CHAPTER 1
An Introduction to
Consumer Behavior
A frame work of consumer behavior
Internal influences
External influences
Internal influences
Personality
Self concept
Life style
Attitude
Perception
Values
Beliefs
External influences
Family
Friends
Relatives
Social groups
Cultural groups
Reference groups
Avoidance groups
Aspiration groups
Decision process
Types of decisions
Simple
Complex
Models of behavior
Extensive problem solving
Limited problem solving
Routinized buying behavior
Consumer Behavior Is
Interdisciplinary
Psychology
Sociology
History & Geography
Anthropology
Economics
Anthropology
The study of people
within and across
cultures
Emphasis on cross-
cultural differences
Questioning of
assumptions within own
culture
Economics
Basic economic issues
Supply and demand
Rational decision making
Perfect information
Emphasis on predicting
behavior
Complications in real life
Behavioral economics—e.g.,
“mental accounting”
History and Geography
Origins of behavior,
perspectives, and traditions
Impact of geography on
individuals
Isolation
Language development
Climate
Geographic determinism
Psychology
Study of human thinking
and behavior
Some issues
Personality
Personal development
Cognition (thinking),
perception
Attention and its limitations
“Learning”—e.g., acquired
tastes
Sociology
Cultural and
interpersonal influences
on consumption—e.g.,
Fads, fashions
Diffusion of innovation
Popular culture
Application Areas of Consumer Behavior: PERMS
Environmental Analysis
Market Research
Segmentation of the Marketplace
Product Positioning and Product
Differentiation
Marketing-Mix Development
Product Positioning . . .
. . . is influencing how consumers perceive a
brand’s characteristics relative to those of
competitive offerings
Goal is to influence demand by creating a product with
specific characteristics (i.e. brand attributes) and a
clear image that differentiate it from competitors
Product Differentiation . . .
. . . is the process of manipulating the marketing
mix so as to position a product in a manner that
allows consumers to perceive meaningful
differences between a brand and its competitors
Environmental Analysis . . .
. . . is the assessment
of the external forces
that act upon the firm
and its customers, and
that create threats and
opportunities
Components of the External Environment
Demographic Technological
Economic Political
Natural Cultural
MARKET RESEARCH . . .
. . . is applied consumer research designed to
provide management with information on factors
that impact consumers’ acquisition,
consumption, and disposition of goods, services,
and ideas
Marketing-Mix Development
. . . involves the development and
coordination of activities involving
the:
Product Pricing
Promotion Distribution
Promotional Strategy
Advertising
Personal Selling
Sales Promotion
Applications
Public Relations
Price Changes
Predicting the likely impact of price changes on
consumers is an important consumer behavior area.
How will consumers react when companies raise or
lower the price of a product?
Principles of perception can be applied to analyze if
consumers will notice a difference in price and if so,
what effect it has
Product Distribution . . .
. . . will be impacted by
understanding how
consumers make their
purchasing decisions.
**Example: low
involvement decision
(e.g., purchase soft drink),
must use extensive
distribution.
Market Segmentation . . .
. . . involves subdividing the
market place into distinct
subsets of customers having
similar needs and wants,
each of which can be
reached with a different
marketing mix
Consumerism &Consumer movement
What it is?
When in started?
What is the result?
Concerns of consumers – government regulations
John F. Kennedy’s Message to Congress on
March 15, 1962
Four basic rights
Right to safety
Right to be informed
Right to choose
Right to be heard
Consumer protection frame work
Consumer protection Act 1986
Three tier structure
District Forum
State Forum
National Forum
What is What?
Role of non governmental organizations
Consumer responsibility
Consumers need to tread cautiously in the market
place. While buying a product, ask yourself these
questions :
Do you really need this product?
For how long would you like to use it? Will it last as
long as you would like it to?
What are the health fallout of that product? If it is a
food product, does it give you any health benefits?
Check the labeling of the product to see the nutritional
chart of the product.
Others
Responsibility towards safe waste disposal
Responsibility to endorse safer products
Junk Food and Young Consumers
Changing face of the consumer behavior
Under the scenario of globalization
Global consumer
Changes in needs, preferences
Increase in standard of living
Changing values
Cross cultural impact
Continued …..
Technological changes
High end products
Aiming at more Convenience in shopping
New retailing environment
Shoppertainment
Specialized stores to hyper markets
Customer convenience is new mantra
E-tailing