CONSUMER BEHAVIOR
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DR. ANUPAMAA S. CHAVAN
STUDENTS ARE STRICTLY WARNED NOT TO SHARE/UPLOAD THIS PPT ON ANY WEBSITE.
Learning Objectives:
- ▪What is Consumer Behavior
- ▪Factors influencing Buyer’s Behavior
- ▪Buying Process
Consumer Behavior
- Consumer behavior is the study of how individual customers,
groups or organizations select, buy, use, and dispose ideas, goods,
and services to satisfy their needs and wants.
- Engel, Blackwell, and Mansard, “Consumer Behaviour is the actions
and decision processes of people who purchase goods and services
for personal consumption”
- A consumer’s buying behavior is influenced by cultural, social, and
personal factors.
- It refers to the actions of the consumers in the marketplace and the
underlying motives for those actions.
Consumer Behaviour
- Marketers need to know:
- What one buys for cleaning teeth?.......... Toothpaste; brand is preferred:-
Colgate/Dantkanti/Close-up/Dabur
- Why he buy’s?.......for sparkling white teeth/strong teeth/ fresh breath
- When he buy’s? ……Weekly/Monthly
- Where he buys from/……..Supermarket/Retail store/Online
- How much he buys?........200gm/400gm
-
WHY DID
DUNKIN DONUT
FAILED IN
INDIA??
Consumer Behaviour Roles/Buyer’s Roles
Initiator: A person who first suggests the idea of buying the particular product or service. Initiator is the individual who
determines that some need or want is not being fulfilled and authorizes a purchase to rectify the situation.
Gatekeeper: Influences the family’s processing of information. The gatekeeper has the greatest expertise in acquiring
and evaluating the information
Influencer: A person whose view or advice influences the decision. Influencer is a person who, by some intentional
or unintentional word or action, influences the buying decision, actual purchase and/or the use of product or service
Decider: A person who decides on any component of a buying decision; whether to buy, what to buy, how to buy, or
where to buy .
Buyer: The person who makes the actual purchase.
User: A person who consumes or uses the product or service.
- ➢State the Buyer’s role for your admission in ASMSOC
MODEL OF CONSUMER BEHAVIOR/(STIMULUS RESPONSE
MODEL)
The starting point for
understanding
consumer behavior is
the stimulus-response
model.
Marketing and
environmental stimuli
enter the consumer’s
consciousness, and a
set of psychological
processes combine
with certain consumer
characteristics to
result in
decision processes
and purchase
decisions.
FACTORS INFLUENCING CONSUMER BEHAVIOR
What Influences Consumer Behavior?
- Cultural factors
- ◦
- ◦ Culture
- ◦
- ◦ Subcultures
- ◦
- ◦ Social classes
Culture
Cultural factors comprise of set of values, beliefs and ideologies of a particular
community or group of individuals.
It is the culture of an individual which decides the way he/she behaves. It is a learned
behavior which is acquired from the surroundings in which one lives.
Subcultures
- Each culture further comprises of various subcultures such
as nationalities, religion, racial groups, geographical
regions. Sub culture provides more detailed identification
of their members.
- Consumer preferences are influenced by their subculture
- Eg: Gujarati can be a Vaishnav or a Jain believer
- For some white colour is auspicious for some it is
inauspicious.
- For Hindus eating beef is considered to be a sin whereas
Muslims and Christians absolutely relish the same.
Social Classes
- The division of members of a society into a hierarchy of distinct classes, so that members
of each class share similar values, interests, and behavior
- Social class depend on variables such as Income, Wealth, Occupation and Education
- The social class in US is classified in seven ascending levels:
- [Link] lowers
- [Link] lowers
- [Link] class
- [Link] class
- [Link] middles
- [Link] uppers
- [Link] uppers
Social Factors
Social factors such as
- [Link] groups
- [Link]
- 3. Family
- 4. Social roles and status
- affect buying behavior……
Reference Groups
- Reference groups having direct influence are membership groups such as:
- ◦Primary groups – Family members, friends, peers, neighbours, and coworkers
- ◦Secondary Groups – Religious/Professional/Trade-Union groups
- People are also influenced by groups which they do not belong to:
- ◦Aspirational Groups
- ◦Dissociative Groups
- ◦
- ◦You also have Opinion Leaders who offers informal advice or information about a specific
product or product category.
- ◦
Reference Groups
- Reference Groups influence individuals in 2 ways:
- [Link] influence: when consumers perform their actions
that confirm to the norms set by the society. Products that are
used in public have normative influence
- [Link] influence: when consumer is provided
information from reliable source which helps him to make a
purchase decision.
- Exercise: Enlist the goods/services you have purchased under
the influence of various reference groups
Cliques
- Cliques are small groups whose members interact frequently.
Family
- Family is a group of individuals who are residing together and are related to each other by
birth, marriage or adoption
- Family can be distinguished between two types
- 1. Family of Orientation: Parents and Siblings – influence a persons orientation towards
religion, politics, economics, ambition
- 2. Family of Procreation: Spouse and Children – direct influence on everyday buying behavior
of the consumers
Role and Status
- Individual belong to many groups- family, clubs, organisation
- Role refers to activities individual is required to perform as a part of that group.
- Each role has an impact of status which the individual has on the society.
- CEO of an organisation has to play two roles:
- -in organisation
- -in his family
Personal Factors
- Age & Life Cycle stage
As an individual grows his taste and preferences change.
- Occupation and Economic situations influences the consumption pattern- accordingly the
products are designed.
- e.g. Software Co. makes different software required for - Lawyers, Engineers,
Physicians, Managers etc.
Personal factors
- Personality and Self Concepts
- Personality signifies the inner psychological characteristics that reflect how a person reacts
to his environment.
- Personality is often described in terms of traits such as self confidence, dominance,
autonomy, deference, sociability, defensiveness, and adaptability.
- Brands also have personality and consumers are likely to choose brands whose
personalities match their own.
- Sincerity (down-to-earth, honest, wholesome, and cheerful)
- Excitement (daring, spirited, imaginative, and up-to-date)
- Competence (reliable, intelligent, and successful)
- Sophistication (upper-class and charming)
- Ruggedness (outdoorsy and tough)
Personal Factors
- Lifestyle & Values : It is a way how person lives. It is individual’s pattern of living in the world as expressed
in activities, interests, and opinions. People from same subculture, social status and occupation may adopt
quite different lifestyles
- Lifestyles are shaped partly by whether consumers are money constrained or time constrained
Eg:- Walmart (Retail)- largest company in the world follows ‘ everyday day low prices’ – for price minded
consumers
- Food processor for time constrained consumers.
- Individuals having healthy lifestyles consume healthy products.
- LOHAS-lifestyles of health and sustainability
Psychological Factors………
- The Psychological factors are the factors that talk about the psychology of an individual
that drive his actions to seek satisfaction. It includes:
- Motivation
- Perception
- Learning
- Emotions
- Memory
Psychographic process/factors
- The starting point for
understanding consumer
behavior is the stimulus-
response model.
- Marketing and
environmental stimuli enter
the consumer’s
consciousness, and a set of
psychological processes
combine with certain
consumer characteristics to
result in decision processes
and purchase decisions.
Motivation
A motive is a need that is sufficiently pressing to direct the person to
seek satisfaction.
Needs can be classified as : biogenic and psychogenic
Biogenic needs - physiological
Psychogenic needs - psychological
Motivation
- Buying Motives are the inner urges, impulses, desires, which makes an individual buy.
- Buying motives can be further classified as:
- Primary Buying Motives
- Secondary Buying Motives:
- Rational Buying Motives
- Emotional Buying Motives
- Patronage Buying Motives
Buying Motives
Primary Buying Motives Secondary Buying Motives
Basic Needs: Rational/Financial Emotional/Non Patronage Buying
Food Buying Motives Financial Buying Motives
Clothing Motives
Shelter Economy/Gain Love & Affection Suitable Location
Profit/Income Pride & Possession Prompt Service
Property Fashion Quality Product
Investments Gifts Value Preposition
Utility Hobbies Personnel ability
Financial instruments Recreation
Education
Maslow’s Theory of Motivation
Freud’s Theory
- This theory talks about the Unconscious, Subconscious and the Conscious mind:
- ID (Instinctive Drives)
- Ego
- Super Ego
Perception
- Perception is the process by which people select, organize, and interpret information
to form a meaningful picture of the world .
- One person might perceive a fast-talking salesperson as aggressive and insincere;
another, as intelligent and helpful. Each will respond to the salesperson differently.
- People emerge with different perceptions of the same object because of three
perceptual processes:
- Selective attention
- Selective distortion
- Selective retention
Perception
- Selective attention is the tendency for people to screen out most of the information to which
they are exposed.
- Selective distortion is the tendency for people to interpret information in a way that will
support what they already believe.
- Selective retention is the tendency to remember good points made about a brand they favor
and to forget good points about competing brands.
- Subliminal Perception - subliminal messages in ads or packaging
The Power of Sensory Marketing
- Sensory Marketing has been defined as ‘marketing that engages the consumer’s senses and
affects their perception, judgement and behavior.’
- All five senses are engaged in sensory marketing:
- Touch (Haptic)
- Smell
- Sound(audition)
- Taste
- Vision
Learning
- Learning is the changes in an individual’s behavior arising from experience and occurs
through interplay of:
- Drives
- Stimuli
- Cues
- Responses
- Reinforcement
Learning
Learning theory teaches marketers that they can build demand for a product by associating it
with strong drives, using motivating cues, and providing positives reinforcement.
Marketers to also note about Hedonic Bias
Hedonic bias occurs when people have a general tendency to attribute success to themselves
and failure to external causes.
Learning
- In classical conditioning, the advertiser attempts to get consumers to associate their
product with a particular feeling or response, in the hope that the consumer will then
buy the product. ...
- Pavlov was the Russian physiologist who trained his dogs to associate the ringing of a bell with
food. After a while, he recorded that his dogs would salivate when they heard the bell, even
without food. Today, his theories are referred to as classical conditioning.
- Consumers may then associate good feelings and having fun with the product and may
be more likely to buy the product.
- In classical conditioning, the goal is to get consumers to associate brands with a
particular feeling or response. ... Coca-Cola, for example, has successfully
associated their brand with happiness and satisfaction
Learning
- Instrumental or Operant conditioning views consumers as an active participant for
learning.
- Instrumental conditioning is another term for operant conditioning, a learning process first
described by B. F. Skinner. In instrumental conditioning, reinforcement or punishment are
used to either increase or decrease the probability that a behavior will occur again in the
future.
- It is referred to as instrumental conditioning because the individual's response
is instrumental in getting a positive reinforcement (reward) or avoiding negative
reinforcement (punishment).
- Instrumental/Operant conditioning might be something like an offer or a reward, such as
“buy one, get one”.
Emotions
- Emotions are changes in the body state that impact psychological processes thereby resulting
in expression of feelings and observable behavioral reactions.
- Brands like Hallmark, McDonald’s, Coca-Cola have made an emotional connection with loyal
customers for years
Memory
- Memory is total accumulation of prior learning experiences
- Memory ranges in duration on a continuum from extremely short to very long term
- Memory processes:
- Memory encoding—how and where information gets into memory
- Memory retrieval—the way information gets out of memory
Memory
- Memory models
- Short-term memory—a temporary and limited repository of information
- Long-term memory—a more permanent, essentially unlimited repository
- Episodic memory
- Semantic memory
- Procedural memory
- Episodic memory is responsible for storing information about events (i.e., episodes) that we have experienced in our lives. It is an
individual’s memory of autobiographical events that capture the context—such as times, places, and associated emotions—in which a
particular event has occurred.
- Semantic memory is responsible for storing information about the world, such as facts, meanings, and concepts. Unlike episodic
memory, which is directly linked to an individual’s personal experience, semantic memory captures general knowledge that is
independent of personal experience.
- Procedural memory is responsible for knowing how to perform certain procedures such as walking, talking, and riding a bike. It is a
memory of motor skills typically acquired through repetition and involves automatic sensorimotor activities that are so deeply
embedded in our minds that they do not involve conscious thought.
The Associative Network Memory Model
The associative network memory model views LTM as a set of nodes and links.
Nodes are stored information connected by links that vary in strength. Any type
of information can be stored in the memory network, including verbal, visual,
abstract, and contextual
A spreading activation process from node to node determines how much we
retrieve and what information we can actually recall in any given situation
Consumer brand knowledge as a node in memory with a variety of linked
associations.
Brand associations consist of all brand-related thoughts, feelings, perceptions,
images, experiences, beliefs, attitudes, and so on that become linked to the brand
node
Beliefs & Attitude
- Belief is a descriptive thought that a person holds about something.
- Attitude is a person’s enduring favorable (positive) or unfavorable (negative) evaluations,
emotional feeling, and action tendencies towards some object or idea.
Consumer Behaviour Model/
Consumer Decision Making Process
Buying Process
Need /Problem Recognition
- Internal stimuli
- External stimuli
Information Gathering/Search
- Information sources:
- Personal: Family, Friends, Neighbors, Acquaintances
- Commercials: Advertising, Websites, E-mails, Sales Person, Dealers, Packaging, Displays
▪ Public: Mass Media, Social Media, Consumer-rating organisations
▪ Experiential: Handling, Examining, Using the Product
Search Dynamics
Total Set
Apple, Dell, Lenovo, Acer, Toshiba, Sony, Samsung, Asus, Huawei, Microsoft, Hewlett
Packard
Awareness Set
Apple, Dell, Lenovo, Acer, Hewlett Packard
Consideration Set
Apple, Dell, Lenovo
Choice Set
Apple ,Dell
Decision
?
- Market Partitioning : Marketers need to identify the hierarchy of attributes that guide
consumer decision-making
- Brand-dominant hierarchy (General Motors, VW)
- Nation-dominant hierarchy
- Type/price/ dominant hierarchy
Evaluation of Alternatives
- The attributes of interest to buyers may vary by products:
- Hotels: Location, Cleanliness, Atmosphere, Price
- Mouthwash: Color, Effectiveness, Germ Killing capacity, Taste/flavor, Price
- Tires: Safety, Tread life, Ride, Quality, Price
- Beliefs and Attitude:
➢ Belief is a descriptive thought that a person holds about something.
➢ Attitude is a person’s enduring favorable (positive) or unfavorable (negative) evaluations, emotional
feeling, and action tendencies towards some object or idea.
All Brands
Known Unknown
Brands Brands
Evoked Set Inept Set Inert Set
(Acceptable (Unacceptable (Indifferent
Brands) brands) Brands)
Not
Purchased
purchased
Brands
Brands
Dr. Anupamaa Chavan 48
Evaluation of Alternatives
- Expectancy Value Model/Multi Attribute Attitude Model
- Expectancy Value model is the consumer attitude theory which proposes that
customers rank products based on product characteristics.
- Exercise on Purchase decision to buy mobile and consumer durable product
according to Expectancy Value model/ Multi Attribute Attitude Theory
Expectancy Value Model/Multi Attribute
Attitude Model:
Particulars&Weights Samsung Apple One Plus Readmi
Price - 9 6 x 9=54 5x9=45 8x9-72 9x9=81
Camera - 10 9 x10=90 10x10=100 7x10=70 4x10=40
Battery - 5 8x5=40 7x5=35 8x5=40 9x5=45
RAM - 6 8x6=48 8x6=48 8x6=48 4x6=24
Storage- 8 9x8=72 8x8=64 9x8=72 9x8=72
Processor - 7 7x49=49 10x7=70 9x7=63 6x7=42
Screen - 4 10x4=40 10x4=40 8x4=32 6x4=24
Total 390 402 397 328
Highest Score = 402 Apple
DR. ANUPAMAA CHAVAN 50
Purchase Decision
- In the evaluation stage, the consumer forms preferences among the brands in the
choice set and may also form an intention to buy the most preferred brand.
Non-Compensatory Processes
- But consumers often take mental shortcuts called ‘heuristics’ or thumb rule in decision process.
- Choice heuristics : (Non-Compensatory Processes)
- Conjunctive heuristics: minimum acceptable cut off level for each attribute
- Lexicographic heuristics: to select a brand on the basis of important attribute
- Elimination-by-aspects heuristics: to compare brands on an attributes selected probabilistically
- [Link]
- Marketers to apply following strategies to stimulate greater interest: (Strategies to Stimulate Attitude )
- Redesign the mobile (Real Repositioning)
- Alter beliefs about the brand (Psychological Repositioning)
- Alter beliefs about competitors brand (Competitive Depositioning)
- Alter the importance to weights
- Call attention to neglected attributes
- Shift the buyers ideals
DR. ANUPAMAA CHAVAN 52
Steps between
Evaluation of
Alternatives and a
Purchase Decision
Intervening Factors
- Even if consumers form brand evaluations, two general factors can intervene between the purchase
intention and the purchase decision.
- The first factor is the attitudes of others.
- The influence of another person’s attitude depends on two things:
- (1) the intensity of the other person’s negative attitude toward our preferred alternative
- (2) our motivation to comply with the other person’s wishes.
- The more intense the other person’s negativism and the closer he or she is to us, the more we will
adjust our purchase intention. The converse is also true.
- Unanticipated situational factors
Purchase Decision
- The Purchase takes place, but….
- The final purchase decision can be disrupted by two factors:
- Negative feedback from other customers and the level of motivation to comply or accept the
feedback.
- The decision may be disrupted due to one or more types of perceived risks (intervening factors):
- Functional Risk: does not perform to expectation
- Physical Risk: threat to physical well being
- Financial risk: not worth the price
- Social Risk: Embarrassment in front of others
- Psychological risk: affects the mental health
- Time Risk: failure of product results in an opportunity cost of finding out other product
Purchase Decision
- After evaluation the customer may make as many as 5 sub decisions :
- Brand
- Dealer
- Quantity/Size
- Timing
- Payment Method
Post Purchase Behavior
- Marketers must monitor :
- Post purchase Satisfaction
- Post purchase Actions
- Post purchase Uses and Disposal
Post Purchase Behavior: How
consumer uses or disposes off the
product
Value creation….
-EXERCISE:
- Describe the buying process in case of any five products bought by you or your family
which has gone through all the steps in buying. Mention the names of individuals
playing various buying roles. Also enumerate if you have encountered dissonance if
any, how was it tackled?