Consumer Behaviour

The Success of marketing efforts largly depends upon the ability of marketing department in studing buying behaviour of their present and potential customer.

6 Ws

Who What When Where

How

Why

Major Factors

Buyer Characteristics Product Characteristics Seller Characteristics Situation Characteristics

Objectives

Developing an understanding of the internal and external influences which shape the behaviour of both consumer and organisational buyers Identifying the discrete stages of the buying process undertaken by consumers and organisational buyers Appreciating how an understanding of buyer behaviour can be used in market segmentation and target marketing.

Why do we need to study Consumer Behaviour

Because no longer can we take the customer/consume r for granted.

All managers must become astute (intelligent/smart) analysts of consumer motivation and behaviour

Can Marketing be standardised?

No.

Because cross - cultural styles, habits, tastes, prevents such standardization

The behaviour of buyers is the result of two broad categories of influence; Endogenous factors - internal to the individual Exogenous factors - those external to the individual

Buyer Behaviour

Consumer

4Ps

Marketing Environment

Buyer Characteristics

Buyer Decision Process

Buyer Decision

Marketing Stimuli

4 Ps

Product

Price

Place

Promotion

Buyer characteristics

Cultural Social Personal Psychological

)influences on buyer behaviour

Factors which are external to the individual but have a substantial impact upon his/her behaviour are social and cultural in nature. These include culture, social class or status, reference groups and family membership.

Culture Culture is perhaps the most fundamental and most pervasive external influence on an individual's behaviour, including his/her buying behaviour. Culture has been defined as: the complex of values, ideas, attitudes and other meaningful symbols created by people to shape human behaviour and the artifacts of that behaviour as they are transmitted from one generation to the next.

culture is created by people. The behavioural patterns, ideas, economic and social activities culture is enduring. in fact passed, largely intact, frm generation to generation. In particular, the values of the society tend to be enduring.

Social status

Social class or social status is a powerful tool for segmenting markets. Research suggests that people from the same social group tend to have similar opportunities, live in similar types of housing, in the same areas, by similar products from the same types of outlets and generally conform (kowtow) to similar styles of living. The variables used to stratify a population into social classes or groups normally include income, occupation, education and lifestyle.

Reference groups

People are social animals who tend to live in groups. The group(s) to which a person belongs exerts an influence upon the behaviour, beliefs and attitudes of its members by communicating norms and expectations. Reference groups provide a standard of comparison against which an individual can judge his/her own attitudes, beliefs and behaviour.

Endogenous(Internal) influences on buyer behaviour

Endogenous influences are those which are internal to the individual. These are psychological in nature and include needs and motives, perceptions, learning processes, attitudes, personality type and self-image.

Needs and motives

When an individual recognises that he/she has a need, this acts to trigger a motivated state. Need recognition occurs when Aware of a discrepancy between his/her actual state and some perceived desired state. recognised need ---- motive. A motive -- an impulse, need,want

Perceptions

how an individual perceives -- situations, -- products, -- promotional messages, --and even the source of such messages,. How people see things. the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture or the world.

Age and life-cycle stage

Consumer purchases are influenced by age and by the stage in the family lifecycle.

Gender
The roles and status associated with men and women vary within most cultures and between cultures. You need to be aware of these differences and of the way in which changes are occurring.

Selective attention:

All people are daily bombarded by stimuli, both commercial and noncommercial. People simply cannot pay attention to all these messages and therefore they develop mechanisms to reduce the amount of information that they actually process. People pay attention to stimuli which meet an immediate need.

Learning Much of human behaviour is learned. The evidence of learning is a change in a person's behaviour as a result of experience. Learning is the product of interactions between drives, stimuli, responses.

Attitudes
four fundamental characteristics of attitudes 1) First thing is that attitudes are enduring. They may change over time but they tend to be reasonably stable in the short to medium term. 2) Stresses that attitudes are learned from the individual's own experience and/or from what they read or hear from others. 3) Third, that attitudes precede and impact upon behaviour. 4) Attitudes reflect an individual's characters towards another person, an event, product or other object. 5) A person may be either favourably or unfavourably predisposed towards an object;

Personality and self-concept

Individuals tend to perceive other human beings as types of persons. There are, for example, people perceived to be nervous types, ambitious types, self-confident types, introverts, extroverts, the timid, the bold, the self-deprecating, and so on. These are personality traits. Like attitudes, personality traits serve to bring about a consistency in the behaviour of an individual with respect to his/her environment.

. An individual's self-image is how he/she sees him/herself. Self-image is a fusion of how a person would ideally like to be, the way a person believes others see him/her and how a person actually is. opportunities to relate product characteristics to these images. The promotional campaign--- focus---congruence between the self-image and the product image.

Buyers Decision Process

Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Consumption Postpurchase behaviour

Consumer Decision-Making Process

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

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

Problem recognition

The buying process begins with a recognition on the part of an individual or organisation that they have a problem or need. Problems and needs can be triggered by either internal or external stimuli. an innate sense of hospitality (internal stimulus) or because social convention dictates that a goat be procured and prepared for special visitors (external stimulus).

Marketing research needs to identify the stimuli that trigger the recognition of particular problems and needs . The Prosess that occurs whenever the customer sees a significance between his/her deisred state of affaires and some desired ideal state.

Hunger--Food. Hunger stimulates your need to eat. See a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.

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

Information search : Information gathering may be passive or active. Passive information gathering occurs when an individual or group simply becomes more attentive to a recognised solution to a given need. That is, he/she exhibits heightened attention. The potential buyer becomes more aware of advertisements or other messages concerning the product in question. In some circumstances the individual is proactive rather than reactive with respect to information. Evoked set

information sources used will fall into Three categories

personal sources (family, friends, work colleagues, neighbours, acquaintances) commercial sources (promotional materials, press releases, technical journals or consumer magazines, distributors, packaging) public sources.

Evaluation of alternatives

: The process of evaluating alternatives not only differs from customer to customer prospective customer but the individual will also adopt different processes in accordance with the situation. It is likely that when making judgments customers will focus on those product attributes and features that are most relevant to their needs at a given point in time.

sound maybe better on the Sony product and picture on the Toshiba.

Brand preference with companies as they good history with a particular brand.
friends may have had a reliable history with one.

If not satisfied with your choice then return to the search phase

Purchase decision

At the evaluation stage the prospective customer will have arrived at a judgment However, two factors can intervene between the intention and the purchase

decision

The attitude of others and unanticipated events.

Unanticipated events can also intervene between

intention and action.

Judgments on assumptions. These assumptions are often implicit rather than explicit.
A farmer --- mechanical thresher machine

Purchase decision--Choose buying

alternative, includes product, package, store, method of purchase etc

Postpurchase Behavior
Cognitive Dissonance

Did I make a good decision? Did I buy the right product? Did I get a good value?

Can minimize through:

Effective Communication Follow-up Guarantees Warranties Underpromise & overdeliver

Postpurchase behaviour:

The process of marketing is not concluded when a sale is made. Marketing continues into the post purchase period. The aim of marketing is not to make a sale but to create a long term relationship with a customer.

Having procured the product the customer will experience either satisfaction or dissatisfaction with his/her purchase. The level of satisfaction or dissatisfaction is largely a function of the congruence between the buyer's expectations of the product and the product's perceived performance.

Buyer expectations of a product are usually based upon promotional messages from the product's supplier, family, friends, work colleagues and, perhaps, professional advisors. In addition, the buyer's own perceptual processes influence expectations. If the product's perceived performance either matches or exceeds its expected performance then the buyer is likely to feel highly satisfied. Dissonance

Cognitive Dissonance
psychological discomfort caused by inconsistencies among a persons beliefs, attitudes, and actions

varies in intensity based on importance of issue and degree of inconsistency

induces a drive state to avoid or reduce dissonance by changing beliefs, attitudes, or behaviors and thereby restore consistency
Applications: Tendency to avoid information can be countered by eliciting interest, norm of fairness, or perceive usefulness of information Post-decision buyers remorse may be increased by importance or difficulty or irreversibility of decision Counter-attitudinal action, freely chosen with little incentive or justification, leads to attitude change (e.g., new product at special low price)

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

Individuals who purchase products on behalf of an enterprise they either own or are employed by have two distinct sets of goals that they pursue: their own and those of the organisation. As an individual, the industrial buyer enjoys exercising authority, seeks job satisfaction, the approval and respect of both peers and superiors and other personal goals and avoids unnecessarily risky decisions.

Industrial buyer characteristics

Industrial buyers are also motivated by the desire to achieve organisational goals such as cost control, improved efficiency of operations, reliable supplies of essential inputs, improved product performance and so on.

An appropriate marketing campaign would attend to both the buyer's personal and organisational goals . The key elements in this process are as follows.

(a) Decision-making unit (DMU)

Various people are involved in the buying process within an organisation. Collectively they constitute the DMU or buying centre.

(b) Interaction between buyer and seller

It is quite usual in business-to-business buying for buyers and sellers to negotiate and influence each other in determining the form of the final transaction and other aspects of the interaction.

(c) Major types of buying situation

The numerous types of buying situation have been grouped into three buyclasses by a number of writers on business markets. The three buyclasses are: Straight rebuy; Modified rebuy; New task.

GOVERNMENT BUYER BEHAVIOUR

Governments and other governmental institutions, such as local authorities and nationalised industries, are important buyers in most national markets. (a) Buying will be a bureaucratic process (b) A tender system is usually used (c) Political influence (e) Types of business and government buying

Motivations of organisational buyers

Buyers Decision

Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

Cultural factors

Culture Sub - culture Social Class

Social factors

Reference Groups Family Roles and Statuses

Personal Factors

Family Life Cycle Occupation and Economic circumstances Lifestyle Personality and self - concept

Psychological Factors

Motivation Perception Learning Beliefs and Attitudes

Buying Roles

Initiator Influencer Decider Buyer User

Buying Behaviour

Complex Dissonance (Difference Of Opinion)Reducing Habitual Variety seeking

Post - Purchase Behaviour

Satisfaction Actions Use and Disposal