Consumer Behaviour

Prof Sameer Kulkarni

Consumer Mind: A Black Box
Stimulus Company Controlled Product Price Advertising Promotion Display Distribution Social
Word of Mouth Reference Group

Buy

Consumer Mind (Black Box)

Response

No Buy

Customer Decision Making Process
Drivers of Change

Technology Development/ New Generations

Awarene ss
•Differ Pleasure vs. •Instant Pleasure

CUSTOMER

Values

•Individualism vs. •Collectivism

Social Structure

•Assertive •Exhibitionist •Self Concept •Life-Style •Aspirations

Personali ty

How they Buy ?
• High involvement products:
 High price  Complex features  Significant differences between alternatives  High perceived risk  Reflect self concept of buyer  E.g. Selection of a Car

How they Buy ?
• Low involvement products
 Alternatives within the same product class are similar  Does not reflect buyers self concept  Frequent brand switching behaviour • E.g. buying a bathing bar (Toilet Soap)

Purchase decision in low involvement products

Theory of evoked set (Howard & sheth’s theory)

Its not product but the Situation

• Routinized response • Limited problem solving • Extensive problem solving

Types of Buying Behavior

High Involvement Significant Differences Between Brands Few Differences Between Brands Complex Buying Behaviour Dissonance Reducing Buying Behaviour

Low Involvement Variety Seeking Buying Behaviour Habitual Buying Behaviour

Motivational reasons
• Sheth’s consumer motives
– Five dimensions of motivation concerning products/services benefits
• Functional – utility or function performed • Aesthetic/emotional – appearance or attractiveness • Social – status or esteem value • Situational – unexpected benefit • Curiosity – interest aroused

Purchase decision in high involvement products

Routinized response (straight re buy)
• Customer is aware of his /her choice • Decision is based on personal experience • Spends little /no time in choosing an alternative • Perceives low risks

Limited problem solving (modified re buy)
• Launch of a new product which leads in a change in the customer’s decision criteria. • Buying leads to trial purchase • Brand extension helps in removing obstacles • Perceives moderate risk

Extensive problem solving (new task)
• • • • • Requires extensive learning Awareness about alternatives is zero Has no decision criteria Unable to evaluate different brands Relocating to a new & unknown environment

Rational behind behaviour

Psychological Factors Motivation Learning Perception

Motivation (Sigmund Freud)

Influence on Buyer Behaviour

Values motivates in buying
• • • • • • Functional value Conditional value Social value Emotional value Knowledge value (according to Sheth , Newman & Gross)

Learning Theory
• Human behaviour is learnt One learns @ the pain of punishment Or @ the lure of rewards • Directing human behaviour is done by developing stimuli and cues which bring to fore the latent need • Attractive advertisement , shelf display, packaging, how to use instructions ,store layout ,availability & sales persons are examples of cues

Basis of Differences
• Gender differences – hunter=men, nurse=women • Intelligence differences – caste, class, education, etc. • Personality differences – job specializations

• Plato stated more than 2000 years ago: “No two persons are born exactly alike; but each differs from the other in natural endowments, one being suited for one occupation and the other for another.”

Cognitive dissonance theory
• Leon Festinger-1957 ,wrote the theory of cognitive dissonance • Psychological discomfort caused by inconsistency among a person’s beliefs , attitudes / actions e.g. smoking • Varies in intensity based on importance of issue & degree of inconsistency

Lifestyles (Indian Perspective)

• Survivors: Price conscious , not very knowledgeable , depressed. • Sustainers: Strugglers , swayed by brand guarantee , impulse buyers. • Belongers: Conventional conservative , nostalgic , unexperimental. • Emulators : Ambitious , upwardly mobile , status conscious , buy to impress others. • Achievers : Leaders , work in hi tech top line products. • I-am-me: Young , Self engrossed , impulsive. • Experimental : Pursue a rich inner life , High sense of social resp.

Buyer lifestyle