INTRODUCTION TO BUYER BEHAVIOR

At the end of this module, the learning

outcomes are:

• Buyer behavior is a ‘complex’ process

• Various factors affecting buyer behavior

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INTRODUCTION TO BUYER BEHAVIOR
Suggested readings
• Marketing Management
by Philip Kotler, 14th edition, Chapter 5

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 CONSUMER BUYING BEHAVIOR
India Airlines
• Monopoly for a long time
• Competition in 90’s
• Bought new aircrafts
• Modern aircrafts
• Modern airport terminals
• Still losing market share
• What went wrong
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 Launch of Aarey Milk based drink

• Milk based products

• Full of nutrients
• Launched as ‘Health Drink’
• Targeted on children

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• Children not enthused
• Poor sales
• Relaunched as ‘Fun Drink’
• Children drinking on Picnics, Birthdays
• Children enthused
• Sales picked up

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 LOOK AT THESE
• Why frozen vegetables sales are sluggish?
• Why Bru Espresso sales has not taken off?
• Why Kellogg’s cornflakes is struggling with
sales?
• Failure of Soya based drinks

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 WHAT DO WE OBSERVE
• Importance of understanding consumer behavior
• Organization need to understand
• Why consumers buy?
• When consumers buy?
• What consumers buy?
• What are the factors influencing his buying?

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 BUYER: AN ENIGMA
• 80% of new products launched fail
• Failure to understand buyer behavior
• Buyer – A Black Box
• Marketers still trying to solve this riddle

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 Consumer Behavior
Consumer behavior is the study of
how individuals, groups, and
organizations select, buy, use, and
dispose of goods, services, ideas,
or experiences to satisfy their
needs and wants.
 What Influences
Consumer Behavior?
Cultural Factors

Social Factors

Personal Factors
 What Is Culture?
Culture is the fundamental determinant
of a person’s wants and behaviors
acquired through socialization processes
with family and other key institutions.
Culture
• Children
• Stay with parents in India
• Become independent very early in US

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 Subcultures
• Nationalities
• Religions
• Racial groups
• Geographic regions
Social Factors
Reference groups

Family

Social roles

Statuses
 Social Factors
Reference Groups
• Social Classes
• People with similar thinking approach stay together
• SEC
• Socio-Economic Classification
• Combination of education and occupation
• Of the chief earner
• Classify buyers in the urban area
• Each class display different preferences

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 Social Classes
A1

A2
B1

B2
C
D
E1

E2
 Social Factors
• Reference Groups
• Direct and indirect influence group on the
attitudes or behavior

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 Reference Groups
• Membership groups
• Primary groups
• Secondary groups
• Aspirational groups
• Dissociative groups
 Social Factors
Membership groups
• Groups having a direct influence.
• Consists of
• Primary groups
– Family members
• Secondary groups
– Professional groups

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 Social Factors
• Aspirational groups
– Those a person hopes to join
• Disassociative groups
– Behavior individual reject

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 Social Factors

Family of orientation: parents and

siblings
 Family of procreation: spouse and
children
 Social Factors
Family
• One research indicated
• Two-third of 13 to 21-year-olds make or
influence family purchase decisions on mobile,
software and vacation decisions.
• Teens spend over 120 billion $ a year.
• Role of television and internet
• Increasing role of teens in family decision making

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 Personal Factors
• Age • Personality
• Life cycle stage • Values
• Occupation • Lifestyle
• Wealth • Self-concept
 Personal Factors
• Age and Stage of Lifecycle
• 63% of Indian families are nuclear
• Average family size is 4.5

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Age and Stage of Lifecycle
 Occupation and Economic
Circumstances
Marketers try to identify the occupational
groups that have above-average interest in
their products and services. Product and
brand choice are also affected by economic
circumstances—spendable income,
savings and assets, debts, borrowing
power, and attitudes toward spending and
saving—to a great extent.
 Personality
Personality refers to a set of distinguishing
human psychological traits that lead to relatively
consistent and enduring responses to
environmental stimuli. Personality can be a
useful variable in analyzing consumer brand
choices.
 Brand Personality
• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness
 Brand Personality
Brands strong on a particular trait
Ruggedness
• Levi’s
Excitement
• MTV
Competence
• CNN
Sincerity
• Campbell
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Lifestyle and Values
 Model of
Consumer Behavior
 WHAT DOES THE CONSUMER BUY

• Consumer buys products

• Reflects his/her personality
• Two types of products
– High Involvement
– Low Involvement

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 CONSUMER BEHAVIOR
HIGH INVOLVEMENT PRODUCTS
Characteristics
• Price
• Complex features
• Large differences between alternatives
• High perceived risks
• Reflect self-concept of buyers

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 CONSUMER BEHAVIOR
LOW INVOLVEMENT PRODUCT
Characteristics
• Less reflection of buyers self concept
• Alternatives within the same product class are
similar
• Frequent brand switching behavior

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 BUYING SITUATIONS
• Situations vary
• Due to
- Awareness of company brands
- Customer has a decision criteria
- Customer is able to evaluate and decide
on his choice

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 BUYING SITUATIONS
Three buying situations
• Straight Rebuy
• Modified Rebuy
• New Task

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 STRAIGHT REBUY
• Customer aware of his choices
• Spends little time on choices
• Highly brand loyal
• Highly satisfied
• Example
ITC – Wills smoker

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 MODIFIED REBUY
• Introduction of competing brands
• Changes decision criteria
• Takes trial
• Unhappy with his/her existing brand

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 NEW TASK
• High risk situation
• Creation of new situation
Example
• White hair
• What do you do
• Regain original color

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 NEW TASK
• What to go for?
• Ayurvedic applications
• Godrej hair dye
• High risk?
• Damage to hair

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 PSYCHOLOGICAL FACTORS
These are:
• Motivation
• Learning
• Perception

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 MOTIVATION
• Will you buy a scooter when you are not able to
buy basic necessity e.g: Food
• Maslow’s hierarchy of needs

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 LEARNING
• Happens
• Lure of rewards
• Pain of punishment
Example
- Holiday trip to Goa
• See attractive offer of Taj holidays
• Motivates you
• Visit Goa
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 LEARNING
• Evaluate actual versus expected experiences
• If exceeds, repeat visit likely
- Suggest to others
• If short , no repeat visits
- Suggest not to visit

We learn from experiences

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 PERCEPTION
• Daily exposed to information
– Kiosks
– Newspaper
– Internet
– Television
– Friends

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 PERCEPTION
• Human being see or hear only what they want
to anticipate
• This is ‘perception’
• Issues related to perception
– Selective attention
– Selective distortion
– Selective retention

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 PERCEPTION
Selective attention
• Do we pay need to all advertisements
• We skip many
• Why?
• We pay selective attention to certain stimuli
• We pay attention to things which we feel will
help us
• Marketers try to understand this
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 PERCEPTION
Selective distortion
• When we see messages
• We add our own values/beliefs
• Filter the original message
• Distort
Example
Feviquick advertisement

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 PERCEPTION
Selective retention
• How many advertisements you saw yesterday
are able to recall?
• Very few
• Results show less than 5%
• Marketers need to create message in a
manner which customers are able to recall?

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 PERCEPTION
Example
Teaser Ads
Look for this space tomorrow and win an
exciting prize

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Consumer Buying Process
Problem Recognition

Information Search

Evaluation of alternatives

Purchase Decision

Postpurchase Behavior
Sources of Information

Personal Commercial

Public Experiential
Successive Sets in Decision Making
A Consumer’s Brand Beliefs about
Laptop Computers
 Purchase Decision
• Forms preferences among the brands
• Intention to buy
• The most preferred brand
• Five subdecision
– Brand
– Dealer
– Quantity
– Timing
– Payment method

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Steps Between Alternative Evaluation
and Purchase
 How Customers
Use or Dispose of Products