Marketing Management

26/10/07 CBS PGPMI - Class 12 Sivapriya Krishnan

Consumer Behaviour-Nature, Scope and Applications

Who is a consumer?
A consumer is typically one who engages in any one or all of the activities described in the definition Customer is one who actually purchases a product or service from a particular organisation or shop.

Two broad types of consumer

Personal
Buys goods or services for his/her own use

Organisational
Including profit and non profit businesses, government agencies and institutions

The focus of the course will be on the individual consumer

Consumer behaviour-some definitions

The decision process and the physical activity engaged in when evaluating, acquiring, using or disposing of goods and services The study of consumer behaviour is the study of how individuals make decisions to spend their available resources (time,money, effort) on consumption related items. It includes the study of what they buy, why they buy it, when they buy it, where they buy it, how often they buy it and how often they use it.

Some consumer behaviour roles

Role
Initiator

Description
The person who determines that some need or want is not being met

Influencer The person who intentionally/ unintentionally influences the decision to buy the actual purchase and/ or use of product or service

Buyer
User

The buyer who actually makes the purchase

The person who actually uses or consumes the product or service

Why the field of Consumer Behaviour developed

Marketing concept evolution
Production orientation: cheap efficient production and intensive distribution Product orientation: focuses totally on the product quality Selling orientation: assumes consumers will not buy without hardsell Marketing orientation: determines the needs and wants of specific target markets.

Why the field of Consumer Behaviour developed

Dawning realisation that consumers rebelled at using identical products
They preferred products that reflected their own special needs, personalities and lifestyles. Hence, marketers adopted Market Segmentation- this technique called for greater understanding of the consumer

Consumer Adoption Process

Adoption : individuals decision to become a regular user Consumer adoption should translate into consumer loyalty

Consumer Adoption Process

Innovation: any good, service, idea that is perceived by someone as new Innovation diffusion process is the spread of a new idea from its source of invention o creation to its ultimate users or adopters

Consumer Adoption Process

Five stages of adoption / innovation diffusion : Awareness : aware but no information Interest : stimulated to seek information Evaluation: considers whether to try the innovation Trial : tries the innovation to estimate its value Adoption : makes full use of innovation

Consumer Adoption Process

Early majority 34% Early adopters 13.5% Innovator 2.5%

Late Majority 34%

Laggards 16%
Sivapriya Krishnan

Individual influencers of buying behaviour

Perception

What is perception?
Perception is the process by which a person selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. Stimuli
Vision Smell Sound Touch Smell

Consumer motivation and involvement

Model of motivation process

Learning

Unfulfilled needs, wants and desires

Tension

Drive

Behaviour

Goal or need fulfillment

Cognitive processes

Tension reduction

Individual determinants of behaviour

Motivation Motivation is that internal force which arouses or activates some need and provides direction of behaviour towards fulfillment of that need.
May be physiological, biological or pyschological

Involvement Refers to the personal relevance or importance of a product or service that a consumer perceives in a given situation. High involvement leads to high motivation

Individual determinants of behaviour (contd)

Attitudes
Learned pre-dispositions towards objects, people and events Not inborn or innate

Personality and self concept

It is the sum total of unique individual characterstics that makes each one of us what we are.

 Beliefs: large number of verbal or mental statements that reflect a persons particular knowledge and assessment about something Values are also beliefs, but
Relatively few in no. Guide for culturally appropriate behaviour Enduring Not tied to specific objects or things Widely accepted by members of society

Customs: overt modes of behaviour that constitute approved or acceptable ways of behaving in specific situations

Individual determinants of behaviour (contd)

Learning and memory
We are exposed to a wide range of information everyday, though we retain very less We remember only that which is of relevance to us, or where we have a motivation to remember Our motives, attitudes and personality act as filters

Evaluation of Classical conditioning

Repetition, Stimulus generalization and discrimination are useful theories Classical conditioning theories assume that consumers are passive beings who react with predictable responses to stimuli after repeated trials. In reality, our assessment of products are often based on the rewards we experience as a result of making specific purchases.

Operant Conditioning
Our assessment of products are often based on rewards we experience as a result of making specific purchasesinstrumental conditioning

Model of Instrumental conditioning

Try brand A Unrewarded Legs too tight

Stimulus Situation (Need good looking Jeans)

Try brand B

Unrewarded Tight in seat

Unrewarded Baggy in seat REWARD Perfect fit

Try brand C

Try brand D

Repeat Behaviour

Instrumental conditioning
Positive reinforcement
Consists of events that strengthen the likelihood of a specific response (using a shampoo that leaves your hair feeling smooth and silky is likely to result in a repeat purchase)

Negative reinforcement
A negative outcome that also encourages a specific behaviour

Massed or distributed learning

Evaluation of instrumental conditioning

This model of learning applies to many situations where consumers learn about products, services and retail stores Classical conditioning simple behaviour Operant explains complex, goal oriented activities Considerable amount of learning also takes place in the absence of +ve or ve reinforcement

Cognitive learning theory

Not all learning takes place as result of repeated trials More often, however, we search for information on which to base a decision. We evaluate what we learn carefully, in order to make the best possible decision. Learning based on mental activity is called cognitive learning (CL) CL theories are strongly based on memory and memory processes

Individual determinants of behaviour (contd)

Information processing
The process and activities which consumers engage in while gathering, assimilating and evaluating information This is also influenced by our motives, attitudes, personality and self concept

Influence of the external environment on consumer behaviour

Cultural Sub cultural Social class Social group Family Personal Other influences

What is lifestyle?
A lifestyle typically depicts the whole person in active interaction with his environment Lifestyle
is a group phenomenon pervades various aspects of life implies a central life interest varies according to sociologically relevant variables

Hierarchy of Influences on lifestyle

Culture and society

Lifestyle patterns and values

Purchase decisions

Market reaction of Consumer

Approaches to study lifestyle

Draws on a variety of disciplines such as anthropology, psychology, sociology and economics. Consumer psychographic profiles are derived by measuring different aspects of consumer behaviour such as
Products and services consumed Activities interests and opinions (AIO) Value systems Personality traits and self-conception

Lifestyle portrayed thru garments ads

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Dinesh Raymonds Peter England Arrow Levis Lee Siyaram Allen Solly Gwalior Colour Plus Formal businessman Upperclass, non ostentatious Young, upwardly mobile, yet VFM (not yet arrived) Upperclass, traditional, formal (arrived) Young, sexy, bold, iconoclastic Active, outdoors lifestyle Ethnic, fashionable, adventurous Dares to be different while conforming Classy, heritage oriented, pedigree Fashionable, youthful, variety seeker

Female Lifestyle types-India

1. 2. 3. 4. 5. 6. 7. The gregarious hedonist The contemporary housewife The affluent sophisticate The tight-fisted traditionalist The troubled homebody The anxious rebel The contented housewife

Targeting of products
Durables
Washing machines Wet Grinders Vacuum cleaner Steel cupboards Watches Contemporary Housewife, affluent sophisticate, gregarious hedonist Contemporary Housewife, affluent sophisticate

Non durables
Gel toothpaste Tamarind paste Skin care cream Upmarket perfumes Talcum powder

The Buying process

The Buying process

Problem recognition

Info, search & evaluation

Purchasing Processes

Post Purchase Behaviour

Information search
Internet Advertising In-store promotion Dealer information Package info Sales personnel Samples and demo

Factors likely to increase search

Product factors Situational factors
Experience Social acceptability

Consumer factors
Demographic characteristics Personality

Information processing
Exposure

Attention

Comprehension

Yielding

Retention

 Exposure: degree to which people notice stimuli Attention: degree to which people focus on stimuli Comprehension: understanding Acceptance: act of agreeing/disagreeing Retention: entry of stimulus into the long term memory

Alternative evaluations in buying decisions

Product attributes Utility function of each attribute Importance weights of each attribute Set of brand beliefs

Purchase process
Physical surroundings Social surroundings Task definition Temporal dimensions Antecedent conditions

Post-purchase evaluation
Dissatisfaction Expectancy confirmation Satisfaction

Marketers response strategies

Monitor consumer reaction Product quality under Mktg.responsibility Handle complaints quickly/efficiently Be a courteous/helpful host State realistic product claims Help consumer on product use Sell solution instead of product Post purchase assurance