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Consumer Behavior

Consumer Behavior
Processes a consumer uses to make
purchase decisions, as well as to use and
dispose of purchased goods or services;
also includes factors that influence
purchase decisions and the product use.

Consumer Behavior

consumers make
purchase decisions

Consumer
behavior = HOW

consumers use and

dispose of product

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THE INDIVIDUAL

INTERVENING
STIMULUS VARIABLES BEHAVIOR

TV Ad, Trigger Buy or not Buy

CAN BE OBSERVED

BLACK BOX, MENTAL VARIOUS

PROCESS & CANNOT BE PSYHCHOLOGICAL &
OBSERVED DIRECTLY SOCIOLOGICAL
THEORIES TO EXPLAIN

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Consumer
Psychology

Motivation
Perception Buying Decision
Purchase
Marketing Other Learning process
Decision
Stimuli Stimuli Memory Problem recognition
Info Search
Product Choice
Products & Evaluation of
Brand Choice
Services Economic Alternative
Purchase Amount
Price Technological Consumer Purchase decision
Purchase timing
Distribution Political Characteristics Post-Purchase
Payment Method
Comms Cultural behavior
Cultural
Social
Personal

CULTURAL
FACTORS

SOCIAL CONSUMER BUYING

FACTORS BEHAVIOR*

PERSONAL
FACTORS

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Cultural factors
Culture : fundamental determinant of a
person’s wants and behaviors acquired
through socialization processes with family
and other key institutions.
What are the values that we are exposed
to ???
- Saving
- Value for old things??
……………………………………………

Smaller Sub Cultures

Each culture consists of smaller subcultures
that provide more specific identification &
socialization for their members
Ex- Nationalities, religions, racial groups,
geographic regions
Within Indian Market do we have sub-
cultures?
South Vs North, State-wise, Within
State…base on food , traditions, festivals
Is there a need to target them specifically?

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Social Class
• SEC classifications in urban based on a
combination of education Vs occupation of
the chief wage earner

• In Rural occupation and type of house of

the main wage earner

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Social Class
• Those within each class tend to behave
more alike than two from two different
classes
• Social Classes show distinct product and
brand preferences in many areas, clothing,
home furnishing, leisure , automobiles…

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The Impact of Social Class on

Marketing

1. Indicates which medium to use for

advertising

2. Helps determine the best distribution

for products

Social Factors

Reference
Family
groups

Social
Statuses
roles

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Reference Groups
• Membership- primary, secondary
- exposes an individual to new behaviors &
lifestyles, Influences attitudes & self
concept, pressure for conformity
• Aspirational? Harley Davidson …
• Dissociative?
Opinion leaders , Tipping Point…..

Influences of Reference Groups

1. They serve as information sources
and influence perceptions

2. They affect an individual’s aspiration

levels

3. Their norms either constrain or

stimulate consumer behavior

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Family
• Family of Orientation
– Religion
– Politics
– Economics

• Family of Procreation
– Everyday buying behavior

Family

Purchase Roles • Initiators

in the Family
• Influencers
• Decision Makers

Children Influence
• Purchasers
Purchase Decisions
• Consumers

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In India???
– Joint Family System in India , Nuclear
families, Pester Power??
– New Products to cater to nuclear families Ex-?

Relationships among Purchasers

and Consumers in the Family

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Personal Factors
• Age, aging population
vs younger population
• Life cycle stage diff
opp at diff age, critical
life events
• Occupation
• Wealth
• Personality, linkage
with brand
personality, buying
behavior
• Lifestyle, pattern of
living. Money
constrained vs. time.
leading to new
products & services

Key Psychological Processes

• Perception
• Motivation
• Learning
• Memory

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Perception

Perception
Process by which people select,
organize, and interpret stimuli
into a meaningful and coherent
picture.

Motivation

• Freud’s theory, unconscious & projective

techniques used..
• Maslow’s hierarchy of needs
• Herzberg’s two-factor theory, satisfiers &
dissatisfiers, necessary vs sufficient , take
care of diss and increase satisfiers

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Consumer Decision-Making
Process

Consumer Decision-Making
Process
A five-step process used
by consumers when
buying goods or services.

Consumer Decision-Making
Process
Need Recognition

Information Search
Cultural, Social,
Individual and
Psychological Evaluation
Factors of Alternatives
affect
all steps Purchase

Postpurchase
Behavior
All Steps??

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Need Recognition

Need Recognition

Result of an imbalance
between actual and desired
states.

Need Recognition

Preferre
Present d State
Status

Marketing helps consumers recognize

an imbalance between
present status and preferred state

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Stimulus

Stimulus
Any unit of input affecting one
or more of the five senses:
sight
smell
taste
touch
hearing

Want

Want

Recognition of an unfulfilled
need and a product (or
attribute or feature) that will
satisfy it.

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Recognition of Unfulfilled Wants

• When a current product isn’t
performing properly

• When the consumer is

running out of a product

• When another product seems

superior to the one currently used

Information Searches
Internal Information Search

 Recall information in memory

External Information search

 Seek information in outside

environment
 Non-marketing controlled
 Marketing controlled

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Sources of Information
• Personal, Family friends, neighbors,
acquaintances
• Commercial. Ads, Web Sites*, salespersons,
dealers, packaging, displays
• Public, Mass media, consumer rating
• Experiential, handling examining, using the
product
-Relative amount & influence vary with product
category & buyer
-Most info – commercial, but effective thru….
- Info vs Legitimizing or evaluation

External Information Searches

Need Less Need More
Information Information

Less Risk More Risk

More knowledge Less knowledge
More product experience Less product experience
Low level of interest High level of interest
Confidence in decision Lack of confidence

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Consideration Set

Evoked Set (consideration

set)
Group of brands, resulting from
an information search,
from which a buyer can choose.

Evaluation of Alternatives
Evoked Set
Analyze product attributes

Use cutoff criteria

Rank attributes by
importance
Purchase!

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Total Set Decision

Evaluation of
Alternatives

Intervening Factors

Purchase
Decision

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Intervening Factors
• Attitude of others?
- Even impact of reviews on TV , blogs..
• Unanticipated situational factors….
• Risk
- functional – performance??
- Physical – use personal or others
- Financial – Worth?
- Social – Others?
- Psychological –mental
- Time – opp cost of finding another product in case this
fails………

Post Purchase Behavior

Why is it important?

Dissatisfaction

Performance Satisfaction

Delight

When Does Customer Delight Happen?

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Cognitive Dissonance

Cognitive Dissonance
Inner tension that a consumer
experiences after recognizing
an inconsistency between
behavior and values or
opinions.

Reducing Cognitive
Dissonance
Consumers can reduce dissonance by:

• Seeking information that reinforces positive

ideas about the purchase

• Avoiding information that contradicts the

purchase decision

• Revoking the original decision by returning

the product

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Postpurchase Behavior

Cognitive Dissonance

?
Did I make a good decision?

Did I buy the right product?

Did I get a good value?

Can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties

Types of Consumer Buying

Decisions

Routine Limited Extensive

Response Decision Decision
Behavior Making Making

Less More
Involvement Involvement

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Five Factors Influencing

Decisions

1. Level of consumer involvement

2. Length of time to make decision

3. Cost of good or service

4. Degree of information search

5. Number of alternatives considered

Continuum of
Consumer Buying Decisions

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Level of Involvement
Previous
Experience
Interest

Perceived Risk of
Factors Determining Negative
Level of Involvement Consequences

Situation
Social Visibility

Marketing Implications of
Involvement

High-involvement Extensive and informative

purchases require: promotion to target market

In-store promotion,
Low-involvement eye-catching package
purchases require: design, and good displays

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Consumer
Psychology

Motivation
Perception Buying Decision
Purchase
Marketing Other Learning process
Decision
Stimuli Stimuli Memory Problem recognition
Info Search
Product Choice
Products & Evaluation of
Brand Choice
Services Economic Alternative
Purchase Amount
Price Technological Consumer Purchase decision
Purchase timing
Distribution Political Characteristics Post-Purchase
Payment Method
Comms Cultural behavior
Cultural
Social
Personal

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