Consumer Behavior

Objectives
 Understand decision making process
 Understand basic model of CB
Changing Consumers
MOV00004.MPG
Indian consumers: Recent Changes
 Emerging middle class
 Mad for ‘Lifestyle’ and ‘entertainment’
 Changing values in middle class
 Freedom of choice
 Changing role of women
 Changes in consumer aspiration and
expectation
 Increasing disposable income
 Contd..
 Proliferation of media and information technology
 Cross-cultural integration

 Increasing degree of consumer awareness

 Emergence of positive mindset towards organized

retail environment
 Transition from rural to urban sector

 Emergence of rural consumer

India’s Consumer Confidence
 Consumer confidence in India is amongst
the highest across the globe
 77% of Indian consumers expecting their
economy to improve
 Indian Consumers Most Likely to Invest
Disposable Income in Apparel, Home
Decoration, Holidays and Equities
 for 50% of Indians, saving money is also a
priority

Source: ACNielsen ORG-MARG India

 How to react?

 To be successful, a company must

determine the needs and wants of
specific target markets and deliver the
desired satisfactions better than the
competition.
Competitive Advantages Through
Customer Satisfaction

Customer
Satisfaction

Repeat Higher Loyalty in Word of One-Stop New Product

Buying Prices Crisis Mouth shopping Innovation

Corporate
Profits Growth
Performance
Consumer
Consumer Buying
Buying Behavior
Behavior

 Consumer Buying Behavior refers to the

buying behavior of final consumers
-individuals & households who buy goods
and services for personal consumption.

 The central question for marketers is:

“How do consumers respond to various
marketing efforts the company might use?”
 Customer Decisions
 Decisions customers make in the
marketplace as buyers, payers, and
users, include:
 Whether to purchase?
 What to purchase?
 When to purchase?
 From whom to purchase?
 How to pay for it?
 Types of buying decision
behaviour
Routine Response Limited problem Extensive problem
Behaviour solving solving

Low cost products----------------------more expensive products

Frequent purchase----------------------infrequent purchase
Low consumer involvement--------high consumer involvement
Familiar product class/brand----unfamiliar product class/brand
Little thought, search & time given to purchase-----extensive
thought search & time given to purchase.

Buyers are fully aware of the product class but are not familiar
with all the brands & their features
Five - Stage Model of the Buying Process

Problem Information Evaluation of Purchase Post purchase

recognition search alternative decision behavior

Personal Post purchase

Friends Purchase satisfaction
intention
Family Post purchase action
Handling
Commercial
dissatisfaction
Public Media,
Attitudes Unanticipated Post Purchase
Fairs etc of others situational use and Disposal
Experimental variables
(Handling,Using,
Examining)
 Initiator

User Influencer

Buying Decision

Buyer Decider
Brainstorming: explain Buying Decision Roles

Elderly Couple.mpg
Ford- Businessline editor.mpg
 Model of Buyer Behaviour
Buyer’s Purchase
Outside Stimuli Buyer Black Box Decisions
Buyer’s Decision
Buyer’s Product choice
Marketing Environmental Characteristics
Process

Product Economics Problem Brand choice

Cultural Recognition
Price Technological Dealer choice
Information
Social
Search Purchase
Place Political Personal Evaluation of timing
Promotion Cultural Psychological Alternatives
Purchase Purchase
Decision
amount
Post
purchase
Behaviour
 Factors
Factors Influencing
Influencing
Consumer
Consumer Behavior
Behavior

Cultural

Social
Personal
Age and Psycho-
Culture Reference logical
groups life-cycle
Occupation Motivation Buyer
Sub- Economic Perception
culture Family
situation Learning
Lifestyle Beliefs and
Roles attitudes
Social and Personality
class status and
self-concept
 Factors
Factors Affecting
Affecting Consumer
Consumer
Behavior:
Behavior:
Culture
CultureCulture
Culture
 Most

Most basic
basic cause
cause of
of aa person's
person's wants
wants and
and
behavior.
behavior.
 Values,

Values, Perceptions,
Perceptions, Wants
Wants && Behavior
Behavior

 P:\saikat\link\itchguard_22012003.jpg
P:\saikat\link\itchguard_22012003.jpg

Social
Social Class
Class
Subculture
Subculture •• Society’s
Society’srelatively
relativelypermanent
permanent
&&ordered
ordereddivisions
divisionswhose
whose
•• Groups
Groupsofofpeople
peoplewith
withshared
shared members
value membersshare
sharesimilar
similarvalues,
values,
valuesystems
systemsbased
basedon
on interests,
interests,and
andbehaviors.
behaviors.
common
commonlife
lifeexperiences.
experiences.
•• P:\saikat\link\cc_tiger_20112002.jpg •• Measured
Measuredby:by:Occupation,
Occupation,
P:\saikat\link\cc_tiger_20112002.jpg Income,
Income,Education,
Education,Wealth
Wealthandand
Other
OtherVariables.
Variables.
Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Social
Social
Groups
Groups
••Membership
Membership
••Reference
Reference
••P:\saikat\link\omega_27042004.jpg
P:\saikat\link\omega_27042004.jpg

Family
Family
••Husband,
Husband, wife, wife, kids
kids Social
Social Factors
Factors
••Influencer,
Influencer, buyer, buyer, user
user
P:\saikat\link\bharatgas_15012001.jpg
•• P:\saikat\link\bharatgas_15012001.jpg

Roles
Roles and
and Status
Status
P:\saikat\link\hdfc_standard_life_15022006.jpg
P:\saikat\link\hdfc_standard_life_15022006.jpg
Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Personal
Personal
Personal
Personal Influences
Influences

Age
Ageand
andLife
LifeCycle
Cycle Occupation
Occupation
Stage
Stage

Economic
EconomicSituation
Situation Personality
Personality &&Self-Concept
Self-Concept
P:\saikat\link\sonata_12062002.jpg
P:\saikat\link\sonata_12062002.jpg

Lifestyle
Lifestyle Identification
Identification
P:\saikat\link\indiakings_16022001.jpg
P:\saikat\link\indiakings_16022001.jpg

Activities
Activities Opinions
Opinions

Interests
Interests
Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Psychological
Psychological
Motivation
Motivation

Beliefs
Beliefsand
and Psychological
Attitudes
Attitudes Factors Perception
Perception

Learning
Learning
 The Dynamic Nature of
Motivation
 Needs are never fully satisfied
 New needs emerge as old needs are
satisfied
 People who achieve their goals set new
and higher goals for themselves
 Maslow’s Need Hierarchy
 Physiological needs (hunger, thirst)
 Safety and security needs (security, protection)
 Belongingness and love needs (social needs)
 Esteem and ego needs (self-esteem,
recognition, status)
 Need for self-actualization (self-development,
realization)
 link\adidas_02042007_huge.jpg
 Perception
The process by which an individual
selects, organizes, and interprets stimuli
into a meaningful and coherent picture
of the world.
 Some Marketing Variables Influencing
Consumer Perception
 Nature of Product
 Country of origin effect
 Physical Attributes of Product
 Package Design
 Brand Name
 Corporate Name
 Price
 Advertisements & Commercials
 Position of Ad
 Editorial Environment
 P:\saikat\link\vip_21122005.jpg
 Elements of Learning:
 Motivation
 Cues
 Response
 Reinforcement
A positive or negative outcome that influences
the likelihood that a specific behavior will be
repeated in the future in response to a
particular cue or stimulus.
 P:\saikat\link\herocycles_22052001.jpg
 link\parachute_therapie_hair_fall_solution_29032007_huge.jpg
 Attitudes:
 A learned predisposition to behave in a consistently
favorable or unfavorable manner with respect to a
given object.
 The attitude “object”
 Attitudes are a learned predisposition
 Attitudes have consistency
 Attitudes occur within a situation
 Beliefs: Strongly held convictions.
 Value: Concepts about desirable end states or behaviors that
transcend specific situations, guide the selection or evaluation
of behavior and events, and are ordered by relative importance
 P:\saikat\link\goodknight.jpg
Brainstorming: Explain Psychological Factors

Motivation
Motivation

Beliefs
Beliefsand
and
Attitudes
Attitudes Perception
Perception

Learning
Learning
Stages
Stages in
in the
the Adoption
Adoption Process
Process
Awareness
Awareness
P:\saikat\link\NECC_02032006.jpg
P:\saikat\link\NECC_02032006.jpg

Interest
Interest
P:\saikat\link\knorr_soup_17072006.jpg
P:\saikat\link\knorr_soup_17072006.jpg

Evaluation
Evaluation
P:\saikat\link\parle_digestive_marie
P:\saikat\link\parle_digestive_marie_24012006.jpg
_24012006.jpg

Trial
Trial
link\cerelac_03022001.jpg
link\cerelac_03022001.jpg

Adoption
Adoption
P:\saikat\link\necc_09062006.jpg
P:\saikat\link\necc_09062006.jpg
Adopter
Adopter Categories
Categories
Percentage of Adopters

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5% Time of Adoption
Early Late
Influence
Influence of
of Product
Product Characteristics
Characteristics
on
on Rate
Rate of
of Adoption
Adoption
Communicability Relative Advantage
Can results be easily Is the innovation
observed or described superior to existing
to others? products?
P:\saikat\link\black_dog_11052006.jpg P:\saikat\link\taj_mahal_09052006.jpg

Product
Product
Characteristics Compatibility
Divisibility Characteristics Does the innovation
Can the innovation fit the values and
be used on a experience of the
trial basis? target market?
P:\saikat\link\impact_30012006.jpg
P:\saikat\link\amul_masti_270320
Complexity
Is the innovation
difficult to
understand or use?
P:\saikat\link\luxor_14052003.jpg
Thank You