Analyzing Consumer Markets

Definition of Consumer Behavior

The study of processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires

Overall Model Of Consumer Behavior

Cultural FactorsFundamental Detriment of consumer’s wants & behavior Set of values, perceptions, preferences, & behaviors acquired thru Family & key InstitutionsSubcultures: Specific Identification & socialization for their members Include Nationalities, Religions, Racial Groups & Geographic Regions Large Subcultures indicate special marketing programs - Diversity Marketing

Cultural FactorsWhy they do certain things: “Coz it’s the right thing to do” Each individual perceives the world through his own cultural lens Wedding associated with Champagne but

Wedding associated with purity & holiness South India: Coconut oil- Major source of

cooking Juices as health or occasional drink –

Penetration required

Cultural FactorsDifferent Ethnic & Demographic niches don’t respond favorably to Mass MarketingMcDonald’s: No Beef Products used Pepsi: All Hinglish CampaignsMcDonald’s: Aloo Tikki Burger Fair & Lovely: Marriage to Aspirations Pongal & Baisakhi Festivals celebrations Horlicks : North India & South India

Social Class

Homogeneous & Enduring divisions in a society, which are hierarchically ordered

Members share similar values, interests & behavior

Reflection of Relative Wealth, Power, Prestige

Reflection of Income, occupation, Education & area of residence

Differ in dress, Speech Patterns, Recreational Preferences & other characteristics

Social Class

Each Class tend to behave more alike than persons from two different social class Persons are perceived as occupying inferior or superior positions according to social class Social class indicated cluster of variables I.e occupation, income, wealth, education & value orientation than by single variable Individuals can move up or down the social class ladder during their lifetimes

Social Class- Importance Show distinct product & brand preferences in many areas including clothing, home furnishings, leisure activities & automobiles

Consumers purchase certain products because these products are favored by members of their own or higher social class or avoid due to vice – a –versa

Social classes differ in media preferences, with upper class consumers preferring magazines & books and lower class preferring Television

Language differences among the Social Classes

Social FactorsReference Groups:

Groups that have direct or Indirect influence on person’s attitude or behavior Any person or group that serves as a point of comparison for an individual in forming either general or specific values, attitudes or behavior Primary Groups: Family, friends, neighbors, co-workers – Direct Influencer Secondary Groups: Religious, Professional

Reference GroupsReference Groups expose an individual to new behaviors & lifestyles

Influence attitudes & self concept

Pressures for conformity that may affect actual product & brand choices

Aspirational Groups are those a person hopes to join

Dissociative groups are those whose values and behaviors an individual rejects

Reference Groups Friendship Groups: Mera No 1

Work Groups: Van Heusen shirts

Brand Communities: Apple, Harley Davidson

Celebrities:Adidas: Sachin TendulkarLux: Madhuri Dixit Ray Ban: Tom Cruise: Top Gun

FamilyMost Influential primary reference group

Family of orientation: Parents & Siblings Influence on Religion, Politics, Economics Sense of Right & Wrong Personal Ambition, Self Worth & Love

Family of Procreation:Spouse & children Product category buying variations according to

influence

Role & Status Role & Status define person’s position in its groups

A role consists of the activities a person is expected to perform

Each Role carries a status

People chose products that communicate their role & status in the society

Status symbol Potential of Products & Brands becomes very important

Roles & Status

Anil Ambani:Mercedes SL 500 Chartered Planes Seven Star HotelsArmani Suits Mont Blanc PenGolf

Analyzing Consumer Markets 1. Personal Factors

Age & Stage in Life Cycle:Need for different product categories changes

with Life Stages Tastes in Clothes, recreation, Automobiles are

purely age related Family Life Cycle influences consumption in a

big way Financial positions & Typical product interests

of each group are different

Personal Factors

Occupation & Economic Circumstances:Need & Consumption patterns for each

occupation are going to be different Companies tailor different products for each

occupational group Product Choice is affected by economic

circumstances Disposable Income patterns, Savings & assets,

Debts, borrowing powers & attitudes to spending

Income sensitive goods are greatly affected by Personal Income, Savings & Interest Rates

Personal FactorsLifestyle:Person’s pattern of living in the world as

expressed in activities, interests & opinions Portrayal of the person’s interaction with the

environment Psychographics is science of measuring &

categorizing consumer lifestyles Different profiling of people

Personal Factors Personality & Self Concept:Personality refers to distinguishing psychological

traits that lead to relatively consistent & enduring responses to environment

Three Distinct Properties:Reflects Individual Differences : Categorization

& Segmentation Consistent & Enduring: Appeal to relevant Traits Personality can change: Develop Products &

Ideas

Personality

Brands Personality is the specific mix of human traits that may be attributed to a particular brand

Consumers are likely to choose brands whose personalities match their own

Brand PersonalitiesNIKE: Athlete: Michael Jordan

ADIDAS: Sports: Sachin Tendulkar

TAG : Style & Trendy: SRK, Tiger woods

Omega: Sophisticated & Class:Pierce Brosnan

Levi: Dependable & Rugged

BMW: Performance

McDonald's : Fun& Entertainment: Ronaldo

Psychological FactorsMotivation:

Needs are the essence of the Marketing Concept

Key to growth is ability to satisfy un filled consumer needs

Marketers don’t create needs, they make consumers more keenly aware of their unfelt needs

Markets are defined in terms of needs rather than Products

Motivation is a driving force that impels them to action Driving Force is produced by a state of tension that exists

as a result of unfulfilled needs

MotivationMarketers must view Motivation as the force that induces consumption, & through consumption experiences, the process of consumer learning

Two Fundamental Concepts: Need: A state of deprivation Goals: Goals are sought after results of motivated

behavior: MBA from IIMs Thirst quenching thru Tropicana Juice Traveling by Chevrolet Optra NIKE for jogging

Positive & Negative Motivation

Emotional & Rational Motive

Psychological Factors Motivation:A motive is a need that is sufficiently pressing to

drive the person to act

Maslow’s Theory:Human needs are arranged in form of hierarchy

from the most pressing to the least pressing People will try to satisfy their most important

needs first & next most important & so on Goal is to let the marketers understand how

various products fit into the plans, goals & lives of consumers

Maslow’s Hierarchy Law

Esteem Needs(Self Esteem, Status

Social Needs(Sense of Belonging, Love)

Safety Needs(Security, Protection)

Physiological Needs (Food, Water, Shelter)

Self Act Needs

Herzberg Theory

Two factor Theory:

Dissatisfiers & Satisfiers

An active Satisfier & absence of dissatisfier

Sellers should do their best to avoid dissatisfiers – Un sell the product

Supply the major satisfiers or motivators of purchase in the market

PerceptionProcess by which an individual selects, organizes & interprets information inputs to create a meaningful picture of the world Perception vary widely among individuals exposed to same reality Three Perceptual processes:Selective Attention: Challenge to present stimuli which people notice Current Need, Anticipate, Large Deviations

Selective Distortion: Tendency to twist info into personal meanings that fits our

preconceptions

Selective Retention: Selective Points retention Drama & Repetition

Learning Change in individual behavior arising from experience

Interplay of drives, cues, stimuli, responses & reinforcement

Learning theory indicates Marketers how they can build up demand for their product by building strong drives, using motivating cues, & providing positive reinforcement

Beliefs & AttitudesA belief is a descriptive thought that a person holds about something

People’s beliefs about product & brand influence their purchase decisions

Marketers need to work upon beliefs consumers carry about their brand

A Brand triggers offs various nodes:

Reliance: Big, Reliable, Affordable Products, Efficient , Consumer Friendly

Attitudes

An attitude is person’s enduring favorable of unfavorable evaluations, emotional feelings, & action tendencies towards some objects or ideas

A frame of mind for liking or disliking, fairly consistent in nature

To fit the product into existing attitudes of persons