complex high involvement, unfamiliar, expensive and infrequently bought products. Spend a lot of time seeking information and deciding. High degree of risk. Example: Cars, homes, computers, education.

IMPULSE BUYING No conscious planning. The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making.

Attitudes― components BELIEFS AFFECT (FEELING) BEHAVIORAL INTENTIONS Attitudes― components

Thank You For Your Time and Consideration!