Consumer Behavior

What is Consumer Behaviour?

Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and follow these actions

Customer vs. Consumer Behavior

Customer behavior: A broad term that covers both individual consumers who buy goods and services for their own use and organizational buyers who purchase business products Consumer behavior: The process through which the ultimate buyer makes purchase decisions
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Need to study ?
You cannot take the consumer for granted any more Therefore a sound understanding of consumer behaviour is essential for the long run success of any marketing program

This study draws on concepts from various other disciplines

Psychology Sociology Anthropology Economics Marketing

Module Objectives
1.

2.
3. 4. 5. 6. 7.
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Distinguish between customer behavior and consumer behavior. Explain how marketers classify behavioral influences on consumer decisions. Describe cultural, group, and family influences on consumer behavior. Explain each of the personal determinants of consumer behavior; needs and motives, perceptions, attitudes, and self-concept theory. Distinguish between high-involvement and lowinvolvement purchase decisions. Outline the steps in the consumer decision process. Differentiate among routinized response behavior, limited problem solving, and extended problem solving by consumers.

Consumer Behavior you are what you buy

 Think of a recent important purchase briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase What influenced you at each step?

Examples of Buying Motives: Psychological or Functional?

A senior wants to impress his date at the prom . His primary motive is ?

Psychological

Examples of Buying Motives: Psychological or Functional?

A girl wants to remember her grandmother on her birthday. Her primary motive is?

Psychological

Examples of Buying Motives: Psychological or Functional?

A homemaker needs a new washing machine and has had good experiences with LG. Her primary motive is ?

Functional

Examples of Buying Motives: Psychological or Functional?

A teacher wants to buy a practical car to be used for family transportation. Her/His primary motive is ?

Functional

Examples of Buying Motives: Psychological or Functional?

A career woman always buys viva clothes Her primary motive is?

Psychological

Examples of Buying Motives: Psychological or Functional?

An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is?

Functional

Examples of Buying Motives: Psychological or Functional?

A homeowner needs to mow their lawn. Their primary motive is?

Functional

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

Consumer Buying Behavior Competency

Functional Motive
The price is 40 cents off the regular price. It never needs ironing. Diamonds are forever. Serving you since 1971.

Psychological Motive

Ninety-day warranty.

Consumer Buying Behavior Competency

Functional Motive
Running shoe with built-in arch. Its all the rage colored action wear and style. Kellogesthe breakfast of champions! JK-belted radial tires warranted for 40,000 miles A watcha gift she will treasure always.

Psychological Motive

Factors affecting Consumer involvement

Previous

experience: low level involvement

Interest: high involvement Perceived

risk of negative consequences: high involvement

Situation: low to high due to risk Social

So
Offer extensive information on high involvement products In-store promotion & placement is important for low involvement products Linking low-involvement product to high-involvement issue can increase sales

visibility: involvement increases with product visibility

Types of consumer involvement and decision making

Routine
Involvement Time Cost Information Search Number of alternatives Short Low Short Internal only one

Limited
Low to moderate Short to moderate Low to moderate Mostly internal few

Extensive
High Long High Internal & external many

 Classifying Consumer Problem-Solving Processes

Three categories of problem-solving behavior
Routinized Response Behavior choosing a preferred brand Limited Problem Solving encountering a new brand Extended Problem Solving brands are difficult to categorize or evaluate

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Individuals Are Affected by the Purchase Situation

Purchase Reason Time Available
Physical Surrounding s

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Consumers Use Problem Solving Processes

Marketing Mixes Psychological Variables Person Making Decision All Other Stimuli Purchase Situation Social Influences Need-want Awareness Routinized Response

Information Search
Set Criteria Feedback of Information as Attitudes

Decide on Solution
Postpone Decision Purchase Product Postpurchase Evaluation

Response

Three Levels of Problem Solving Are Useful

Low involvement Frequently purchased Inexpensive Little risk Little information High involvement Infrequently purchased Expensive High risk Much information desired

Routinized Response Behavior

Limited Problem Solving

Extensive Problem Solving

Low involvement
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High involvement

Limited or Extensive Problem Solving?

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Problem Solving is a Learning Process

Awareness Interest Evaluation Trial Dissonance may set in after the decision!

Decision
Confirmation
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Ethnic Dimensions of the Indian Market

Buy Differently

Avoid Stereotypes

High Growth Rate

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Consumer Decision-Making Process

Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior

Complete model of consumer behavior

Start
Need recognition Internal search Exposure Stimuli (marketer dominated, other) Attention Comprehension Acceptance Retention Memory Purchase Individual differences resources motivation & involvement knowledge attitudes personality, values, lifestyle Alternative evaluation Influences culture social class family situation

Search

Outcomes

External search Dissatisfaction Satisfaction

Factors Influencing Consumer Behavior Personal

Psychological Social Cultural

 Cultural Influences
Culture: values, beliefs, preferences, and tastes handed down from one generation to the next It is important to recognize the concept of ethnocentrism, or the tendency to view your own culture as the norm, as it relates to consumer behavior.

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 think of an important purchasing decision you have made

what are some of the thoughts you have had following your purchase? Any regrets? what has influenced those thoughts?

how have you dealt with the discomfort?

how has the company anticipated or dealt with your discomfort?

The information search stage

An internal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem-- often sufficient for frequently purchased products. An external search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low.

Personal sources (friends and family)

Public sources (rating services like Consumer Reports) Marketer-dominated sources (advertising or sales people)

The evoked

set: a group of

brands from which the buyer can choose

 go back to your past purchase what were the specific internal and external sources of information that influenced your decision? how do you determine (and rate) the credibility of these sources?

what specific information influenced you?

Interpersonal Determinants of Consumer Behavior

Why People Buy New Products

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 International Perspective on Cultural Influences

Cultural differences are particularly important for international marketers Successful strategies in one country often cannot extend to other international markets because of cultural variations

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 Subcultures: subgroup of culture with its own, distinct modes of behavior

Cultures are not homogeneous entities with universal values. Subcultures can differ by:
Ethnicity or Nationality Age or Gender Religion Social class or Profession

Ethnic and Racial Minorities as a Percentage of the Total U.S. Population

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Exhibit 5-7
The Family Life Cycle

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Family Life Cycle Implications

Acceptance of new ideas

Reallocation for teenagers

Key Issues

Senior Citizens

Empty Nesters

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 Family Influences
Autonomic role is when the partners independently make equal numbers of decisions. Husband-dominant role is when the husband makes most of the decisions. Wife-dominant role is when the wife makes most of the decisions. Syncratic role is when both partners jointly make most decisions.

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Family Influence on Buying Behavior

Husband-Dominant Wife-Dominant Equal

Relative influence of husbands & wives

Final decision Information search
lamps furniture groceries NonRx Toys/games

Wife Dominant
Child clothing Pots & pans

Womens clothing

luggage
carpet refrigerator vacations Paint wallpaper Mens leisure clothing Mens business clothing TV sets stereo camera Financial planning

Joint

Family car

Sport equipment hardware

Lawn mower

Extent of role specialization

100 75 50 25

Husband Dominant
0

 Children and Teenagers in Family Purchases

Growing numbers are assuming responsibility for family shopping They also influence what parents buy They represent over 50 million consumers in their own right
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Social Influences Affect Consumer Behavior

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Social Class Affects Attitudes, Values, & Buying

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Other Social Influences

Reference Groups

Opinion Leaders

Culture

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Group Influences
Brand Choice
Strong
Public Luxuries Strong Golf Clubs
Snow Skis Sail Boat

Weak Private Luxuries

TV Video Games Ice Makers Trash Compactors

Product Choice

Weak

Public Necessities
Wrist Watch Automobiles Dress Clothes

Private Necessities
Mattresses Floor Lamps Refrigerators

Appealing to Minority Consumers

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 quickly list 10 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?

Personal Determinants of Consumer Behavior

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 Needs and Motives

Need: an imbalance between a consumers actual and desired states Motives: inner states that direct a person toward the goal of satisfying a felt need

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Psychological Factors
Wants
Based on a want or desire to have something. Not a necessity.

Need Recognition
Marketing helps consumers recognize (or create) an imbalance between present status and preferred state When a current product isnt performing properly
When the consumer is running out of an product When another product seems State Preferred superior to the one currently used

Several Needs at the Same Time

Personal Needs

Social Needs

Safety Needs

Physiological Needs
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Physiological Needs
Products Vitamins, herbal supplements, medicines, food, exercise equipment, fitness clubs Pepcid antacidJust one and hearburns done Puffs facial tissuesA nose in need deserves Puffs indeed Ocean Spray cranberry juiceCrave the wave Safety Needs Products Cars and car accessories, burglar alarm systems, retirement investments, insurance, smoke and carbon-monoxide detectors, medicines Firemans Fund insuranceLicense to get on with it. American General Financial GroupLive the life youve imagined. VolvoProtect the body. Ignite the soul.

Marketing themes

Marketing themes

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Belongingness Products Beauty aids, entertainment, clothing, cars

Marketing themes

Old NavySpring Break from coast to coast Washington Mutual banksMore human interest TJ Maxx clothing storeYou should go
Esteem Needs

Product Marketing themes

Clothing, cars, jewelry, hobbies, beauty spa services Lexus automobilesThe relentless pursuit of perfection Van Cleef & ArpelsThe pleasure of perfection. Accutron watchesPerhaps its worthy of your trust. Jenn-Air kitchen appliancesThe sign of a great cook. Self-Actualization

Products
Marketing themes
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Education, cultural events, sports, hobbies, luxury goods, technology, travel

GatoradeIs it in you? DePaul UniversityTurning goals into accomplishments Dodge cars and trucksGrab life by the horns

Marketing Strategies and Maslows Hierarchy

Discovering Purchase Motives

Manifest motives are those that are known and acknowledged. Latent motives are those that are either unknown to the customer or ones that the customer are reluctant to acknowledge. Researching latent motives often requires use of projective techniques.

Latent and Manifest Motives

Motivation Research Techniques

Projective Technique Example

What do you think of the new software that the company installed?

I havent used it much yet, but...

Projective Technique Example

Someone who drinks hot tea is ______________. Tea is good to drink when __________________. Making hot tea is _________________________. My friends think tea is _____________________.

Projective Technique Example

Results of a word association test with alternative brand names for a new fruit-flavored sparkling water drink included the following:

Possible Brand Name

Associated Words

Means-End Analysis
The benefit chain or laddering technique (based on Means-End Theory) seeks a deeper understanding of how product attributes are associated with personal beliefs and goals. Thus, it provides insights into why the customer thinks various benefits are important. Knowing why customers care about certain attributes may suggest the kinds of quality improvements that will be most meaningful to customers.

 Here is a typical chain or ladder obtained from a secretary discussing why she would prefer to use an overnight package delivery service that has drop boxes available:
Drop Box Convenient Save Time Can Do More Personal Satisfaction Accomplishment Self-Esteem

Most Ads appeal to Multiple Motives

 Approach-Approach Conflict choice between 2 attractive alternatives. Approach-Avoidance Conflict both + and consequences in purchase of particular product. Avoidance-Avoidance Conflict choice between 2 undesirable alternatives.

Motivation Conflict

Interactive Exercise: Needs

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Personal Needs

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 HarleyDavidsons Appeal to SelfActualization Needs

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 Perceptions: the meaning that a person attributes to incoming stimuli gathered through the five senses sight, hearing, touch, taste, and smell.

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Perception Determines What Consumers See and Feel

Selective Exposure

Selective Retention
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Selective Perception

Learning Determines What Response is Likely

Drive

Cues Reinforcement Response

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Cue

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 Perceptual screens: the filtering processes through which all inputs must pass Sony
Breaking Through Perceptual Screens

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 Subliminal Perception: subconscious receipt of information

Almost 50 years ago, a New Jersey movie theater tried to boost concession sales by flashing the words Eat Popcorn and Drink Coca-Cola. Subliminal advertising is aimed at the subconscious level of awareness. Subliminal advertising has been universally condemned as manipulative, and is exceedingly unlikely that it can induce purchasing. Research has shown that subliminal messages cannot force receivers to purchase goods that they would not consciously want.
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 Attitudes
A persons enduring favorable or unfavorable evaluations, emotional feelings, or action tendencies toward some object or idea Attitude components:
Cognitive individuals information and knowledge about an object or concept Affective components deal with feelings or emotional reactions Behavioral involves tendencies to act in a certain manner
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Attitudes Relate to Buying

Belief: an opinion Attitude: a point of view Key Concepts Meeting Expectations Is Important Ethical Issues May Arise
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Need to Understand attitudes & Attitudes & Beliefs

Work With Existing Attitudes

 Changing Consumer Attitudes

Attempt to produce consumer attitudes that will motivate the purchase of a particular product Evaluate existing consumer attitudes and then make the product characteristics appeal to them
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 Modifying the Components of Attitude

Attitudes change in response to inconsistencies among the three components Marketers can work to modify attitudes by providing evidence of product benefits and by correcting misconceptions
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Personality and Lifestyle Analysis

Personality: how people see things

Activities

Interests Opinions
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 Learning
An immediate or expected change in behavior as a result of experience. The learning process includes the component of:
Drive any strong stimulus that impels action [fear, pride, hunger] Cue an object in the environment that determines the nature of the consumers response to a Drive [ad for a restaurant] Response a reaction to a set of Drives and Cues [go to the restaurant] Reinforcement a reduction in drive that results from a proper response

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