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B Y
P R O F . P A L L A V I S A J A N A P W A R
Introduction
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B E C A U S E N O L O N G E R C A N W E T A K E T H EC U S T O M E R / C O N S U ME R F O R G R A N T E D .
Why do we need to study
Consumer Behaviour?
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Failure rates of new products introduced
Out of 11000 new products introduced by 77companies, only 56% are present 5 years later.
Only 8% of new product concepts offered by 112leading companies reached the market. Out of that83% failed to meet marketing objectives.
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Consumer Behavior
The decision process and physical activity individualengage in when evaluating , acquiring , using ordisposing of goods, services or ideas .
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The questions Businesses try to understand
What makes customers tick.
Who buys?
How do they buy?
When do they buy?
Where do they buy?
Why do they buy?
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Studying consumers provides clues for
1. Improving/introducing products & services
2. Setting prices
3. Devising channels
4. Crafting messages
5. Developing other marketing activities
6. Look for emerging trends and new opportunities
To understand the buyer and to create a customerout of him
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Buyer Behaviour
4Ps Marketing
Environment
Buyer
Characteristics
Buyer
Decision Process
Buyer
Decision
Consumer
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Buyer characteristics
Factors influencing Consumer Behaviour
External Determinants Internal Determinants
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Overall Model Of Consumer Behavior
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Internal Determinants
1. Perception
2. Learning
3. Memory
4. Personality5. Emotion
6. Attitude
7. Motives
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External Determinants
1. Culture
2. Subculture
3. Social Class
4. Social Group5. Family
6. Reference Group
7. Opinion leader
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The Concept of Culture
Culture: The complex whole that includesknowledge, belief, art, law, morals, customs,and any other capabilities and habits
acquired by humans as members of society Key issues: Comprehensive
Acquired
Boundaries Seldom Aware
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Cultural Factors
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Variations in Cultural Values
Environment-
oriented
values
Other-
oriented
values
Self-oriented
values
Consumption
Purchase
Communications
Societys view
of relationships
between people
Societys view
of relationships
with environment
Objectives/
approaches
to life society
finds desirable
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Other-oriented Values
Individual/Collective: Membership
Extended/Limited Family:Grandparents
Adult/Child: US versus other Countries
Masculine/Feminine: Rank, Prestige
Competitive/Cooperative: Comparative
Ads
Youth/Age: Elders
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Environment-oriented Values
Cleanliness: How Much?
Performance/Status: Branded Goods
Tradition/Change: Innovation
Risk taking/Security: Entrepreneur
Problem-solving/Fatalistic:Acceptance
Nature: Social Responsibility
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Self-oriented Values
Active/Passive: DO SOMETHING!
Material/Nonmaterial:Instrumental/Terminal
Hard work/Leisure: Vacation?
Postponed gratification/Immediategratification: Credit
Sensual gratification/Abstinence:Differences
Humor/Serious: Superficial
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Factors Influencing NonverbalCommunication
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Sub Culture
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Nature of Subcultures
A segment of a larger culturewhose members sharedistinguishing patterns ofbehavior.
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Sub Culture
It is based on the social history of the group as wellas current situation.
Ethnic Groups, Religion and Geographical region
is base for the sub culture. Individual can be part of more than one sub
culture.
Which subculture dominates a particular targetgroup is major task in front of the manager.
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Identification Produces UniqueMarket Behaviors
Culture and subculture defines the Product
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Point of Study for Subculture :
Demographic Characteristics
Size
Location
Income and Employment Education
Family and Age
Psychographic characteristics
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Marketing Implications of Subculture :
Product Purchase Patterns
Shopping Behavior
Promotion
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Sub cultures in India
Differences in Festival
Religious norms
Eating Habit
Clothing
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Social Class ,Group and Family
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Social Class Influence
Social classrepresents an interesting way to look ata market; influenced by such factors as education,occupation, and place of residence
may be used as a basis for segmenting markets, andmay reflect the aspirations of consumers
social classes exist whether people care to admit it or
not; differences in beliefs and attitudes exist acrossclass boundaries; and social class may be a betterpredictor of buyer behaviour than income
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Understanding Stratification
Rossides (1997) uses five-class model to describe U.S. classsystem:
Upper class
Upper-middle classLower-middle class
Working class
Lower class
.
Systems of Stratification Social Classes
Income inequality basic characteristic of class
system
The Social Class
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The Social ClassSystem
The Upper
Class
(2%)
The Upper (Old Money) The Lower (New Rich)
The Middle
Class
(45%)
The Upper (12%)
Moderately successful business
people, professionalsThe Lower (32%)
White collar workers, technicians,
small business owners
The Lower
Class(54%)
The Upper (38%)Blue collar (working class)
The Lower (16%)Unskilled, chronically unemployed,
welfare poor
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Groups
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Reference Group Influence
Reference groups are those with whom we interactand who influence our attitudes, values and
behaviour
Small reference groupsestablish norms thatinfluence purchase decisions, and their word-of-mouth is considered to be more powerful than
advertising and other commercial forces.
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Broad categories of reference groups
Normative reference groups : Family and House hold
Comparative reference groups :Neighbourhood, College etc.
Indirect Reference Group : TV stars, Political leaders
Formal and informal/friendship groups
Membership Vs Aspirational groups
Positive vs Negative groups
Virtual groups or communities
h ff f
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Factors That Affect Reference GroupInfluence :
Information and Experience
Credibility , Attractiveness and Power of Reference
group Conspicuousness of the product
Reference groups and consumer conformity.
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Types of reference groups
Reference groups
Formal & informal groups
Primary/secondary groups
Membership groups
Aspirational groups
Dissociative groups
Distinctions &characteristics Formal reference groups have
clearly specified structure, informalgroups do not
Primary reference groups involvedirect, face-to-face interactions;
secondary groups do not
people become formal members ofmembership reference groups
People aspire to join or emulateaspirational reference groups
People seek to avoid or rejectdissociative reference groups
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The Nature of Reference Group Influence
Informational: when an individual usesbehavior and opinions of reference groupmembers as potentially useful bits ofinformation
Normative: when an individual fulfillsgroup expectations to gain a direct reward orto avoid a sanction
Identification: when individuals haveinternalized the groups values and norms
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Discussion Question (#31)
How important are reference groups to the purchaseof these products? Would their influence also affectthe brand or model? Would their influence beinformational, normative, or identification?
a. Mobile Phone
b. Bike
c. Traditional weard. An Internet connection
e. Volunteering with a nonprofitorganization
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Family
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Household Influenceson Consumption Decisions
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Family influences
The importance of the family is also emphasised by itsvarious functions to marketers-The family as a consumption unit-A purchasing unit
-A financial resource- A source of information- A source of physical satisfaction- A source of emotional satisfaction
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Family
Household Influences the most ConsumptionDecisions.
Structure of Family
Stage of FamilyLife Cycle
FamilyDecision Process
Family Purchaseand
Consumption
Behavior
MarketingStrategy
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Stages of Family
Each stage represents unique needs and wants awell as financial conditions and experiences from aparticular social class and group.
Bachelor stage
Young married couple
Full nest I
Full nest II
Empty nest Retired people
Special Category
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Stages of Family
For each stage three parameters play important rolein the purchase behavior
Financial Situation
Market behavior What do they pay for?
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Types of Roles Found in Families
Everyone has a role:
Users: Persons who use/consume theproduct
Gatekeepers: Information Controllers Influencers: Evaluation Assistants
Deciders: Actual Decision Makers
Buyers: Purchase Makers Maintainers: Maintenance Personnel
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Family decision-making
Kotler distinguishes five buying roles which must betaken into consideration in analyses of familyconsumption behaviour
The initiator
The influencer
The decider
The purchaser
The user
It is common for individuals in a family to carry outdifferent and sometimes more than one role in thepurchase process
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Consumer Behavior Roles
Initiator The person who first suggests or thinks of the idea of
buying a particular product or service Influencer A person whose view or advice influences the buying
decision Decider The individual with the power and/or financial authority to
make the ultimate choice regarding which product to buy Buyer
The person who concludes the transaction User The person (or persons) who actually uses the product or
service
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Consumer Behavior Roles :
Initiator : The individual who determines that some need
or wan is not being me and authorizes a purchaseto rectify the situation.
Influencer :
A person who by some intentional orunintentional word or actions influences thepurchase decision , the actual purchase and orthe use of product or service .
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Consumer Behavior Roles :
Buyer :
The individual who actually makes the purchasetransaction.
User :
The person most directly involved in theconsumption or use of the product.
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Consumer Behavior Roles : Example :
Initiator : Architect suggesting for
the kitchen amenities .
Influencer :
Interior designersuggesting the designs.
Decider : The woman in the family
Buyer :
The head of the Family
User :
The women in the familyor the maid.
Implication of family decision making for
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Implication of family decision making formarketers
Marketers must find out whether a woman or man in thehousehold is the buyer or decision-maker for the product.
Whether it is parents or children who usually finds out firstabout products or brands
Who in the family has the power to persuade the buyer tomake a particular brand choice and purchase
The above information may determine the productpositioning (ie masculine/feminine, youthful/matureimage)
May also determine distribution and promotion pattern May determine target audience for information
This information comes from study of?
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Opinion Leadership
An Opinion Leader is a person who informally influencesthe actions or attitudes of others
He/she may be a leader in relation to certain products
Opinion Leader has the following characteristics
Knowledge and interest Consumer innovators Media choice
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Opinion Leadership
Characteristics of opinion leader
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Assignment
Case study Rambir singh and family
To be discussed on February 22, 2011 from 10 a.m.to 1p.m.