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Consumer is the most important person in business.

Meaning of Consumer/Buyer Behavior

His attitude, behavior, needs and reactions play an important role in regard to marketing plans and policies of companies. Companies study the behaviours of consumers constantly for their benefits. Consumer behavior is comparatively new area within the scope of business management. The purpose of study of consumer behavior is to understand human actions and reactions (consumer behaviour) in the best possible manner.

Defining Consumer Behavior


1) Consumer Behavior is the Process Involved When Individuals or Groups Select, Use, or Dispose of Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires.

2) Consumer

behaviour refer to the study of how individuals makes decisions in spending their available resources like time, money and effort on various consumption related items. 3) Kotler & Armstrong : Consumer buying behaviour refer to the buying behaviour of consumer individual household who buy goods and service for personal consumption

Definition of Consumer/Buyer behaviour


Consumer behavior is the process whereby individuals decide what, when, where, how and from whom to purchase goods and services.

Walters and Paul

Buyer behaviour is all psychological, social and physical behaviour of potential customers as they become aware of, evaluate, purchase, consume and

tell others about the products and services.

Webster

Blackwell,Miniard &Engel defined behaviour as activities

people undertake when obtaining, consuming and disposing of product and service Consumer behaviour: Identify the three element of consumer behaviour: A)Obtaining product & service: Obtaining refer to the activities leading up to and including the purchase of product. B) Consuming product and services: Consuming activity refer to how, where, when, and under what circumstances consumer use product C) Disposing product and services: Disposing activities refer to how consumer get rid of product and packaging after consumer the product

Consumer behaviour refer to the study of how individuals makes decisions in spending their available resources like time, money and effort on various consumption related items.

Who buy product or services How do they buy product or service? Where do they buy them? How often do they buy them When do they buy them? Why do they buy them? How often do they use them?

Importance of Studying Consumer Behaviour


The economists have called the customer a king

The study of consumer behaviour is very useful in

determining the form, style, packing ,brand ,trademark etc of the product Consumer behaviour also help to formulate various marketing policies To understand consumer behaviour one can know the various consumption related aspects of individuals

Factors influencing buyer behaviour


Social factors.-Family, roles and status, ref. groups Economic factors.-size of family, consumer credit,income Cultural factors.-sub culture, soc. Class (wealth, income)

Personal factors.-age, occ., life style, personality


Physiological factors.-basic needs Psychological factors.-motivation, perception, learning, beliefs, attitude

Meaning & Importance of Buyer/Consumer Psychology


Knowledge : knowledge is one type of information and

on the basis of the knowledge, the psychology of customer develop Attitudes & Emotions: Attitude is a state of mind or feeling. if includes a predisposition to behave in some way Intentions : Intention means desires to do something Buying Motives: It is the integral state which direct the behaviour of a person.

Types of Buyers
Friendly/co-operative buyer. Timid/reserved/shy buyer. Silent buyer. Undecided buyer. Price or quality conscious buyer. 6. Argumentative buyer. 7. Suspicious buyer.
1. 2. 3. 4. 5.

Impatient buyer. Bargain buyer. Impulsive buyer. Over-cautiosu buyer. Slow-thinking buyer Rude/ill-mannered buyer. 14. Clever/intelligent buyer.
8. 9. 10. 11. 12. 13.

Issues During Stages in the Consumption Process

Decisions taken by the buyer while purchasing


Need recognition Information search

Evaluation of alternatives

Purchase decision

Post-purchase Behaviour

Type of buying behaviour


Complex buying behaviour
Dissonance reduces buying behaviour Variety seeking buying behaviour

Habitual buying behaviour

Complex buying behaviour: When the customer

highly involved in the purchase and there are significant different among brand, they show this type of behaviour Dissonance reducing behaviour: The customer is highly involved because the product is expensive and risky. there are very little difference among brands so the customer is confused and wants to collect a lot information. After the purchase the customer might develop dissonance because of dissatisfying feature of the purchased product

Varitey Seeking buying behaviour: Customer show

low involvement because the product is not expensive and purchased frequently Habitual buying behaviour: customer has low involvement and absence of significant brand different .

Theories of personality
Trait theory
Freudian psychonalytic theory Jungian theory

Socio psychological or New freudian theory

Trait theory: A personality trait can be define as an

enduring attribute of a person that appears constantly in a variable of situation Individual can be describes in term of construction of traits such as affiliation,achievement,anxiety,aggression and dependency Trait distinguishes one personality from another.

Freudian psychoanalytic: psychoanalytic theory is based on the notion that man is motivated more by unforeseen forces than he is controlled by conscious rational thought Element: 1)Pre-conscious element 2) Conscious element(feeling,belief,desier) 3) Unconscious(ideas,wishes,dreams)

Jungian Theory: theory based on predisposing


patterns borrowed by the individual from his ancestors Sensing intuiting Thinking feeling Extroversion Introversion Judging perceiving Socio psychological: according to this, the individual and society are interlinked

Self concept
Self concept can be described simply as how one perceives

himself and his behaviour in the market place Self- concept divided into six types as: Actual Self: How a person actually perceives himself Ideal Self: This is concerned with how an individual would like to ideally perceive himself Expected Self: This kind of image is between actual and selfimage Social self : How a person thinks other perceive him Ideal social self: How a person would like other to perceive him Situational Self: A person self image in a specific situation

Perception
Perception is the process through which the

information from outside environment is selected, received, organized and interpreted to make it meaningful information results in decisions and actions Perception is define as the process by which an individual select, organize and interpret stimuli into a meaningful and coherent picture of the world

Perception and consumer behaviour


People can emerge with different perception of the same object

because of these perceptual processes Selective attention Selective distortion Selective retention

Selective Attention: people are exposed to a huge amount of

daily stimuli in the form of advertisement but a person cannot possibly give attention to all the advertisements Selective Distortion: It describes the tendency of people to twist information into personal meaning Selective Retention: people tend to retain information that supports their attitudes and beliefs

Consumer attitude
Attitude have usually been associated with the notion

of liking or disliking something Attitude can be define as a learned orientation or disposition ,towards an object or situation ,which provides a tendency to respond favourably or unfavourably to the object or situation

Characteristics of Attitude
Attitude are not innate Appearance of an attitude is

dependent on learning Attitude cannot be observed Attitude are not temporary states but are more less enduring once they are formed Attitude always imply a relationship between the person and objects Marketer are concerned with understanding attitude

Attitude Formation
Attitude formation is learning on attitude There are some sources of influence on attitude formation Personality affects attitude formation

Economic factor Family factor Social factor Political factor Psychological factor Personality factor Reference group factors

Attitude components
Congnitive component(belief)
Affective component(feeling) Conative component( response tendencies)

Attitudes - defined
An attitude may be defined as a learned predisposition to

respond in a consistently favourable or unfavourable manner with respect to a given object

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Attitude models
Two main attitude models:
Tri-component model Fishbeins multi-attribute model

Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 9-27

The tri-component model of attitudes

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The tri-component model of attitudes


Attitudes are generally considered to be made up of

three elements:
Affective component

Feelings Based on physiological nervous reactions to an object Beliefs What a person believes to be true about an idea, event, person, activity or object

Cognitive component

Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 9-29

Behavioural intentions

An observable reaction e.g. to purchase a particular brand

Fishbeins multi-attribute model of attitudes


Multi attitude model examines attitude in terms of

selected product attributes or belief Attitude towards object model Attitude towards behaviour model Attitude towards ad model

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Functions of attitudes
Attitudes have 4 main functions:
1. Adjustment function Attitudes help consumers adjust to situations People seek out group acceptance in order to gain praise or rewards and avoid punishment 2. Ego defensive function Attitudes are formed to protect the ego 3. Value expressive function A consumers attitudes are often a reflection of their values 4. Knowledge function Attitudes help consumers make decisions and process and filter information

The Customer as a Learner


Learning is a change in the content of long-term

memory Human learning is directed at acquiring a potential for future adaptive behavior

Consumer psychographic
Psychographics is commonly known as study of

lifestyle of consumers. It plays an important part in consumer behaviour and helps in the promotion of those products and services which are related to items of personal care, fashion, automobiles, telephonic services, etc. in a country like India where lifestyle differs widely from region to region, the study of consumer psychographic is of great significance to the marketer.

Measurement of life style


Demographics age,education,income,family, gender

etc Attitude people, place, ideas etc Usage rate heavy,medium, light, no users Media pattern the specific media the consumer utilise Activities and interests Hobbies, sport Values Widely held about what is acceptable or desirable

Determinants of consumer buying behaviour


Cultural factor includes a consumers culture,

subculture and social class Social factor include reference group,Family, status Personal factor include age occupation,lifestyle

Family roles by stage in decision MAKING


Consumer information processing
Brand evaluation Intention to buy

Purchase
Post purchase evaluation

Social factor
Reference group
Family Opinion leader(opinion leadership is the process by

which one person informally influences the action or attitudes of other who may be opinion seeker or merely opinion recipients) Role and status

Culture
Culture is a set of learned belief values,attitudes,

habits and from of behaviour that are shared by a society and are from generation to generation Features : The culture is inculcated into an individual and passed on from generation to generation Cultural values keep on changing through the passage of time The cultural values are shared by the society as whole

Sub cultural
Each cultural contains smaller group of sub cultural

that provides specific identification for its member .the member of s specific sub cultural possess belief ,values and custom that set them apart from other member of the same society

Social class
Social class are relatively homogeneous and ensuring

division in a society that are hierarchically ordered and whose member share similar values ,interest and behaviour ( kotler) Characteristics: Person of two different social classes tend to behave differently Social class is not measured by a single variable but is measured as a weighted function of one occupation ,income ,education ,status

Social class is hierarchical


A person social class in indicated by number of

variables as occupation ,income ,wealth and education rather than by any single variable Social class categories Upper class Middle class Lower class

Consumer decision making process

BUYING PROCESS
Wants and Needs
Pre-Purchase Activity Purchase Decision Post-Purchase Evaluation

PRE-PURCHASE ACTIVITY
Relevant information search

Evaluation of alternative choices

RELEVANT INFORMATION SEARCH


Personal Experience

External Searches

EXTERNAL SEARCHES
Formal searches Informal searches Internet searches

POST-PURCHASE EVALUATION
After the buyer actually purchases the product, the buyer then evaluates how satisfied he/she is with the product

POST-PURCHASE BEHAVIOR
Satisfied with purchase Disappointed in product Buyer remorse

Types of decision process


Extended consumer decision making
Limited consumer decision making Routing consumer decision making

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