Team Members:

Khurram Khan Shahid Ali Riaz Saleem Arshad Khan Rehan Ahmed

Team Members:

Khurram Khan Shahid Ali Riaz Saleem Arshad Khan Rehan Ahmed

Consumer Behavior: The buying behavior of final consumers, individuals & households who buy goods & services for personal consumption.

Customers vs. Consumers: Customer: customer means who purchases the product from the marketer or from the retailer or from the wholesaler. Here we dont bother about who uses the product. Consumer: consumer means who uses the product of course purchased by the customer. Here we consider finally who is going to use the product we call them as consumer.

The Ultimate Consumer: Those individuals who purchase for the purpose of individual or household consumption.

Significance in Daily Lives:

Much of our time spent directly in the Marketplace, shopping or engaging in other activities. A large amount of additional time is spent thinking about products & services, talking friends about them. Seeing or hearing advertisements about them.

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Consumers are often studied because certain decisions are significant affected by their behavior or expected actions. For this reason, Consumer behavior is said to be Applied Discipline.

Advertising Managers, product managers, product designers and many others in profitoriented businesses are interested in understanding consumers in order to be more effective at their tasks and earn more profit for their Organizations.

Consumers collectively influence economic and social conditions within an entire society.

Consumer purchases are highly influence by two factors.

Internal
Psychological

External
Cultural

Personal

Social

Motivation

Perception Psychological Factors

Learning

Beliefs

Attitudes

Motivation

Motivation
Motive or (drive) A need that is sufficiently pressing to direct the person to seek satisfaction of the need.

Perception Psychological Factors

Learning

Beliefs

Attitudes

Motivation

Perception
The process by which people select, organize and interpret information to from a meaningful picture of world.

Perception Psychological Factors

Learning

Beliefs

Attitudes

Motivation

Learning
Changes in an individuals behavior arising from experience.

Perception Psychological Factors

Learning

Beliefs

Attitudes

Motivation

Beliefs
A descriptive thought or conviction that a person holds about something.

Perception Psychological Factors

Learning

Beliefs

Attitudes

Motivation

Attitude
A persons relatively consistent evaluation, feelings and tendencies towards an object or an idea.

Perception Psychological Factors

Learning

Beliefs

Attitudes

Age and life cycle Personal Factors

Occupation
Economic situation

Age and life cycle Personal Factors

Age and life cycle

Occupation
Economic situation

Age and life cycle Personal Factors

Occupation

Occupation
Economic situation

Age and life cycle Personal Factors

Economic Situation

Occupation
Economic situation

Culture Cultural Factors

Sub culture
Social Class

Culture

Culture Cultural Factors

Sub culture
Social Class

The set of basic values, perceptions, wants and behavior by a member of society from family and other important institution

Sub-Culture

Culture Cultural Factors

Sub culture
Social Class

A group of people with shared value system based on common life experiences and situation.

Social Class

Culture Cultural Factors

Sub culture
Social Class

Relatively permanent and ordered divisions in a society whose members share similar values, interests and behavior.

House hold Type Reference groups Social Factors Roles and status Roles in buying process

The consumer market buy goods for their personal consumption.

Consumer vary tremendously in Age, Income, Education, Taste & other factors.
Buyers may pass quickly or slowly through these stages and much depends on the nature of buyer, the product, and the buying situation.
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A new product, a good service or idea

that is perceived by some potential customers as new.

Adoption Process, the mental process

through which an individual passes from first learning about an innovation to final adoption
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Awareness: Consumer becomes aware of new product, but lacks information about it.
Interest: Consumer seeks information about the new product. Evaluation: Consumer considers whether trying new product makes sense.

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Trial: Consumer tries new product on a small scale. Adoption: Consumer decides to make regular use of the new product.

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Innovators (2.5%): They try new product or adopts a new idea. Early Adopters (13.5%):Opinion leaders in their communities. Early Majority (34%):They adopt new idea before average person.
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Late Majority (34%):They adopt idea after a majority of people have tried it Laggards (16%):They adopt when it becomes tradition.

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Influence of Product Characteristics on Rate of Adoption

Communicability
Can results be easily observed or described to others?

Relative Advantage
Is the innovation superior to existing products?

Can the innovation be used on a trial basis?

Divisibility

Is the innovation difficult to understand or use?

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Complexity

Does the innovation fit the values and experience of the target market?

Compatibility

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It is difficult enough for companies marketing within the borders of a single country. For operating in many countries, understanding & serving the needs of consumers can be daunting. Although some countries may have some things in common ,their values, attitudes and behaviours often vary greatly. So, international marketers must understand their differences and adjust their products & marketing program accordingly.
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Shaking heads from side to side means NO in most countries but YES in Bulgaria & SriLanka. In South America, southern Europe & many Arab countries ,touching another person is a sign of warmth & friendship. In the Orient, it is considered an invasion of privacy.

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In Norway or Malaysia, it is rude to leave something on your plate when eating but in Egypt, it is rude not to leave something on your plate..

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Initiator User Influencer

Buying Decision

Buyer

Decider
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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 some weight in making the final buying decision.

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The person who ultimately makes a buying decision or any part of it- whether to buy, what to buy, how to buy or where to buy .

Buyer
The person who makes an actual purchase.

User
The person who consumes or uses a product or service.
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Purchase Decision Evaluation of Alternatives Information Search Need Recognition

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Post purchase Behavior

The first stage of the buyer decision in which the consumer recognizes a problem or need.

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The stage of the buyer decision process in which the consumer aroused to search for more information; the consumer may simply have heightened attention or may go into active information search.

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Personal Sources:
(family, friends, neighbors etc)

Commercial Sources:
(Advertising, Sales people, Dealers etc)

Public Sources:
(Mass Media, Consumer Rating Organization)

Experimental Sources:
(Handling, Examining, Using the product)

The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.

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The stage of the buyer decision process in which the consumer actually buys the product.

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The stage of the buyer decision process in which the consumer take further action after the purchase, based on their satisfaction or dissatisfaction.

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Sigmund Freud(1856-1939)

sought to explain: People are largely unconscious about the real psychological forces shaping their behaviour

As persons grows, repressing many urges

Urges are never eliminated or under perfect control Why?

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B/c they emerge: in dreams

in slips of tongue
in neurotic worried about smthg.

obsessive behaviour mind is filled with one particular thing

ultimately in psychoses mental illness that effects the
whole personality
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Various project techniques to throw the ego off guard for e.g., 1) word associations

2) sentence completion
3) picture interpretation 4) role playing

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Interesting & odd conclusions from researchers about buyers mind regarding certain purchases

For e.g., A/c to one classic study concluded: Consumer resist prunes b/c theyre wrinkled and remind people of sickness and old age

- Motivation research remains a useful tool for marketers seeking a deeper understanding of consumer behaviours
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Abraham Maslow(1908-1970 ) sought to explain: Why people are driven by particular needs at particular times? Why does one person spend much time and energy on:

Personal safety ?
On gaining the esteem of others?
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Human needs are arranged in Hierarchy i.e.

From the most pressing to the least pressing

From Bottom to Top
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 1.

In order of importance they are: Physiological needs (hunger, thirst)

Daily usage commodities, for e.g.*wheat *milk *water etc.

2.

Safety needs (security, protection)

* Health Protection *Insurances *Provident Funds etc.

3.

Social needs (sence of belonging, love)

How s/he is seen in: * Get togethers * Festivals Parties * Attending
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4.

Esteem needs: (self-esteem, recognition, status) Occupation & Designation? Part of organization & his/her performance? Shaping Livings standards accordingly

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5. Self-actualization needs: (Self-development & realization) Self-development

Latest happenings in the art world? Do I invest my money in starting a business? What are the trends to make ROIs?

Realization

How to minimize risks?! Why not to invest in a running business?

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Perception: To form a meaning full picture of the world Two people with similar motivation might act quite differently For e.g.
* Buyer A of Stereo System considers a fast talking sales person loud or insincere. * Buyer

B of Stereo System considers the same person intelligent & helpful. Why perceptions are different of Buyer A & B?

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B/c of the Flow of Information through our five senses:

Sight Sound Smell Touch Taste

These five senses receives in an individuals way using:

* Short-term memory

* Long-term memory

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Three perceptual processes:

Selective exposure - consumers attention
For e.g., a person exposed to more than 1500 ads a day be precise/specific.

1.

2.

Selective distortion understanding consumers mindsets

For e.g., Nike Australias Annual sales from 500K to 1.3M in reducing their joggers prices.

3.

Selective retention retain info. that supports peoples attitude & beliefs.
For e.g., Nokia makes mobile sets for all age, group peoples.
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SUBLIMINAL PERCEPTION CAN CONSUMERS BE AFFECTED WITHOUT KNOWING IT?

Lets watch a case study!

This case study is available on YouTube as well:

http://www.youtube.com/cssubliminalads

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