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Defining Consumer Behaviour
Consumer Behavior is the Process involved when individuals or groups select, use or dispose of Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires.
Based on Concepts of
Psychology Sociology Anthropology Marketing Economics
Issues During Stages in the Consumption Process
Pre Purchase Issues
How are consumer attitudes towards products formed and/or changed? What cues do consumers use to infer which products are superior to others?
How does a consumer decide that he/she needs a product? What are the best sources of information to learn more about alternative choices?
Is acquiring a product a stressful or pleasant experience? What does the purchase say about the consumer?
How do situational factors, such as time pressure or store displays, affect the consumer¶s purchase decision?
Post Purchase Issues
Does the product provide pleasure or perform its intended function? How is the product eventually disposed of and what are the environmental consequences of this act?
What determines whether a consumer will be satisfied with a product and whether he/she will buy it again? Does this person tells others about his/her experiences with the product and influence their purchase decision?
You figure it out how to give it to her. It may not be the person you thought you knew. MEET THE NEW CONSUMER and smile when you do because she is your boss. -Fortune Editor .Need to study You cannot take the consumer for granted any more Therefore a sound understanding of consumer behaviour is essential for the long run success of any marketing program. she tells you what she wants. Instead of choosing from what you have to offer.
Out of this 83% failed to reach marketing objectives Group EFO Ltd. 1993 .Why is this important? Out of 11000 products launched by 77 companies.. only 56% are present five years later Kuczmaski & Associates Only 8% of new product concepts offered by 112 leading companies reached the market. Feb 1. Marketing News.
Characteristics Affecting Consumer Behaviour Culture Social Personal Psychological Buyer .
Marketing and Environmental Forces These are the factors which exist in and around the company and affect its working either directly or indirectly. It can be divided into two categories: External Environment Internal Environment .
Understanding External Environment External analysis is the process of scanning and evaluating a company s various external environmental sectors in order to determine positive and negative trends that impact upon organizational performance 9 .
Components Of External Environment General Environment The general environment is composed of elements in the broader society that can indirectly influence an industry and the companies within the industry. political/ legal technological. socio cultural and economic 10 . It includes five factors or elements: Demographic.
buyers. product substitutes and the intensity of rivalry among competitors.Industry Environment Industry environment is a constellation of factors. suppliers. threat of new entrants. that directly influence a company and its competitive decisions and actions. 11 .
an investigation of the Social. Legal. Economic. Political. This takes the form of a SLEPT analysis. i. and Technological influences on a business.e. .SLEPT Analysis Before creating business plans or when evaluating existing ones it is important to 'scan' the General environment.
It acts out its ways of living in the context of social institution. . governmental and business institutions. including family. These ways are unique for different groups of people who follow it and thus become the demarcating line between these groups.Social and Cultural Analysis Anthropologists and sociologists define culture as ways of living built up by a group of human beings. A significant fact is that all facets of culture are inter-related. religious. which are transmitted from one generation to another. educational. you change one and it will have its effect on the other.
The reason cultural factors are a challenge to global marketers is that they are hidden from view. A universal (common character) is the mode of behaviour existing in all cultures and thus provide for standardisation of some or all aspects of the marketing program for global companies. . These companies often discover that much of the cultural diversity in the world turns out to be different ways of accomplishing the same thing. An important quest for the global market is to discover cultural universal.
The next slides has some funny yet monumental language problems that are big enough to take away your customers forever there by losing the core essence of international marketing Access to Market . understanding and speaking the local language is and invaluable asset for understanding the country s culture. . you need to know your customer s language to sell him your product. You can buy in your own country language.Communication Although English continues to grow as the international language for travel and business.
Norway bar Come alive with Pepsi Come alive out of the grave . it is suggested that the lobby be used for the purpose.Zurich hotel Ladies are requested not to have children in the bar.Paris hotel Drop your trousers here for best results .Germany Pepsi brings your ancestors back from the grave .China . Please leave your values at the desk . .Bangkok laundry The manager has personally passed all water served here Acapulco restaurant Because of the impropriety of entertaining guests of the opposite sex in the bedroom.
g. On the contrary in Chinese culture it is considered polite of take a portion of every food served and consider belching a sign of satisfaction. Other social behaviours if not known may put an international traveler at a grave disadvantage. and belch. . For e. like it is considered improper in gulf countries to ask a person for the health of his spouse. make noise while eating. Westerners consider it impolite to mound food on the plate.Social Behaviour There are a number of social behaviours and comments that have different meanings in other cultures.
thirst) . protection) Physiological Needs (hunger.Maslow s Hierarchy of Needs Self Actualization (Self-development) Esteem Needs (self-esteem. status) Social Needs (sense of belonging. love) Safety Needs (security.
Such operationalisations of culture are essential if empirical research is ever to build a theoretical structure for explaining cross-cultural differences in behaviour.Hofstede's Cultural Typology Hofstede s dimensions of Individualism. Power distance and Uncertainty avoidance are richly suggestive of psychological processes. Masculinity. By locating cultures on a four-factor map. . this seminal work has enabled crosscultural psychologists to select cultures for comparison on a priori basis.
clan. It relates to people's self-concept: 'I' or 'We'. .The four dimensions: Individualism versus Collectivism: Individualism stands for a preference for a loosely knit social framework in society wherein individuals are supposed to take care of themselves and their immediate families only. Collectivism stands for a preference for a tightly knit social framework in which individuals can expect their relatives. The key issue is the degree of interdependence a society maintains among individuals. or other ingroup to look after them in exchange for 5 unquestioning loyalty.
People in Large Power Distance societies accept a hierarchical order in which everybody has a place which needs no further justification for power inequalities. This affects the behaviour of both less powerful and more powerful members. . The fundamental issue addressed by this dimension is how a society handles inequalities among people. Large versus Small Power Distance Power Distance is the extent to which the members of society accept unequal distribution of power. This has consequences for building institutions and organizations.
Uncertainty Avoidance has consequences for the way people build their institutions and organizations. Weak Uncertainty Avoidance societies maintain a more relaxed atmosphere and deviance is more easily tolerated. Strong versus Weak Uncertainty Avoidance Uncertainty Avoidance is the degree to which members of a society feel comfortable with uncertainty and ambiguity. Strong Uncertainty Avoidance societies maintain rigid codes of belief and behaviour. promising certainty and protecting conformity. this dimension addresses how society views linearity of time and to control future or let it happen. These societies are intolerant towards deviant persons and ideas. Fundamentally. .
caring for the weak. Masculinity versus Femininity Masculinity stands for a preference in society for achievement. and material success. modesty. and the quality of life. heroism. Femininity. . Its opposite. The fundamental issue addressed by this dimension is the way in which a society allocates social (as opposed to biological) roles to the sexes. assertiveness. stands for a preference for relationships.
It is useful to understand the complexities of the host country legal system .POLITICAL AND LEGAL ENVIRONMENT Global marketing activities influenced by governmental institutions. political parties & organizations Unexpected Political or Legal Influences and failure to anticipate these events.
Ex: U. environmental laws.HOME COUNTRY POLITICAL AND LEGAL ENVIRONMENT No manager can afford to ignore the policies and regulations of the country from which he or she conducts international marketing transactions. Some legal and regulatory measures are aimed at international activities. Ex: labour laws. Gray Market: goods enter markets in ways not desired by the manufacturer.S. government pressuring India to establish safeguards for Intellectual Property Rights Violations of intellectual property rights occur anywhere. designed to help domestic companies. .
Political Environment determines attitude towards: Sovereignty Political risk Taxes Dilution of equity control Expropriation . Economic Sanctions can force countries to behave peacefully in international community. Governments may work to reduce trade barriers or to increase or to increase trade opportunities. Unilateral sanctions may not work and governments often consider them as being free of cost. Governmental actions that distort the free flow of trade in goods and services.
Passion or other strong emotions .Marketing s Impact on Consumers: The Meaning of Consumption Types of Relationship a person may have with a Product: Self Concept Attachment Helps to establish the User s Identity Nostalgic Attachment Serves as a link with a Past Self Interdependence Part of the user s Daily Routine Love Elicit Bonds of Warmth.
the Standards Against which People in a Culture Judge what is Right or Wrong.Marketing Ethics Business Ethics are Rules of Conduct that Guide Actions in the Marketplace. Good or Bad. .
. Do Marketers Create Artificial Needs? Response: Marketing attempts to create awareness that these needs do exist. rather than to create them. if approached from an Information Dissemination perspective. they do not have the ability to create miracles 2.FAQ s on Marketing Ethics 1. Are Advertising and Marketing Necessary? Response: Yes. 3. Do Marketers Promise Miracles? Not if they are honest.
Factors Affecting Buyer Behaviour Consumer 4Ps Marketing Environment Buyer Characteristics Buyer Decision Process Buyer Decision .
Marketing Stimuli 4 Ps Product Price Place Promotion .
Other Stimuli Marketing Environment Economic Technological Political Cultural .
Mass Marketing Same product to all consumers (no segmentation. i.e. Companies Divide Large.Market Segmentation Levels of Market Segmentation Through Market Segmentation. a commodity) Segment Marketing Different products to one or more segments (some segmentation. Marriott) . i. e. Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.
Market Segmentation Geographic Segmentation International National Regional/City .
Market Segmentation Demographic Segmentation Dividing the market into groups based on variables such as: Age Gender Family size or life cycle Income Occupation Education Religion Race Generation Nationality .
Market Segmentation Psychographic Segmentation Divides Buyers Into Different Groups Based on: .
Market Segmentation Behavioral Segmentation Dividing the market into groups based on variables such as: Occasions Benefits User status Usage rate Loyalty status Readiness stage Attitude toward product .
purchasing power. Effective programs can be designed to attract and serve the segments. Accessible Substantial Actionable .Market Segmentation Segments must respond differently to different marketing mix elements & programs Requirements for effective segmentation Measurable Size. profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve.
Evaluating Market Segments Segment size and growth Segment structural attractiveness Company objectives and resources .
Choosing a market-coverage strategy Company resources Degree of product homogeneity Market homogeneity Competitors¶ strategies .
the way the product is defined by consumers on important attributes the place the product occupies in consumers¶ minds relative to competing products.Positioning for Competitive Advantage Product¶s Position . Marketers must: Plan positions to give their products the greatest advantage in selected target markets .
Positioning Strategies Positioning by specific product attributes Positioning by benefits Positioning for user category Positioning for usage occasion Positioning against another competitors Positioning against another product class .
Step 3. Communicating and Delivering the Chosen Position. . Step 2. Identifying Possible Competitive Advantages: Competitive Differentiation.Steps to Choosing and Implementing a Positioning Strategy Step 1. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP).
Product Differentiation Physical attributes Service differentiation Personnel differentiation Location Image differentiation .
Which differences to promote? Important to customers Distinctive Superior Communicable to customers Preemptive Affordable Profitable .
Types of Buying Decisions High Involvement Significant differences between brands Few differences between brands Low Involvement Complex Buying Behavior DissonanceReducing Buying Behavior VarietySeeking Behavior Habitual Buying Behavior .
Buyer s Decision Process The Consumer Decision Making Process Stimuli Marketer Activities Others External Search Problem Recognition Search Evaluation Of Alternatives Formation of Intentions Environmental Influences Culture Social Class Reference Groups Personal Characteristics Evaluation Criteria Attitude Formation Internal Search Purchase Consumption Outcomes .
Buying Roles Initiator Influencer Decider Buyer User .
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