An Introduction to Consumer Behavior

Dr. R. Satish Chandra Dr. R. Satish Chandra Asst. Professor Asst. Professor AMC Engineering College AMC Engineering College Bangalore Bangalore

Remember Me? Remember Me?

I'm the fellow who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the fellow who goes into a department store and stands quietly while the sales clerks finish their little chitchat. I'm the man who drives into a gasoline station and never blows his horn, but waits patiently while the attendant finishes reading his comic book. "Yes, you might say, I'm a good guy. But do you know who else I am? I am the fellow who never comes back, and it amuses me to see you spending thousands of dollars every year to get me back into your store, when I was there in the first place, and all you had to do to keep me was to give me a little service; show me a little courtesy." Source: From a Better Business Bureau bulletin submitted by An Arkansas Reader to Dear Abby

Defining Consumer Behavior Defining Consumer Behavior

Consumer Behavior is the Process Involved When Individuals or Groups Select, Use, or Dispose of Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires.

Issues During Stages in the Consumption Process

Consumers Impact on Consumers Impact on Marketing Marketing Understanding consumer behavior is good business. Strategy Strategy

Firms exist to satisfy consumers needs, so Firms must understand consumers needs to satisfy them. Identifies Groups of Consumers Who are Similar to One Another in One or More Ways, and Devises Marketing Strategies that Appeal to One or More of These Groups.

The Process of Marketing Segmentation:

Segmenting Consumers by Segmenting Consumers by Demographic Dimensions Demographic Dimensions

Demographics are Statistics That Measure Observable Aspects of a Population Such As:
Geography Geography Age Age

Race and Race and Ethnicity Ethnicity

Gender Gender

Social Class Social Class and Income and Income

Family Structure Family Structure

Consumers Impact On Marketing Consumers Impact On Marketing Strategy: Building Bonds With Strategy: Building Bonds With Consumers Consumers Relationship Marketing occurs when a company makes an effort to interact with customers on a regular basis, and gives them reasons to maintain a bond with the company over time.

Database Marketing involves tracking

consumers buying habits very closely, and crafting products and messages tailored precisely to peoples wants and needs based on this information.

Marketings Impact on Consumers: Marketings Impact on Consumers:

The Meaning of Consumption The Meaning of Consumption
Types of Relationships a Person May Have With a Product:
Self-Concept Attachment
Helps to Establish the Users Identity

Nostalgic Attachment
Serves as a Link With a Past Self

Interdependence
Part of the Users Daily Routine

Love
Elicits Bonds of Warmth, Passion, or Other Strong Emotion

Consumption Typology Explores the Different Ways That Products and Experiences Can Provide Meaning to People. There Are 4 Distinct Types of Consumption Activities:
Consuming as Experience Consuming as Integration Consuming as Classification Consuming as Play An Emotional or Aesthetic Reaction to Consumption Objects Express Aspects of Self or Society Communicate Their Association With Objects, Both to Self/ Others Participate in a Mutual Experience and Merge Self With Group

Marketings Impact on Consumers: Marketings Impact on Consumers: Consumption Typology Consumption Typology

Marketings Impact on Consumers

Marketing and Culture Popular Culture Intangible and Tangible Objects

The Global Consumer

Global Consumer Culture

Virtual Consumption
Business to Consumer Selling (B2C Commerce) Consumer to Consumer Selling (B2B Commerce) Virtual Brand Communities

Blurred Boundaries: Marketing and Reality

Marketing Ethics Marketing Ethics

Business Ethics are Rules of Conduct That Guide Actions in the Marketplace - the Standards Against Which Most People in a Culture Judge What is Right and What is Wrong, Good or Bad.

Other Marketing Ethics Issues Other Marketing Ethics Issues

Do Marketers Create Artificial Needs?
Response: Marketing attempts to create awareness that these needs do exist, rather than to create them.

Are Advertising and Marketing Necessary?

Response: Yes, if approached from an information dissemination perspective.

Do Marketers Promise Miracles?

Not if they are honest; they do not have the ability to create miracles.

Among the issues covered are

Business Relationships (must never take unfair
advantage of others through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice) Offering Gifts to Clients (may not furnish or offer to furnish any gift that is of more than token value or that goes beyond the common courtesies) Receiving Gifts From Clients (must never request or ask for gifts, entertainment or any other business courtesies) Business Communication (should take care to avoid exaggeration, colorful language, guesswork, legal conclusions and derogatory remarks or characterizations of people and other companies)

The Code discusses such issues as:

Accuracy of Representation of Products (must accurately
and fairly describe the product or service offered) Support of Claims Made About Products (must be able to substantiate the basis for any performance claim or comparison) Acceptability for Using the Word Free (Products or services offered without cost or obligation) Guidelines for Advertising Which Compares One Product to Another ("must be factual, verifiable and not misleading)

The Dark Side of Consumer The Dark Side of Consumer Behavior Behavior
Compulsive Consumption
>Behavior is Not Done by Choice >Gratification is Short-Lived >Strong Feelings of Regret or Guilt Afterwards

Addictive Consumption
> Gambling

Illegal Activities
> Consumer Theft (Shrinkage) >Anti-consumption Culture Jamming Cultural Resistance

Consumed Consumers
> People Who Are Exploited for Commercial Gain in the Marketplace.

Interdisciplinary Influences Interdisciplinary Influences

Individual Focus Individual Focus

Experimental Psychology Clinical Psychology Developmental Psychology Human Ecology Microeconomics Social Psychology Sociology Macroeconomics Semiotics/Literary Criticism Demography History Cultural Anthropology

Social Focus Social Focus

Two Perspective on Consumer Two Perspective on Consumer Research Research

Positivist Positivist Approach Approach Objective Objective Prediction Prediction Independent Independent Real Cause Real Cause Separation Separation Interpretivist Interpretivist Approach Approach Socially Socially Constructed Constructed Understanding Understanding Contextual Contextual Simultaneous Simultaneous Shaping Shaping Interaction Interaction

The Wheel of Consumer The Wheel of Consumer Behavior Behavior

Consumerism
Consumerism is concerned with broadening the
rights of consumers. The concepts of social responsibility and consumerism go hand-in-hand. If every organization practiced a high level of social responsibility the consumer movement might never have begun. Consumerism is a struggle for power between buyers and sellers; specifically, it is a social movement seeking to increase the rights and powers of buyers in relation to sellers. required to foster realism and accuracy among consumers.

 Sellers rights and powers are presented in the

following list: To introduce any product in any size and style they wish into the marketplace, so long as it is not hazardous to personal health or safety or if it is hazardous, to introduce it with the proper warnings and controls

 To price the product at any level they

wish, provided there is no discrimination among similar classes of buyers To spend any amount of money they wish to promote the product, so long as the promotion is not defined as unfair competition

 To formulate any message they wish about

the product provided that it is misleading or dishonest in content or execution To introduce any buying incentive schemes they wish In contrast, here are buyers rights and power: To refuse to buy a product that is offered to them

 To except the product to be safe To expect the product to essentially

match how the seller represented it To receive adequate information about the product It is in the best interest of marketers to understand the level of consumer standards and the natureof consumer perceptions, as well as what is

 What Marketers Need To Know As Consumers Take Contro

by Matthaeus Paul

Understanding And Predicting Consumer Behavior

by Danziger Pamela N Consumer Behavior And Managerial Decision Making by Kardes Frank R

Why We Buy by Paco Underhill, Consumer Psychology by Na