Consumer Behaviour Models UNIT-2

Dr. Urvashi Makkar Professor & Chairperson- Marketing, IMS, Ghaziabad

Agenda 
           

Consumer Decision Making Framework Reference Groups Various Layers of Consumer¶s Variables having Impact on Market-Driven Approach Kotler¶s Consumer Behaviour Model Stages in Buyer Decision Making Pre-Purchase Information Search Factors affecting Process of Decision Making in PrePurchase Search Post- Purchase Decision Choice Criteria depends on 3 levels of Decision Making Cognitive Dissonance Howard-Sheth Model of Consumer Behaviour Consumer SegmentationAn Important Tool to Understand Consumer Decision Making Consumer Profiling

Consumer Decision Making Framework
Social Factors
Family Influence, Reference group influences, Roles and Status

External

Cultural Factors

Culture, Sub-Culture, Social Class

Consumer as Decision Maker Psychographics,Motivation ,Personality, Occupation, Economic circumstances, Age and family life cycle

Beliefs and Attitude, Learning

Psychological Factors

Internal

Personal Factors

Reference Groups

Reference Groups: Primary/ Secondary Formal / Informal  Membership/ Symbolic

Individual Family Friends Social Class

Various Layers of Consumer¶s Variables having Impact on MarketDriven Approach Market Driven Approach Motivational Layer Attitudinal Layer Behavioral Layer Demographic Layer .

Kotler¶s Consumer Behaviour Model Step I Input/ External Influences Marketing Stimulus (i)  Product  Price Step II Process/ Consumer Decision Making Buyer Characteristics (i) Psychological Personal Culture Buyer Decision Process (ii) Step III Output/ Consumer Decisions/ Actions Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount Other Stimulus (ii)  Economic Technological Promotion Political  Channels Social Culture of Distribution .

Stages in Buyer Decision Making (Buyer Decision Process) Problem Recognition Pre-Purchase Information Search Evaluation of alternatives Purchase Decision Post.Purchase Decision .

Perception. Attitude Experience Process Evaluation of Alternatives Post-Decision Behaviour Purchase Output Post-Purchase Evaluation -Trial -Repeat Purchase .Social Class .Channels of Distribution Consumer Decision Making Information Processing Frame work Need Recognition Pre-Purchase Search Psychological Field Motivation.Family -Informal Sources .Promotion .Culture Input .Price . Learning. Personality.Kotler¶s Consumer Behaviour Model External Influences Firm¶s Marketing Efforts (Stimuli) Social/Cultural Environment . .Product .

Purchase Satisfaction Pre-Purchase Search Post-Purchase Behaviour Cognitive Dissonance .

Factors affecting Process of Decision Making in Pre-Purchase Search Involvement  Differentiation  Time Pressure  .

) Involvement High Low Differentiation Highly High Differential/ Complex Buying Behaviour DissonanceReducing Low Behaviour Variety Seeking Behaviour Habitual Buying Behaviour .Factors affecting Process of Decision Making(contd.

Choice Criteria depends on 3 levels of Decision Making Extensive Problem Solving Limited Problem Solving Routinized/Habitual Response Behaviour .

Purchase Satisfaction Pre-Purchase Search Post-Purchase Behaviour Cognitive Dissonance .

.Purchase Satisfaction The feeling on part of the customer that the decision to buy was appropriate because the product met his expectations. expectations.

Cognitive Dissonance The tension that results from holding two conflicting ideas or beliefs at the same time. in terms of Consumer Behaviour The negative feelings that a consumer may experience after making a commitment to purchase. purchase. .

Consumers Response to Dissatisfaction A dissatisfied consumer decides to: to: Take no action. action. Discontinue purchasing a product .

.Cognitive Dissonance The tension that results from holding two conflicting ideas or beliefs at the same time. in terms of Consumer Behaviour. the negative feelings that a consumer may experience after making a commitment to purchase. purchase.

Different Types of Consumers Based on Post Purchase Behavior High Profitability Butterflies True Friends Strangers Low Barnacles Low Loyalty High .

Consumers log on to Net for research on goods Writankar Mukherjee KOLKATA Economic Times Business of Brands August. 19.2008.Tuesday .

using internet for research on products still takes centrestage. INDIAN consumers are using internet for not just research into financial products but even purchasing them. Nearly 68% of consumers go online to research on products that interest them. However. . A latest study indicated that about 18% of all financial products are sold online in India.

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The encouraging trend is that such activities are not just limited to the urban pockets. The study was conducted by Google and implemented by the strategic market research firm Media Screen LLC to gain deeper understanding of the Indian consumer behaviour in the online space. .

 ³Using internet for such transactions is more skewed towards metros due to the greater penetration of internet.´ Google India business head (financial services) Sridhar Seshadri told ET. As regulations on selling financial products become more relaxed in India. . there is an equally optimistic demand arising from smaller towns. But. the number of online transactions will increase manifold.

³The financial company websites are the most important online source when making the final decision. . comparing costs have become more important than evaluating product details (48% vs 42%).´ said Mr Seshadri. Between the two. The study highlighted that comparing costs and product details are the two most common online financial research activities.

search engines play a major role in accessing other websites and nearly 67% of respondents use them for financial product research. Some 30% of consumers use search engines to become aware of special rates/promotions and to access expert advice. . Around 55% see an online advertisement and click on them to learn more. However.

 Coming to the specifics. use comparison shopping sites for gathering information. Those seeking new loans rely as much on online sources as on advice from friends. Credit card shoppers. . for instance. family or colleagues. search engines (69%) and bank¶s website (47%). too. consumers undertaking research for banking services. get such information from TV advertisements (41%). the Google study noted.

Howard-Sheth Model of Consumer Behaviour Four Sets of Variables     Inputs Perceptual and Learning constructs Outputs Exogenous or External Variables .

Price c. Social a. Social class Motives Perceptual Bias Brand Comprehension Attention Attention Satisfaction . Family b. Availability Perceptual constructs Overt search Learning Outputs constructs Intention Confidence Purchase Intention ii. Significative a. c.Inputs Stimulus Display i. e. Symbolic a. d.Distinctiveness d. Service e. Reference groups c. Quality b. b. Attitude Stimulus Ambiguity Attitude Choice Criteria Brand Comprehension iii.

Exogenous or External Variables Importance of Purchase Personality Variables Social Class Culture Time Pressure Financial Status .

Consumer SegmentationAn Important Tool to Understand Consumer Decision Making .

Consumer Segmentation Demographics  Behavioral  Geographic  Socio-Economic  Benefit Segmentation  Segmentation Based on ± Psychographics ± Life Styles/AIOs .

Behavioral and Psychographics Socio-economic Classification (SEC) SEC A SEC B SEC C SEC D .Consumer Profiling & Adv. Analysis  Consumer-Profile in terms of Demographics.

Personality .Demographics Lifestyle and Psychographics ‡ Demographics Consumer Lifestyle ‡Media Habits ‡Benefit Sought Purchase Psychographics ‡Brand attitudes & Beliefs ‡Purchase Behaviour. etc.

Consumer Lifestyle Consumer Lifestyle is function of AIO¶s Activities Interests Opinions .

Current Trends having Impact on Consumer Decision Making Process The rise of Young/Children as Direct Consumer  Changed Family Buying Behavior  ± Changed Family StructuresJoint/Nuclear Families ± Increasing Influence of Children in Decision Making ± Women as Consumer .

5/11/2007 .Marketers waking up to 8-year-old gadget gurus Savitha V & Sushmita Mohapatra ET.

computers and TV . Children in the age group of 8 to 14 years play consultants to parents in buying mobile phones.

     They do in-depth research on the Net. computers and TV sets. We mean really young. compare product features and act as consultants. Up to 76% of the children surveyed display high involvement in mobile phone purchases and 61% in computers. study the specifications. They are the young savvy consumers who know exactly what they want. . to be precise. 8 to 14 years of age. The recent survey done by Walt Disney Company and Group M shows that children in this age group function as consultants to their parents when it comes to buying mobile phones. they know the features and they know what works. They know the brands.

Walt Disney Television International (India).´ says Antoine Villeneuve.  .  They are also very finicky about brands. The 1314-yearolds are more brand conscious than the younger ones.³In lots of categories. They do a lot of research and are highly informed on the attributes and specifications of a product. senior vice-president and managing director. we found kids are the consultants for parents.

³There is a lot of media consumption within this age group.´ he says. BenQ targets this audience through the internet and also holds college road shows. . BenQ India. ³The age group 10-20 is one that is curious about technology. They are more exposed to advertisements and are probably more social when compared to their parents. They get a lot of information from the internet. news papers and news channels.     Mr Villeneuve attributes this level of involvement mainly to the influence of media. They inevitably pick up the latest news about phones.´ says Ish Bawa. And it¶s this age group that the companies are targetting with their communication messages. marcom head.

They have a good say especially when it comes to entertainment products. LG. Our products have technology at its core and children probably understand it better than their parents. Mr Ramachandran says.     ³We have seen that parents depend a lot on children particularly for comparison of one product to another. LG has put a strong focus on its web site. especially to the young generation. who we identify as µpioneer young¶. The web has become an important tool for marketing.´ says V Ramachandran. . ³Although we have not launched any communication targetting the 8-14 age group primarily. Companies also tap the teenager market with targetted content. director (marketing & sales). We address our communication to kids above 14-15 years of age. targetting teenagers and young adults.

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Economic Times Business of Brands (22-07-08) .

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Wednesday) .27.2008.Economic Times Business of Brand (August.