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REPORT
ON
CHAPTER PRESENTATION
OF
PRESENTED BY:
TEJAS SACHALA
JIGNESH GAMIT
PARESH SIDHDHAPURA
DIGESH SHAH
CHANDRAJIT KHANIYA
KARTIK PATEL
Marketers are always looking for emerging trends that suggest new marketing
opportunities
CONSUMER BEHAVIOR
“Consumer behaviour is the study of when, why, how, and where people do or do
not buy products”.
Conceptual Background:
It also tries to assess influences on the consumer from groups such as family, friends,
reference groups, and society in general.
Customer behaviour study is based on consumer buying behaviour, with the customer
playing the three distinct roles of user, payer and buyer. Relationship marketing is an
influential asset for customer behaviour analysis as it has a keen interest in the re-discovery
of the true meaning of marketing through the re-affirmation of the importance of the
customer or buyer. A greater importance is also placed on consumer retention, customer
relationship management, personalisation, customisation and one-to-one marketing. Social
functions can be categorized into social choice and welfare functions.
Each method for vote counting is assumed as a social function but if Arrow’s
possibility theorem is used for a social function, social welfare function is achieved. No
social choice function meets these requirements in an ordinal scale simultaneously. The most
important characteristic of a social function is identification of the interactive effect of
alternatives and creating a logical relation with the ranks. Marketing provides services in
order to satisfy customers. With that in mind, the productive system is considered from its
beginning at the production level, to the end of the cycle, the consumer.
The black box model is related to the black box theory of behaviourism, where the
focus is not set on the processes inside a consumer, but the relation between the stimuli and
the response of the consumer. The marketing stimuli are planned and processed by the
companies, whereas the environmental stimulus are given by social factors, based on the
economical, political and cultural circumstances of a society. The buyers black box contains
the buyer characteristics and the decision process, which determines the buyers response.
The black box model considers the buyers response as a result of a conscious, rational
decision process, in which it is assumed that the buyer has recognized the problem. However,
in reality many decisions are not made in awareness of a determined problem by the
consumer.
Problem
recognition
Economic Attitudes
Information Product choice
Product Technological Motivation
search Brand choice
Price Political Perceptions
Alternative Dealer choice
Place Cultural Personality
evaluation Purchase timing
Promotion Demographic Lifestyle
Purchase decision Purchase amount
Natural Knowledge
Post-purchase
behaviour
Once the consumer has recognised a problem, they search for information on products
and services that can solve that problem. Sources of information include:
Personal sources
Commercial sources
Public sources
Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organises, and interprets information to create a meaningful picture of the world'
Stage Description
- Selective exposure consumers select which promotional messages they will expose
themselves to.
- Selective attention consumers select which promotional messages they will pay
attention to
- Selective comprehension consumer interpret messages in line with their beliefs,
attitudes, motives and experiences
- Selective retention consumers remember messages that are more meaningful or
important to them
The implications of this process help develop an effective promotional strategy, and select
which sources of information are more effective for the brand.
Information evaluation
At this time the consumer compares the brands and products that are in their evoked
set. How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set?
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The marketing
organization must facilitate the consumer to act on their purchase intention.
Postpurchase evaluation
To manage the post-purchase stage, it is the job of the marketing team to persuade the
potential customer that the product will satisfy his or her needs. Then after having made a
purchase, the customer should be encouraged that he or she has made the right decision.it is
not effected by advertisement.
Internal influences
External influences
• Social factors
• Personal factors
• Psychological factors
CULTURAL FACTORS
Cultural factors
Each culture consists of smaller subcultures that provide more specific identification
and socialization for their members
Social classes are relatively homogeneous and enduring divisions in a society, which
are hierarchically ordered and whose members share similar values, interests and
behavior
Social classes reflect not only income, but other indicators such as occupation,
education and area of residence
Culture: Culture is the set of basic value, perception, wants and behaviours learned by a
member of society from family and other institution. Culture is the most basic cause of a
person’s wants and behaviour. Every group or society has a cultural influence on buying
behaviour.
When Kellogg launched its cornflakes in the Indian market, the response from the
consumers was not very encouraging.
The company conducted a market research and discovered that Indians prefer hot milk
with cornflakes whereas the ‘Crispiness’ benefit that it was claiming could be
delivered only when the cornflakes were mixed with cold milk
SOCIAL FACTORS
Reference Groups
Humans are inherently social animals, and individuals greatly influence each other.
A useful framework of analysis of group influence on the individual is the so called reference
group—the term comes about because an individual uses a relevant group as a standard of
reference against which oneself is compared. Reference groups come in several different
forms.
• The aspirational reference group refers to those others against whom one would like
to compare oneself. For example, many firms use athletes as spokespeople, and these
represent what many people would ideally like to be.
Reference groups come with various degrees of influence. Primary reference groups come
with a great deal of influence—e.g., members of a fraternity/sorority. Secondary reference
groups tend to have somewhat less influence—e.g., members of a boating club that one
encounters only during week-ends are likely to have their influence limited to consumption
during that time period.
A person’s reference groups consist of all groups that have a direct or indirect
influence on the person’s attitudes or behavior
Prior to the launch of its KitKat Kubes, a variant of the popular KitKat brand, Nestle
hired an agency to create a buzz among opinion leaders in the age 16 to 25 market
A database of about 20,000 was sent text messages and then this database was
whittled down to 100 opinion leaders by a phone questionnaire
Family
Children may also have strong influence on family buying decision. For example children
as young as age six may influence on the family car purchase decision. “By six, they know
the names of cars,” says an industry analyst. Chevrolet recognizes this influence in marketing
its Chevy Venture minivan.
The members of the family play different roles such as influencer, decider, purchaser
and user in the buying process of any product
A person’s orientation towards religion, politics and economics are all based on the
values acquired from the parents and family members
For example:
A person’s position in each group can be defined in terms of role and status
Eg. A Supreme court justice has more status than a sales manager and a sales manager
has more status than office clerk
People choose products that communicate their role and status in society
Company presidents often drive Mercedes, wear expensive suits, and drink Chivas
Regal scotch
PERSONAL FACTORS
People buy different goods, fund services over a life time. Taste in food, clothes,
furniture and recreation is often age related.
Brand Personality is the specific mix of human traits that may be attributed to a
particular brand.
1. motivation,
2. perception,
3. learning, and
4. memory
MOTIVATION
A person has many needs at any given time
Some needs are biogenic; they arise from physiological states of tension such as
hunger, thirst, or discomfort
Other needs are psychogenic; they arise from psychological states of tensions such as
the need for recognition, esteem, or belonging
1) Abraham Maslow
2) Fredrick Herzberg
Abrham maslow sought to explain why people are driven by particular needs at
particular times. His answer his that human needs are arranged in a hierarchy from
most to least pressing-physiological needs, safety needs, social needs, esteem needs,
and self-actualisation needs. People will try to satisfy their most important needs first.
When a person succeeds in satisfying an important need, he will then then try to
satisfy the next-most-important need.
2) Frederick Herzberg:
Hygiene factors (e.g. status, job security, salary and fringe benefits) that do not give
positive satisfaction, though dissatisfaction results from their absence. These are extrinsic
to the work itself, and include aspects such as company policies, supervisory practices, or
wages/salary.
Unlike Maslow, who offered little data to support his ideas, Herzberg and others have
presented considerable empirical evidence to confirm the motivation-hygiene theory. Their
work, however, has been criticized on methodological grounds. Nevertheless, Herzberg and
his associates have rendered a valuable service to science and to management through their
efforts to apply scientific methods to understanding complex motivational problems at work
and have stimulated others to continue the search.
PERCEPTION
A motivated person is ready to act. How the motivated person actually acts is
influenced by his or her view or perception of the situation
In marketing perception are more important than the reality, as it is perceptions that
will affect consumers’ actual behavior
Because a person cannot possibly attend to all these, most stimuli will be screened
out- a process called selective attention.
Consumer will often distort information to be consistent with prior brand and product
beliefs.
3) Selective Retention: People will fail to register much information to which they are
exposed in memory, but tend to retain information that supports their attitudes and
beliefs
MEMORY:
All the information and experiences we encounter as we go through life can end up in our
long-term memory. Cognitive psychologists distinguish between short-term memory- a
temporary and limited repository of information-and long term memory- a memory
permanent, essentially unlimited repository.
1. NEED RECOGNITION
Difference between the desired state and the actual condition.
Example:
By seeing a commercial for a new pair of shoes, stimulates your recognition that you
need a new pair of shoes.
– is hungry
2. INFORMATION SEARCH
Internal Search:
--- Memory
External Search:
A successful information search leaves a buyer with possible alternatives, the evoked set.
Example:
Chinese food
Indian food
Burger king
An internal search involves the scanning of one's memory to recall previous experiences or
knowledge concerning solutions to the problem-- often sufficient for frequently purchased
products.
An external search may be necessary when past experience or knowledge is insufficient, the
risk of making a wrong purchase decision is high, and/or the cost of gathering information is
low.
3. EVALUATION OF ALTERNATIVES
Need to establish criteria for evaluation, features the buyer wants or does not want.
Rank/weight alternatives.
Example:
If you want to eat something spicy, then Indian food gets the highest rank etc…
The marketer needs to know which people are involved in the buying decision and what
role each person plays, so that marketing strategies can also be aimed at these people.
• Initiator: the person who first suggests or thinks of the idea of buying a particular
product or service.
• Influencer: a person whose views or advice carry weight in making the final buying
decision
• Decider: the person who ultimately makes the final buying decision or any part of it
DECISION ISSUES
Types of decisions
Type of evaluation:
May differ from decision, time lapse between purchase decision and the actual purchase,
product availability.
Decision Processing
Consumer decision making varies with the level of involvement in the purchasing decision
• Extensive: problem solving occurs when buyers purchase more expensive, less
frequently purchased products in an unfamiliar product category requiring
information search & evaluation; may experience cognitive dissonance.
• Limited: problem solving occurs when buyers are confronted with an unfamiliar
brand in a familiar product category
When buyers purchase low cost, low risk, brand loyal, frequently purchased, low personal
identification or relevance, items with which they are familiar.
5. POST-PURCHASE EVALUATION :
It is the outcome, Satisfaction or Dissatisfaction.
Example:
After eating an Indian meal, you may think that really you wanted a Chinese meal
instead.
4. Impulse buying
Examples :
That is when you need to obtain information about unfamiliar brand in a familiar
product category.
Example:
Spend a lot of time seeking information and deciding. High degree of risk.
Example:
4. IMPULSE BUYING :
No conscious planning.
The purchase of the same product does not always elicit the same Buying
Behavior. Product can shift from one category to the next.
For example:
Going out for dinner for one person may be extensive decision making (for someone
that does not go out often at all), but limited decision making for someone else.
The reason for the dinner, whether it is an anniversary celebration, or a meal with a
couple of friends will also determine the extent of the decision making.
REFERENCE:
1. www.scribd.com
2. http://en.wikipedia.org/wiki/consumer_behaviour
3. http://marketingpr.suite101.com/article.cfm