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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. It refers to the
actions of the consumers in the marketplace and the underlying motives for those actions.

Reason for studying C.B.


 Importance of Consumer Behavior to business managers

1. To design the best possible product or service that fully satisfies consumer’s needs and
demands.
2. To decide where the service or product would be made available for easy access of
consumers.
3. To decide the price at which the consumers would be ready to buy that product or
service.
4. To find out the best method of promotion that will prove to be effective to attract
customers to buy a product.
5. To understand why, when, how, what and other factors that influence buying decision of
the consumers.

 Importance of Consumer Behavior to Marketers

1. To understand Buying Behaviour of consumers


2. To create and retain customers though online stores
3. To Understand the factors influencing Consumer’s buying Behaviour
4. To understand the consumer’s decision to dispose a product or services
5. To increase the knowledge of sales person influence consumer to buy product
6. To help marketers to sale of product and create focused marketing strategies

Consumer Decision making process


1. Need Recognition
2. Information Search ( Internal and External)
 Extension Problem solving behavior
 Limited problem Solving Behavior
3. Alternative Evaluation
4. Purchase Decision
5. Post – Purchase Evaluation

Determinant involves in CB

1. Social ( Reference Group, Family Roles, Status)


2. Personal ( Age and Life style stage, economic situation, Occupation)
3. Cultural ( Culture, Social class, Subculture)
4. Psychological ( Motivation, Perception, Learning, Benefits and Attitudes)

CB Development
1. Changing Consumer Preferences
2. Less Predictable purchase behavior

Disciplines involves in CB
1. Psychological
2. Sociological
3. Cultural Anthropology
4. Economics

CB Application in Marketing
1. Analysis Marketing Opportunities
2. Selecting Target Market
3. Marketing mix decision ( Price, Product, Distribution, Promotion)
4. Use in Social and Non Profit market

Model of Consumer Behavior


1. Economic
2. Learning
3. Sociological
4. Psychological
5. Behavioral

Micro/ Macro model of Consumer

Micro/ Macro View Points

 Permanent Hypothesis
 Relevant Hypothesis

Problem Recognition

1. Routine problem ( Grocery Purchase)


2. Emergency Problem ( Car Breakdown)
3. Planning problem ( A car needed in future)
4. Evolving Problem ( Fashion till it spreads)
Evaluating or Choice Criteria

Evaluation - The making of a judgment about the amount, number, or value of something;
assessment.

Choice Criteria - Choice criteria in a decision model are objectives that can be quantified. In
other words, they are goals that can be measured and quantifiably attained.

I. According to Google
 Customer use no of attributes in selecting of a product
 Choice criteria differ from customer to customer
 Silent evaluating criteria ( Important, Camera)
 Determinant evaluation criteria ( More imp. , Price)
 Criteria Attribute = Silent + Determinant
II. According to Sir
 Two Approaches for processing information
 Brand Processing or choice by processing brands
 Attribute processing or choice by processing attribute

Attributes determined by preprocessing:

 Brand
 Price
 Size

Evaluation Rules use by Consumers

 Non Compensatory Decision Rule ( When good performance of one criteria does not
compensate for bad performance attributes)

 Disjunctive Rule ( Make the standard price)


 Lexicographic Rules
 Sequential Elimination Rule ( No ordering)

 Compensatory Decision Rule ( Brand strength can compensate brand weakness)

Factors influencing the Evaluation

 The more urgent the need, the less evaluation


 The more significant the product
 The more complex the alternatives
Results of Evaluation

 Consumer find the alternatives


 Consumer has not find the alternatives, still searching

Perceptual Mapping

It is the visual tech. design to show how the consumer understands the positioning of company’s
brand or it is a tool that attempts to map the consumer’s perception and understand in the
diagram.

Attribute

Specifically, we study the influence of perceived quality of intrinsic attributes (e.g. color, flavor,
smell, appearance) and extrinsic attributes (e.g. brand, denomination of origin, and image of
traditional product) on consumer satisfaction, loyalty and purchasing intention.

Types of Perceptual Mapping

1. Using two determinants attribute


2. Using many product attribute
3. Joint Perceptual map
 A statistical program (such as SPSS) has the capacity to map multiple products.

Value Perception?
Customer Perceived Value
Customer Perceived Value is the evaluated value that a customer perceives to obtain by buying a
product. It is the difference between the total obtained benefits according to the customer
perception and the cost that he had to pay for that. Customer perceived value is seen in terms of
satisfaction of needs a product or service can offer to a potential customer. The customer will
buy the same product again only if he perceives to be getting some value out of the product.
Hence delivering this value becomes the motto of marketers.

Customer Perceived Value = Total Perceived Benefits – Total Perceived Costs


The CPV is kind of an evaluation done by customer on what value a product or a service would
be able to provide if he/she buys it by paying money.
Please note that the benefits and costs also include the emotional benefits and costs.
Example of Customer Perceived Value:
While buying a car, the expected reactions from family and friends also become a part of
benefits or gain. The customer evaluates whether the particular car would be able to provide
whatever he/she is looking for from a car. Whether the car would provide the comfort and the
usability. Also for many customer the perceived value would also include the mileage a car
gives.
Measuring Satisfaction and value

1. Overall Satisfaction Measure (Attitudinal)

 Overall quality

 Perceived reliability

 Extent of customer’s needs fulfilled

2. Loyalty Measurement (Affective, Behavioral)

 Overall, how satisfied are you with [brand]?

 How likely are you to continue to choose/repurchase [brand]?

 How likely are you to recommend [brand] to a friend or family member?


3. A Series of Attribute Satisfaction Measurements (Affective and Cognitive)

Affect (liking/disliking) is best measured in the context of product attributes or benefits.


Customer satisfaction is influenced by perceived quality of product and service attributes, and is
moderated by expectations of the product or service. The researcher must define and develop
measures for each attribute that is important for customer satisfaction

4. Intentions to Repurchase Measurements (Behavioral Measures)

When wording questions about future or hypothetical behavior, consumers often indicate that
“purchasing this product would be a good choice” or “I would be glad to purchase this product.”
Behavioral measures also reflect the consumer’s past experience with customer service
representatives.

Cognitive Dissonance Theory


Cognitive dissonance refers to a situation involving conflicting attitudes, beliefs or behaviors.
This produces a feeling of discomfort leading to an alteration in one of the attitudes, beliefs or
behaviors to reduce the discomfort and restore balance, etc.
For example, when people smoke (behavior) and they know that smoking causes cancer
(cognition), they are in a state of cognitive dissonance.

Influential Factors

 Cognitions that are more personal, such as beliefs about the self, tend to result in greater
dissonance.
 The importance of the cognitions; things that involve beliefs that are highly valued
typically result in stronger dissonance.
 The ratio between dissonant (clashing) thoughts and consonant (harmonious) thoughts
 The greater the strength of the dissonance, the more pressure there is to relieve the
feelings of discomfort.

Common Reactions
 Focus on more supportive beliefs that outweigh the dissonant belief or behavior
 Reduce the importance of the conflicting belief
 Change the conflicting belief so that it is consistent with other beliefs or behaviors
Need Recognition Process
Need recognition is the first step in consumer buying behavior and is also called problem
identification. It occurs when a consumer discovers an unmet need that must be fulfilled.

 Situation leading to problem recognition


 Consumer learning
 Observational learning
 Operant conditioning

Classical Conditioning
The most important thing to remember is that classical conditioning involves automatic or
reflexive responses, and not voluntary behavior (that's operant conditioning, and that is
a different post). What does this mean? For one thing, that means that the only responses that can
be elicited out of a classical conditioning paradigm are ones that rely on responses that are
naturally made by the animal (or human) that is being trained. Also, it means that the response
you hope to elicit must occur below the level of conscious awareness - for example, salivation,
nausea, increased or decreased heartrate, pupil dilation or constriction, or even a reflexive motor
response (such as recoiling from a painful stimulus). In other words, these sorts of responses
are involuntary.

For example, the repeated use of a drug could cause the body to compensate for it, in an effort
to counterbalance the effects of the drug. This causes the user to require more of the substance in
order to get the equivalent effect (this is called tolerance). However, the development of
tolerance also takes into account other environmental variables (the conditional variables) - this
is called the situational specificity of tolerance. For example, alcohol tends to taste a certain way,
and when alcohol is consumed in the usual way, the body responds in an effort to counteract the
effect. But, if the alcohol is delivered in a novel way (such as in Four Loko), the individual could
overdose. This effect has also been observed among those who have become tolerant to
otherwise lethal amounts of opiates: they may experience an overdose if they take their typical
dose in an atypical setting. These results have been found in species ranging from rats and mice
to humans.

Operant Conditioning
Operant conditioning is a learning process through which the strength of a behavior is modified
by reinforcement or punishment. It is also a procedure that is used to bring about such learning.

Operant conditioning focuses on using either reinforcement or punishment to increase or


decrease a behavior. Through this process, an association is formed between the behavior and the
consequences for that behavior. For example, imagine that a trainer is trying to teach a dog to
fetch a ball. When the dog successful chases and picks up the ball, the dog receives praise as a
reward. When the animal fails to retrieve the ball, the trainer withholds the praise.
Eventually, the dog forms an association between his behavior of fetching the ball and receiving
the desired reward.

Diff. between Operant and Classical conditioning

 One of the simplest ways to remember the differences between classical and operant
conditioning is to focus on whether the behavior is involuntary or voluntary.
 Classical conditioning involves associating an involuntary response and a stimulus, while
operant conditioning is about associating a voluntary behavior and a consequence
 In operant conditioning, the learner is also rewarded with incentives, while classical
conditioning involves no such enticements. Also, remember that classical conditioning is
passive on the part of the learner, while operant conditioning requires the learner to
actively participate and perform some type of action in order to be rewarded or punished.
 For operant conditioning to work, the subject must first display a behavior which can
then be either rewarded or punished. Classical conditioning, on the other hand, involves
forming an association with some sort of already naturally occurring event.
 Today, both classical and operant conditioning are utilized for a variety of purposes by
teachers, parents, psychologists, animal trainers, and many others. In animal
conditioning, a trainer might utilize classical conditioning by repeatedly pairing the sound
of a clicker with the taste of food. Eventually, the sound of the clicker alone will begin to
produce the same response that the taste of food would.
 In a classroom setting, a teacher might utilize operant conditioning by offering tokens as
rewards for good behavior. Students can then turn in these tokens to receive some type of
reward such as a treat or extra play time. In each of these instances, the goal of
conditioning is to produce some sort of change in behavior.

Reinforcement
One of the many different ways in which people can learn is through a process known as operant
conditioning. This involves learning through reinforcement or punishment. The type of reinforcement
used can play an important role in how quickly a behavior is learned and the overall strength of the
resulting response.

Reinforcement is a term used in operant conditioning to refer to anything that increases the
likelihood that a response will occur. Note that reinforcement is defined by the effect that it has
on behavior—it increases or strengthens the response.

For example, reinforcement might involve presenting praise (the reinforcer) immediately after a
child puts away her toys (the response). By reinforcing the desired behavior with praise, the child
will be more likely to perform the same actions again in the future.
Primary and Secondary Reinforcement

 Primary reinforcement:

Primary reinforcement is sometimes referred to as unconditional reinforcement. It occurs


naturally and doesn't require learning in order to work. Primary reinforces often have an
evolutionary basis in that they aid in the survival of the species. Examples of primary
reinforces include food, air, sleep, water, and sex. Genetics and experience may also play a
role in how reinforcing such things work. For example, while one person might find a certain
type of food very rewarding, another person may not like that food at all.

 Secondary reinforcement:

Secondary reinforcement, also known as conditioned reinforcement, involves stimuli that


have become rewarding by being paired with another reinforcing stimulus. For example,
when training a dog, praise and treats might be used as primary reinforces. The sound of a
clicker can be associated with the praise and treats until the sound of the clicker itself begins
to work as a secondary reinforce.

Types of Reinforcement

In operant conditioning, there are two different types of reinforcement. Both of these forms of
reinforcement influence behavior, but they do so in different ways. The two types include:

1. Positive reinforcement involves adding something to increase a response, such as giving


a bit of candy to a child after she cleans up her room.
2. Negative reinforcement involves removing something in order to increase a response,
such as canceling a quiz if students turn in all of their homework for the week. By
removing the aversive stimulus (the quiz), the teacher hopes to increase the desired
behavior (completing all homework).

Examples of Reinforcement in the Real World

 During practice for your office softball team, the coach yells out, "Great job!" after you
throw a pitch. Because of this, you're more likely to pitch the ball the same way again.
This is an example of positive reinforcement.
 At work, you exceed your manager's sales quota for the month and so you receive a
bonus as part of your paycheck. This makes it more likely that you will try to exceed the
minimum sales quota again next month. This is another example of positive
reinforcement.
 You go to your doctor to get your yearly flu shot in order to avoid coming down with the
flu. In this case, you are engaging in a behavior (getting a shot) to avoid an aversive
stimulus (getting sick). This is an example of negative reinforcement.
 You slather some aloe vera gel on a sunburn to prevent the burn from hurting. Applying
the gel on the burn prevents an aversive outcome (pain), so this is an example of negative
reinforcement. Because engaging in the behavior minimizes an aversive outcome, you
will be more likely to use aloe vera gel again in the future. This is another example of
negative reinforcement.

 You take acetaminophen to get rid of a terrible headache. After about 15 or 20 minutes,
the pain in your head finally recedes. Because taking the pills allowed you to eliminate an
aversive situation, it makes it more likely that you will take the pain pills again in the
future to deal with physical pain. This is another example of negative reinforcement.

Types of memory and their application in marketing

 Glance and Forget means that in seconds we forget what we just saw or read. The vast
majority of social media and mass media, just to name a couple of channels, is just that: glance
and forget. That’s why in these channels, repetition is key to move the prospect up the ladder to
short-term memory.
 Short-Term Memory evaporates in just minutes or hours. This may be just enough time to
move a person to action, but with the risk that there may be a misunderstanding of your product
leading to cart abandonment, underutilized product potential, or cancellations.
 Long-Term Memory lasts several hours, a day, maybe a week, and in a few instances, a
lifetime. Once you achieve long-term memory, your odds of closing the deal are significantly
enhanced. Moreover, this is how your customer becomes an advocate and sticks with you in the
long run.

Personality
Personality is defined as the characteristic set of behaviors, cognitions, and emotional patterns that
evolve from biological and environmental factors. While there is no generally agreed upon
definition of personality, most theories focus on motivation and psychological interactions with
one's environment. Trait-based personality theories, such as those defined by Raymond
Cattell define personality as the traits that predict a person's behavior. On the other hand, more
behaviorally based approaches define personality through learning and habits. Nevertheless, most
theories view personality as relatively stable.

Psychoanalytic theory

Psychoanalytic theory is the theory of personality organization and the dynamics of personality
development that guides psychoanalysis, a clinical method for treating psychopathology. First laid
out by Sigmund Freud in the late 19th century, psychoanalytic theory has undergone many
refinements since his work.
Sigmund Freud is closely related to the psychoanalytic theory. According to him, the human
behavior is formed through an interaction between three components of the mind, i.e. Id, Ego and
Super Ego.
1. Id: Id is the primitive part of the mind that seeks immediate gratification of biological or instinctual
needs. The biological needs are the basic physical needs and while the instinctual needs are the
natural or unlearned needs, such as hunger, thirst, sex, etc. Id is the unconscious part of the mind;
that act instantaneously without giving much thought to what is right and what is wrong.

Example: If your Id passed through a boy playing with a ball, the immediate urge to get that ball
will drive you to snatch it by any means, this is irrational and may lead to the conflict between the
boys. Thus, Id is the source of psychic energy, a force that is behind all the mental forces.

2. Super-Ego: The Super-Ego is related to the social or the moral values that an individual inculcates
as he matures. It acts as an ethical constraint on behavior and helps an individual to develop his
conscience. As the individual grows in the society, he learns the cultural values and the norms of
the society which help him to differentiate between right and wrong.

Example: If the super-ego passed that boy playing with a ball, it would not snatch it, as it would
know that snatching is bad and may lead to a quarrel. Thus, super ego act as a constraint on your
behavior and guides you to follow the right path. But if the Id is stronger than super-ego, you will
definitely snatch the ball by any means.

3. Ego: Ego is the logical and the conscious part of the mind which is associated with the reality
principle. This means it balances the demands of Id and super-ego in the context of real life
situations. Ego is conscious and hence keep a check on Id through a proper reasoning of an external
environment.

Example: If you pass through the same boy playing with the ball, your ego will mediate the
conflict between the Id and super-ego and will decide to buy a new ball for yourself. This may hurt
you Id, but the ego would take this decision to reach to a compromise situation between the Id and
super-ego by satisfying the desire of getting a ball without committing any unpleasant social
behavior.

Trait Theory
The Big Five: Five-Factor Model
As a result of a thorough research on Cattell's and Eysenck's personality trait theories, the Big Five theory was
formulated. This model states that there are 5 core traits which collaborate in order to form a single
personality. These include:

1. Extraversion - tendency to be active, sociable, person-oriented, talkative, optimistic, empathetic


2. Openness to Experience - tendency to be imaginative, curious, creative and may have unconventional
beliefs and values.
3. Agreeableness - tendency to be good-natured, kind-hearted, helpful, altruistic and trusting.
4. Conscientiousness - tendency to be hardworking, reliable, ambitious, punctual and self-directed.
5. Neuroticism - tendency to become emotionally unstable and may even develop psychological distress

Pro's

 That leadership depends upon having certain traits allows behavior modification to become more
tenable in producing good leaders, if one takes to heart the writings of B.F. Skinner. Though the
theory says that the traits are innate, this is controversial and allows testing as to whether or not the
traits can be developed.
 Knowing what general traits make a successful leader aids in identifying potential leaders.
 The specific traits that are listed permits them to be available for quantification or correlation with
validation techniques, such as brain scans.

Con's

 One question of what has been really added to the "Great Man Theory", other than an enumeration of
traits. It is controversial whether or not these traits are innate.
 "Traits" in the trait theory refer to innate characteristics and it is questionable, at best, to consider them
only as a partial outgrowth of personality.
 There is no situational awareness. The terms may mean different things in different contexts. What is
malevolent in one situation may be beneficial in another.

Self-Concept theory

One's self-concept is a collection of beliefs about oneself. Generally, self-concept embodies the
answer to "Who am I?". Self-concept is distinguishable from self-awareness, which refers to the
extent to which self-knowledge is defined, consistent, and currently applicable to one's attitudes and
dispositions
Self-concept is an overarching idea we have about who we are—physically, emotionally, socially,
spiritually, and in terms of any other aspects that make up who we are (Neill, 2005). We form our
self-concept as we grow, based on the knowledge we have about ourselves. It is multidimensional,
and can be broken down into these individual aspects; for example, you may have a very different
idea of who you are in terms of your physical body and who you are in terms of your spirit or soul.
The Meaning of Self-Concept Theory
There are many theories about what exactly self-concept is and how it develops, but generally,
theorists agree on these points:

 On the broadest level, self-concept is the overall idea we have about who we are and includes
cognitive and affective judgments about ourselves.
 Self-concept is multi-dimensional, incorporating our views of ourselves in terms of several
different aspects (e.g., social, religious, spiritual, physical, emotional).
 It is learned, not inherent.
 It is influenced by biological and environmental factors, but social interaction plays a big role
as well.
 Self-concept develops through childhood and early adulthood when it is more easily changed
or updated.
 It can be changed in later years, but it is more of an uphill battle since people have established
ideas about who they are.
 Self-concept does not always align with reality. When it does, our self-concept is
“congruent.” When it doesn’t, our self-concept is “incongruent.” (Cherry, 2018B; Gecas,
1982).

Real vs. Ideal self


In psychology, the real self and the ideal self are terms used to describe personality domains. The
real self is who we actually are. It is how we think, how we feel, look, and act. The real self can be
seen by others, but because we have no way of truly knowing how others view us, the real self is
our self-image.
The ideal self, on the other hand, is how we want to be. It is an idealized image that we have
developed over time, based on what we have learned and experienced. The ideal self could include
components of what our parents have taught us, what we admire in others, what our society
promotes, and what we think is in our best interest.
Actual Self
Actual self is your representation of the attributes that you believe you actually possess, or that you believe
others believe you possess. The "actual self" is a person's basic self-concept. It is one's perception of their
own attributes (intelligence, athleticism, attractiveness, etc.).
Ideal Self
According the Humanistic Psychologist Carl Rogers, the personality is composed of the Real Self
and the Ideal Self. Your Real Self is who you actually are, while your Ideal Self is the person you
want to be.

The Ideal Self is an idealized version of yourself created out of what you have learned from your
life experiences, the demands of society, and what you admire in your role models.

VALS- Value, Attitude, Lifestyle


Vals which is also known as values attitude and lifestyle is one of the primary ways to
perform psychographic segmentation. All three terms are intangible in nature and therefore give an
idea of the inert nature of the consumer. If you know what your consumer is thinking, you would
know what kind of promotions or communications will attract him most. And how do you know
what the consumer is thinking? By determining his VALS – Values, attitudes and lifestyle.

VALS is different for different people. Let’s take income as an example. If you are a person with
high income your lifestyle would probably include habits of the SEC A class such as dining out of
home frequently and that too in top class restaurants, wearing only branded clothes and buying the
best cars out there. Whereas if you are a middle class income group consumer, you would be more
wary of spending money and would rather concentrate on savings.

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