CONSUMER BEHAVIOUR

ANALYZING MARKETS

Analyzing Consumer Markets

Analyzing Business Markets

B 2 C

B 2 B

Influences on Consumer Behavior

1. CULTURAL FACTORS- Culture- Subculture- Social class2. SOCIAL FACTORS- Reference Groups- Family- Social Roles- Status3. PERSONAL FACTORS- Age- Stage in Life Cycle- Occupation- Economic Circumstances- Life style- personality

Culture

Culture is the fundamental determinant of a persons wants and behavior.

Culture includes :- Values- Perceptions- Preferences- Behaviors- And it is influenced by ones family and other key

institutions.

Subculture

Subculture provides more specific identification and social belonging to a person.

Subcultures include :- Nationality- Religion- Race- Cast- Ethnic group

Social Class

Social Class is a homogenous and enduring division within a society, which is hierarchically ordered and whose members share similar values, interests and behavior.

Example : Upper class Middle class Lower class etc.

Reference Groups

Primary Groups ( friends, informal ) Secondary Groups ( professional, formal ) Aspirational Groups Dissociative Groups OPINION LEADERS

Role and Status

A persons position in each group is defined in terms of role and status.

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

Each role carries a status. People choose products that reflect and

communicate their role and actual or desired status in society.

Age and Family Life Cycle

People buy different goods and services over a life time.

Taste in food, clothes, furniture and recreation is generally age related.

Household consumption is shaped by the family life cycle and the number, age and gender of the people.

Lifestyle

People from the same subculture, social class and occupation may lead totally different life styles.

A lifestyle is a persons pattern of living in the world as expressed in activities, interests and opinions.

Personality and self-concept

HUMAN PERSONALITY

Self-confidence Dominance Autonomy Deference Sociability Defensiveness adaptability

BRAND PERSONALITY

Sincerity Excitement Competence Sophistication Ruggedness

PSYCHOLOGICAL PROCESSESAFFECTING CONSUMER BEHAVIOR

1. MOTIVATION

2. PERCEPTION

3. LEARNING

4. MEMORY

Motivation

1. Freud’s theory : psychological forces shaping people’s behavior are largely subconscious.

2. Maslow’s theory : Need circles ( Physiological, Safety, Social, Esteem and Self-actualization).

3. Herzberg’s theory : Absence of Dis -satisfiers is not enough. Satisfiers must be present to motivate a purchase.

Perception

Perception is the process by which an individual selects, organizes and interprets information to create a meaningful picture of the world.

Perceptions can very widely among individuals exposed to the same reality.

In Marketing, perceptions are more important than reality.

Selective Attention

People are more likely to notice stimuli that relate to a current need.

People are more likely to notice stimuli that they anticipate.

People are more likely to notice stimuli whose deviation is large in relation to the normal size of the stimuli.

Selective Distortion

Selective Distortion is the tendency to interpret information in a way that will fit our preconceptions.

Consumers often distort information to be consistent with prior brand and product beliefs.

Selective Retention

People fail to register much information to which they are exposed in memory, but tend to retain information that supports their attitudes and beliefs.

We are likely to remember the good points about the product we like and forget good points about the product we do not like.

Learning

When people act, they learn. It involves changes in individual’s behavior arising from experience.

Discrimination is learning to recognize the differences in sets of similar stimuli to adjust responses accordingly.

Memory

Short term memory ( STM ) Long term memory ( LTM ) Memory Encoding refers to how and where

information gets into memory. Memory Retrieval refers to how information

gets out of memory. Associative Network Memory Model explains

this complex process.

BUYING DECISION PROCESSTHE 5 POINT MODEL

1. PROBLEM RECOGNITION

2. INFORMATION SEARCH

3. EVALUATION OF ALTERNATIVES

4. PURCHASE DECISIONS

5. POSTPURCHASE BEHAVIOR

MENTAL ACCOUNTING

It refers to the manner by which consumers code, categorize and evaluate financial outcomes of their choices.

1. Consumers tend to segregate gains (List of separate benefits appears bigger than the whole product )

2. Consumers tend to integrate losses ( Small value furniture can be clubbed with the large value of the house )

3. Integrate smaller losses with larger gains ( monthly TDS is better accepted than large Tax Cuts at the end of the year)

4. Segregate small gains from large losses ( People are happy to get small discounts on very expensive cars )

ORGANIZATIONAL BUYING SITUATIONS

NEW TASK. STRAIGHT REBUY. MODIFIED REBUY.

THE BUYING CENTRE

1. Initiators

2. Users

3. Influencers

4. Deciders

5. Approvers

6. Buyers

7. Gatekeers

Stages in Buying Process

1. Problem or Need Recognition.

2. Need Description and Product Specification

3. Supplier Search

4. E-Procurement

5. Proposal solicitation

6. Supplier Selection

7. Order – Routine Specification

8. Performance Review