CONSUMER BEHAVIOUR
“Customers are the best salespersons
of
an organization”
“Today's Marketing starts with customers
&
ends with customer”
Meaning of Marketing Management
• American Marketing Association defines marketing as “the performance of
business activities that direct the flow of goods and services from producer
to consumer or user”. This definition seems somewhat narrow because of
its emphasis on flow of products that have already been produced and more
of a physical distribution oriented idea which presupposes that there is
nothing beyond smooth flow of quality goods and services to customers.
• Phillip Kotler defines marketing “a societal process by which individuals and
groups obtain what they need and want through creating, offering and freely
exchanging products and services of value to each other”. It is an ongoing
process of discovering and translating consumer needs and desires in to
products and services, creating demand for these products and services,
serving the consumer through a network of marketing channels and
expanding the market base in the face of competition.
Consumer Behaviour
The American Marketing Association has defined consumer behaviour as,
“The dynamic interaction of affect and cognition, behaviour, and the
environment by which human beings conduct the exchange aspects of their
lives.”
Peter D. Bennett, ed. Dictionary of Marketing Terms, 2nd ed. 1995.
“Consumer behaviour refers to the actions and decision processes of people
who purchase goods and services for personal consumption.”
James F. Engel, Roger D. Blackwell and Paul W. Miniard,
“Consumer Behaviour” (1990).
Consumer behaviour refers to “the mental and emotional processes and the
observable behaviour of consumers during searching for, purchasing and
post consumption of a product or service.”
General Model of Consumer Behavior
Consumer
Buying Decision Purchase Decision
Psychology Process
Marketing Other Motivation Problem Product Choice
Stimuli Stimuli Perception Recognition
Learning
Products Economic Brand Choice
Memory
Information
&
search
Services Technological Dealer Choice
Evaluation of Purchase
Price Political Alternatives
Consumer Amount
Characteristics
Distribution Cultural Purchase
Purchase Timing
Culture Decision
Communication Social
Personal Payment Method
Post Purchase
Behavior
Steps in Value Creation process
Understand Customer Needs
Design Value Driven Segments
Develop Value Propositions
Link Customer Knowledge and Business Strategy
Develop New Product and Services
Delivering Customer Value
Measure and Monitor Customer Satisfaction and Retention
Various Factors Influencing Consumer Behaviour
Social Factors Psychological Personal
Factors Factors
Culture and Subculture
Roles and Family Motivation Perception Demographic Factors
Social Class Learning Attitudes Lifestyle Situational
Reference Groups Personality factors Involvement Level
Consumer Decision-Making Process
Problem Information Post
Alternatives’ Purchase
Recognition Search purchase
Evaluation Action
Actions
Roles and Family(Joint Decision-Making Process)
Initiator (Need recognition)
Gatekeeper (Information search)
Influencer (Evaluation of alternatives)
Decision- maker (Decision to buy)
Buyer (Purchase)
User (Consumption) & evaluation
Buyers and Users
The person who buys a particular product may not necessarily be the user, or the
only user of this product. Likewise, it is also true that the person who purchases the
product may not be the decision-maker.
Role Description
Initiator The initiator is the individual who ascertains some need or want
Influence the family’s information processing and has the most expertise in
Gatekeeper
obtaining & evaluating the information.
The influencer is someone who intentionally or otherwise by word or
Influencer action, influences the purchase decision, actual purchase and/or the use of
product or service
Decider The decider is the person or persons who actually decides which product or
service will be chosen.
Buyer is any individual who actually makes the final purchase transaction.
Buyer
He is a person most directly involved in the use or consumption of
User(s) the purchased product
Organizational Buyer Decision Process
The size of a decision-making unit (DMU) may vary according to how new,
complex and important the purchase decision is; and how centralised,
structured and specialised the organisation is.
1. Problem Recognition :- The first stage of organizational buying decision
involves recognizing a need or problem.
2. Product Specification:- Participants involved in the decision-making
process assess the problem or need and determine what is required to
resolve or satisfy it.
3. Product and Vendor Search :- The organization tries searching for possible
products to solve the problem, and also to locate firms who may qualify to be
suitable suppliers for those products.
4. Product and Vendor Evaluation :- The buying centre makes an evaluation
to determine which products meet the laid down specifications. Various
vendors are also evaluated on criteria such as price, delivery, service,
warranty, credit terms, etc.
5. Product and Vendor Selection :- Information gathered during evaluation
stage is used to select finally the product to be purchased, as well as the
vendor from which the purchase will be made.
6. Performance Evaluation:- The last stage in purchase decision process
involves an evaluation of the product as well as vendor performance.
Buying Behavior
• Complex Buying Behavior
– The buyer develops beliefs about the product.
– He develops attitude towards the product.
– He makes a thoughtful choice.
– Product is expensive, bought infrequently, risky and
highly self expressive
Marketer’s role
(The marketer must understand consumer’s information gathering and
evaluation behavior and develop strategy to assist the buyer in learning
about the products attributes and their relative importance and that call
for attention for high standing on brand on the important attributes ,
needs to differentiate brand’s features )
Dissonance Reducing Buyer Behavior
• Consumer is highly involved in the purchase but sees little
difference in brands. The buyer will move around ,will buy quickly
responding to a price variable or purchase convenience
• He may experience dissonance by hearing about other brands. He
will be alert to information supporting his decision.
• The consumer first acted , then acquired new belief and ended up
with a set of attitudes.
Marketer’s role
Marketing Communication should supply beliefs and
evaluations that help the consumer feel good about his brand
choice.
Habitual Buying Behavior
• Low involvement
• Absence of Brand difference
• Buying out of habit not due to loyalty
• Low cost frequently purchased products
Marketer’s Role
Marketers should use price and sales promotion to stimulate
product trial. Television is effective because it is a low
involvement medium
Link to some issue
Link with personal situation
Trigger strong emotion related to personal value and ego
Add an important feature
Variety Seeking Buyer Behavior
• Low involvement but high brand difference
• Consumers often do switching of brands
Marketer’s Role
The leader tries to develop habitual buying behavior by
dominating the shelf space avoiding out of stock situation
and sponsoring frequent reminder advertising
Challengers motivate for variety seeking by offering low price
deals, coupons free samples and advertising that presents
reasons for trying something new.
Market Segmentation – bases of Segmentation
There are two types of segmentation variables:
1. Needs
2. Profilers
The basic criteria for segmenting a market are customer needs.
To find the needs of customers in a market, it is necessary to undertake
market research.
The most common profilers used in customer segmentation include the following:
Geographic : - · Region of the country, · Urban or rural.
Demographic :- · Age, sex, family size, · Income, occupation, education,
· Religion, race, nationality
Psychographic:- · Social class, · Lifestyle type, · Personality type.
Behavioral :- · Product usage - e.g. light, medium, heavy users, · Brand
loyalty: none, medium, high
Conclusion
Organizations exist because they deliver promised values to
customers through their product and service propositions. If they
forget to deliver desired customer value, they vanish from the
memory of customers. Customer value is the net of expected
benefits of customers and cost involved in acquiring the product or
service. Benefits can be product benefits, brand or company
benefits, functional or performance benefits, service benefits and
emotional or self-expressive benefits. Customer has to pay the
cost of the product plus the margin of the channel in the form of
final price. There are various other costs involved in the
acquisition of a product like cost of acquiring and inventorying the
product, cost associated with using the product, cost of
maintaining and repairing the product and cost of delivering the
product.
