Chapter 05 Consumer Behavior

Chapter 05 Consumer Markets & Consumer Buying Behavior1What are Consumer Markets?What is Consumer Buying Behavior?Model of Consumer Behaviour.Characteristics Affecting Consumer Behavior. Types of Buying Decision Behaviour.The Buying Decision Process. The Buying Decision Process for New product.

Topics to be Covered----

All the individuals and house hold who buy or acquire goods or services for personal consumption. 1. Consumer Markets

The buying behavior of final consumer --- individuals and households that buy goods and services for personal consumption. 2. Consumer Buying Behavior Behavior Attitude A way to understand that why consumer purchase????3. Model of Consumer BehaviorA customer make many buying decision daily.The ultimate purpose of the marketing efforts is to influence buying decision of customer.A company can easily identify that what customer buy, when customer buy, where customer buy, how and how much customer buy.Butt a single most important question is that WHY a customer buy?For answering this question company need to go deep in customer's mind.Often consumer dont know that why they are purchasing something or why they are not purchasing.We can measure the effectiveness of input to consumer buying decision. How an internal or external stimuli changed in a behavior is important.

A TV commercial was advertised for Nokia Lumia 910 last month.Nokia Lumia 910, 5000 units sold in Pakistan last month. But why customer behave in such a manner against a TV commercial , this is important to be noted. These factors strongly influenced consumer behavior, although these are not in control of marketers but they must take them into account. 4.Characteristics Affecting Consumer Behavior

1. Culture Culture is the learned values, perceptions, wants, and behavior from family and other important institutions. [Pakistans Culture] 2. Sub- Culture Subculture are groups of people within a culture with shared value systems based on common life experiences and situations. [Punjabs Culture] HispanicAfrican AmericanAsianMature consumers

Culture Factors 3. Social Classes Social classes are societys relatively permanent and ordered divisions whose members share similar values, interests, and behaviorsMeasured by a combination of occupation, income, education, wealth, and other variables.Upper ClassUpper-middle Class Middle ClassLower Class/Working Class

Culture Factors. 1. References Groups Membership groups, Inspirational Groups, Reference Groups Word of mouth influence and Buzz marketing Opinion leaders are use as brand ambassadors. Online social groups are also play their part and Include blogs, social networking sites (Face Book), virtual worlds (second life)2. Family Family is the most important consumer-buying organization in society. 3. Roles and Status Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status.

Social Factors 1. Age and Life Cycle Stage RBC Royal Bank stagesYouthyounger than 18Getting started18-35Builders35-50Accumulators5060Preserversover 602. Occupation Occupation affects the goods and services bought by consumers.Profession: [i.e. Salaried Person or Businessman]

Personal Factors 3. Economic Situation Economic situation includes trends in:Personal incomeSpending Savings Interest Rates 4. Life Style Lifestyle is a persons pattern of living as expressed in his or her psychographicsMeasures a consumers AIOs (activities, interests, opinions) to capture information about a persons pattern of acting and interacting in the environment. [Top Business Executives --- Jinnah Bagh, Chenab Club]

Personal Factors . 5. Personality and Self Concept Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumers environment [Chen One --- upscale life style ]e.g. AggressivenessDominance Self-confidence

Personal Factors . 1. Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. [Constructing or Renovating House] Safety need, Social needs, Esteem needs, Self actualization needs. Motivation research refers to qualitative research designed to probe consumers hidden, subconscious motivations.

2. Perception [TV Commercials, Advertising Boards] Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world , from three perceptual processesSelective attentionSelective distortionSelective retention

Psychological Factors 3. Learning Learning is the change in an individuals behavior arising from experience.[Fast food is not good for health] 4. Beliefs and Attitudes Belief is a descriptive thought that a person has about something based on:KnowledgeOpinionFaithE.g. Music is UN-ISLAMIC. E.g. coffee tastes good. Attitudes describe a persons relatively consistent evaluations, feelings, and tendencies toward an object or idea.E.g. Chinese products are of inferior quality.E.g. High Advertising companies offers goods /services with low quality.

Psychological Factors . Some purchases are simple and routine, even habitual. Other are far more complex __ involving extensive information gathering and evaluation __ and are subject to something subtle/slight influences. For Example, think of all that goes into a new car buying decision. 5.Types of Buying Decision Behavior High Involvement Low Involvement Significance differences between Brands Few differences between Brands Buying behavior differs greatly for a Tube of toothpaste, an I Phone, Financial Services and a new car. Consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands. Consumer be highly involve where product is Expensive, Risky, Purchased Infrequently. E.g. A PC/Car/Mobile buyer may not know what attributes to consider. First a learning process would be carried, then consumer would buy the product. 1. Complex Buying Behavior Consumer buying behavior in situations characterized by high consumer involvement in a purchase but few perceived differences among brands. Consumer be highly involve where product is Expensive, Risky, Purchased Infrequently. E.g. A consumer buying a Air Conditioner, Furniture, Curtain material.

2. Dissonance-reducing Buying Behavior Consumer buying behavior in situations characterized by Low consumer involvement in a purchase but few perceived differences among brands.Low cost frequently purchased items. Because consumer is less involved in purchase, he/she will go to store for purchasing a certain brand for that item and making it habit to purchase that, note that this is habit not customer loyalty. E.g. Salt, Match Box

3. Habitual Buying Behavior Consumer buying behavior in situations characterized by Low consumer involvement in a purchase but Significant perceived differences among brands.Consumer will do lot of brand switching, because he/she is not highly involved in purchase and items are less expensive. E.g. Chips, Biscuits.

4. Variety Seeking Buying Behavior The actual purchase decision is just part of a much larger buying process ___ starting with need recognition through how you feel after making the purchase.Marketer want to be involved throughout the buyer decision process. 6.The Buyer Decision Process

The buying process starts long before the actual purchase and continues long after. In fact, it might result in a decision not to buy. Therefore, marketers must focus on the entire buying process, not just purchase decision. Occurs when the buyer recognizes a problem or need triggered by:

Internal stimuliExternal stimuli

1.Personal SourcesFamily and Friends2.Commercial SourcesAdvertising, Internet3.Public SourcesMass media, Consumer organizations4.Experiential SourcesHandling, Examining, Using the product

In the evaluation stage, the customer must choose between the alternative brands, products and services.How does the customer use the information obtained?

High Involvement Purchase Low Involvement Purchase

The act by the consumer to buy the most preferred brandThe purchase decision can be affected by:

Attitudes of othersUnexpected situational factorsThe satisfaction or dissatisfaction that the consumer feels about the purchase. Relationship between:Consumers expectationsProducts perceived performanceThe larger the gap between expectation and performance, the greater the consumers dissatisfactionCognitive dissonance is the discomfort caused by a post purchase conflict. Customer SatisfactionFeeling Hunger, wana eat Zinger Burger KFCMacDonald'sFri-Chicks AFC KFC Purchased n Eat Nothing like a KFCs Zinger.

The Buyer Decision Process ---- Brand Loyalty Feeling hunger, wana eat zinger burger. Purchased and Eat.

Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.

7.The Buyer Decision Process for New Product [Adoption Process]