Consumer Behavior

What is consumer behavior? What the marketer need to know about consumer? Consumers decision making process

 One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society."

 Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.

Cont Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.

What the marketer need to know about Consumer Behavior

The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions;

Cont Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

 Understanding these issues helps the marketer adapt their strategies by taking the consumer into consideration. For example, by understanding that a number of different messages compete for potential customers attention, marketer learn that to be effective, advertisements must usually be repeated extensively. Marketer also learn that consumers will sometimes be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the consumer, we will be able to make a more informed decision as to which strategy to employ.

Consumers Decision Making Process

Stages of the process of buying Problem recognition Information search Alternative evaluation Purchase decision Post purchase evaluation Internal psychological process Motivation Perception Attitude formation Integration Learning

Need Recognition
A need recognition is a result of an imbalance between actual and desired states.
Need recognition is triggered when a consumer is exposed to either an internal or an external stimulus. Stimulus is any unit of input affecting one or more of the five senses: sight, smell, taste, touch, hearing. Marketers can also create wants. Wants are the recognition of an unfulfilled need and a product that will satisfy it.

Psychological Influences/Motivation
Motive: a driving force that causes a person to take action to satisfy specific needs. (Hungry=Eat) Maslows Hierarchy of Needs: a method of classifying human needs and motivations into 5 categories in ascending order of importance: physiological, safety, social, esteem, and self-actualization.

Information Search
Internal information search is the process of recalling past information stored in the memory. External information search is the process of seeking information in the outside environment. Non-marketing controlled information search is a product information source that is not associated with advertising or promotion. Marketing controlled information search is a product information source that originates with marketers promoting the product. Evoked set (consideration set) is a group of brands resulting from an information search, from which a buyer can choose.

Psychological Influences/Perception
Perception: the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Selective exposure: the process whereby a consumer notices certain stimuli and ignores others. Selective distortion: a process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs. Selective retention: a process whereby a consumer remembers only that information that supports his or her personal beliefs.

Marketer use Subliminal perception

Consumers see or hear messages without being aware of them. This is a hotly debated issue with more popular appeal than scientific support. Research suggests that such messages have limited effects on behavior

Evaluation of Alternatives
Pick an attribute; eliminate all products/services not meeting that attribute. Use cutoffs or minimum or maximums. Rank the attributes in order of importance and then evaluate the products/services on the most important attributes

Psychological Influences/Attitude formation

Attitude: a learned tendency to respond consistently (favorably or unfavorably) toward a given object. Consumers hold attitude towards a variety of objects:
Individuals (Source: celebrity, spokesperson) Brands Companies (Tata, Infosys) Product category (close substitutes like: chicken/mutton, tea/coffee etc.) Advertisement

Multiattrubute attitude Model

Marketer try creating, reinforcing and changing attitudes:

Increasing or changing beliefs about the extent to which a brand has certain attribute
Antidandruff shampoo

Change the perceived importance of the attributes

Safety in driving a car

Adding new attributes to the product

Soap resulting fairness

Changing perceptions of belief rating from a competing brand

Colgate dental cream

Purchase decision
After alternative evaluation consumer develop purchase intention i.e. the predisposition to buy. Matching of purchase motives with attributes of brand There is a difference or rather a gap between purchase decision and actual purchase
Nondurable and low involvement products the gap is short For durable and high involvement products the can be long
When to buy - store atmosphere, sale, time pressure etc. Where to buy past experience, terms of sale, return policy etc. How much to spend

Psychological Influences/Integration
Integration process is know as decision rules (heuristics)
Simplified decision rules
Price based Promotion based

Affect referral decision rules: consumers have affective impressions of brands stored in memory recalled at the time of purchase
Kellogg cornflakes Johnson baby products

Post-purchase Behavior
Expectations are metsatisfied. Expectation not metdissatisfied. Reduce those lingering doubts.
Cognitive dissonance: inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Reduce this with information; communicate with the customer.

Psychological Influences/Learning
Learning: a process that creates changes in behavior, immediate or expected, through experience and practice. Consumer learning is a process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior.

 Cognitive learning
Information received processed lead to response

Behavioral learning
Classical conditioning: neutral stimulus becomes conditioned after repeated pairing with conditioned stimulus.
Advertisers associate product/brand with models and logos that can evoke a positive response

Operant conditioning: response is instrumental to reinforcement

Advertisers use positive reinforcement for selling

Marketers use Schedules of reinforcement

Continuous: every response is rewarded Partial: only some responses are rewarded Learning through shaping: introductory offers

Stimulus generation: a form of learning that occurs when one response is extended to a second stimulus similar to the first.
Marketer use this when they extent the same brand for different product

Stimulus discrimination: a learned ability to differentiate among similar products.

Other Factors Influencing Consumer Buying Decisions

Cultural influences (culture and values, subculture, social class) Social influences (reference groups, opinion leaders, family) Individual influences (gender, age, family, personality, self-concept, lifestyle) Psychological influences (perception, motivation, learning, beliefs and attitudes)

Cultural Influences
Culture: the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next.
Culture is pervasive. Culture is functional. Culture is learned. Culture is dynamic.

Cultural Influences/Subculture
Subculture: A homogenous group of people who share elements of the overall culture as well as unique elements of their own group.

Cultural Influences/Social Class

Social Class: a group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms. Measured as a combination of occupation, income, education, wealth, and other variables.

Social Classes
Capitalist class Upper middle class Middle class Working class Working poor Underclass

Social Influences/Reference Groups

Reference group: a group in society that influences an individuals purchasing behavior. Primary membership group: (direct) regular interaction, informal, face-to-face (friends, family) Secondary membership group: (direct) less consistent, more formal (clubs, religion, professional group) Aspirational group: a group you would like to join Non-aspirational group: a group you do not want to associate with

Social Influences/Opinion Leaders

Opinion leader: an individual who influences the opinions of others.

Social Influences/Family
Socialization process: how cultural values and norms are passed down to children.

Individual Influences/Gender
Men and women have different needs Men and women shop differently Changing roles of men and women in society

Individual Influences/Age and Family Life Cycle Stage

The age of a consumer generally indicates what products they are interested in. Consumers are often defined in terms of their family life cycle:
Young singles Young married with children Middle-aged married without children Lifelong singles Childless couples

Individual Influences/Personality, Self-Concept, and Lifestyle

Personality: a way of organizing and grouping the consistencies of an individuals reactions to situations. Self-concept: self perception, how consumers perceive themselves. Self-concept combines:
Ideal self image: the way an individual would like to be. Real self image: the way an individual actually perceives himself or herself.

Lifestyle: a mode of living as identified by a persons activities, interests, and opinions. (Psychographics)