Professional Documents
Culture Documents
BUYER BEHAVIOR
By: M Rafeeq
UNIT-I
“There never was in the world two opinions alike, no more than two hairs or two grains,
the most universal quality is diversity”.
“You never really understand a person until you consider things from his point of view”.
- Harper Lee.
I. Introduction: -
“The customer is the business ‘and’ the purpose of a business is to create a
customer”. Consumer is described by two different kinds of consuming entities.
Def: - The decision process and physical activity or individuals engage in when
evaluating, acquiring, using, or disposing of goods and services.
The term CB refers to the behavior that consumers display in searching for
purchasing, using, evaluating and disposing of products services and ideas that they
expect will satisfy their needs.
The study of CB is the study or how individuals make decisions to spend their
available resources (time, money, effort) on consumption-related items. It includes
the study of what they buy, why they buy it, when they buy it, where they buy it, how
often they buy it and how often they use it.
E.g.: - Toothpaste.
- What types of toothpaste do consumers buy (Gel, regular, striped, in a tube)?
1
AZAD College
products and services, talking to friends about them, and seeing or hearing
advertisements about them.
2.Application to Decision Making: -
Consumers are often studied, because certain decisions are significantly affected
by their behavior or expected actions. For this reason, CB is said to be an applied
discipline and can exist at two different levels of analysis.
a) Micro Perspective: -
The micro perspective seeks application of this knowledge to problems
faced by the individual firm or organization
The Micro perspective involves in understanding consumers for the
purpose of helping a firm or organization to accomplish its objectives.
Advertising managers, product designers, and many others in profit-oriented
businesses are interested in understanding consumers in order to be more effective
at their tasks.
Managers of various non-profit organizations have benefited from the
same knowledge. For e.g.: - Red Cross has been effective in applying an
understanding of consumer behavior concepts to their activities.
b) Societal Perspective: -
The societal perspective applies knowledge of Consumers to aggregate-
level problems faced by large groups or by society as a whole.
In this consumers collectively influence economic and social conditions
with in an entire society. Market system is based on individual choice, consumers
strong influence what will be produced, for whom it will be produced, and what
resources will be used to produce it.
Vast amounts of resources have been used to produce cars, highway
systems, and petroleum products used in their operation. It has also strongly
influenced where many of us live (e.g.: - rural, suburbs) and how we run our daily
lives (e.g.: - what we eat, where we shop, and how we are entertained).
3
AZAD College
Intervening variables are internal to the individual and can include values,
mood, knowledge, etc.
The study of Consumer Behavior is complex, because it is involved with
many variables to interact and influence each other, which are grouped into three
major sections.
1. External environmental variables influencing behavior. (Unit-2)
2. Individual determinants of behavior (Unit-3)
3. Consumer decision process (Unit-4)
Market segmentation, is the way marketers respond to the fact that different
groups of customers have different wants and needs. A large homogeneous market
is divided into segments that share certain characteristics.
Steps:
1. Identify segmentation variables and segment the market.
2. Develop profiles of resulting segments.
Market consists of buyers, and buyers differ in one or more respects. They
may differ in their wants, purchasing power, geographical locations, buying attitudes,
and buying practices.
5
AZAD College
1. Geographic segmentation: -
Dividing market into several geographical units such as nations, regions,
etc. The company pays attention to local variations in geographical needs &
preferences.
The geographical variables are:
Country ------- India, China, Canada, etc.
Region ------- NEWS, Pacific, Atlantic, etc.
Size ----------- under 5,000; 10,000 to 20,000; ---- etc,.
Density ------- Urban, Suburban, Rural
Climate ------- tropic, subtropics, temperate.
Description: -
Divided by location:
People in same area have similar needs & wants, and that these needs &
wants differ from those of people living in other areas. E.g.: - Food Products.
Some can be accounted by climate. The Sunset regions of south and west
prefer bathing suits and refrigerators, air coolers and in Snow Belt regions of the
North and East prefer more for room heaters.
Coffee is sold nationally but flavored regionally. Its coffee is flavored
stronger in the west than the east.
Maruthi – Axile is made stronger in India, due bad condition of roads.
Geographic Segmentation can be easily reached through local media,
including newspapers, TV and Radio, and through regional editions of magazines.
2. Demographic segmentation:
This is the most popular bases for distinguishing customer groups, because
consumer wants, p It refers to vital and measurable statistics of a population.
It helps to locate target marketing.
Demographic variables are easier to measure than other segmentation
variables. references, and usage rates.
It is the study of human population statistics.
It is often said Market = People x Purchasing power x willingness to buy.
The demographic variables are:
Age ------------------ under1; 1-2; 2-5; --- >60.
Gender -------------- male, female.
Family size --------- 1-2; 2-3; so on.
Family life cycle ---- young, single; -young, married, no children;
-young, married, youngest child under 6;
- young, married, youngest child 6 or over;
-older, single; -older, married, no children; etc.
Income ------------- 3,000 - 5,000; 5,000 - 10,000; > 10,000.
Occupation -------- professional, technical, managers, students
Education --------- none, elementary education, primary education,
secondary education, under graduate, post graduate.
Description: -
7
AZAD College
3. Psychographic segmentation: -
People within same demographic group can exhibit different
psychographic profiles.
The psychographic variables are:
Needs-motivations - Shelter, safety, security, affection, sense of self worth
Personality ---------------- aggressive, gregarious, ambitious.
Perception ------- Low risk, Moderate risk, High risk
Learning involvement---------- Low involvement, High involvement.
Attitudes---------- Positive, Negative attitude.
Social class ---------------- Lower lowers, Upper lowers, Middle class,
Upper middles, Lower uppers, Upper uppers.
E.g.: car, clothing, furnishing
Life style ------------------ Achievers, strivers, strugglers
Description: -
Psychological characteristics: - It refers to the inner or intrinsic qualities of the
individual consumer. Consumer Segmentation strategies are often based on
specific psychological variables.
Personality: - Endow their products with brand personalities that correspond to
consumer personalities like, is using personality of certain athletes.
8
AZAD College
Description: -
Culture: - Members of same culture tend to share the same values, beliefs and
customs. The cultural segmentation is particularly successful in international
marketing.
Subculture: - With in large culture, distinct sub groups often are united by certain
experiences, values or beliefs that make effective market segments based on race,
religion, ethnicity
E.g.: - Advertisement – in different Languages.
Social Class: -The concept of social class implies a hierarchy in which
individuals in the same class generally have the same degree of status, while
members of other classes have either higher or lower status/different social
classes vary in terms of values, product preferences and buying habits.
Family Life cycle: - It passes through similar phrases in their formation, growth
and final dissolution. At each phase, the family unit needs different products and
product styles.
5. Use-related segmentation: -
The use-related segment variables are:
Usage rate ------------- Heavy users, Medium users, Light users, Non users
Awareness status ----- Unaware, aware, interested, enthusiastic
Brand loyalty ------- -- None, same, strong
Description: -
9
AZAD College
Usage Rate: - Segmentation to light, medium, heavy user groups of the product.
Heavy users are often a small % of the marketing but account for a high % of
total consumption.
(Product %Users) Heavy half Light half
Soaps (94%) 75% 25%
Cola (67%) 83% 17%
Beer (41%) 87% 13%
Shampoo (94%) 79% 21%
Fig: - Heavy and light users of common consumers products.
Awareness Stage: - The readiness to buy a product the some un ware, some
aware, same all informed, some are interested some desire, some intend to buy.
E.g.: - Medical tests, products, etc
Brand Loyalty: - A market can be segmented by consumer loyalty patterns.
Consumers can be loyal to brands (Coca-cola).
For e.g.: - Assume that there are five brands: A, B, C, D & E. Buyers can
be divided into four groups:
1.Hard-core Loyals: Consumers who buy same brand all the time.
A, A, A, A, A, A, A.
2.Split Loyals: consumers who are loyal to 2 or 3 brands.
A, A, B, B, A, B.
3.Shifting Loyals: Consumers shifting from one brand to another.
A, A, A, B, B, B.
4.Switchers: Consumers who show no loyalty to any brand.
A, C, E, B, D, B
7. Benefit Segmentation: -
Benefits --------------------- Quality, speed, economy, service
6. Behavioral segmentation:
Buyers are divided according to consumer’s knowledge, attitude, use or
response to a product. Many marketers believe that this segmentation is the best
for constructing market segments.
Occasions --------------- --- Regular, Special.
.
User status ------------------ First time, regular, non-user.
10
AZAD College
Culture:
- Changing life styles plays an important role in determining the product benefits.
11
AZAD College
- Benefit segmentation can be used to position various brands with in the same
product category.
Eg:- close-up, with a social appeal that stresses bright teeth, targeted to young,
good-lasting encourage children to brush longer, remove tartar (Cosmetic benefit)
and plaque (health benefit).
- Benefit Segmentation is used not only to find a niche for new products, but also to
reposition established products.
- Combining several segmentation valuables rather than relying as a single
segmentation base.
12