Unit 4
Meaning of Consumer Behaviour
- Study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services,
ideas, or experiences to satisfy needs and wants
- Encompasses decision-making processes before and after purchase
Scope
- Includes all consumer activities and decisions related to consumption
- Considers both rational and emotional aspects of decision-making
Importance of Understanding Consumer Behaviour
A. Benefits for Businesses
1. Effective Marketing Strategies
- Tailor marketing mix (product, price, place, promotion) to target audience
- Develop customer-centric campaigns and messages
2. Product Development and Positioning
- Create products that meet consumer needs and preferences
- Position products effectively in the market
3. Improved Customer Service and Satisfaction
- Understand customer expectations and deliver better experiences
- Address customer pain points and concerns
4. Targeted Advertising and Promotions
- Identify the most effective channels and tactics to reach target audience
- Optimize ad spend and maximize return on investment (ROI)
5. Understanding Market Trends and Consumer Preferences
- Anticipate shifts in consumer behaviour and adapt strategies accordingly
- Identify new market opportunities and stay ahead of competitors
B. Importance for Consumers
- Helps consumers make informed purchase decisions
- Enables comparison of products and services to find the best value
- Allows for better budgeting and financial planning
Consumer Buying Process
1) Problem Recognition
- Consumer identifies a need or want that must be satisfied
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- Consumer identifies a need or want that must be satisfied
- Can be triggered by internal stimuli (e.g., hunger) or external stimuli (e.g., advertisement)
2) Information Search
- Consumer gathers information about potential solutions to their problem
- Can be internal (e.g., memory) or external (e.g., online research, asking friends)
3) Evaluation of Alternatives
- Consumer compares different products or services to determine which one best meets their needs
- Considers factors such as price, quality, brand reputation, and personal preferences
4) Purchase Decision
- Consumer decides to buy a particular product or service
- Influenced by factors such as price, availability, and perceived value
5) Post-Purchase Behaviour
- Consumer evaluates their purchase and determines satisfaction level
- Can lead to repeat purchases, brand loyalty, or negative word-of-mouth if dissatisfied
Factors Influencing Buying Behavior
A. Cultural Factors
1. Culture
- Shared values, beliefs, and behaviours of a society
- Influences consumer preferences, attitudes, and decision-making
2. Subculture
- Distinct groups within a culture with shared characteristics (e.g., ethnicity, religion)
- Can have specific product and brand preferences
3. Social Class
- Relatively permanent and ordered divisions in a society
- Influences purchasing power, lifestyle, and consumption patterns
B. Social Factors
1. Reference Groups
- Groups that have a direct or indirect influence on an individual's attitudes and behaviour
- Can be aspirational (e.g., celebrities) or membership-based (e.g., family, friends)
2. Family
- Most influential primary reference group
- Shapes values, attitudes, and consumption habits from an early age
3. Roles and Status
- Position of an individual within a group
- Influences purchase decisions based on expectations and norms associated with the role
C. Personal Factors
1. Age and Life-Cycle Stage
- Consumer needs and preferences change with age and life stages (e.g., bachelor, married, retired)
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- Consumer needs and preferences change with age and life stages (e.g., bachelor, married, retired)
- Influences product and brand choices
2. Occupation
- Affects income level and purchasing power
- Certain occupations may require specific products or services
3. Economic Situation
- Disposable income, savings, and credit influence purchase decisions
- Changes in economic situation can alter consumer behaviour
4. Lifestyle
- Patterns of living expressed through activities, interests, and opinions
- Influences product and brand preferences, as well as consumption habits
5. Personality and Self-Concept
- Unique psychological characteristics and traits of an individual
- Affects brand choices and product preferences based on perceived fit with self-image
D. Psychological Factors
1. Motivation
- Internal drive that compels individuals to take action to satisfy a need or want
- Can be based
on Maslow's hierarchy of needs (physiological, safety, social, esteem, self-actualization)
2. Perception
- Process by which individuals select, organize, and interpret information from the environment
- Influences how consumers view and respond to marketing stimuli
3. Learning
- Changes in behaviour resulting from experience and knowledge acquisition
- Affects product and brand preferences, as well as purchasing habits
4. Beliefs and Attitudes
- Opinions, convictions, and evaluations about a particular object or idea
- Shape consumer perceptions and influence purchase decisions
Types of Consumer Buying Decisions
1) Complex Buying Behaviour
- High involvement in purchase decision
- Significant perceived differences among brands
- Extensive information search and evaluation of alternatives
- Examples: purchasing a car, a house, or expensive electronics
2) Dissonance-Reducing Buying Behaviour
- High involvement in purchase decision
- Little perceived difference among brands
- Possible post-purchase dissonance (doubt or regret)
- Examples: purchasing carpeting, home furnishings, or clothing
3) Habitual Buying Behaviour
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3) Habitual Buying Behaviour
- Low involvement in purchase decision
- Few significant perceived brand differences
- Automatic or routine purchases with little information search
- Examples: buying milk, bread, or other staple goods
4) Variety-Seeking Buying Behaviour
- Low involvement in purchase decision
- Significant perceived brand differences
- Desire for variety and novelty rather than dissatisfaction with current brand
- Examples: trying new snack foods, beverages, or cosmetics
Implications for Marketers
1) Understanding Target Audience
- Conduct market research to gather insights on consumer behaviour
- Segment the market based on relevant factors (e.g., demographics, psychographics)
2) Developing Effective Marketing Strategies
- Tailor marketing mix to target audience preferences and needs
- Create compelling value propositions and brand positioning
3) Enhancing Customer Experience
- Optimize the customer journey across all touchpoints
- Provide excellent customer service and support
4) Adapting to Changing Consumer Behaviour
- Monitor market trends and consumer preferences
- Continuously innovate and improve products and services
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