1. CONSUMER BEHAVIOUR Samir K Mahajan

2. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS The central focus of marketing is the consumer. To devise good marketing plans, it is necessary to examine consumer’s behavioural attributes and needs, lifestyles, and buying processes. Final consumers purchase for personal, family, or household use. The study of consumer behaviour includes the study of what they buy, why they buy, how they buy, when they buy, from where they buy, how much they and how often they buy. An open-minded consumer-oriented approach is imperative in today’s diverse global marketplace so that a firm can identify and serve its target market, minimize dissatisfaction, and stay ahead of competitors. The starting point for understanding buying behaviour is the stimulus response model (Kotler). Marketing and environmental stimuli influence buyer’s consciousness ( buyer’s characteristics and buyer’s decision process) which in turn lead to certain purchase decisions. The marketers’ task is to understand what happens in the buyer’s consciousness between arrival of outside stimuli and the purchase decisions. STIMULUS RESPONSE MODEL Marketing Stimuli Environmental Stimuli Buyer’s characteristics Buyer’s Decision Process Buyer’s decision o Product o Price o Place o Promotion o Economic o Technological o Political and legal o Cultural o Social o Personal o Psychological o Problem (need) recognition o Information search o Evaluation of alternatives o Purchase decision o Purchase behaviour Product choices Brand choices Dealer choices Purchase timing Purchase amount Samir K Mahajan

3. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS contd. A consumer’s behaviour is influenced by cultural, social, personal, and psychological factors. Cultural factors exert the broadest and deepest influence. Characteristics/factors affecting consumer buying behaviour are discussed as follows: Samir K Mahajan

4. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS contd.  Cultural Factors: Culture, sub Culture and social class are particularly important in buying behaviour. o Culture: Culture is the fundamental determinant of a person’s wants and behaviour. It’s a set of basic values, perceptions, preferences, belief and behaviours learned by a member of society from family and other important institutions. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country. Marketers are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand. o Sub Culture : Each culture contains smaller “sub-cultures” – groups of people with shared values based on common life experiences and situations. Sub-cultures include nationalities, religions, racial groups, or groups of people sharing the same geographical location. When sub culture grows large and affluent enough, it will create a substantial and distinctive market segment of its own. For example, the “youth culture” or “club culture” has quite distinct values and buying characteristics, and differ from the much older “grey generation”. o Social Class : Human societies exhibit social stratification. Social class is the result of further social stratification which are hierarchically ordered and whose members have similar values, interests and behaviour. Social class reflects not only on income but also other indicators such as education, occupation, wealth, value orientation and areas of residence. Social class differ in dress, speech pattern, recreational preferences, language. Social classes show different product and brand difference in many areas including clothing, home furnishes, leisure activities, automobiles, media preferences. Samir K Mahajan

5. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS contd.  Social Factors Affecting Consumer Buying Behaviour: A consumer’s behaviour is also influenced by social factors, such as : reference groups, family, roles and status. o Reference groups : A person’s reference group consists of all group that have a direct (face-to-face) or indirect influence on the person's attitude or behaviours. Group having a direct influence on a person are membership groups. Some membership groups are primary groups such as family, neighbours and co-workers with whom the persons interacts fairly continuously and informally. People also belong to secondary groups such as religious groups, professional association, and trade-unions groups which tend to be more formal and require less continuous interaction. People are also influenced by group to which they do not belong. Aspirational groups are those a person hopes to join. Dissociative group are those whose values or behaviour an individual reject. Marketers try to identify target customers’ reference group. o Family: The family is the most important consumer buying organization society and it has been researched extensively. Family members constitute the most important influential primary reference group and can strongly influence buyer behaviour. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services. These roles vary widely in different countries and social classes. o Roles and Status: A person belongs to many groups, family, clubs, and organizations. The person’s position in each group can be defined in terms of both role and status. A Role consists of the activities people are expected to perform according to the persons around them. Each role carries a status. A district commissioner has more status than a sales office supervisor, an office supervisor has more status than a clerk and a clerk has more status than a office assistant. People chose product that communicate their role and status in society. Samir K Mahajan

6. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS contd.  Personal Factors Affecting Consumer Buying Behaviour: A buyer's decisions also are influenced by personal characteristics such as: buyer's Age and life cycle, Occupation, Economic situation, Lifestyle, Personality and Self- concept o Age and Life cycle Stage: People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. o Occupation: A person’s occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A Company can even specialize in making products needed by a given occupational group. o Economic situation: A person’s economic situation will affect product choice. Rich and wealthy people may seek brand and quality product. Poor people purchase low priced product. o Life style: Life Style is a person’s pattern of living, understanding these forces involves measuring consumer’s major AIO dimensions, i.e. activities (work, hobbies, shopping, support etc.), interest (food, fashion, family recreation) and opinions (about themselves, business, products). o Personality and self-concept: Each person’s distinct personality influence his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Samir K Mahajan

7. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS contd.  Psychological Factors: A person's buying choices are further influenced by four major psychological factors such as: motivation, perception, learning, memory. o Motivation: Motive (drive) is a need that is sufficiently pressing to direct the person to act (seek satisfaction of the need). Maslow’s Hierarchy of needs highlights that people are driven by particular needs at particular times. Human needs are arranged in a hierarchy from most pressing to least pressing. Physiological needs – Hunger, water, shelter Safety needs – Security, protection Social needs – Sense of belonging, love Esteem needs - Self-esteem, status Self-actualisation needs –Self-development o Perception: A motivated person is ready to act. How the motivated person is actually act is influenced by his or her view or perception of the situation. Perception is the process by which people select, organize, and interpret information into to form a meaningful picture of the world. Perception depends not only on physical stimuli, but also on stimuli’s relation to the surrounding field and on conditions within the individual. In marketing, perceptions are more important than reality, and perceptions affects consumer’s behaviour. Samir K Mahajan

8. FACTORS INFLUENCING BUYING BEHAVIOURS OF CONSUMERS contd. o Learning: learning involves changes in an individual’s behaviour arising from experience. Most human behaviour is learnt. Learning theorists believe that learning is produced through interplay of drives, cues, responses and reinforcement. A drive is a strong internal stimulus impelling action. Cue are minor stimuli that determines when, where and how a persons respond. Suppose you purchase a Dell and your experience is rewarding, your response to computers and Dell will be positively reinforced. Later on when you purchase a printer, you may think of Dell. o Memory: All information and experiences individual encounter as they go through life can end up in their long-term memory. Marketing can be seen sure that consumers have the right type of product and services experiences such that right brand knowledge structures are created and maintained in memory. Samir K Mahajan

9. THE BUYING DECISION PROCESS Generally speaking, buyers run through a series of steps in deciding whether to purchase a particular product. Some purchases are made without much thought. You probably don’t think much, for example, about the brand of gasoline you put in your car; you just stop at the most convenient place. Other purchases, however, require considerable thought. For example, you probably spent a lot of time deciding which college to attend. Let’s revisit that decision as a means of examining the five steps that are involved in the consumer buying process and that are summarized as follows: Samir K Mahajan

10. THE BUYING DECISION PROCESS contd. Need Recognition:- Consumer buying decision process starts with need recognition. The marketer must recognize the needs of the consumer as well as how these needs can be satisfied. For example if a person is hungry then food is desired or if it is a matter of thirst than water is desirable. Information Search:- In consumer buying decision process information search comes at second number. In this stage consumer searches the information about the product either from family, friends, neighbourhood, advertisements, whole seller, retailers, dealers, or by examining or using the product. Evaluation of Alternatives:- After getting the required knowledge about the product the consumer evaluate the various alternatives on the basis of it’s want satisfying power, quality and it’s features. Purchase decision:- After evaluating the alternatives the buyer buys the suitable product. But there are also the chances to postpone the purchase decision due to some reasons. In that case the marketer must try to find out the reasons and try to remove them either by providing sufficient information to the consumers or by giving them guarantee regarding the product to the consumer. Samir K Mahajan

11. THE BUYING DECISION PROCESS contd. Post -purchase behaviour:- After buying the product consumer will either be satisfied or dissatisfied. If the consumer is not satisfied in that case he will be disappointed otherwise If he is satisfied than he will be delighted. It is usually said that a satisfy consumer tell about the product to 3 people and a dissatisfy consumer tell about the product to 11 people. Therefore it is the duty of the marketer to satisfy the consumer. The marketer is responsible for selling the goods in the market so he must have the knowledge how the consumers actually make their buying decisions. For this he must study the consumer buying decision process or model. Samir K Mahajan

12. THE BUYING DECISION PROCESS contd. Ref: Philip Kotler and Internet