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Consumer

Behavior

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Contents:

1) Definition of Consumer Behavior

2) Need of Study of Consumer

Behavior3) Consumer Decision Process Model

4) Factors Affecting ConsumerBehavior

5) Changes in Consumer Behavior

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What Is Consumer BehaviorConsumer Behavior is defined as activities

people undertake when obtaining , consuming

and disposing of products and services.

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Consumer Behavior

OBTAINING CONSUMING DISPOSINGHow You Decide How You Use The How you get rid of

You Want To Buy Product Remaining Product

Where You Buy Who Uses The Product How You Recycle It

How You Transport How Much You Are You Going To

Product Home consume. Resell.

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Need Of Studying C.B

To Design the optimal product or servicesfor customers.

To Determine what price will the customer

give up for purchasing product or service. To Determine where the product or

services should be available so that it

would be easy for the customer to buy.

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To Determine which method of promotion

would be most effective for getting thecustomers to buy a product.

It Helps in changing the behavior of the

consumers.

The Important reason for studying consumer

behavior is the significance in our lives.

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Consumer Buying Decision Process:

NEED

RECOGNITION

SEARCH FORINFORMATION

PRE -PURCHASE

EVALUATION OF

ALTERNATIVES

PURCHASECONSUMPTION

POST-

CONSUMPTION

EVAALUATION

DIVESTMENT

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Stage 1: Need (or Problem) Recognition:

The starting point of any purchase decision is a

consumers need or problem. Consumer buys theproduct if he believes that its ability to solve a

problem is more than its cost of buying.

Manufacturers must examine the needs of the

consumers before making the product.

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Example of Need Recognition:

Need of car to university going student who is

wiling to spend 5 lacs.

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Stage 2 : Search For Information: Once need

recognition occurs , consumers begin

searching for information and solutions tosatisfy unmet needs . The sources of

information can be of 2 types:

1) Market-dominated source: Advertisements ,salesperson , websites etc

2) Non Market-dominated sources: Friends ,

family , peers etc

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Example of search for information:

Now Student begin his quest of information

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Stage 3 : Pre-Purchase Evaluation of

Alternatives:

This includes evaluation of variousalternatives identified during the search

process. Factors affecting evaluation of

alternatives are:Price

Features

Reliability

Safety

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Example of Pre-Purchase evaluation of alternatives:

After collecting information and compiling a list of

models, he evaluate models on the basis of price,

features, Style, safety, mileage, maintenance cost

etc

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Stage 4 : Purchase: After choosing the

alternative, the customer decides from which

retailer to buy the product. Factors influencingthe consumer to choose the retailer are:

Price Discount

Influence of salespersonAvailability of Product

Credit Card Facility

Location

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Example of Purchase: Student Choose a reliable,

four door red car that priced under 5 lacs.

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Stage 5: Consumption:

After Taking the possession of a product,

Consumption can occur at the point at whichconsumer use the product. Consumption can

either occur immediately or delayed.

Durable Goods: consumption can be

immediately or delayed.

Perishable Goods: consumption occurs in short

time.

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Stage 6 : Post Consumption Evaluation:

The success of product depends upon its

consumption i.e. how the consumer uses the

product and how much he uses.

Highly Satisfied

When Expectation Matched

Shorter Next Purchase Decision

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Stage 7 : Divestment:

It is the last stage in consumer decision process.

It include Reuse of Product Or Reselling. As incase of student car buyer, he has a choice of

reselling or taking it to junkyard.

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Factors Affecting Consumer Behavior

Factors

Affecting

Consumer

Behavior

Cultural

Factors

Social Factors

Personal

Factors

Psychological

Factors

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Cultural Factors

Culture

Sub-

culture

Social

class

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Culture: It refers to set of learned beliefs , values ,

attitude, morale ,customs ,habits and forms of

behavior that are shared and transmitted fromgeneration to generation.

Sub-culture : A group of people with shared value

systemsbased on

common life

experiencesand situations.

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Example of cultural difference: People in

north India splurge money on luxuries on

the other hand people in south Indiaprefer simple living. The first showroom of

Mercedes was opened in Ludhiana owing

to great scopeSocial Class : Almost every society has

some form of social structure. Social

classes are society's relatively permanent

and ordered divisions whose members

share similar values, interests and

behavior

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Social Factors

Family

Refere-

nce

Groups

Roles and

Status

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Family: Family size and Family

structure has considerable influence

on consumer behavior.

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Reference Groups:Reference groups refers

to persons with whom the customer interact

while taking purchase decisions. There are 2types of reference groups:

1) Primary Group: Family , close friends ,

neighbors , relatives etc2) Secondary Group: It refers to groups with

which consumer interact occasionally like

professional groups , salesman etc

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Roles and status: A person belongs to many

groups , family , clubs and organization . The

person's position in each group can be definedin terms of both role and status.

For example: "X" plays the role of father and

husband in his family. In his company, he playsthe role of manager, etc. A Role consists of the

activities people are expected to perform

according to the persons around them..

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Personal Factors

Age and Lifestyle Occupation

Economic Situation Personality

Personal

Factors

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Age and Life cycle: Purchasing tastes changes

with age.

Occupation: Occupation

also shapes the pattern

of consumer behavior.

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Economic Situation:

Personal Income HIGHDemandsHIGH

Personal IncomeLOW -- DemandsLOW

Personality and Lifestyle: Personality refers to

traits such as self-confidence , sociability ,

aggressiveness etc. Everyone has its own

lifestyle , some lives simple lifestyle while

other believes in materialism.

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Psychological Factors

Motivation Perception

Learning Beliefs & Attitudes

Psychological

Factors

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Motivation: It is an inner drive that reflects goaldirected arousal. It is the drive to satisfy needs and wants

both physiological and

psychological

through the

purchase and

use of products

and services.

MASLOW THEORY

OF MOTIVATION:

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Perception : Perception is the process by

which person interpret and organize sensation

to produce a meaningful experience of theworld. Perception includes:

I. Exposure to stimuli

I. Interpretation of stimuli

I. Ability to identify

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Learning: Learning is a behavioral modification

that occurs through experience . For instance we

may experience the sales people in one storebeing nicer to us than those in other . Thus we

develop a preference for that store. Another

example of learning is that people avoid to buythose food that they have consumed shortly

before becoming ill.

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Beliefs and Attitude: A belief is a descriptive

thought that a person has about something. A

person may believe that a certain cooking oilX has the lowest fat and is best for health.

This belief may be based on some real facts or

may not be.

Attitude refers to persons consistently

favorable and unfavorable evaluation or

feelings towards a project or an idea.

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Changes In Consumer Behavior

Surveyed by ICMOC

Indian Consumers became more value

sensitive.

They strictly follow their culture.

They give preference to features of product

rather than Brand name.

Rural Indian Consumers showing signs of

change.

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Emerging Trend of credit Shopping.

Indian Consumers not confined to single

brand.

Tastes and Preferences of current

generation are changing rapidly.Middle class Indian consumers provided a

big boost to consumer buying culture.

Indian companies are doing well.

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What influences you when you buy

some thing??

Price?

Utility?

Need?