consumer behavior

Session 7

Marketing Management

IMT DUBAI

Facts about GCC Consumers• 38.5 million people• Saudi Arabia, biggest GCC nation, accounted for around 65.5 per cent

(25.2 million) • The UAE is second most populated GCC state, accounting for around

12.5 per cent (4.87 million). The population in Kuwait at 2.91 million, 2.73 million in Oman, 868,000 in Qatar and 765,000 in Bahrain

• The region's population is mostly young, affluent, fashion-conscious and rapidly growing, an irresistible combination for retailers.

• With higher discretionary incomes, increased use of credit cards and a thirst for what is new, the region has become a hotbed for brands, looking to develop the next generation of shoppers.

• Kuwait is by far the most fashion conscious of the Arabian Gulf countries, with the UAE a close second.

• The region's malls are the best place for the younger generations to get together. With little or no use of social clubs, or youth societies, shopping malls have become defacto clubs, where, on most days of the week, youngsters from a range of nationalities gather, looking for something to do.

• The tradition of travelling to Europe to buy luxury items, such as watches, designer clothing, jewellery, has long since gone, as the items are available here.

Facts about UAE Consumers • UAE has one of the most diverse populations in the Middle East, consisting of the

native Emarati (19%), other Arab and Iranian (23%), South Asian (50%), and remaining 8% being the Westerners and East Asians.

• According to 2006 population estimates, there were approximately 1.2 million Indians and 300,000 Pakistani residing in the UAE, making them the largest expatriate community in the country.

• One of the interesting features of UAE population is that almost 70 % of the population is estimated to be male and 30% female.

• The population or age structure appeared to be dominated by the young to medium age group with 25.3% coming in (0-14 years) and 71.1% falling in (15-64 years) age group.

• Abu Dhabi is the largest and most populous emirate in the UAE with a population of 1.4 million, followed by Dubai (1.2 million), Sharjah (570,000), Ajman (200,000), Ras Al Khaimah (190,000) and Umm Al Quwain (55,000) as per 2005 estimates.

Consumer Buying BehaviorConsumer Buying Behavior

• Consumer Buying Behavior Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption.

• Study consumer behavior to answer: ““How do consumers respond to marketing efforts the How do consumers respond to marketing efforts the

company might use?” company might use?”

Model of Consumer BehaviorModel of Consumer BehaviorMarketing andOther Stimuli

Marketing andOther Stimuli

Buyer’s Black BoxBuyer’s Black Box

Buyer’s ResponseBuyer’s Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Characteristics Affecting Consumer Behavior

Buyer’s Decision Process

Product Choice

Brand Choice

Dealer Choice

Purchase Timing

Purchase Amount

Culture

Cultural Factors

Subculture

Social Class

BuyerBuyer

Fundamental determinant of a Person’s wants and behavior

More specific identification andSocialization for their members

Social stratificationCaste, income, wealth, education

Social Factors• Reference group

– Group on which an individual’s attitude and behavior is influenced (directly or indirectly)

– Membership groups – direct influence• Primary

– Family, friends, neighbors (continuous & informal interaction)

• Secondary – Religion and professional membership (formal & less continuous)

– Aspirational I want to join this group.. I aspire. • Indirect influence (not belonging to the group but hopes to join)

– Dissociative • Whose values or behaviors an individual rejects

– Opinion leader• persons offer informal advice on product and brand choice

Personal Factors• Family life cycle

– Bachelor• Young, single, not living at home (basic home equipments, furniture, clothing)

– Newly married couples • young, no children & buy car, furniture, appliances, vacation

– Full nest I • Youngest child under six, home purchasing at peak – baby food, cough medicines,

vitamins, dolls– Full nest II

• youngest child six or over – buy larger size packages – bicycles, school notebooks, uniforms

– Full nest III • older married couple with dependent children, some children get jobs – dental

services, magazines– Empty nest I

• Older married couples, no children living with them, head of the household at job– make gifts and contributions

– Empty nest II• Older married couples, no children living with them, head of the household retired

– medical appliances, medical care products– Solitary survivor

• Personality– Set of distinguishing psychological traits

• Eg. self confidence, dominance, autonomy

• Brand personality– Human traits attributed to a brand

• Sincerity (Raymond), excitement (Coke), competence (Philips, sony), sophistication (Mercedes), ruggedness (Levi’s)

Motivation - Maslow’s Hierarchyof Needs

Physiological needs(food, water, shelter)Physiological needs(food, water, shelter)1

Safety needs(security, protection)

Safety needs(security, protection)

2

Social needs(sense of belonging, love)

Social needs(sense of belonging, love)3

Esteem needs(self-esteem, recognition)

Esteem needs(self-esteem, recognition)

4

Self-actualization

(self-developmentand realization)

Self-actualization

(self-developmentand realization)

5

Perception

• Selecting, organizing and interpreting information to have meaningful picture of the world

• Different for person to person• Perceptual process

– Selective attention• Current need, anticipated (marketeer should work hard

to grab more customer attention.

– Selective distortion• Tendency to twist information into personal meanings

– Selective retention• Retaining information that supports attitudes & beliefs

Four Types of Buying Behavior

ComplexBuying

Behavior like u buy a furniture like itsA major decision

Dissonance-Reducing Buying

Behavior like u buy does things which of Popular brand u don’t want to be

Out cast.

Variety-Seeking

Behavior like buying a luggage bag.

HabitualBuying

Behavior

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

HighInvolvement

LowInvolvement

Consumer BuyingProcess

• It’s a kind of process that the consumer follow. They alwaz think these factors before buying the products. Like if I hv to buy a car then I have to make all these decision to buy the car. Post purchase means after sales response about the product

ProblemProblemrecognitionrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Postpurchasebehavior

The Buyer Decision ProcessStep 1. Need Recognition

The Buyer Decision ProcessStep 1. Need Recognition

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

Internal Stimuli

• Hunger

• Thirst

• A person’s normal needs

Internal Stimuli

• Hunger

• Thirst

• A person’s normal needs

Need RecognitionDifference between an actual state and a desired state

Like I have a driving license now I want a car

Need RecognitionDifference between an actual state and a desired state

Like I have a driving license now I want a car

The Buyer Decision ProcessStep 2. Information Search

The Buyer Decision ProcessStep 2. Information Search

•Family, friends, neighbors•Most influential source of information

•Advertising, salespeople•Receives most information

from these sources

•Mass Media

•Handling the product•Examining the product•Using the product

Personal Sources Personal Sources

Commercial SourcesCommercial Sources

Public SourcesPublic Sources

Experiential SourcesExperiential Sources

The Buyer Decision ProcessStep 3. Evaluation of Alternatives

The Buyer Decision ProcessStep 3. Evaluation of Alternatives

Product AttributesEvaluation of Quality, Price, & Features

Product AttributesEvaluation of Quality, Price, & Features

Degree of ImportanceWhich attributes matter most to me?

Degree of ImportanceWhich attributes matter most to me?

Brand BeliefsWhat do I believe about each available brand?

Brand BeliefsWhat do I believe about each available brand?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

TotalSet

Decision Making Sets

• It’s a kind of set we are using like we have a whole bunch of brand available to us we know little bit of brand then we see which one better then make a choice then finally our decision.

Aware-nessSet

Consid-erationSet

ChoiceSet Decision

Steps Between Evaluation of Alternatives and a Purchase Decision

• It’s a decision evaluation thing when make a decision regarding a product then the attitude of others also affects our decision making or some situational factors happened before we buy a product. Then finally when we are making our purchase its some thing different.

EvaluationEvaluationofof

alternativesalternatives

Purchasedecision

Unanticipatedsituational

factors

Attitudeof others

Purchaseintention

• It’s a buying behavior bout the consumer. First the marketing mix which is a external stimuli then some economic factors. Then comes the brain of the consumer what he actually evaluates the product his decision about the product characteristics then finally he purchase a particular brand and product from particular dealer.

Model of Consumer BehaviorModel of Consumer BehaviorMarketing andOther Stimuli

Marketing andOther Stimuli

Buyer’s Black BoxBuyer’s Black Box

Buyer’s ResponseBuyer’s Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Characteristics Affecting Consumer Behavior

Buyer’s Decision Process

Product Choice

Brand Choice

Dealer Choice

Purchase Timing

Purchase Amount

Consumer Analysis

In order to analyze consumers, marketers need answers to the the following questions:

1. Who Buys? What is their demographic, geographic,

psychographic or behavioral orientation?2. What is Bought? Is it a core product, augmented product, service, etc.3. Why is the Purchase Made? Influences on purchasing – family, culture, friends,

marketers, age, social status, etc.

Consumer Behavior

In order to analyze consumers, marketers need answers to the the following questions:

4. How Often is the Purchase Made? Frequency of purchase, number of purchases, etc.5. Where is the Purchase Made? Location, convenience, online, offline, etc.6. When is the Purchase Made? Time, season, occasion, etc.7. How is the Purchase Made? Decision making process

• Rainbow Milk, a brand of Royal Friesland Foods, was one of the first multinational brands introduced to the Arab world in 1955.

• Rainbow Milk has unveiled its new look coinciding with the 50th anniversary of brand in the Gulf. One of the products under the $5 billion global company Royal Friesland Foods, the Rainbow Milk range includes evaporated milk, milk powder, drinking milk and sweetened condensed milk.

"With the new packaging, we have chosen to put greater emphasis on the 27 vitamins and minerals contained in our products, while still reinforcing its great taste and heritage," said Vikas Mittal, marketing director for Friesland Foods. "This rejuvenation is part of our continuous efforts to evolve with the changing consumer needs in the region."

The new brand will be introduced into the market via traditional media TV, radio, as well as in-store sampling. There will be school visits in Saudi and in Dubai's summer camps. The primary targets for this product are mothers and children.

Annually, in UAE alone, over 400 million cups of tea are served with Rainbow Milk. With consumers increasingly focused on nutrition, Rainbow has been first to introduce innovative products like cholesterol-free evaporated milk and cardamom evaporated milk.

Although these numbers seem high, Wout Matthijs, managing director of Friesland Foods, is still wary that compared to global consumption, the average consumption of milk in the throughout the Gulf is still low.

In line with this, Rainbow Milk will have an awareness campaign for the health benefits of milk and dairy products. Studies in the Arabian Gulf countries showed that only 30-35% of schoolchildren and adolescents drink milk daily. Also, it was found that as the children grow older, consumption of milk decreases and the intake of soft drinks increases.

• Suggest ways to increase the consumption of milk products in the Arabian Gulf.

California Milk Processor board’s Got Milk Campaign

Bollywood film Fanaa release help up in Gujarat due to agitation over star's comments on Narmada Dam Project - June '06

On new up coming popular singer Himesh Reshammiya - June '06 On proposed implementation of quota

reservation in institutes of higher education - June '06

On the fracas between Bollywood item girl Rakhi Sawant and Punjabi pop singer Mika Singh on his birthday party - June '06

Buying Situations