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Consumer Behaviour
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Block 1
Consumer Behaviour Issues and
Concepts
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Nature of Consumer Behaviour
Consumer Behaviour can be defined as: "The decision process and physical activity engaged
in when evaluating, acquiring, using or disposing ofgoods and services.
Initiator The person who determines that some need orwant is not being met.
Influencer The person who intentionally/unintentionallyinfluences the decision to buy the actual purchase and/oruse of product or service.
Buyer The person who actually makes the purchase. User The person who actually uses or consumes the product or
service.
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THE DECISION PROCESS
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INDIVIDUAL DETERMINANTS
Motivation and Involvement Attitudes
Personality and Self-concept
Learning and Memory Information Processing
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EXTERNAL ENVIRONMENT
Cultural Influences Sub-cultural Influences
Social Class Influences
Social Group Influences Family Influences
Personal Influences
Other Influences
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APPLICATIONS OF CONSUMER
BEHAVIOUR IN MARKETING
Analyzing Market Opportunity Selecting the Target Market
Determining the Product Mix
Use in Non-profit and Social Marketing
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CONSUMER BEHAVIOUR AND LIFESTYLE
MARKETING
CHARACTERISTICS OF LIFESTYLELifestyle is a group phenomenon
Lifestyle pervades various aspects of life
Lifestyle implies a central life interest Lifestyles vary according to sociologically
relevant variables
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INFLUENCES ON LIFESTYLE
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VALS SYSTEM OF CLASSIFICATION
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ORGANISATIONAL BUYING BEHAVIOUR
organizational buying as a complex process ofdecision making and communication, which
takes place over time, involving several
organizational members and relationship with
other firms and institutions
Buying decision process
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ORGANISATIONAL BUYING BEHAVIOUR:
CHARACTERISTICS
Organizational buying is a multiperson buyingactivity
It is a formal activity which follows the
procedures laid down in an organization
Longer time lag between efforts and results
The uniqueness of organizations
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Factors influencing Organizational
Buying
External environment factors Economic
Infrastructural
Social Political
Competition
Regulatory
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Organizational factors
objectives
Policies
objectives
Procedures
Organizational structure
System
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Interpersonal factors
Authority Status
Empathy
Persuasiveness
Individual factors
Age
Income
Education Job position
Risk attitude
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Buying situation
Straight re-buy situation Modified re-buy
New task
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Buying Behavior Models
Simple model
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Buy grid model
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The fishers model
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Block 2
Individual influences on buying
behavior
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Perception process
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Stages in perceptual
Primitive categorization Cue check
Confirmation check
Confirmation completion
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Sensory system
Vision Smell
Sound
Touch Taste
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Sensory thresholds
The absolute threshold The differential threshold
The JND and Webers law
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Perceptual selection
Subliminal perceptionSubliminal techniques
embeds
auditory messages
consumer folklore
low level auditory stimulation
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Consumer motivation and involvement
Need and types of needs need for affiliation
need for power
need for uniqueness
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Maslows
hierarchy needs
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Motivation
Refers to the process that cause people to behaveas they do
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Theories of motivation
Instinct theory Drive theory
Expectancy theory
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Motivational conflicts
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Types of involvement
Purchase involvementmessage-response involvement
ego involvement
Measuring involvement Development of involvement
Segmenting by involvement
Strategies of to increase involvement
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Attitude and its constituent
Attitude is learned predisposition to respond in aconsistently favorable and unfavourable manner
with respect to given stimuli
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Functions of attitude
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Attitude models
Multi-attribute model
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ATO
These models seek information on the importance ofbrand attributes, belief about presence and absence
of those attributes and information on their combined
effect
algebraically
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Behaviour intention model
This model predict intentions to behaveAlgebraically
B=BI = W1 (AB) + W2 (SN): where
B = behavior; BI = Behaviour Intention
AB = attitude toward performing the behaviorSN = the subjective norm
W1 and W2, are empirically determined weights, throughregression analysis.
AB and SN are obtained directly from consumers viaquestionnaires. Thus, AB is obtained from the followingequation: Where
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where
SN = subjective norm;
NBj = the normative belief that a reference
group of persons j thinks that the consumer
should or should not perform thebehaviour;
MC = the motivation to comply with
the influence of the referent j and
n = number of relevant referencegroups of individuals.
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Learning and Memory
Learning refers to the permanent change in thebehavior caused by experience.
Theories of learning
Classical conditioning :theory given by IvanPavlov.Acc.to theory learning occurs when
stimulus elicit a response paired with
another stimulus that initially does not elicit
as response on its own, but will cause aresponse over time since it is associated
with the first stimulus
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Operant conditioning
This is given by B.F.Skinner acc.to this theoryindividual learns to perform behaviors that
produce positive outcome and avoid those
having negative outcome.
Instrumental learning occurs in 2 ways
+ve reinforcement in the form of reward response
is strengthened.
_ve reinforcement strengthens responses so that
Appropriate behavior is learned.
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Issues of learning
Issue of consciousness Observational learning
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Memory:structure and functioning
Is the process of acquiring information andstoring it over time so that it will available when
needed.
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Relationship among memory systems
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Retrieving information
is the process whereby information isaccessed from long-term memory
Measuring memory for advertising
Recognition vs. recall Starch test
Problems with memory measures
Response biases
Memory lapses
Memory vs. feeling
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Marketing applications
Repetition Conditioning product associations
Stimulus generalizations
Strategies on stimulusFamily branding
Product line extensions
LicensingLook-alike packaging
Reinforcement of consumption
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Personality and self concept
Refers to a person's unique psychological makeup and how it consistently influences the way a
person response to the environment
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Personality determinants
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Theories of personality
1) Psychoanalytic theorygiven by Sigmund freud . Acc. to this personality is
the product of
IdEgo
Super ego
2) Neo-Freudian theory
Acc .to this theory personality is classified into
three groups
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Compliant individuals Aggressive individuals
Detached individuals
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Trait theory
a person's unique psychological make up thatallows him to respond in a consistent manner
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Self-Consciousness Self esteem
Multiple selves
Symbolic interactionism The looking-glass self
THE THEORY OF SELF-CONCEPT
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CONSUMPTION AND SELF-CONCEPT
Self Image-Product Image Congruence The Extended Self
four levels of extended self
a) Individual levelb) Family level
c) Community level
d) Group level
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Block 3
Group influences on consumer
behaviors
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REFERENCE GROUPS
reference groups are defined as groups that aperson refers to, and identifies with, to theextent that the group becomes a norm,standard or point of reference.
Types of reference groups1) Membership or Non-membershipgroups
2) Formal or Informal Groups
3) Primary or Secondary Groups4) Aspiration groupsAnticipatory aspiration groupsSymbolic aspiration groups
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On the basis of function normative group
comparative group
status group dissociative group
status group
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Types of power
1) Reward Power2) Coercive Power
3) Legitimate Power
4) Referent Power5) Expert Power
REFERENCE GROUP INFLUENCE ON
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REFERENCE GROUP INFLUENCE ON
PRODUCTS
1) Influence on Product and Brand (PublicLuxuries)
2) Influence on Product only (Private Luxuries)
3) Influence on Brand only (Public Necessities)4) No Group Influence (Private Necessities)
Reference Group Applications in
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Reference Group Applications in
Marketing
Use ofcelebrities for product endorsements Use ofexperts for product endorsements
Use ofspokespersons for product
endorsements
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OPINION LEADERSHIP
Opinion leadership has been defined as theprocess by which one person, the opinion
leader, informally influences
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OPINION LEADERSHIP PROCESS
THE CONCEPT OF SOCIAL CLASS: ITS
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THE CONCEPT OF SOCIAL CLASS: ITS
NATURE AND MEANING
Social class refers to the social position that anindividual occupies in society
SOCIAL CLASS AND SOCIAL
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SOCIAL CLASS AND SOCIAL
STRATIFICATION
The significance of social stratification isthat there are differences in values and
attitudes of each of the classes. These
differences are reflected in their lifestylesand their purchasing patterns and
consumption characteristics and,
therefore, provide a basis on which to
segment the market
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SOCIAL CLASS CATEGORISATION
SOCIAL CLASS AND BUYING
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SOCIAL CLASS AND BUYING
BEHAVIOUR
People's buying behavior is stronglyinfluenced by the social class to which
they belong.Social class measures have
also been linked to demographic andgeographic data
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CONSUMER SOCIALISATION
Consumer socialization is the process bywhich young people acquire the skills,
knowledge and attitudes relevant to their
functioning as consumers FactorsInfluencing Consumer Socialization
1)The Background/Environmental Factors
2)The Socializing Agents
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INTERGENERTIONAL INFLUENCES
FAMILY ROLE STRUCTURE AND BUYING
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FAMILY ROLE STRUCTURE AND BUYING
BEHAVIOUR
The Instigator (Initiator): This is the personwho first suggests the idea of a product orservice and initiates the purchase process, tobegin with
The Influencer: This is someone whose opinionis valued in the decision-making process. Aninfluencer may be a friend, brother, sister,spouse, doctor
The Decider: This is the person who makes thefinal decision on what brand or make to buy,after all aspects such as price, quality, servicing,have been thought over.
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The Purchaser (Buyer): This is the individualwho actually purchases the product, pays for it,
takes it home or arranges for delivery
The Consumer: He is the user of the goods or
service.Family Decision Stages
Problem recognition
Search for information Evaluation of alternatives
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Final decision Purchase
THE DYNAMICS OF FAMILY
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THE DYNAMICS OF FAMILY
DECISION-MAKING Wife-dominant decisions: Wives have been found to
dominate decisions on food purchase, groceries,household furniture and appliances.
Husband-dominant decisions: Husbands have beenfound to dominate the decisions on purchases such as
automobiles and life insurance. Syncratic decisions (Joint decisions): These are
decisions in which husbands and wives share influence.Vacations, choice of schools for children, for example,are jointly decided.
Autonomic decisions (Unilateral decisions): Decisions oflesser importance that either the husband or wife makeindependently
The element of power within the family is
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The element of power within the family is
obtained from a variety of sources
Economic resources Cultural norms
Expert power
Legitimate power
Bargaining power
Bargaining power
Emotional power
Th f il Lif C l St
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The family Life Cycle Stages
The Bachelor Stage (Young and single)In the bachelor stage of the life cycle, income is
low, few financial burdens
The Newly Married Couples (Young, no
children) the requirements and resources
change. Household requirements increase. In
addition, in some cases, both partners may be
working. This stage therefore represents a highexpenditure period.
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Full Nest 1 (Young, married, with child) Thearrival of a child creates major changes. The
financial resources change.Child rearing and
educational responsibilities increase.
Full Nest 2 (Older, married, with children)The family's financial position starts to improve
because of career
Full Nest 3 (Older, married, with dependentchildren) Income is high. they represent
experienced buyers and less interested in new
product purchases. Expenditures continue to be
high
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Empty Nest (Older, married, with no childrenliving with them)
financial position stabilizes
Savings accumulate.
Hobbies become an important source ofsatisfaction.More is spent on luxury appliances
Solitary Survivor (Older, single, retired
people)more economical lifestyle
lower income due to retirement
C lt d b lt
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Culture and subculture
Culture is defined as:"a complex set of values, ideas, beliefs,
attitudes and other meaningful symbols,
created by human beings to shape human
behaviors and the artifacts of that behavioras they are transmitted from one generation
to another .
culture is divided into two components
1) internal mental culture
2) The external material culture
THE CHARACTERISTICS OF CULTURE
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THE CHARACTERISTICS OF CULTURE
Culture is invented Culture is a set of learned responses
Culture is shared
Culture is gratifying and persistent Culture is dynamic and adapts
Culture is an organized and integrated whole
Cultures are similar yet different Culture is prescriptive
CULTURAL VALUES
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CULTURAL VALUES
A cultural value can be defined as a widely heldbelief that endures over time
Two types of values
Instrumental values
Terminal values
SUBCULTURES AND THEIR INFLUENCE
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SUBCULTURES AND THEIR INFLUENCE
Subcultures can be defined as a distinctcultural group that exists within a layer,
complex society as an identifiable segment
in terms of its beliefs customs and values
Types of subcultures
Racial or nationality subcultures
Religious subcultures
Geographical and regional subcultures
Age subcultures
Block 4
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Block 4
The buying process
PROBLEM RECOGNITION
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PROBLEM RECOGNITION
INFORMATION SEARCH
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INFORMATION SEARCH
Is the search for informationTypes of information search
Types of Information Search
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Types of Information Search
Internal search External search
Sources of Information
Internet
Advertising
In-store promotion
Dealer information
package information Sales personnel
samples and demonstrations
INFORMATION PROCESSING
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INFORMATION PROCESSING
a series of activities by which stimuli aretransformed into information, stored and used
Information processing consists of two separate
terms: Information and Processing
Information is "all facts, estimates, predictions,
and generalized relationships which affect a
decision maker's perception of the nature and
extent of uncertainties associated with a givenconsumption problem or opportunity
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Processing Processing refers to the act(s) bywhich the stimulus is converted into response
THE INFLUENCING FACTORS
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THE INFLUENCING FACTORS
demographics of the consumers psychographic factors
information characteristics themselves
cultural environment
media characteristics
ALTERNATIVE EVALUATION IN BUYING
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DECISIONS
ALTERNATIVE EVALUATION : FOURCOMPONENTS
Product Attributes
Utility Function Importance Weights of Attributes
Brand Beliefs Based on Consumer
Perception
FORMATION OF BRAND SETS FOR
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ALTERNATIVE EVALUATION
THE CHOICE-MAKING RULES
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Consumers
Consumers make a variety of choices. These aremade on the basis of certain criteria known as
choice rules or heuristics.
The Benefits of Choice Heuristics
provide with guidance while making decisions;
offer a short cut to a decision;
allow them to integrate and arrange information
In consumer information processing help thembetter in facing complexities
The Use of Choice Rules
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The Use of Choice Rules
The most complicated buying decision behavior isknown as Extended Problem Solving (EPS). It is
seen mostly for high involvement products.
The second type is the Limited Problem Solving
(LPS). It is The most common and routineprocess is called Routine Response Behaviour
(RRB).
The last one is most evident in respect of low
involvement products.
The Choice Rules and the Multi-Attribute
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Choice Models
Multi-attribute choice models explain howconsumers combine their beliefs about productattributes to form their attitudes about variousbrand alternatives. These models assume thatthe brand which receives the best attitude will bechosen.
The Choice Rules and the Ideal Brand Model
This model prescribes that a consumer will
compare actual brands to his ideal brand. Thecloser an actual brand comes to this ideal, themore it will be preferred.
THE BASIC CHOICE HEURISTICS
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THE BASIC CHOICE HEURISTICS
THE MARKETING RESPONSE TO THE
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CHOICE HEURISTICS
Relying on a product signal Market beliefs as heuristics
Price as a heuristics
Brand name as a heuristic
PURCHASE PROCESS & POST-
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PURCHASE BEHAVIOUR
PURCHASE PROCESSConsumers make two types of purchases
Trial purchase and repeat purchases. `If aconsumer purchases or is induced to purchase
for the first time, a smaller quantity than usualthis is termed as a product trial.
Repeat purchase on the other hand, indicatescommitment on the part of the customer
towards the product, company and others. It isclosely related to concept of development ofbrand loyalty and signifies that the product hasmet with the consumers' expectations.
Determinants of Choice Process
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Determinants of Choice Process
STEPS TO BENEFIT FROM SITUATIONAL
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INFLUENCES Identify the relevance of each situational factor
on his buying process; Determine the impact of relevant situational
variables through appropriate research;
Consider appropriate segmentation andpositioning based on the findings;
Develop an appropriate marketing mix,incorporating the above;
Remember the general findings andhypothesized relationships between situationalvariables and purchase process.
AN ANATOMY OF NON-STORE BUYING
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AN ANATOMY OF NON-STORE BUYING
non-store buying is known as direct marktingTheDirect Mail Marketing Association (DMMA) has
defined Direct Marketing as follows:
"Direct (response) marketing is the total of
activities by which products and services areoffered to market segment in one or more media
for information purposes, or to solicit a direct
response from a present or prospective
customer or contributor by mail, telephone orother access."
ROUTES OF NON-STORE BUYING
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ROUTES OF NON-STORE BUYING
The in-home buyer Tele Marketing
Mail-order buying
Direct in-home sales
Interactive video selling
POST-PURCHASE BEHAVIOUR
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POST-PURCHASE BEHAVIOUR
Post purchase activities
Formation of Satisfaction/Dissatisfaction
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Formation of Satisfaction/Dissatisfaction
THEORIES OF POST-PURCHASE
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EVALUATION
Responses of a Dissatisfied Customer
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Responses of a Dissatisfied Customer
Block 5
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Block 5
MODELLING BUYER BEHAVIOUR
EARLY MODELS
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EARLY MODELS
ECONOMIC MODELSThe economic theory, which largely explains
behaviour on the basis of allocation of scarce
resources among unlimited needs and wants,
has given alternative views of the consumerfrom the view point of its sub-disciplines, i.e.
micro-economic and macro economics.
Micro economic models:The focus was on the
act of purchase in terms of what customer
bought and how much would be purchased
Macro economic perspective
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Macro economic perspective
Macro economics, focused on aggregate flowsin the economy, their direction and change overtime. Macro economic field are important for ourunderstanding of consumer behaviour. Theseare
the relative income hypothesis hypothesisHigher income families spend a lower portion oftheir disposable income as compared to thelower income families. thesis.
the permanent income hypothesis is thatindividuals are slow to change their consumptionpatterns even when there are sudden changesin their income.
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stimuli are inputs which are capable of arousing
drives or motives.
Cues is a sign or signal which acts as a
stimulus to a particular drive.
The way an individual reacts to the stimuli is
known as his response. If the response to a
given stimulus is "rewarding", it reinforces the
possibility of similar response
THE PSYCHOLOGICAL MODEL (THE
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PAVLOVIAN LEARNING MODEL) The learning model was first introduced by Ivan
Pavlov.The model suggests that humanbehaviour is based on some central concepts -the drives, stimuli, cues, responses andreinforcements which determine the human
needs and needs satisfying behavioura drive isa strong internal stimulus which compels action.
stimuli are inputs which are capable of arousing drivesor motives.
The way a person responds to a given stimulus woulddepend upon the Configuration of cues. Cues is a signor signal which acts as a stimulus to a particular drive.
The way an individual reacts to the stimuli is known as
his response.
THE GESTALT MODEL
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THE GESTALT MODEL
Empahsis on man and his environment. individuals perceive and interpret the
stimuli in relation to their own individual
experiences. the gestalt theory dealt specifically with
the physical perception of stimuli
THE PSYCHOANALYTIC MODEL
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THE PSYCHOANALYTIC MODEL
Sigmund Freud is the founder of thismodel.
Pioneered the procedure of observation
and analysis to understand the personalitycomplexities
THE COGNITIVE DISSONANCE
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COG SSO C
Leon Festinger, the propounder of the theoryhypothesised that:
The existence of dissonance (a state of
imbalance in the cognitive structure) is
psychologically uncomfortable and will lead theperson to reduce dissonance and achieve
consonance (i.e. balance)
Whenever dissonance exists, the person willtry to avoid situations and information which
add to dissonance.
SOCIOLOGICAL MODEL
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This model is given by thorsteine veblen He suggested that man's needs and behaviour
are dependent upon and shaped by the social
groups and forces.
HOWARDSHETH MODEL
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TYPES OF PROBLEM SOLVING
BEHAVIOUR
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BEHAVIOUR
1) Extensive problem solving behaviourrepetitive decision making where the buyer has
not yet developed strongly predispositions
2) Limited problem solving behaviour
where because of learned experience about the
brands, the choice criteria have a clear
definition and organization, but the buyer is still
undecided about the actual choice among thealternatives.
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3) Routinised response behaviourThe buyer on account of the learned
experience has now well defined
evaluative criteria and strong
predisposition towards one particular
brand
THE EVALUATIVE CRITERIA
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The evaluative criteria are the consumer'sreference scale on which he judges the
brands as alternative choices
CLASSIFICATION OF CURRENT
MODELLING EFFORTS
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MODELLING EFFORTS
Modelling ObjectivesDescription of buying behaviour
Describing the consumer processes
Predictability and Control of Consumerbehaviour
Support of Basic Disciplines
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pp p
Decision Sciences Anthropology
Systems Dynamics and Simulation
Support of Analytic Techniques
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pp y q
stepwise regression analysis,correspondence analysis are very often
used for identifying the salient variables
and their relationships out of the observed
data.
Factor analysis and multidimensional
scaling techniques are used for reducing
data. Conjoint analysis has come as a
handy tool for such purposes.
SOME RECENT MODELS
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a) Nicosia's Model of Consumer Decision
Process
This model elaborates the decision making
steps that the consumers adopt before buying
goods or services.
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BETTMAN'S INFORMATION PROCESSING MODEL
OF CONSUMER CHOICE
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OF CONSUMER CHOICEThe main components of the model are the
following
Processing Capacity
Motivation
Attention and perceptual encoding
Information acquisition and evaluation
Memory
Decision process
Consumption and learning processes
Scanner and interrupt mechanisms
EVALUATION OF CONSUMER
BEHAVIOUR MODELS
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BEHAVIOUR MODELS
i) External validityii) Internal validity
iii) Robustness
iv) Generalisability
v) Descriptive ability
vi) Predictability
vii) Simplicity
viii) Comprehensiveness