Consumer Behavior

Contents:
1) Definition of Consumer Behavior 2) Need of Study of Consumer Behavior 3) Consumer Decision Process Model 4) Factors Affecting Consumer Behavior 5) Changes in Consumer Behavior

What Is Consumer Behavior

Consumer Behavior is defined as activities people undertake when obtaining , consuming and disposing of products and services.

Consumer Behavior
OBTAINING
How You Decide You Want To Buy Where You Buy How You Transport Product Home

CONSUMING
How You Use The Product Who Uses The Product How Much You consume.

DISPOSING
How you get rid of Remaining Product How You Recycle It Are You Going To Resell.

Need Of Studying C.B

To Design the optimal product or services for customers. To Determine what price will the customer give up for purchasing product or service. To Determine where the product or services should be available so that it would be easy for the customer to buy.

To Determine which method of promotion would be most effective for getting the customers to buy a product. It Helps in changing the behavior of the consumers. The Important reason for studying consumer behavior is the significance in our lives.

Consumer Buying Decision Process:

NEED RECOGNITION DIVESTMENT SEARCH FOR INFORMATION

POSTCONSUMPTION EVAALUATION

PRE -PURCHASE EVALUATION OF ALTERNATIVES

CONSUMPTION

PURCHASE

Stage 1: Need (or Problem) Recognition: The starting point of any purchase decision is a consumers need or problem. Consumer buys the product if he believes that its ability to solve a problem is more than its cost of buying. Manufacturers must examine the needs of the consumers before making the product.

Example of Need Recognition: Need of car to university going student who is wiling to spend 5 lacs.

Stage 2 : Search For Information: Once need recognition occurs , consumers begin searching for information and solutions to satisfy unmet needs . The sources of information can be of 2 types: 1) Market-dominated source: Advertisements , salesperson , websites etc 2) Non Market-dominated sources: Friends , family , peers etc

Example of search for information: Now Student begin his quest of information

Stage 3 : Pre-Purchase Evaluation of Alternatives: This includes evaluation of various alternatives identified during the search process. Factors affecting evaluation of alternatives are: Price Features Reliability Safety

Example of Pre-Purchase evaluation of alternatives: After collecting information and compiling a list of models, he evaluate models on the basis of price, features, Style, safety, mileage, maintenance cost etc

Stage 4 : Purchase: After choosing the alternative, the customer decides from which retailer to buy the product. Factors influencing the consumer to choose the retailer are: Price Discount Influence of salesperson Availability of Product Credit Card Facility Location

Example of Purchase: Student Choose a reliable, four door red car that priced under 5 lacs.

Stage 5: Consumption: After Taking the possession of a product, Consumption can occur at the point at which consumer use the product. Consumption can either occur immediately or delayed.

Durable Goods: consumption can be immediately or delayed.

Perishable Goods: consumption occurs in short time.

Stage 6 : Post Consumption Evaluation: The success of product depends upon its consumption i.e. how the consumer uses the product and how much he uses.
Highly Satisfied When Expectation Matched Shorter Next Purchase Decision

Stage 7 : Divestment: It is the last stage in consumer decision process. It include Reuse of Product Or Reselling. As in case of student car buyer, he has a choice of reselling or taking it to junkyard.

Factors Affecting Consumer Behavior

Cultural Factors

Psychological Factors

Factors Affecting Consumer Behavior

Personal Factors

Social Factors

Cultural Factors
Social class Subculture Culture

Culture: It refers to set of learned beliefs , values , attitude, morale ,customs ,habits and forms of behavior that are shared and transmitted from generation to generation. Sub-culture : A group of people with shared value systems based on common life experiences and situations.

Example of cultural difference: People in north India splurge money on luxuries on the other hand people in south India prefer simple living. The first showroom of Mercedes was opened in Ludhiana owing to great scope Social Class : Almost every society has some form of social structure. Social classes are society's relatively permanent and ordered divisions whose members share similar values, interests and behavior

Social Factors
Roles and Status

Reference Groups

Family

Family: Family size and Family structure has considerable influence on consumer behavior.

Reference Groups: Reference groups refers to persons with whom the customer interact while taking purchase decisions. There are 2 types of reference groups: 1) Primary Group: Family , close friends , neighbors , relatives etc 2) Secondary Group: It refers to groups with which consumer interact occasionally like professional groups , salesman etc

Roles and status: A person belongs to many groups , family , clubs and organization . The person's position in each group can be defined in terms of both role and status. For example: "X" plays the role of father and husband in his family. In his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them..

Personal Factors
Age and Lifestyle
Personal Factors

Occupation

Economic Situation

Personality

Age and Life cycle: Purchasing tastes changes with age.

Occupation: Occupation also shapes the pattern of consumer behavior.

Economic Situation: Personal Income HIGH Demands HIGH Personal Income LOW -- Demands LOW
Personality and Lifestyle: Personality refers to traits such as self-confidence , sociability , aggressiveness etc. Everyone has its own lifestyle , some lives simple lifestyle while other believes in materialism.

Psychological Factors
Motivation
Psychological Factors

Perception

Learning

Beliefs & Attitudes

Motivation: It is an inner drive that reflects goal

directed arousal. It is the drive to satisfy needs and wants both physiological and psychological through the purchase and use of products and services.

MASLOW THEORY OF MOTIVATION:

Perception : Perception is the process by which person interpret and organize sensation to produce a meaningful experience of the world. Perception includes: I. Exposure to stimuli I. Interpretation of stimuli I. Ability to identify

Learning: Learning is a behavioral modification that occurs through experience . For instance we may experience the sales people in one store being nicer to us than those in other . Thus we develop a preference for that store. Another example of learning is that people avoid to buy those food that they have consumed shortly before becoming ill.

Beliefs and Attitude: A belief is a descriptive thought that a person has about something. A person may believe that a certain cooking oil X has the lowest fat and is best for health. This belief may be based on some real facts or may not be. Attitude refers to persons consistently favorable and unfavorable evaluation or feelings towards a project or an idea.

Changes In Consumer Behavior Surveyed by ICMOC

Indian Consumers became more value sensitive. They strictly follow their culture. They give preference to features of product rather than Brand name. Rural Indian Consumers showing signs of change.

 Emerging Trend of credit Shopping. Indian Consumers not confined to single brand. Tastes and Preferences of current generation are changing rapidly. Middle class Indian consumers provided a big boost to consumer buying culture. Indian companies are doing well.

What influences you when you buy some thing??

Price? Utility? Need?