Consumer behavior (CB)

Arash Najmaei

Arash.unity@gmail

Arash.unity@yahoo.com

H/P : 0172116875

Lecture one( 15 April2008)

Assessment…

• 60% course works

1.10% attendance

2.10% class participation

3.40% assignment

• 40% final exam

Referencing….

• “ Consumer Behavior” Leong G.Schifferman and Lesilie Lazar Kanuk. Pearson Prentice Hall ninth edition

• “ Consumer Behaviour” Michael R. Solomon , Prentice Hall

• “Consumer Behaviour” Hawkins,Mothersbaugh and Best, McGraw Hill

• Lecture notes

introduction

• Consumer Vs. Customer

• The importance of consumer and CB

• Marketing evolution and shifts of power

Consumer versus Customer

• Theoretically consumers are end users and customers are buyers but this definition brings about some degree of ambiguity . Therefore we define consumers as those who seek products to consume and satisfy they needs. Based on this definition, consumers are the most important element in marketing and understanding their behavior makes really sense.

Application of CB

1. Marketing Strategy

2. Regulatory (Public) Policy

3. Social Marketing

4. Personal Consumer Skills

Orientation in CB

• Anthropology( cultural and cross culture studies)

• Economics( demand, supply, purchasing power and so

on…)• History and geography• Psychology ( attitudes, perceptions, beliefs

an so on…)• Sociology

6 - 8

Characteristics Affecting Consumer Behavior

1. Cultural

2. Social

3. Personal

4. Psychological

Key Factors in studying consumer behavior Key Factors in studying consumer behavior

Factors Influencing Consumer Behavior

Cultural

Culture

Subculture

Social Class

Cultural

Culture

Subculture

Social Class

Social

Reference Groups

Family

Roles & Status

Social

Reference Groups

Family

Roles & Status

Personal

Age & Life-Cycle Stage

Occupation

Economic Situation

Lifestyle

Personality & Self-Concept

Personal

Age & Life-Cycle Stage

Occupation

Economic Situation

Lifestyle

Personality & Self-Concept

Psychological

Motivation

Perception

Learning

Beliefs & Attitudes

Psychological

Motivation

Perception

Learning

Beliefs & Attitudes

Influences on the consumer purchase decision process

Consumer and Marketing

• Peter Drucker and Consumer

The sole aim of business is to create consumer

• Consumer behavior elements

1. Pre-purchase

2. Purchase

3. Consumption

4. Post consumption

Marketing Strategy and Consumer Behavior

MARKETANALYSIS

MARKETINGSTRATEGY

MARKETSEGMENTATION

CONSUMER DECISION

PROCESSES

OUTCOMES

Questions….

• Why do we buy?• How do we buy?• Where do we buy from?• How much do I buy?• With whom do I buy?• For whom do I buy?• How often do I buy?• What brand do I buy?

The Nature of Consumer Behavior

1. External Influences

2. Internal Influences

3. Self-Concept

4. Situations

5. Experiences and acquisitions

Consumer decision process

• Consumer decision making steps (5 steps) • Consumer decision process and

corresponding model to elaborate their decision making process in order to analyze their behavior along different steps.

• CDP model

6 - 16

• Five Stages:1. Need recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision

5. Post-purchase behavior

The holistic Buyer Decision Process

CONSUMER DECISIONS:Theory and Reality in Consumer Buying

InformationSearch

ProblemRecognition

Evaluation ofAlternatives

Purchase

PostpurchaseEvaluation/Behaviors Theory

Complications

Consumer Decision-Making Process

Postpurchase Behavior

Postpurchase Behavior

PurchasePurchase

Evaluation of AlternativesEvaluation

of Alternatives

Information SearchInformation Search

Need RecognitionNeed Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

Consumer needs..

• Maslow’s famous hierarchy of needs helps both marketers and consumers to understand and classify their needs in order to find the best choice of satisfaction.

Hierarchy of needs

6 - 22

The Buyer Decision Process

• Need recognition

• Information search

• Evaluation of alternatives

• Purchase decision

• Postpurchase behavior

• Needs can be triggered by:– Internal stimuli

• Normal needs become strong enough to drive behavior

– External stimuli• Advertisements• Friends of friends

Process Stages Process Stages

6 - 23

The Buyer Decision Process

• Need recognition

• Information search

• Evaluation of alternatives

• Purchase decision

• Post-purchase behavior

• Primary source of information:

• Internal

Retrieval and cognitive process

• external

Process Stages Process Stages

• Consumers exhibit heightened attention or actively search for information.

• Sources of information:– Personal– Commercial– Public– Experiential

• Word-of-mouth

Approaches to Search for information and Problem Solutions

INTERNAL

EXTERNAL

MemoryThinking

Word of mouth, media,store visits, trial CATALOG

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

Determinants of External Search

Cost vs. Benefits of Search

• Market Characteristics

• Product Characteristics

• Consumer Characteristics

• Situation Characteristics

The mechanism of consumer loyalty achievement

• By studying consumer behavior marketers being able to understand different behavior of various consumers toward different products and brand .then they can set proper set of strategies in marketing mix policies to target and serve consumers in different segments which in return would result in consumer satisfaction , consumers satisfaction will undoubtedly lead to consumer loyalty and constant profit for company.

Summary….

• Consumer and customer

• Consumer behavior

• Application of CB

• Orientation of CB

• Underlying characteristics

• Consumer decision process ( CDP)