CONSUMER BEHAVIOUR

SESSION 2

Rajiv Vohra
WHAT DID WE DISCUSSED IN THE LAST
SESSION?
 Course Outline
 Criteria of Evaluation
 Significance of studying Consumer Behaviour
 Consumer Behaviour Introduction
 Individual Buying Roles
 Individual Buying Behaviour
 Applications of Consumer Behaviour
 Consumer Behaviour Model
 INDIVIDUAL BUYING BEHAVIOUR
 Complex Buying Behaviour
 Highly Involved purchase decisions
 Expensive, bought infrequently, risky
 Limited knowledge levels
 Awareness of various brands
 Dissonance Reducing Buying Behaviour
 Highly Involved purchase decisions
 Less expensive, bought infrequently, risky
 Buying on basis of price and convenience
 Habitual Buying Behaviour
 Low Involvement
 Low cost, bought frequently
 Variety Seeking Buying Behaviour
 Low Involvement
 Significant Brand Differential
 Seeking variety paramount than dissatisfaction
 INDIVIDUAL BUYING BEHAVIOUR
 Complex Buying Behaviour
 Dissonance Reducing Buying Behaviour
 Habitual Buying Behaviour
 Variety Seeking Buying Behaviour

Assumptions underlying the decision making process

1. Two or more alternatives exist so that the choice can be made.
2. Consumer evaluative criteria facilitate the forecasting of each alternative’s
consequences for his goals or objectives
3. Consumer uses a decision rule or evaluative procedure to determine the
chosen alternative.
4. Information obtained from external sources and or memory is used in the
application of the decision rule/evaluative procedures.
 WHERE ARE WE?
 What is the latest Item that you have bought and why have you
bought it?
 Which type of buying behaviour does it fall into?
 Why you bought it?
 What criteria did you use to narrow down the choice to but this
particular item?
 Is there any product that you wanted to buy, had found the match
and still walked out by not buying it?
 Why did this happen?
 OBJECTIVE
 Types Of Decisions Consumers Must Make.
 Individual Buying Behaviour Assumptions.
 Problem Solving Approaches.
 Reasons Of Purchase
 Purchase Delay
 Purchase Recognition
 Problem Recognition Process
 Types Of Problems
 Difference Between High Involvement And Low Involvement
Categories With Respect To Problem Recognition.
 Marketing Implications
 TYPES OF DECISIONS

1. What to buy ?
 Most fundamental decision made by any consumer
 This decision, apart from considering the general product category may
also look in for the specifications/brands
2. How much to buy ?
3. Where to buy ?
 Same product may be perceived to be very different depending on the
place its bought.
 Product and outlet choices are most of the times thought
simultaneously
4. When to buy ?
 Influenced by need and availability of the chosen product.
5. How to buy ?
 Complex issue
 CHARACTERISTICS OF PROBLEM
SOLVING APPROACHES
CBB DRBB HBB

Purchase Involvement level High Medium Low

Problem Recognition Complex Less Complex Automatic

Search & Evaluation Extensive Limited Minimal

Purchase Process Highly Involving Involving Convenience

Post Purchase Behaviour Complex Less Complex Limited

 PURCHASE: RESULT OF APPROACH

 They can occur out of necessity.

 Derived from culturally mandated lifestyle.
 Interlocked with other purchases.
 Purchase preference acquired in early life.
 Congruity to group norms
 Recommendation from Personal/non-personal sources.
 Made on the basis of Surrogates
 Occur on the basis of more superficial basis.
REASONS FOR DELAYING PURCHASES

 Difficulty in selecting the best brand.

 Time Pressure.
 Perceived Risk of product performance
 Uncertainty
 Task avoidance and unpleasantness
 PURCHASE RECOGNITION

 The process of being a function of the congruity between the

positive or negative valence value of some perceptual stimulus and
the respective positivity or negativity values for some evoked
referent.
 The effect of repeated occurrence of similar problems under
consideration
 Through Actual State change
 Through Desired State Change
 Through a combination of the two
 People are predominantly AS or DS Type
 One person can be AS type for certain goods and DS type for
others
 Which group of customers are of interest to marketers ?
 CONSUMER PROBLEM RECOGNITION PROCESS
Factors Affecting either
Factors Affecting Factors Affecting
Desired state or actual state
Desired state Actual state
Financial Considerations
Assortment Deficiency
Previous Decisions
Ref Groups Arousal of need
Personal Factors
Novelty Post Purchase Evaluation
Marketing efforts
Thinking

Desired state Actual State

Memory Info Processing Motives

Perceived
Ideal State
Discrepancies

Not a Consumer
Nature of Discrepancy Denial Excuses
Problem

Opportunity Need
Recognition Recognition

Consumer Problem Recognition

 CONSUMER PROBLEM RECOGNITION PROCESS

Problem Delineation Problem not defined

Info Search

Purchase
Intention
Consumer Action
Save

Borrow
No Customer Action

Resistance

Insufficient Low Insufficient Insufficient

Discrepancy Importance Resources Information
 TYPES OF PROBLEM RECOGNITION

Solution Urgency

Immediate Solution Required Immediate Solution Not Required

Occurrence
Expected Routine Planning

Occurrence
not Expected Emergency Evolving
 SITUTATION LEADING TO PROBLEM
RECOGNITION
 Depletion or Inadequate stock of goods
 Discontentment with the existing lot
 Changing Environmental Circumstances
 Changing Financial Circumstances
 Marketing Activities
 RESULTS OF PROBLEM RECOGNITION
High Involvement Categories
 Not to pursue further
 Magnitude of the Problem: Difference between the actual and the perceived
state is not sufficient.
 Importance of Problem: Constraints for - Time, Financial, Environmental, Family
values
 Pursue the Problem Recognition towards Decision Making
 Information Search & Evaluation

Low Involvement Categories

 Its characterized by point of purchase triggering or stimulation of problem recognition
based on familiarity with brands developed through repetitive advertisements.
 The problem recognition in this case not as a result of first time exposure to sales
promotions, perhaps because of a low level of appeal in which the customer may
have developed a mild interest in checking out the product’s suitability at some point
of time in the near future
 If found favuorable the product purchase tends to become routine.
 MARKETING IMPLICATIONS OF
PROBLEM RECOGNITION
MEASURING PROBLEM RECOGNITION
 Scaling Techniques

ACTIVATING PROBLEM RECOGNITION

 Influencing the desired state

 Through ads stressing on the benefits of the product ownership

 Encouraging product experiences through samples, test drives
 Influencing Perceptions of Actual State
 Interrupt consumer’s rather automatic decision making process eg.
Jaago rahe campaign, Anchor Tooth Paste Ad of Kajol
 Comparative Advertisements
 Influencing the Timing of Problem Recognition
 Ads at specific timings, festive seasons
 Promotions at point of sale for impulse purchase items
 MARKETING IMPLICATIONS OF
PROBLEM RECOGNITION
 Utilizing Problem Recognition Information
 Analyzing Purchase Intention Categories
 Analyzing Conversion of Purchase Intensions
 OBJECTIVE OF THE SESSION

 Major Types Of Consumer Information Seeking Activities

 Types and Sources of Information Used By Consumers
 Degree of External Search Used and Factors Influencing them
 Consumer Information Evaluation
 Marketing Strategies to Influence Search & Evaluation
 SEARCH AND EVALUATION

 Once the consumer has recognized the existence of a problem, and

there is no constraint he moves to the next stage
 How the consumer searches and evaluates is important to
manufacture and retailers.

 Information: Knowledge obtained about some facts or knowledge.

 Search: Mental and or physical information seeking and processing
activities which one engages in to facilitate decision making
regarding some goals-object in the market place
 The search could be for product, solution, experience, etc
 TYPES OF CONSUMER ACTIVITIES

 Based on the Purpose of Search

 Pre-purchase Search
 Ongoing Search

 Based on the Source

 Internal
 External
 PURPOSE OF SEARCH
 Pre-purchase Search
 The consumer recognizes the problem then pre-purchase search would
be engaged in.
 Ongoing Search
 Search Activities independent of specific needs or decisions, it doesn’t
occur in order to solve a recognized and immediate purchase problem.
Example :
 Planning & Evolving Problems
 In both though the purpose is different the process involved is the
same
 Determinants
 Motives
 Outcomes
FRAMEWORK FOR CONSUMER
INFORMATION SEARCH
Pre-purchase
Search
• Involvement in the Purchase
• Market Environment
• Situation Factors
Determinants
• To make better purchase
decisions
Motives
• Increased product and market
knowledge
Outcomes • Better purchase decisions
• increase satisfaction with the
purchase outcome
Ongoing
Search
• Involvement in the Purchase
• Market Environment
• Situation Factors
• Build a bank of information for
future use
• Experience fun and pleasure
• Increased product and market
knowledge
• Future Buying Efficiency
• Personal Influence
• Increased Impulse Buying
• Increase Satisfaction
 BASIS OF SEARCH
 Internal Search
 First Stage to occur as soon as the problem is recognized.
 Recall of information/experience store in the memory.
 Most shoppers rely on experimental information source in retail shopping
trips.
 Considerable amount of decision making may be done prior to external
search
 BASIS OF SEARCH
 External Search
 Process of obtaining information from other sources in addition to that
which can be recalled from the memory.
 Information about the existence and availability of various product
offerings
 Information useful in forming evaluative criteria
 Information on properties and characteristics of alternatives
 Generally used for
 Expensive Purchases : CBB, DRBB
 First purchases
 Novelty Involvement
 Sources of External Search
 Market Dominated : Advertisements, Promotions etc
 Customer : Existing Users
 Neutral : Government Publications, Magazines, Newspapers, Journals
etc
 AMOUNT OF EXTERNAL SEARCH
ACTIVITIES
 Consumers typically consult few information sources before making a
purchase.
 40% to 60% shoppers visit only one store before making a purchase.
 Limited number of alternatives are considered.
 People acquire limited amount of information about brands.
 Less than 12 seconds elapse between the time grocery shoppers arrive and
depart from a product display.
 In 85% of purchases only the chosen brands were handled.
 90% shoppers physically inspect one size only

 WHAT ARE THE REASONS FOR THIS LIMITED SERACH ?

 REASONS FOR EXTERNAL SEARCH

 Comfortable feeling due to informed purchase.

 Increased choice leading to more satisfaction.
 Positive feeling derived from being generally knowledgeable.
 Pleasure of shopping.
 Potential monetary payoff.
 POTENTIAL COSTS FOR EXTERNAL
SEARCH
 Time commitment
 Opportunity cost
 Frustration or tension involved in the activity
 Monetary Costs

ARE THE COST BENEFITS WE JUST DISCUSSED REAL OR PERCEIVED ?

 DETERMINANTS OF EXTENT OF
EXTERNAL INFORMATION SEARCH
 Market Environment
 Number of alternatives +
 Complexity +
 Information +
 Size of market +
 Situational Variables
 Time Pressure –
 Social Pressure –
 Financial Pressure +
 Ease of access –
 Knowledge & Experience
 Stored Knowledge +
 Usage rate –
 Previous Information +
 Brand Satisfaction -
 Individual Differences
 Ability to process info +
 Training +
 Enjoyment of shopping –
 Age –
 Income +
 Education –
 Self Confidence +
 Open Mindedness –
 Retail Variables
 Crowded Stores +
 Distance from store –
 Similarity bet. Stores –
INFORMATION-EVALUATION PROCESS

 Evaluative Criteria
 Consumer evaluates a brand on the basis of a number of choice criteria.
 The criteria may be subjective and or objective.
 Criteria selection and importance differ among consumers.
 These are dynamic concepts and change with time and attitude related
to buying behaviour.
 Innovative Product Launch.
 Innovative feature in existing product.
 New information from external source.

 WHEN DO PEOPLE USE MORE EVALUATIVE CRITERIA EXPENSIVE

OR INEXPENSIVE PURCHASES ?
 RANGE OF ALTERNATIVES
 Evoked Set
 Few selected brands evaluated positively by the consumers for
purchase/consumption.
 Inert Set
 Those brands that the consumer has failed to perceive any advantage in
buying.
 Evaluated neither positively nor negatively.
 Insufficient information to evaluate.
 Not perceived better than brands in evoked set.
 Inept Set
 Brands that are rejected based on experience or feedback.

 There is consistent proportional tendency between +ve and –ve

brand evaluations within a product category and it is related to the
size of awareness set and depth of information processing.
 Consumers may not use the same variables for both the evoked set
and the inept set.
 EVALUATING ALTERNATIVES
 Consumers evaluate the information on the basis of
 Brand Processing
 Attribute Processing
 Non Compensatory Decision Rules
 Good performance on one evaluative criteria doesn’t offset or compensate for
poor performance in an other evaluative criteria.
 Disjunctive Rule: Consumers establishes minimum acceptable performance
standards which must be met, any brand will be acceptable if it exceeds the
minimum standard.
 Conjunctive Rule: Consumer establishes a minimum acceptable level of each
attribute, for all the brands under consideration.
 Lexicographic Rule: Additional evaluative criteria to be incorporated if
necessary, there is specific order of elimination for the attributes.
 Sequential Rule: Establish acceptable performance minimums for each
evaluative criterion and then proceed to eliminate all which don't measure up
to these minimums.
 EVALUATING ALTERNATIVES

 Compensatory Decision Rules

 Perceived favourable ratings to offset unfavourable evaluations.
 Determine brands to be considered.
 Define their needs and rank them.
 Determine the degree to which brands meet their needs.
 Select brands that best meet their most important needs.
 WHERE ARE WE ?

 If the choices are less and the customer is well educated which decision
rule would he apply ?
 In case the product is evaluated on the basis of attributes which non
compensatory decisions rule would be used ?
 What are the implications for marketers if the consumer chooses the
product on the basis of attributes ?
 FACTORS INFLUENCING AMOUNT OF
EVALUATION
 The more urgent the need, the less evaluation will take place.
 The more significant the product to the buyer the greater amount of
evaluation
 The more complex the alternatives, the more evaluation will take
place.

 Alternative evaluation in low involvement situations

 It occurs after purchase, not before.
 Switching may occur due to incentives, even if the customer has a
favourable opinion.
 MARKETING IMPLICATIONS
 Studying the information search process
 Determining sources of information
 Data pertaining to the place the shopping took place.
 In-depth Research: Questionnaires
 Determining Source Influence
 Determining effectiveness of information source
 Influencing Consumer’s Evoked Set
 Measuring Evaluative Criteria
 Determining Criteria used by the consumers
 Determining the Importance of Criteria Used by Consumers
 Determining Consumer's Evaluations of Brand Criteria Performance
 Determining Customer’s Cue Usage
 Influencing Consumer's Evaluation
 Altering Cue Characteristics
 Alerting Information Value
THANK YOU