Consumer Buying Behavior & Opinion leadership

RUSHIKESH.T.PAWAR(07)

2012

CONSUMER BEHAVIOUR R.K.T College of Education

T College of Education. : 2012-2013. : Consumer Behavior. College Name  Year  Subject Name  Project On  Project By  Submitted To  University : R. : Consumer Buying Behavior & Opinion leadership : Rushikesh Pawar (07) : Professor.K. Neetu Mulchandani. : Mumbai 2 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR .

Her expert guidance. 3 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR .Acknowledgement I express my sincere thanks to Prof. constructive suggestion and sincere support and most of all for being an inspirational source in conducting this project successfully. Neetu Mulchandani for giving me an opportunity to work on a topic like Consumer Buying Behavior and Opinion leadership which gave a brief idea about how the process of Consumer Buying Behavior and Opinion leadership.

Introduction What influences consumers to purchase products or services? The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of consumers. Information search 4 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . The internet contains information about products (specifications). This is the first step in the consumer buying process. but which brand? Shall we buy the same brand as the one that blew up? Or stay clear of that just in case the new player experiences the same problems as the old one? Consumer often goes on an information search to help them choose their product. On the next page there is a discussion of what influences consumer buying behavior and the different types of buying behavior. What is the solution? Yes go out and purchase a new one. Information search So we have a problem. and retail staff and in this digital age the internet. otherwise you will not be able to play your Blue-Ray films So you have a problem or a new need. Consumers do not spend much time thinking about the purchase of low value products which are bought on impulse. Sources of information include family. Manufacturers of such products will need to implement strategies that encourage consumers to buy on impulse from them instead of their competitors. When consumers purchase high value products or non impulse products. Problem or Need Recognition How do you decide which particular product or service to purchase? It could be that your Blue-Ray DVD player stops working and you now have to look for a new one. product reviews and online product forums. This process is discussed below. they often go through a set process. friends. our Blue-Ray player no longer works and we need to buy a new one.

Appealing product features will be emphasized on product packaging. Consumer behavior is affected by many uncontrollable factors. Even if a consumer buys on this occasion a negative buying experience could stop them buying in the future. Once product may be a clear winner or the consumer may have to reprioritize their criteria to help them select a product. the media. Toshiba or Samsung player? Consumers often create a point system in their minds where products are scored based on how many of their features appeal to them. Purchase decision After the evaluation process consumers will select the product they would like to purchase. Just think. so that they will purchase from them again and recommend them to family and friends. in the hope that when such a consumer is ready to buy they will use the "stored" information about their product into account and buy their products. brand may be more important than price and for another customer product appearance may be important. So for one customer. Even at this stage the purchaser could change their mind and select a competitor product or cancel the purchase altogether. promotional materials and the manufacturer's websites. It is therefore just as important for manufacturer's promotions to reassure purchasers. The job of the seller is to ensure that the purchase process is simple and effective. impolite sales staff or complicated sales process can all dissuade consumers from buying. Evaluation of different purchase options So what Blue-Ray DVD player do we purchase? Will it be a Sony. Manufacturers of products clearly want purchasers to feel proud of their purchase.may involve a visit to a retail store to view products that the consumer is interested in purchasing. Firms will take such consumers into account when designing their marketing strategies. a role model or influences from certain groups? 5 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . Consumers also acquire and store information for future purchases. In our example the consumer is on an information search to solve an immediate problem. Promotions should make purchasers feel that they have bought their product from a strong and reputable organization with "good" products. In the case of a DVD player consumers may be reviewing sound and picture quality. as it is for them to attract new customers. Therefore sellers need to make the buying process as simple and enjoyable as possible to safeguard this and future purchases. what influences you before you buy a product or service? Your friends. Marketing strategies will try and influence this stage of the process by highlighting product features that they think will appeal to consumers. they intend to make a purchase at the end of the process. your culture. An evaluation system is particularly useful when there are a large number of options. Post Purchase Behavior Ever have doubts about the product after you purchased it? Research shows that this feeling is common post purchase behavior. your upbringing. A long queue.

the type of job may mean you need to purchase formal clothes. When this has been met they then move up to the next stage of the hierarchy. the income which is earned has an impact. Social needs come in the next level of the hierarchy. Esteem need is the need for status and recognition within society. a child is influenced by their parents. where the priority is with job security and knowing that you have a regular income. do consumers have a secure job and a regular income to spend on goods? Marketing and advertising obviously influence consumers in trying to evoke them to purchase a particular product or service. or people they look up to may influence their choices of purchasing a particular product or service. So it maybe a friend who works with the IT trade who may influence your decision on what computer to buy. Simply culture is defined as our attitudes and beliefs. Whether the person is extrovert (out going and spends on entertainment) or introvert (keeps to themselves and purchases via online or mail order) again has an impact on the types of purchases made. Reference groups are particular groups of people some people may look up towards too that have an impact on consumer behavior. Also characters have an influence on buying decision. So they can be a singer like the Lady Gaga or your immediate family members. What is their role within society? Are they Actors? Doctors? Office worker? And mothers and fathers also? Clearly being parents affects your buying habits depending on the age of the children. Supermarket firms develop value brands to meet the psychological needs of hunger and thirst. He set out his answer in a form of a hierarchy. Opinion leaders are those people that you look up to because your respect their views and judgments and these views may influence consumer decisions. He suggests individuals aim to meet basic psychological needs of hunger and thirst. These factors will influence their purchase behavior however other factors like groups of friends. which helps them develop these opinions. the need to belong or be loved is a natural human desire and people strive for this belonging. sister and other family member who may teach them what is wrong or right. Harrods develops products and services for those 6 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . But how are these attitudes and beliefs developed? As an individual growing up. status sometimes drives people. The economical environment also has an impact on consumer behavior. Maslow’s Hierarchy of Needs Abraham Maslow hierarchy of needs theory sets out to explain what motivated individuals in life to achieve. The lifestyle of someone who earns £250000 would clearly be different from someone who earns £25000. attitudes and beliefs (AIO). Self-actualization the realization that an individual has reached their potential in life. safety needs. marketing is about meeting needs and providing benefits.Status and Culture Culture is one factor that influences behavior. People's social status will also impact their behavior. the need to have a good job title and be recognized or the need to wear branded clothes as a symbol of status. The point of self-actualization is down to the individual. They learn about their religion and culture. when do you know you have reached your point of self-fulfillment? But how does this concept help an organization trying to market a product or service? Well as we have established earlier within this website. brothers. Maslow’s concept suggests that needs change as we go along our path of striving for self-actualization.

purchasing and post consumption of a product or service. So an individual may shop around for different breakfast cereals because he/she wants variety in the mornings! Dissonance reducing buying behavior is when buyers are highly involved with the purchase of the product.who want have met their esteem needs. Complex buying behavior is where the individual purchases a high value brand and seeks a lot of information before the purchase is made. because the purchase is expensive or infrequent. Types of buying behavior. There is little difference between existing brands an example would be buying a diamond ring. when they buy and 7 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . Habitual buying behavior is where the individual buys a product out of habit e. So Maslow’s concept is useful for marketers as it can help them understand consumer needs and wants. Consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching. sugar or salt. Consumer behavior involves study of how people buy.g. what they buy. there is perceived little difference between existing diamond brand manufacturers. a daily newspaper. There are four typical types of buying behavior based on the type of products that intends to be purchased. Variety seeking buying behavior is where the individual likes to shop around and experiment with different products.

citizenship etc. anthropology and economics.Psychological Factors These are internal to an individual and generate forces within that influenceher/his purchase behavior. attitudes or behavior of group members.Social Factors Social factors refer to forces that other people exert and which affect consumers’ purchase behavior. in that group there can be behavior patterns of values. So. perceptualand cognitive processes with respect to some aspect of our environment. this will influence and change his/her buying behavior. For example. These social factors can include culture and subculture. use of harmful and addictive drugs etc. he/she will meet different people and form a group. this will influence those customers to buy Sony products due to this attitude towards the brand. Social Factors2. handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol. for example style of clothing. sociopsychology. The major forces include motives. friends. Reference group refers to a group with whom anindividual identifies herself/ himself and the extent to which that person assumesmany values. attitude and personality. learning.Personal Factors. roles and family. Destructive behavior. reference groups and society in general. work group.Psychological Factors3. emotional. C.Consumer form attitude towards a brand on the basis of their beliefs about the brand.why they buy. For example. B. A. club membership. Factors Affecting Consumer Buying Behavior Consumer buying behavior is influenced by the major three factors: 1. school or college. consumers of Sony products might have the belief that the products offered by Sony are durable. Reference groups can befamil y. Example: By taking into consideration Reference group. Example: Attitude is an enduring organization of motivational. social class and reference groups.Personal Factors 8 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . It also tries to assess the influence on the consumer from groups such as family. perception. It blends the elements from psychology. these can influence/ affect theconsumer buying behavior. Buyer behavior has two aspects: the final purchase activity visible to any observer and the detailed or short decision process that may involve the interplay of a number of complex variables not visible to anyone. if fresher student joins a college / university. according to how an individual references him / her to that particular reference group. sociology.

9 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . a CEO or Manager is likely to buy more formal clothes. These factors include demographic factors.g. lifestyle.These include those aspects that are unique to a person and influence purchase behavior. Example: Lifestyle is an indicator of how people live and express themselves on the basis of their activities. Lifestyle dimension provide a broader view of people about how they spend their time the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. interests. and opinions. ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. and situationalfactors . E. So according to their lifestyle and profession. the buying behavior of people differs from one another. This is influenced by demographic factors and personality.

The two – step flow of communication theory highlights the role of interpersonal influence in the transmission of information from the mass media to the populations at large. retail outlets. they may feel differentiated from others and choose to act differently (or public individuation). Market mavens are also distinguished from other opinion leaders because their influence stems not so much from product experience but from a more general knowledge or market expertise that leads them to an early awareness of a wide array of new products and services. generally one of their interests. The opinion leadership process usually take place among friends. Other motives include product involvement. Additionally. These consumers possess a wide range of information about many different types of products. and other dimensions of markets. Marketers try to simulate and stimulate opinion leadership. the sociometric method and the objective method. Market researchers identify opinion leaders by such methods as self designation. these opinion leaders will transmit the information to those who seek product advice. opinion leaders are gregarious. which takes into account the fact that information and influence often are 2 way processes and that the opinion leaders both influence and are influenced by opinion receivers. Studies of opinion leadership indicate that this phenomenon tends to be product category specific. message involvement or any other involvement. 10 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . When marketers can direct their promotional efforts to the more influential segments of these markets. self confident. These conversations usually occur naturally in the context of the product-category usage. It is important for the marketers to segment their audiences into opinion leaders and opinion receivers for their respective product categories.What is Opinion Leadership? Opinion Leadership is the process by which the opinion leader informally influences the actions or attitudes of others. key informants. The diffusion process and the adoption process are 2 closely related concepts concerned with the acceptance of new products by customers. who may be opinion seekers or merely opinion recipients. They have also found that they can create opinion leaders for their products by taking socially involved or influential people and deliberately increasing their enthusiasm for a product category. neighbors and work associates who have frequent physical proximity and thus have ample opportunity to hold informal product related conversations. Opinion receivers perceive the opinion leader as a highly credible. This theory provides the foundation for a revised multi step flow of communication model. objective source of product information who can help reduce their search and analysis time and perceived risk. An opinion leader of one product range can be an opinion receiver for another product category. They both initiative discussions with other consumers and respond to requests for market information over a wide range of products and services. The diffusion process is a macro process that focuses on the spread of an innovation from its source to the consuming public. innovative people who like to talk. Opinion leaders are motivated to give information or advice to others. Their interests may often overlap into adjacent areas and thus their opinion leadership may also extend into those areas. in part doing so enhances their own status and self image and because such advice tends to reduce any post purchase dissonance that they may have. Who is a market maven? The market maven is an intense case of a opinion leader kind of person. Generally. They acquire information about their areas of interest through avid readership of special interest magazines and evinces and by means of new product trials.

Awareness. Market oriented (how long the product has been on the market or an arbitrary percentage of the potential target market that has purchased it). and that even after adoption there will be post adoption or purchase evaluation that might either strengthen the commitment or alternatively lead to discontinuation of the product/service. Five Product Characteristics influence the consumer’s acceptance of a new product: 1. 4. Firm oriented (new to the firm). the likelihood that some form of evaluation might occur through the entire process. 3. Market-oriented definitions of innovation are most useful to consumer researchers in the study of the diffusion and adoption of new products. 11 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . Marketing Strategists try to control the rate of adoption through their new product pricing policies. Evaluation Trial Adoption To make it more realistic. 5. Relative Advantage Compatibility Complexity Trial ability Observability Diffusion researchers are concerned with 2 aspects of communication – the channels through which word about a new product or service is spread to the public and the types of messages that influence the adoption or rejection of new products or services. 3. The 5 adopter categories are innovators. an enhanced model is recommended as one that considers the possibility of a pre existing need or problem. early majority. 4. such as a target market. or 4. Companies who wish to penetrate the market to achieve market leaderships try to acquire wide adoption as quickly as possible by using low prices. Product oriented (a continuous innovation. with the rate of adoptions and with the identification of sequential adopters. or A discontinuous innovation). Interest. The definition of the term innovation can be 1. The traditional adoption process model describes 5 stages through which an individual consumer passes to arrive at the decision to adopt or reject a new product: 1. a dynamically continuous innovation. Diffusion is always examined in the context of a specific social system. a community. Researchers are concerned with the amount of purchase time required for an individual customer to adopt or reject a new product/service. early adopters. a region or even a nation. Those who wish to recoup their developmental costs quickly use a skimming pricing policy but lengthen the adoption process. 2. Time is an integral consideration in the diffusion process. 3. 2. Consumer oriented (new to the customer). late majority and laggards. 5.The adoption process is a micro process that examines the stages through which an individual consumer passes when making a decision to accept or reject a new product. 2.

purchase and consumption traits.Companies marketing new products are vitally concerned with identifying the consumer innovator so that they may direct their promotional campaigns to the people who are most like to try new products. adopts them and influences others. These serve as useful variables in the segmentation of markets for new product introductions. Consumer Research has identified a number of consumer related characteristics. including product interest. media habits. social characteristics. Who are the innovators and early adopters for your products and services? How have you planned your diffusion strategy for the current products and the new products? 12 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . personality factors. and demographic variables that distinguish consumer innovators from later adopters. opinion leadership.

blogs 4. new feature product Tell-A-Friend email. Take Join blog & Part conversation 5. With that said. viral. Honest word of mouth marketers live by earning the respect of their customers. and other techniques that get customers talking about your products. bloggers 2. forwardable Message board. Word of mouth has been with us forever. In many cases. But word of mouth marketing is a new marketing specialty that is as actionable. Tools. buzz stunt. customers. evangelism programs 1. And it's fantastic products that get customers talking about you. blogs. 13 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . or anything that hides the marketer's involvement is strictly forbidden by the Word of Mouth Marketing Association (WOMMA) Code of Ethics. Track Blogpulse. The Five Steps in Word of Mouth Marketing Step Easy Advanced Influencer. Google message board Outreach teams. emotional and social media marketing. tractable. Talkers Volunteers. Word of mouth marketing (WOM) is an umbrella term for dozens of techniques that can be used to engage and energize customers. Stealth marketing.Word-Of-Mouth Marketing . Topics. Technorati.WOM Marketing’ When a consumer's interest for a company's product or service is reflected in their daily dialogs. It's great customer service that earns customer respect. trend analysis Feedster. WOM is never about deception. shilling. online communities. agent. campaigns by PR and customer service Advanced metrics program. coupon form. Word-of-mouth marketing can be encouraged through different publicity activities set up by companies. It includes buzz. new Viral campaign. loyalty programs. communities. Taking Part. Just as important. Tools Special offer. great service. or by having opportunities to encourage consumer-to-consumer and consumer-tomarketer communications. Topic 3. there are five basic steps that all word of mouth marketing campaigns share— the Five Ts of word of mouth marketing: Talkers. and plan able as any other form of marketing. WOM isn't actually "marketing" at all. Learn to identify these. and you'll be able to implement WOM in all of your marketing programs. WOM includes viral marketing. and Tracking. blog. and anything that breaks that trust will backfire.

they expect you to participate in that conversation. 4. The challenge: Find a topic that is interesting enough to motivate your talkers. simple idea that can be relayed successfully. Talkers: People who are more likely to relay your word of mouth message Talkers are often referred to as "influentials. and then give them tools to help facility that conversation. and encourage them to start talking about your brand." but they can be any group of people who have the enthusiasm and connections to relay your message to target audience. They can be sophisticated brandbuilding concepts. Taking part: Participating in the word of mouth conversation and engaging in a genuine two-way dialog This is the hardest part for most marketers to work with. or a tangential idea like "JetBlue has TVs. The challenge: Keep that conversation going by taking part in it. something as simple as a special discount coupon. there is no way to shut it again. or they can be bloggers who happen to cover your topic. When you open the door to real people. The challenge: Track the conversation and build it into your marketing plan. but it has exponential marketing power when you pack it into an easy-to-forward email. The challenge: To learn to identify the right core group and give them a topic that they are willing to talk about. They may be part of a formal evangelism program. giving them a story to share. The recent growth of word of mouth as a marketing technique is largely due to the growth of the tools that we have to support WOM conversations. you need to accept comments on your blog. Topics: Portable concepts for people to talk about. you'll be earning the respect and recommendation of your customers and building powerful long-term relationships.1. A blog is a tool that enables a company to talk directly with fans. however. you need to participate in the discussion board. simple ideas that are word-of-mouth friendly All word of mouth centers on creating the message that you want to spread. 2. 14 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR ." The specifics of the message don't matter. and you need to answer the phone. You need to respond to their messages. Sometimes they are new customers bubbling with enthusiasm. you'll get crackpots. Online communities create a home and focus for otherwise disparate conversations. You'll get negative feedback. but you need to give people something a clear. and you'll need to assign staff to listen and learn from the conversation. Good topics are portable: simple ideas that one person can relay to another. Formal evangelism programs provide the support and encouragement that keeps fans them talking. Once you open the door to word of mouth conversations with your talkers. sometimes they are rabid fans willing to spread your message. Tools: Techniques and technology that make it easier for word of mouth conversations to take place Word of mouth marketers make their biggest impact when they provide the infrastructure to help messages spread. A special friends-and-family discount may be worth talking about. At the same time. 3.

we can take that online conversation and project it into the offline world. It provides a level of genuine understanding that is more authentic that the data squeezed out of focus groups. The challenge: Learn to value this raw consumer feedback and to use it to build better companies. and when it's written down it's much easier to measure. 15 Consumer Buying Behavior and Opinion leadership | CONSUMER BEHAVIOUR . This represents a major knowledge boom for marketers. It lets you understand what consumers really think about your brand.5. The rapid growth of blogs and online communities have put much of the verbal consumer-to-consumer conversations in writing. and your products. your marketing. Tracking: Measuring the online conversation Amazing tools have been developed in the past year that enable us to understand how word of mouth conversations travel and how we can follow what consumers are saying about companies. From there.

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