consumer behvoiur
TRANSCRIPT
Consumer BehaviorBy Prof. Rajeev Kumar
The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.
Personal Consumer
The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend.
Organizational Consumer
A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.
FACTORS INFLUENCING CONSUMER BUYING BEHAVIOR
• Cultural factors: Culture Sub- Culture eg: Kellogg’s
SOCIAL CLASS
• Upper Class• Upper Middle Class• Middle Class• Lower Class
SOCIAL FACTORS
• Social Groups• Colleagues at work• Consumer Action Groups• Reference Groups• Family
PERSONAL FACTORS
• Age and Life Cycle stage• Occupation and Financial status• Life-style
PSYCHOLOGICAL FACTORS
• MOTIVATION• PERCEPTION• ATTITUDE• LEARNING
Copyright 2007 by Prentice Hall
Needs and Motivation
• Needs are the essence of the marketing concept.
• Motivation is the driving force within individuals that impels them to action.
Consumer Motivation
• Represents the drive to satisfy both psychological and physiological needs through product purchase and consumption.
• gives insights into why people buy certain products.
• stems from consumer needs: industries have been built around basic human needs.
Types of Consumer Needs
• Physiological needs- Fundamental human needs, including food,
water and shelter• Safety and Health needs- Threats to our safety and health motive
purchases for personal security and protection.
• Safety and Health needs Protecting our personal information and
computers represents new types of safety needs.
Businesses provide a variety of products and services to appeal to safety and health conscious consumers.
Safety and Health Needs
Motivational conflicts and need priorities
• satisfying a need often comes at the expense of another need- this causes motivational conflicts.
Figure 4.1 Model of the Motivation Process
Figure 4-2aGoals Structure for Weight Control
The Dynamic Nature of Motivation
• Needs are never fully satisfied• New needs emerge as old needs are satisfied• People who achieve their goals set new and
higher goals for themselves
This ad reflects a need for
accomplishment with a
toothpaste.
Motivating with Money
PERCEPTIONS
• The process by which an individual selects, organizes and interprets stimuli into meaningful thoughts and pictures.
(Customers perceive their environment through the sense of touch, smell, taste, hearing, etc.
BELIEFS AND ATTITUDE
• A belief is a descriptive image or thought that an individual holds about something.
• A person’s attitude is a set of his feelings and the way in which he reacts to a given idea or thought.
LEARNING
• Consumer learning is a process which evolves and changes as a result of newly acquired knowledge or experience
ObtainingObtaining ConsumingConsuming DisposingDisposing
ConsumerConsumerInfluencesInfluences
OrganizationalOrganizationalInfluencesInfluences
Consumer Behavior
Consumer Consumer InfluencesInfluences
Organizational InfluencesOrganizational Influences
Culture EthnicityPersonality FamilyLife-stage ValuesIncome Available ResourcesAttitudes OpinionsFeelingsMotivations Past ExperiencesPeer GroupsKnowledge
Brand Product FeaturesAdvertising Word of MouthPromotions Retail DisplaysPrice QualityService Store AmbianceConvenience Loyalty ProgramsPackaging Product Availability
ObtainingObtaining ConsumingConsuming DisposingDisposing
ConsumerConsumerInfluencesInfluences
OrganizationalOrganizationalInfluencesInfluences
Consumer Behavior
OBTAININGHow you decide you want to buyOther products you consider buyingWhere you buy How you pay for productHow you transport product home
CONSUMINGHow you use the productHow you store the product in your homeWho uses the product How much you consumeHow product compares with expectations
DISPOSINGHow you get rid of remaining productHow much you throw away after useIf you resell items yourself or through a consignment storeHow you recycle some products
CONSUMER INFLUENCESCulture EthnicityPersonality FamilyLife-stage ValuesIncome Available ResourcesAttitudes OpinionsMotivations Past ExperiencesFeelings Peer GroupsKnowledge
ORGANIZATIONAL INFLUENCES
Brand Product FeaturesAdvertising Word of MouthPromotions Retail DisplaysPrice QualityService Store AmbianceConvenience Loyalty ProgramsPackaging Product Availability
Consumer Behavior
Customers?
• Who are our existing / potential customers?• What are their current / future needs?• How can we satisfy these needs?
• Can we offer a product/ service that the customer would value?
• Can we communicate with our customers?• Can we deliver a competitive product of service?
• Why should customers buy from us?
Becoming a Winner : A Three Dimensional Approach
Ability to Delight Customers ( Market Orientation - Learning Ladder )
Ability to Focus ( Specialization Ladder )
Efficiency Ladder
Ability To
AchieveLower
cost
Successful Relationships
Customer Value
Customer Satisfaction
Customer Retention
Successful Relationships
• Customer Value• Customer
Satisfaction• Customer
Retention
• Defined as the ratio between the customer’s perceived benefits and the resources used to obtain those benefits
• Perceived value is relative and subjective
• Developing a value proposition is critical
Value, Satisfaction, and Retention
Successful Relationships
• Customer Value
• Customer Satisfaction
• Customer Retention
• The individual's perception of the performance of the product or service in relation to his or her expectations.
• Customers identified based on loyalty include loyalists, apostles, defectors, terrorists, hostages, and mercenaries
Value, Satisfaction, and Retention
Successful Relationships
• Customer Value• Customer
Satisfaction• Customer
Retention
• The objective of providing value is to retain highly satisfied customers.
• Loyal customers are key– They buy more products– They are less price sensitive– They pay less attention to
competitors’ advertising– Servicing them is cheaper– They spread positive word of
mouth
Value, Satisfaction, and Retention
Customer Profitability-Focused Marketing
• Tracks costs and revenues of individual consumers
• Categorizes them into tiers based on consumption behavior
• A customer pyramid groups customers into four tiers
Customer Profitability-Focused Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
Traditional Marketing Concept Vs. Value and Retention Focused Marketing
Table 1-2
Traditional Marketing Concept
Value and Retention Focused Marketing
Make only what you can sell instead
of trying to sell what you make
Use technology that enables
customers to customize what
you make
Do not focus on the product; focus on
the need that it satisfies
Focus on the product’s
perceived value, as well as the
need that it satisfies
Market products and services that
match customers’ needs better than
competitors’ offerings
Utilize an understanding of
customer needs to develop
offerings that customers perceive as more valuable than
competitors’ offerings
Why Study Consumer Behavior?
"All marketing decisions are based on assumptions and knowledge of consumer behaviour," (Hawkins and Mothersbaugh, 2007). Researching consumer behaviour is a complex process, but understanding consumer behaviour is critical to marketers-they can use it to:
Provide value and customer satisfaction.Effectively target customers.
Enhance the value of the company.Improve products and services.Create a competitive advantage
Understand how customers view their products versus their competitors' products.
Expand the knowledge base in the field of marketing,Apply marketing strategies toward a positive effect on
society (encourage people to support charities, promote healthy habits, reduce drug use etc.)
Educating Consumers About Crises
Understanding consumers’ issues or problems and developing methods to reach and educate consumers
Educating Consumers About Health
Understanding consumers’ issues or problems and developing methods to reach and educate consumers
Educating Consumers About Health
Evolution of Consumer Behavior
Wholesaler Manufacturer Retailer Consumer
ManufacturingOrientation
ConsumerOrientation
SellingOrientation
MarketingOrientation
Consumers’ Increasing Influence
U.S. 1750-1850 1850-WWII 1970-2000 2000+
Europe 1750-1850 1760-WWII 1970-2000 2000+
Consumer Behavior Is Interdisciplinary
• Psychology • Sociology • Social psychology• Anthropology• Economics
A Simplified Model of Consumer Decision Making – Figure 1-1
The Underlying Principles of Consumer Behavior
The Consumer Is Sovereign
The Consumer Is Global
Consumers Are Different; Consumers Are Alike