Consumer Markets and Consumer Buyer Behavior

The chihuahua and the leopard (creative thinking)

A lady takes her pet dog with her on a safari holiday. Wandering too far one day the dog gets lost in the bush, and soon encounters a very hungry looking leopard. The dog realises he's in trouble, but, noticing some fresh bones on the ground, he settles down to chew on them, with his back to the big cat. As the leopard is about to leap, the dog smacks his lips and exclaims loudly, "Boy, that was one delicious leopard. I wonder if there are any more around here." The leopard stops mid-stride, and slinks away into the trees. "Phew," says the leopard, "that was close - that evil little dog nearly had me."

A monkey nearby sees everything and thinks he'll win a favour by putting the stupid leopard straight. The dog sees the monkey go after the leopard, and guesses he might be up to no good. When the leopard hears the monkey's story he feels angry at being made a fool, and offers the monkey a ride back to see him exact his revenge. The little dog sees them approaching and fears the worse. Thinking quickly, the little dog turns his back, pretends not to notice them, and when the pair is within earshot says aloud, "Now where's that monkey got to? I sent him ages ago to bring me another leopard...."

Consumer Buying Behavior

Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption. Study consumer behavior to answer How do consumers respond to marketing efforts the company might use?

Model of Consumer Behavior

Product Price Place Promotion

Marketing and Other Stimuli

Economic Technological Political Cultural

Buyers Decision Process

Buyers Black Box

Characteristics Affecting Consumer Behavior

Product Choice

Brand Choice
Dealer Choice

Buyers Response

Purchase Timing Purchase Amount

Characteristics Affecting Consumer Behavior

Culture

Social
Personal Psychological

Buyer

Factors Affecting Consumer Behavior Culture Most basic cause of a person's wants and behavior. Values and cultural shifts
Subculture
Groups of people with shared value systems based on common life experiences. pre independence Pre liberalization Post LPG Mature Consumers

Social Class
People within a social class tend to exhibit similar buying behavior.
Occupation

Income Education Wealth

Cultural Habits
Acceptance of Ice tea was difficult Acceptance of Kelloggs took time

Factors Affecting Consumer Behavior Social

Groups
Membership Reference

Family Husband, wife, kids Influencer, buyer, user

Social Factors

Roles and Status

Social
Cartoon Network Pogo influencing the children with its advertisement and there by making them influence their parents in purchase decisions

Factors Affecting Consumer Behavior: Personal

Personal Influences
Age and Family Life Cycle Stage
Economic Situation Occupation

Lifestyle, Personality & Self-Concept

Lifestyle Identification
Activities
(work, hobbies, shopping, sports and social events)

Opinions (food, fashion,

family and recreation)

Interests (about themselves, social issues, business and products)

VALS 2
Principle Oriented Ideals

Actualizers Status Oriented Achievement

Abundant Resources
Action Oriented Self-expression

Fulfilled

Achievers

Experiencers

Believers

Strivers

Makers

Strugglers Minimal Resources

Factors Affecting Consumer Behavior: Psychological

Motivation

Beliefs and Attitudes

Psychological Factors

Perception

Learning

Maslows Hierarchy of Needs

Self Actualization
(Self-development)

Esteem Needs

(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)

Motives
Nutrament, a product marketed by Bristol-Myers Squibb originally was targeted at consumers that needed to receive additional energy from their drinks after exercise etc., a fitness drink. It was therefore targeted at consumers whose needs were for either love and Belonging or esteem. The product was not selling well, and was almost terminated. Upon extensive research it was determined that the product did sell well in inner-city convenience stores. It was determined that the consumers for the product were actually drug addicts who couldn't not digest a regular meal. They would purchase Nutrament as a substitute for a meal. Their motivation to purchase was completely different to the motivation that B-MS had originally thought. These consumers were at the Physiological level of the hierarchy. BM-S therefore had to redesign its MM to better meet the needs of this target market. Motives often operate at a subconscious level therefore are difficult to measure.

Perception
Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes Are you able to notice all these products? Why?

Perception
What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. We chose what info we pay attention to, organize it and interpret it.

Learning
Helps companies and individual customers

Beliefs and Attitudes

Knowledge and positive and negative feelings about an object or activitymaybe tangible or intangible, living or non- living.....Drive perceptions There is a difference between attitude and intention to buy (ability to buy)

Types of Buying Decisions

High Involvement
Significant differences between brands

Low Involvement

Complex Buying Behavior DissonanceReducing Buying Behavior

VarietySeeking Behavior Habitual Buying Behavior

Few differences between brands

The Buyer Decision Process

Need Recognition Information Search

Evaluation of Alternatives
Purchase Decision Postpurchase Behavior

The Buyer Decision Process

Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state

Internal Stimuli Hunger

Thirst

External Stimuli
TV advertising

Magazine ad

A persons normal needs

Radio slogan
Stimuli in the environment

The Buyer Decision Process

Step 2. Information Search
Personal Sources Commercial Sources
Family, friends, neighbors Most influential source of information Advertising, salespeople Receives most information from these sources Mass Media Consumer-rating groups Handling the product Examining the product Using the product

Public Sources

Experiential Sources

The Buyer Decision Process

Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand? Based on what Im looking for, how satisfied would I be with each product?

Total Product Satisfaction

Evaluation Procedures
Choosing a product (and brand) based on one or more attributes.

The Buyer Decision Process

Step 4. Purchase Decision
Purchase Intention Desire to buy the most preferred brand

Attitudes of others

Unexpected situational factors

Purchase Decision

The Buyer Decision Process

Step 5. Post purchase Behavior
Consumers Expectations of Products Performance Products Perceived Performance

Satisfied Customer!

Dissatisfied Customer
Cognitive Dissonance

Stages in the Adoption Process

Awareness Interest

Evaluation
Trial Adoption

Adoption of Innovations
Percentage of Adopters

Early Majority Innovators

Late Majority

Early Adopters
13.5%

34%

34%

Laggards

16%

2.5%

Time of Adoption Late

Early

Influences on the Rate of Adoption of New Products

Communicability
Can results be easily observed or described to others?

Relative Advantage
Is the innovation superior to existing products?

Divisibility
Can the innovation be used on a trial basis?

Product Characteristics

Compatibility
Does the innovation fit the values and experience of the target market?

Complexity
Is the innovation difficult to understand or use?