Consumer Decision Making Process

Demographic Profiles CCDC Barista Starbucks Costa

Non loyal respondents Loyal CCDC responses to coffee consumer cafes responses
1 It is an expensive brand of coffee

Loyal Barista consumer responses

4.23
3.85 2.53 3.33 3.63

2.31
4.11 3.97 3.91 3.66

2.57
3.97 3.09 3.43 3.86

The brand's customers are young and highly 2 aspirational

3 The place is for everyday coffee lovers

The people who visit this place are tech savvy 4 and possess the latet gadgets The aroma of this brand of coffee is very 5 pleasant This brand is meant to dissociate the coffee 6 drinking habit from being a mundane activity
7 The coffee is priced competitively

3.03 2.33

3.46 3.29

2.8 3.14

The people who drink this brand of coffee are 8 professionals and are sophisticated
9 The brand's caf is a place to hang out

3.38 3.9 2.7

4.2 4.03 4.23

3.2 3.26 3.97

The brand's caf is the perfect place to enjoy 10 solitude.

Loyal CCDC Non loyal respondents consumer responses to coffee cafes responses 11 The brand projects a 12 It

Loyal Barista consumer responses

sophisticated image.

3.8 3.63 3.08 3.45 3.63 3.9 2.48 3.58 3.1 3.28 3.43 3.48

4.2 3.63 3.23 4.26 3.86 2.6 3.71 3.86 2.6 3.71 3.69 4.03

4.26 3.09 4 3.69 3.77 3.89 3.74 3.4 2.29 4.17 4.03 4.23

is a trend to drink the brand's ccoffee. The brand's coffee makes one feel proud 13 about drinking coffee. The brand reminds me of my friends and 14 the times we spent together The brand's caf is a place for recreation, 15 appropriate for one to enjoy and have fun. The brand's caf is a place to spend time 16 with friends.
17 The prices

are reasonable and affordable. The customers are urban people who 18 follow the latest fashion. This brand is meant for highly recognised 19 people. The brand has the authentic colour of 20 coffee. Consuming this brand of coffee makes one 21 feel refreshed and energised. 22 The brand uses quality ingredients.

Non loyal respondents responses to coffee cafes

Loyal CCDC consumer responses

Loyal Barista consumer responses

The brand's caf is a place to meet 23 new people The dcor of this brand's caf 24 reminds people of luxury. The strength of this brand's coffee is 25 appropriate and has a lasting effect. One feels westernised while drinking the coffee associated with 26 this brand. The brand's caf is a place to have 27 formal meetings. This brand stands for quality coffee 28 that guarantees satisfaction. The entire setting of this brand's caf such as its interiors, lighting. 29 Dcor, etc creates excitement. A large variety of beverages is 30 available at this brand's caf. The interiors of this brand's caf 31 makes me feel relxaxed. 32 The brand highlights one's status

2.55 3.25 3.3

4.37 4.11 3.91

4.17 4.06 4.17

3.35 2.95 3.5

3.17 4.26 3.89

3.29 3.77 4.11

3.5

3.89

4.03

3.33
3.58 3.53

3.71
4.71 3.57

3.31
4.17 4.34

Self-fulfilling Effect or the Pygmalion Effect

the difference between a lady and a flower girl is not how she behaves but how she's treated. I shall always be a flower girl to Professor Higgins, because he always treats me as a flower girl, and always will, but I know I can be a lady to you because you always treat me as a lady, and always will."

Model of Consumer Behavior

INTERNAL

EXTERNAL
PROCESS OUTPUT

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Indian Consumer Share of Wallet

2005
Food, Beverage, Tobacco

2025 25% 20% 13% 11% 9% 10% 6%

42% 17% 7% 8% 5% 12% 2%

Transportation Health Care Personal products Education & recreation Housing & utilities Communication

Apparel Household Products

6% 3%

5% 3%

Source : McKinsey Global Institute

How India Spends 2009-10 (NSS)

Expenditure Cereals Pulses Fruit & veg Sugar Milk & Milk pr Eggs, fish,meat Edible oil Beverages Other FMCG Pan & Intoxicants FOOD Bottom (10%) 24.9 4.7 9 2.4 4.1 2.9 4.8 5.1 4.8 2.2 64.9 Middle(4050%) 16.2 4.1 8 2.6 8.8 3.7 3.9 5.4 4.9 2.3 59.9 Top (10%) 4.8 1.6 4.7 .9 6.2 2.1 1.5 7.1 3.4 0.9 33.2 All India 12.5 3.3 7 2 7.9 3.1 3.1 5.7 4.4 1.7 50.8

How India Spends 2009-10 (NSS)

Expenditure Durables Fuel & Light Clothing Education Health Conveyance Consumer Service Others Non Food Total Bottom (10%) 2.3 11.9 7 1.7 3 1.4 3.1 4.4 35.1 Middle(4050%) 2.7 1 10.2 6.3 3.1 4.6 3.2 4.5 4.6 40.2 Top (10%) 9.8 1.5 5.5 4.6 12.2 7.4 7.7 8 9.9 66.6 All India 4.8 1.2 8.5 5.7 6.1 5.7 4.9 5.6 6.6 49.2

Entertainment 0.3

Some key sources of data NCAER Indian Readership Survey Ministries McKinsey Global Institutes study on The Rise of Indias Consumer Market

What Influences Consumer Behavior?

Cultural Factors

Social Factors

Personal Factors

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According to Hofstede (1980),culture is the collective programming of the mind which distinguishes the members of one human group from another. Culture determines the identity of a human group. Hofstede distinguishes values as individual and cultures as societies.

Culture Power Distance Individualism & Collectivism Masculinity & Feminity Uncertainity

What is Culture? Culture is the fundamental determinant of a persons wants and behaviors acquired through socialization processes with family and other key institutions.

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Cultural Factors Did culture influence consumer behavior of your product: Sub culture : race, geography, religion, nationality. Social Class : Education & Occupation

Socio economic Classification Urban : Occupation & Education ( SEC A, B,C & D ) Rural : Type of House ( pucca, semi-pucca and kucha ) and education ( R 1, R2 etc )

Socioeconomic Classification (SEC) MatrixIndia (Urban)

The rural area is segregated in to: R1, R2, R3, R4.

Education of chief wage earner Professional degree Graduation/ PG College SSC/HSC Class 4-Class 9 Up to class 4 Pucca R1 R1 R1 R2 R3 R3

Type of House Semi-pucca R2 R2 R2 R3 R3 R3 Kuchcha R3 R3 R3 R3 R4 R4

Self-learning
Illiterate

R3
R4

R4
R4

R4
R4

No of HHs ( % of HH) in each segment

Urban A1:1 A2: 1.9 B1: 2.5 B2: 2.6 C: 6.2 D: 7.0 E1: 3.2 E2: 5.4 Sub-Total : 28.8
Source : Marketing Whitebook

Rural R1: 2.7 R2: 7.6 R3: 26.9 R4: 33.0 Sub-Total : 70.2

Characteristics of Social Classes Within a class, people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Class designation is mobile over time

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Social Factors Identify the following of your consumer:

Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups Opinion Leaders

What other Social Factors influenced your products consumer behavior?

Reference groups

Family

Social roles
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Statuses

Roles and Status

What degree of status is associated with various occupational roles?

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Personal Factors
Age Selfconcept Life cycle stage

Lifestyle
Values

Occupation
Wealth

Personality
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The Family Life Cycle

Group #5: Explain your study in this context.

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Brand Personality

Group #6: Explain your study in this context.

Sincerity
Excitement Competence Sophistication Ruggedness
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Lifestyle Influences

Group #7: What was the lifestyle of your consumer?

Multi-tasking

Time-starved
Money-constrained

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Faysal Bank of Pakistan has extended banking hours for timepressed executives.

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LOHAS (Lifestyles of Health and Sustainability) Market Segments Sustainable Economy Healthy Lifestyles Ecological Lifestyles Alternative Health Care Personal Development

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Model of Consumer Behavior

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Key Psychological Processes

Motivation

Perception

Learning

Memory

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Motivation
Maslows Hierarchy of Needs Behavior is driven by the lowest, unmet need Herzbergs Two-Factor Theory Behavior is guided by motivating and hygiene factors

Freuds Theory Behavior is guided by subconscious motivations

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Maslows Hierarchy of Needs

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Herzbergs Two-Factor Theory

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Absence of dissatisfiers not enough. Satisfiers must be present.

Herzbergs theory
Herzbergs theory has two implications. First, sellers should do their best to avoid dissatisfiers (for example, a poor training manual or a poor service policy). Although these things will not sell a product, they might easily unsell it. Second, the seller should identify the major satisfiers or motivators of purchase in the market and then supply them. These satisfiers will make the major difference as to which brand the customer buys.

Perception
Selective Attention
Selective Retention Selective Distortion Subliminal Perception
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State Farm Mental Map

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Mental Accounting Consumers tend to Segregate gains Integrate losses Integrate smaller losses with larger gains Segregate small gains from large losses

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Consumer Buying Process

Problem Recognition Information Search Evaluation Purchase Decision Postpurchase Behavior
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Problem Recognition

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Sources of Information

Personal

Commercial

Public

Experiential

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Figure 6.5 Successive Sets Involved in Consumer Decision Making

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Rural Consumer Behaviour Rural consumers are more brand loyal Restrictions on consumption Collective consumption behaviour: for family rather than individual Seasonality of consumption based on seasonality of agricultural production/income Specific patterns in the five-stage buying decision process
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Other Theories of Consumer Decision Making

Involvement
Elaboration likelihood model Low-involvement marketing strategies Variety-seeking buying behavior

Decision Heuristics ( non rational)

Availability quickness & ease Representativeness ie how similar is the outcome Anchoring and adjustment . First impressions are lasting impressions.

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