1. Consumer Behavior

2. What is Consumer Behavior?
Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

3. “MEET THE NEW CONSUMER and smile when you do because she is your boss
“MEET THE NEW CONSUMER and smile when you do because she is your boss. It may not be the person you thought you knew. Instead of choosing from what you have to offer, she tells you what she wants. You figure it out how to give it to her.” -Fortune Editor

4. Understanding and adapting to consumer motivation and behavior is not an option – it becomes a necessity for competitive survival
A new product must satisfy consumer needs, not the needs and expectations of management.

5. The advice to footwear salesmen should be ‘Don’t sell shoes – sell lovely feet’
Marketers must contend with small changing segments of highly selective buyers intent on receiving genuine value at the lowest price

6. Dominant forces shaping Consumer Research
Factors that move an economy from Production-driven to Market-driven
Level of sophistication with which human behavior is understood in psychology and other behavioral sciences
Dominant forces shaping Consumer Research

7. Development of the Marketing Concept
Production Concept
Product Concept
Selling Concept
Marketing Concept

8. The Production Concept
Assumes that consumers are interested primarily in product availability at low prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion

9. The Product Concept
Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features
Marketing objectives:
Quality improvement
Addition of features
Tendency toward Marketing Myopia

10. The Selling Concept
Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so
Marketing objectives:
Sell, sell, sell
Lack of concern for customer needs and satisfaction

11. The Marketing Concept
Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition
Marketing objectives:
Profits through customer satisfaction

12. Why Study Consumer Behavior?
Understanding consumer behaviour will help you become better marketers as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing
Understanding consumer behaviour will help you become better marketers as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing
Why Study Consumer Behavior?

13. Why study Consumer Behavior?
Knowledge of consumer behaviour is essential for non-profit organizations
Non profits have different customers to please Donors, users, volunteers, general public, government
Understanding consumer behaviour will help you become better marketers as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing
Why study Consumer Behavior?

14. Why study Consumer Behavior?
Understanding consumer behaviour will help you become better marketers as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing
Public service initiatives have to be based on an understanding of consumer behaviour
Canada’s largest advertiser is the federal government
Most government initiatives (e.g., antismoking campaigns) need a knowledge of consumer behaviour to succeed
Why study Consumer Behavior?

15. Why study Consumer Behavior?
Understanding consumer behaviour will help you become better marketers as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing
Better understanding of our own consumption behaviour
Why study Consumer Behavior?

17. Factors influencing consumer behavior
Cultural
Social
Personal
Psychological

18. I. Cultural factors Culture and societal environment:
Culture is crucial when it comes to understanding the needs and behaviors of an individual. Throughout his existence, an individual will be influenced by his family, his friends, his cultural environment or society that will “teach” him values, preferences as well as common behaviors to their own culture. For a brand, it is important to understand and take into account the cultural factors inherent to each market or to each situation in order to adapt its product and its marketing strategy. As these will play a role in the perception, habits, behavior or expectations of consumers.
Culture and societal environment:

19. Sub-cultures : A society is composed of several sub-cultures in which people can identify. Subcultures are groups of people who share the same values ​​based on a common experience or a similar lifestyle in general. Subcultures are the nationalities, religions, ethnic groups, age groups, gender of the individual, etc.. The subcultures are often considered by the brands for the segmentation of a market in order to adapt a product or a communication strategy to the values ​​or the specific needs of this segment

20. Social classes:
Social classes are defined as groups more or less homogenous and ranked against each other according to a form of social hierarchy. Even if it’s very large groups, we usually find similar values​​, lifestyles, interests and behaviors in individuals belonging to the same social class.
We often assume three general categories among social classes : lower class, middle class and upper class.
People from different social classes tend to have different desires and consumption patterns. Disparities resulting from the difference in their purchasing power, but not only. According to some researchers, behavior and buying habits would also be a way of identification and belonging to its social class.

21. II. Social factors
Social factors are among the factors influencing consumer behavior significantly. They fall into three categories: reference groups, family & social roles and status.

22. Reference groups and membership groups :
The membership groups of an individual are social groups to which he belongs and which will influence him. The membership groups are usually related to its social origin, age, place of residence, work, hobbies, leisure, etc..
The influence level may vary depending on individuals and groups. But is generally observed common consumption trends among the members of a same group.
The understanding of the specific features (mindset, values​​, lifestyle, etc..) of each group allows brands to better target their advertising message.

23. Within a reference group that influence the consumer buying behavior, several roles have been identified:
The initiator:
the person who suggests buying a product or service
The influencer:
the person whose point of view or advice will influence the buying decision. It may be a person outside the group (singer, athlete, actor, etc..) but on which group members rely on.

24. The decision-maker:
the person who will choose which product to buy. In general, it’s the consumer but in some cases it may be another person. For example, the “leader” of a soccer supporters’ group (membership group) that will define, for the whole group, which supporter’s scarf buy and bear during the next game.
The buyer:
the person who will buy the product. Generally, this will be the final consumer.

25. Family Helps in shaping an individual's attitudes and behaviours
Develops political and religious beliefs, lifestyle choices, and consumer preferences

26. III. Personal factors
Decisions and buying behavior are obviously also influenced by the characteristics of each consumer.

27. Age and way of life:
A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values​​, environment, activities, hobbies and consumer habits evolve throughout his life.
For example, during his life, a consumer could change his diet from unhealthy products (fast food, ready meals, etc..) to a healthier diet, during mid-life with family before needing to follow a little later a low cholesterol diet to avoid health problems.

28. Purchasing power and revenue:
The purchasing power of an individual will have, of course, a decisive influence on his behavior and purchasing decisions based on his income and his capital.
This obviously affects what he can afford, his perspective on money and the level of importance of price in his purchasing decisions. But it also plays a role in the kind of retailers where he goes or the kind of brands he buys.
As for social status, some consumers may also look for the “social value” of products they buy in order to show “external indications” of their incomes and their level of purchasing power..

29. Lifestyle:
The lifestyle of an individual includes all of its activities, interests, values ​​and opinions.
The lifestyle of a consumer will influence on his behavior and purchasing decisions. For example, a consumer with a healthy and balanced lifestyle will prefer to eat organic products and go to specific grocery stores, will do some jogging regularly (and therefore will buy shoes, clothes and specific products), etc..

30. IV. Psychological factors
Among the factors influencing consumer behavior, psychological factors can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes.

31. Motivation:
Motivation is what will drive consumers to develop a purchasing behavior. It is the expression of a need is which became pressing enough to lead the consumer to want to satisfy it. It is usually working at a subconscious level and is often difficult to measure.
Motivation is directly related to the need and is expressed in the same type of classification as defined in the stages of the consumer buying decision process.
To increase sales and encourage consumers to purchase, brands should try to create, make conscious or reinforce a need in the consumer’s mind so that he develops a purchase motivation. He will be much more interested in considering and buy their products.
They must also, according to research, the type of product they sell and the consumers they target, pick out the motivation and the need to which their product respond in order to make them appear as the solution to the consumers’ need.

32. Perception:
Perception is the process through which an individual selects, organizes and interprets the information he receives in order to do something that makes sense. The perception of a situation at a given time may decide if and how the person will act.
Depending to his experiences, beliefs and personal characteristics, an individual will have a different perception from another.
Each person faces every day tens of thousands of sensory stimuli (visual, auditory, kinesthetic, olfactory and gustatory). It would be impossible for the brain to process all consciously. That is why it focuses only on some of them.

33. Learning:
Learning is through action. When we act, we learn. It implies a change in the behavior resulting from the experience. The learning changes the behavior of an individual as he acquires information and experience.
For example, if you are sick after drinking milk, you had a negative experience, you associate the milk with this state of discomfort and you “learn” that you should not drink milk.

34. Beliefs and attitudes:
A belief is a conviction that an individual has on something. Through the experience he acquires, his learning and his external influences (family, friends, etc..), he will develop beliefs that will influence his buying behavior.
While an attitude can be defined as a feeling, an assessment of an object or idea and the predisposition to act in a certain way toward that object. Attitudes allow the individual to develop a coherent behavior against a class of similar objects or ideas.
Beliefs as well as attitudes are generally well-anchored in the individual’s mind and are difficult to change. For many people, their beliefs and attitudes are part of their personality and of who they are.

35. Models of consumer behavior
Traditional models:
Economic Model
Learning Model
Psychoanalytic Model
Sociological Model

36. Economic model Law of principal of maximum utility
Law of equimarginal utility enables a consumer to secure the maximum utility from limited purchasing power
Price effect
Substitution effect
Income effect

37. Learning model
The response of satisfaction reinforces the relationship
Learns to associate connection between stimulus and response which becomes habit
Understanding the response of consumer at the market place

38. Psychoanalytical model
Personality of consumers and their responses
Consumer behavior is directed by a complete set of deep seated motives

39. Sociological model
As his role, status, interaction, influence, group relation, lifestyle, income, occupation, place of residence, social class etc.

40. Models of consumer behavior
Contemporary models:
Howard sheth model
Nicosia
Webster and wind
Engle, blackwell and miniard model

41. Howard sheth model
Customer lacks well defined evaluative criteria to judge the product
Searches for information
After passing his own personality, his intake is modified
Evaluates the brands available
Seeks greatest potential of satisfying his motives

42. The Howard Sheth Model of buying behaviour

43. Example
Online shopping

44. Nicosia model Proposed by Francesco Nicosia in 1970s
Incomplete in a number of aspects, very reductionist
Variables in the model have not been clearly defined

45. Continued..
A number of assumptions have been made that question the validity of this model, for instance:
What type of consumer are we talking about?
The company and the consumer have an existing relationship? What type?
Is this for a new product? Is this the first exchange the consumer has had with the producer?

47. Example
Four-wheelers

48. Engel, Blackwell and miniard model
Information input
Information processing
Decision process stage
Variables influencing decision making process

50. Example Garment sector Social class Family Lifestyle Personality
Beliefs
attitudes

51. Webster and wind Partitiones the buying process into several processes
Processes of decision-making are determined by environmental and organizational factors.
Final buying process rendered as the mixture of individual and group decision

54. Example
Automobile manufacturing
B2B business
Purchasing tires

55. Conclusion
Understanding consumer contributes the best to any organization and for this, models would work great.

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