1. CONSUMER BEHAVIOUR
Lalit Tank

2. Course Outline Introduction Consumer Decision Making Process
- Consumer Influence & the diffusion of innovations
- Consumer Decision Making
Consumer As An Individual
- Consumer Motivation
- Personality & Consumer Behavior
- Consumer Perception
- Consumer Learning
- Consumer Attitude Formation & Change
Consumer in their Social & Cultural Settings
- Reference Groups & Family Influences
- Social Class & Consumer Behavior
- Influence of Culture & Consumer Behavior

3. Consumer Behavior
Behavior that consumer display in searching for , purchasing , using , evaluating & disposing of – products & services , that they expect will satisfy their needs .

4. Consumer Behavior is rooted in the
MARKETING CONCEPT
Focuses on the needs of the buyer

5. CB-Introduction Defination of CB
The term consumer behavior is defined as the behavior that consumer display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

6. What is Consumer Buying Behavior?
Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people
involved in buying and using products.
Need to understand:
why consumers make the purchases that they make?
what factors influence consumer purchases?
the changing factors in our society.

7. Importance of CB
Enables marketers to understand & predict consumer behavior
Not only concerned with why , when , where , how & how often they buy it .
Integral part of strategic market planning
Calls on marketers to fulfill the needs of their target markets – in ways that improve society as a whole
Providing customer value
Providing customer satisfaction
Providing customer retention

8. A firm needs to analyze buying behavior for:
Buyers reactions to a firms marketing strategy has a great impact
on the firms success.
The marketing concept stresses that a firm should create a
Marketing Mix (MM) that satisfies (gives utility to) customers,
therefore need to analyze the what, where, when and how
consumers buy.
Marketers can better predict how consumers will respond to
marketing strategies.

9. Stages of the Consumer Buying Process
Note:-
Six Stages to the Consumer Buying Decision Process (For complex decisions).
Not all decision processes lead to a purchase. All consumer decisions do not always
include all 6 stages, determined by the degree of complexity
6 Stages :-
Problem Recognition (awareness of need)
Information search
Evaluation of Alternatives
Purchase decision
Purchase
Post-Purchase Evaluation--outcome

10. Stage :-1 Problem Recognition
Problem Recognition (awareness of need)—
Difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information--did not know you were deficient? ex:- see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.

11. Stage 2:- Information Search
Internal search, memory.
External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc.
A successful information search leaves a buyer with possible alternatives, the evoked set :-
Hungry, want to go out and eat, evoked set is
Chinese food
Indian food
Fast food
South Indian Food etc

12. Stage 3:- Evaluation of Alternatives
Need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, Indian gets highest rank etc.
If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives.

13. Stage 4 :- Purchase Decision
Choose buying alternative, includes product, package, store, method of purchase etc

14. Stage 5:- Purchase
May differ from decision, time lapse between 4 & 5, product availability

15. Stage 6:- Post-Purchase Evaluation
outcome: Satisfaction or Dissatisfaction.
Cognitive Dissonance, have you made the right decision.
This can be reduced by warranties, after sales communication etc.
After eating an indian meal, may think that really you wanted a chinese meal instead.

16. Cognitive Dissonance cognitive dissonance is an uncomfortable
feeling or stress caused by holding two contradictory
ideas simultaneously.

17. The CB describes two different kinds of consumer entities
Personal consumer: buys goods and services for his or her own use for the use of household. the products brought for final use by individual who are referred to as end users or ultimate consumers.
Organizational consumer include profit and not for profit business, government agencies. All of which must buy products, equipment and services in order to run their organization.

18. Development of the marketing concept and discipline of consumer behavior
The field of consumer behavior is rooted in the marketing concept. A business orientation that involved several alternative approach towards doing business respectively as the
Production concept
Product concept
Selling concept

19. The role of consumer research
Consumer research describes the process and tools used to study consumer behavior. Two theoretical perspectives that guide consumer research methodology.
Positivists approach: tend to be objective and empirical, to seek causes for behavior and to conduct research studies that can be generalized to large population. use for strategic managerial decision.
Interpritivists approach: tend to be qualitative and based on small sample. View each consumption situation as unique and nonpredectable seek to find common pattern of operative value, meaning and behavior across consumption situation.

20. Consumer Decision Making and Beyond

21. Decision
Decision is the selection of an option from two or more alternative choices.

22. Levels of Consumer Decision Making
Not all consumer decision making situation require the same degree
of information search
Extensive Problem Solving- consumers need a great deal of information
Limited Problem Solving- search for additional information is more like”fine-tunning”- already have established basic criteria
Routine Response Behavior-consumers have experience with the product

23. Models of Consumers: Four Views of Consumer Decision Making
An Economic View- consumer has motivation for price bargaining
A Passive View- consumer surrenders to self-serving interests & promotional efforts of marketers .
A Cognitive View- consumer are as a thinking problem solver- seek & evaluate information
An Emotional View- impulsive

24. Figure : A Model of Consumer Decision Making
External Influences
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial sources
4. Social class
5. Subculture and culture
Input
Consumer Decision Making
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Need Recognition
Prepurchase Search
Evaluation of Alternatives
Process
Experience
Post decision Behavior
Output
Purchase
1. Trial
2. Repeat purchase
Postpurchase Evaluation

25. Three Stages of Consumer Decision Making
Need Recognition
Prepurchase Search
Evaluation of Alternatives

26. Factors that are Likely to Increase Prepurchase Search
PRODUCT FACTORS
-Long interpurchase time (a long-lasting or infrequently used product)
-Frequent changes in product styling
-Volume purchasing (large number of units)
-High price
-Many alternative brands
-Much variation in features

27. Table continued SITUATIONAL FACTORS Experience First-time purchase
No past experience because the product is new
Unsatisfactory past experience within the product category
Social Acceptability
The purchase is for a gift
The product is socially visible
Value-Related Considerations
Purchase is discretionary (judgemental) rather than necessary
All alternatives have both desirable and undesirable consequences
Family members disagree on product requirements or evaluation of alternatives
Product usage deviates from important reference group
The purchase involves ecological considerations
Many sources of conflicting information

28. Table continued PERSONAL FACTORS
Demographic Characteristics of Consumer
Well-educated
High-income
White-collar occupation
Under 35 years of age
Personality
Low dogmatic (code of belief)
Low-risk perceiver
Other personal factors, such as high product involvement and enjoyment of shopping and search

29. Issues in Evaluation of Alternatives
Evoked Set (consideration set)
Criteria Used for Evaluating Brands
Consumer Decision Rules
Lifestyles as a Consumer Decision Strategy
Incomplete Information and Non comparable Alternatives
Series of Decisions
Decision Rules and Marketing Strategy
Consumption Vision

30. The Evoked Set as a Subset of All Brands in a Product Class
Known Brands
Unknown Brands
(1)
Evoked Set
Inept Set
Inert Set
Acceptable Brands
Unacceptable Brands
Indifferent Brands
Overlooked Brands
(2)
(3)
(4)
Purchased Brands
Not Purchased Brands
(5)

31. Consumer Decision Rules
2 categories
Compensatory
Noncompensatory(2 rules)
Conjunctive Decision Rule
Disjunctive Decision Rule
Lexicographic Rule

32. Compensatory Decision Rules
A type of decision rule in which a consumer evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score.

33. Non-compensatory Decision
Rules
A type of consumer decision rule by which positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute.

34. Conjunctive Decision Rule
A non compensatory decision rule in which consumers establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration.
-useful in quickly reducing the number of alternatives to be considered

35. -mirror image of conjunctive rule. Estb higher level
Disjunctive Rule
A non compensatory decision rule in which consumers establish a minimally acceptable cutoff point for each relevant product attribute.
-mirror image of conjunctive rule. Estb higher level

36. Lexicographic Rule
A non compensatory decision rule - consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important.

37. Affect Referral Decision Rule
A simplified decision rule by which consumers make a product choice on the basis of their previously established overall ratings of the brands considered, rather than on specific attributes.

38. Table :- Hypothetical Use of Popular Decision Rules in Making a Decision to Purchase an Ultra light Laptop
DECISION RULE
MENTAL STATEMENT
Compensatory rule
“I selected the computer that came out best when I balanced the good ratings against the bad ratings.”
Conjunctive rule
“I selected the computer that had no bad features.”
Disjunctive rule
“I picked the computer that excelled in at least one attribute.”
Lexicographic rule
“I looked at the feature that was most important to me and chose the computer that ranked highest on that attribute.”
Affect referral rule
“I bought the brand with the highest overall rating.”

39. Types of Purchases or Purchase behavior
Trial
Purchases
Repeat
Purchases
Long-Term
Commitment
Purchases

40. Outcomes of Postpurchase Evaluation
Objective of Post Purchase evaluation is to increase
The consumer’s satisfaction with the purchase
Actual Performance Matches Expectations
Neutral Feeling
Actual Performance Exceeds Expectations
Positive Disconfirmation (validity) of Expectations
Performance is Below Expectations
Negative Disconfirmation of Expectations

41. Gifting Behavior
Gifting is an act of symbolic communication, with explicit (loud & Clear) and implicit (hidden) meanings ranging from congratulations and love, to regret, obligation, and dominance.

42. Table :- Reported Circumstances and Motivations for Self-Gift Behavior
Personal accomplishment
Feeling down
Holiday
Feeling stressed
Have some extra money
Need
Had not bought for self in a while
Attainment of a desired goal
Others
MOTIVATIONS
To reward oneself
To be nice to oneself
To cheer up oneself
To fulfill a need
To celebrate
To relieve stress
To maintain a good feeling
To provide an incentive toward a goal
Others

43. Gifting Subdivisions Inter group Gifting Inter category Gifting
Intra group
Gifting
Inter personal
Gifting
Intra personal
Gifting

44. Table :- Gifting Relationships
Inter group
Inter category
EXAMPLE
DEFINITION
A Christmas gift from one family to another family
A group giving a gift to another group
A group of friends chips in to buy a new mother a baby gift
An individual giving a gift to a group or a group giving a gift to an individual
Intra group
Interpersonal
A family buys a VCR for itself as a Christmas gift
A group giving a gift to itself or its members
Valentine’s Day chocolates presented from a boyfriend to a girlfriend
An individual giving a gift to another individual
Intrapersonal
A woman buys herself jewelry to cheer herself up
Self-gift

45. Figure A Simple Model of Consumption
Choice or Purchase Decision
Consumption Set
Added to one’s assortment or portfolio
Input
Consuming Style
How the individual fulfills his or her consumption requirements
Process of
Consuming
and
Possessing
Consuming and Possessing Things and Experiences
Using, Possessing, Collecting, Disposing
Feelings, Moods, Attitudes, Behavior
Output
Altered consumer satisfaction, change in lifestyle and/or quality of life, learning and knowledge, expressing and entertaining oneself

46. Relationship Marketing
Marketing aimed at creating strong, lasting relationships with a core group of customers by making them feel good about the company and by giving them some kind of personal connection with the business.

47. Figure: A Portrayal of the Characteristics of Relationship Marketing
The Firm provides
The Customer provides
Products/Services
Individualized attention
Continuous information
Price offers
Customer services
Extras and perks, etc.
Repeat Purchase
Increased Loyalty
Goodwill
Positive word-of-mouth
Lower costs for the firm
Trust and promises

48. Consumers Are Less Loyal - Why?
Abundance of choice
Availability of information
Entitlement (consumer ask “what have you done for me lately”)
Commoditization (most products seem to be similar)
Insecurity (consumers financial problems)
Time scarcity