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Consumer Behavior
Who buys the product?
What does he buy?
When does he buy? How does he buy?
Why does he buy?
Where does he buy
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Who buys the product?
Individual orIndustrial buyer
On the basis ofInvolvement of customer products can be classified as
a) High Involvement Product
b) Low Involvement Product
High Involvement Product
Characteristics
High Price ( TV)
Complex Features ( PC, motor cycles)
Large difference between alternatives
High Perceived Risk ( Shares, Perishable products)
Reflecting self concept ( clothes, perfumes, jewellery , Hobbies)
Low Involvement Product
Low cost, not reflecting buyers self concept, small difference between alternatives
. Eg toilet soap
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Classification of behavior Depending on Involvement and differentiation
of product (buying situations)
Routine response
Limited Decision making
Extensive Decision making
Routine response
low involvement & low differentiation .eg toilet soap , tooth paste
Products with lower price & frequently purchased
Limited Decision making
High involvement & low differentiation . Eg TV, refrigerators ,new brand
Comparative Investment is more and less frequently purchased.
Time consuming ,moderate risk and leads to trial purchase.
Companys strategy is brand extension (lifeboy liquid soap) to avoid
newness
Extensive Decision making
High involvement & High differentiation
Purchasing unfamiliar product ,high price and purchased once
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What does he buy?
product or service (what type)
Product classification
On the basis of durability
Non durable products ( soap, foods products)
Durable Products ( TV, automobile etc)
Services
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Product
Consumer Goods Industrial Goods
Convenience Shopping Specialty Unsought
furniture Mercedes encyclopedia
life insurance
Staples Impulse Emergency
salt cold drink drugs,umbrela
Toothpaste ice cream
soap
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Theories of Motivations
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SELF
ACTUALIZATION
ESTEEM NEEDS
SOCIAL NEEDS
SAFETYNEEDS
PRIMARYNEEDS
MASLOWS HIERARCHYTHEROM
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ASSUMPTIONS
MANIS WANTING BEING
SATISFIED NEED IS NOT MOTIVATOR
NEEDS HAVE HIERARCHY OF IMPORTANCE
Basic Needs- air, food, drink, shelter, warmth, sex, sleep, etc.
Safety Needs- protection from elements, security, order, law, limits,stability, etc.
Affiliation work group, family, affection, relationships, etc.
Esteem Needs Self esteem, achievement, recognition
Self Actualization Personal Potential, personal growth, self fulfillment
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Hertzberg's Two FactorTheory
Satisfiers (Motivators) and dissatisfiers (Hygiene) present in work situation
Presence of motivators motivate persons but absence doesnt affect that much
where as presence of hygiene affects more.
Motivators brand name, customer service, focused sales team
Hygiene product quality, price, warranty
McClelland's Theory of Achievement Motivation
Three motives that drive human performance .need for belonging, need for power and
need for achievement.
These drivers motivate customer to purchase product & marketer has to differentiate
advertise according to that.
Need for belonging- Johnson baby soap , Cadbury, Master card
Need for Achievement- Onida TV advertisement,
Need for power-
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Learning Theory
Learning through punishment or lure of reward which can be conditioned or
result of trial
It is result of factors like drives, stimuli, cues, responses and reinforcement
Theory of Cognitive Dissonance
Explains Customers post purchase behavior
Present when alternatives are more and all are almost similar also price of
product is more. Result of high involvement.
It is post purchase behavior when buying process or product performance
doesnt happen the way we expect. eg post purchase behavior for car
purchasing thinking about after sales service ,car performance
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STIMULI
MKTG OTHER
BUYER
CHARACTER. BUYING
ROCESS
CULTURAL
SOCIAL
PERSONAL
PSYCHOL
OGICAL
PROBLEM
RECOGNITION
INFORMATION
SEARCH
EVALUATION
OF
ALTERNATIVES
PURCHASE
DECISION
POSTPURCHAS
E BEHAVIOR
BUYERS
DECISSIONPRODUCT
CHOICE
BRAND
CHOICE
DEALER
CHOICE
PURCHAS
E TIMING
PURCHAS
E AMOUNT
PROD
UCT
PRICE
PROM
OTION
PLAC
E
POLITIC
AL
ECONO
MICAL
SOCIAL
TECHN
OLOGIC
AL
CONSUMER BEHAVIOR MODEL
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The Consumer Buying Process
Marketing Inputs
Product
Price
Promotion
Place
consumer
Purchase Decisions
Product Choice
Location Choice
Brand Choice
Other Choices
Psychological Inputs
Culture
AttitudeLearning
Perception
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Consumer Buying Behavior
Cultural Social Personal PsychologicalCulture
Subculture
Social class
Reference
group
-Primary
- Secondary
Roles status
Age
Occupation
Lifestyle
Personality self
concept
Perception
Motivation
Attitude
Need & motives
Learning
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Psychological Factors
Needs and motives
Customer buy product when there is need
Needs follows hierarchy when first is satisfied then second comes.
Basic need- Customer purchase toilet soap for basic need of cleaning when this is
satisfied then he goes for another
Security need- alarm or godrej lock
Love needs- greeting cards ,gifts, clubs, chocolates
Affiliation needs- parker pen, Mercedes car
Self actualization needs- social camps or activities, meditation camps etc
Perception
It is process of being exposed to Stimuli ( 4ps,environment),paying attention to
stimuli,selecting them,organizing , interpreting them and reacting to them.
It has three dimensions
Selective attention, Selective distortion and selective retention
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Selective attention
When stimuli matches to expectation and it is beneficial, attention is paid
Eg customer want to purchase car then only he will pay attention to different offers and
advertisements of cars
Selective Distortion
Happens because customer add their values and beliefs to the message.
Eg ITC cigarette add shown young person smoking with older persons
Kelvin Care add showing young children on ramp
Selective Retention
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Learning
It is the process by which people get knowledge and experience which they use
while buying and purchasing. Eg new product in market (liquid soap)
Attitude
Persons favorable or unfavorable reaction of a stimulus. It is the consistently
positive or negative inclination towards objects, ideas ,products or people.
Company has to influence attitude by taking help of marketing mix.( surf ki
kharidari mai hi samzdari hai)
Personal Factors
Age
It affects purchasing power, taste, needs ,interest and behavior
Stages like birth, infanthood, growing child, teenager, adolescent adult,middleaged and finally death
Income
Occupation and income affects consumer behavior.eg carpenter will purchase
hacksaw .car satisfies basic need of transportation but choice will different for
different income group
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Education
It affects consumer behavior as educated people will be well aware of alternatives.
Eg demand for magazine or news paperGeographic Location
Metro city, urban or rural area, cold area or desert. eg clothes
Personality
Persons distinct psychological and physical characteristics. Adventures sports-high risk takers
Cultural Factors
It represents all beliefs, values, traditions , habits shared by a group and passed
on to successive generations. It involves
Cultural Changes ( eg role of women)
Core values ( Cigarette advertisement showing young as well as old person)
Sub culture ( based on nationality, religion, region as north Indian)
Social Class ( lower , middle and upper class)
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Social Influences
Social Status or roles
Reference Group ( social ,economic or professional group)
Family
Roles as decider ,influencer, buyer and user.
Male dominating ; insurance
Wife dominating ; kitchen appliances
Situational Influence
Proper arrangement, display, advertisement ,recommendation by retailer
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Types of buyer behaviour
Complex buyer behaviour e.g. Intel
Pentium Processor
Dissonance-reducing behaviour (brandreduces after-sales discomfort)
Habitual buying behaviour e.g. salt - little
difference
variety seeking behaviour - significant
brand differences e.g. soap powder
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The Buying Decision Process
recognition of the need e.g. Bike
choice of involvement level (time and effort justified) e.g.two weeks
identification of alternatives e.g. Hero Honda ,Bajaj,TVS,LML
evaluation of alternatives I.e. price, instalment ,mileage,comfort ,style ,maintainace ,service,
decision - choice made e.g. Hero Honda
action e.g. buy Hero Honda post-purchase behaviourI.e. use, breakdowns, etc
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INDUSTRIAL BUYING BEHAVIOR
Marketing of goods to Industrial and Institutional Customers
Difference between consumer market and Industrial Market
Fewer buyers
Larger size buyers
Close supplier Customer RelationshipDerived Demand
Inelastic demand
Fluctuating Demand
Professional Purchasing
Several Buying InfluencesDirect Purchasing
Reciprocity
Geographic concentration of buyers
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Industrial Buying Process
Need Recognition
General need Description
Product Specification
Supplier Search
Inviting Proposal from qualified suppliers
Supplier Selection
Determination of Order Size and placement of order
Review and Feedback
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