Consumer Behaviour–Issues and Concepts o

Consumer Behaviour–Issues and Concepts

1. CONSUMER BEHAVIOUR

2. NATURE OF CONSUMER BEHAVIOUR “The decision process and physical activity engaged in when evaluating, acquiring, using or disposing of goods and services.”

3. WHO IS A CONSUMER? To put in very generic terms, a consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or business activities (Wikipedia) A “customer” is one who actually purchases a product or service from a particular shop or organization

4. DECISION PROCESS

5. INDIVIDUAL DETERMINANTS Motivation and Involvement: All of us are consumers, with in a given society all of us have the same alternatives to choose from and yet not two consumers may exhibit identical consumer behavior each one of us is a unique individual with a unique set of needs, desires and motivation. Motivation is that internal force which arouses or activates some need and provides direction of behaviour towards fulfilment of the need.

6. A motivation may be physiological in nature directed towards fulfilment of biological needs such as hunger and thirst, other motivations are psychological in nature focusing on the satisfaction of psychological desires such as the need for seeking status Everyone has both physiological and psychological motivations, but we each fulfil them in different ways.

7. The reason why we adopt different methods of satisfaction of our motivations is because of the differing level of personal involvement in various activities. Involvement refers to the personal relevance or importance of a product or service that a consumer perceives in a given situation.

8. High involvement leads to a highly motivated state of mind . High involvement and high motivation lead to a consumer behaviour process which is distinctively different from that of a low involvement and low motivation

9. Attitudes Attitudes are our learned predispositions towards objects, people and events. It is our attitudes which influence how we respond to different products and services. Attitudes are not inborn or innate in us Our attitudes influence our purchase decisions and consumption

10. Personality and Self-concept A related construct, Self-concept or self-image is the way we perceive ourselves in a social framework. We always tend to buy only those products and services which we think fit or match with our personality or are in conformity with our selfconcept .

11. Learning and Memory We only remember the information which is of relevance and importance to us, or where we have a motivation to remember Our motives, attitudes and personality act as filters by letting in only relevant information and keeping all other information out. Surely, we would see the product, hear its jingle but chances are it will not register in our minds. We will remember it only for a short while and then forget it. This is known as selective retention

12. InformationProcessing This refers to the process and activities which consumers engage in while gathering, assimilating and evaluating information. The manner in which we assimilate and evaluate this selective information is determined by our motives, attitudes and personality and self-concept.

13. GROUP DETERMINANTS

14. Cultural Influences The first of the influences is that of cultural variables. Culture is defined as the complex, sum total of knowledge, belief, traditions, customs, art, morals, law and any other habits acquired by people as members of a society. Culture of one society differs from that of another. Many of our actions, and behaviour as consumers stem from our cultural background

15. Sub-cultural Influences Within a given culture, there are many groups or segments of people with distinct customs, tradition and behaviour , which set them apart from other people. These subcultures as part of the same cultural mainstream on account of their dress, food habits, religious traditions and rites; offer interesting implication for the marketer.

16. Social Class Influences Social class is a group consisting of a number of people who share more or less equal position in a society. Within a social class people tend to share same values, beliefs, and exhibit similar patterns of behaviour and consumption. Some social classes are ranked as higher and lower. Social classes differ from one society to another, and their standing in society may also change over time. Social classes may be defined by parameters such as income and occupation. The belongingness to a social class influences decisions such as choice of residence, type of holiday, means of entertainment and leisure.

17. Social Group Influences A social group is a collection of individuals who share some common attitudes and a sense of relationship as a result of interaction with each other. Social groups may be primary where face-to-face interaction take place frequently, such as families, workgroups and study groups. Secondary groups are those where the relationship is a more formalized and less personal in nature.

18. Family Influences Family is a social group which can be defined as a primary group. it is one of the strongest sources of influences on consumer behaviour . The first and strongest influence on a child is that of his family and he imbibes many behavioural patterns from other family members sub consciously. These influences tend to stay with him even after attaining adulthood. Further, within a family many decisions are made jointly with various members exerting different degree of influence. The changing structure of families as the joint family system gradually gives way to single nucleus families also influence the consumer behaviour

19. Personal Influences Each individual is influenced by the family, social class, sub-cultural and cultural group to which he belongs, and yet has his own distinct personality which influences his decisions and behavior as a consumer. Each decision process is the outcome of an interplay of personal and social variables. The process of evaluation of different products and different brands will vary from person to person. For one, price may be the most important parameter in making the decision to buy a water geyser, for another it is convenience, and for yet another it may be the status symbol value.

20. MODELS OF CONSUMER BEHAVIOR The Howard Sheth Model and The Engel Kollat Blackwell models both present comprehensive models of individual buying behavior The family buying behavior explains the decision process and influences that come into play when the buying is being done for joint use by a given family.

21. The Howard Sheth Model The Howard Sheth Model recognizes consumer decision making under 3 different problem-solving levels. The first level describes extensive problem-solving where the consumer does not have any basic information or knowledge about the brand or have any preferences for any product. In this situation, the consumer will seek information about all the different brands in the market before purchasing

22. The second level, limited problem-solving, exists when consumers have little knowledge about the market, or partial knowledge about what they want to purchase. In order to arrive at a brand preference, some comparative brand information is sought The third level is habitual or routinised response behavior exists when, the consumer knows very well about the different brands, can differentiate between the different characteristics of each product, and his repeat buying decision is usually a brand replenishment decision in favour of his preferred brand.

23. This Howard Sheth model explains the buying decision process with the help of four sets of variables that include ( i ) the inputs, (ii) the perceptual and learning constructs (iii) the output and (iv) exogenous variables.

24. The input variables consist of the stimuli like price, quality, distinctiveness presented by the marketers which have both significative and symbolic impact. Input variables also include social variables like family, social class and reference groups. The learning constructs comprise psychological variables such as motives, attitudes, brand comprehension and choice criteria which enable the buying intention

25. The perceptual stimuli explain how the consumer receives and understands the information from the input stimuli and other parts of the model. For example, stimulus ambiguity results when the consumer does not understand the message from the environment. Perceptual bias occurs if the consumer distorts the information received so that it fits his or her established needs or experience.

26. The output variable is the purchase decision and the resultant post purchase evaluation of either satisfaction or dissatisfaction. The former will result in strengthening of brand comprehension and brand attitude, while the latter will trigger off a reaction of negative attitude, low attention to the product stimuli, poor brand comprehension and negative intention to purchase.

27. The Exogenous variables on the other hand are not shown as being part of the decision process but may have an important bearing on the overall decision as such. These include importance of the purchase, consumer personality traits, religion, and time pressure

28. The Engel Kollat and Blackwell mode ,the model explains the buying behavior process with the help of five components, Information input Information processing Decision process Decision process variables External influences

29. Information input- This component includes all kinds of marketing stimuli like advertisements, product displays, a point of purchase stimulus and non-marketing stimuli like information inputs shared by friends, family or colleagues, Once you are exposed to this information from a variety of sources you begin to process this information by going through the stages of exposure, attention, comprehension, acceptance and retention of this information. You also utilize your stored memory relevant to this purchase in processing this information and before retaining it as actionable input for your decision process

30. The next component, the decision-making process, in this model, suggests that you could enter the decisionmaking process at any time during your information processing stage. The decision process is shown to comprise of the sequential stages of problem recognition search for alternatives, alternative evaluation, choice, and outcomes (post-purchase evaluation and behavior).

31. Once you arrive at the decision based on your alternative evaluation, which in turn is impacted by both individual differences and external influences, this decision will lead to a purchase. The outcome of the purchase could be satisfaction or result in post purchase dissatisfaction, if your purchase does not fully meet your expectations.These outcomes will now become feedback and be stored in your memory to be used as reference in your next purchase or related decision-making situation

32. Individual variables like demographics, motives, beliefs, attitude, personality, values, lifestyle and external influences like culture, social class and reference groups are important influences that impact the stages of both information processing and decision making. If any of your important reference group members like a colleague in the IT department of your office has expressed a strong negative opinion about the after sales service of a given laptop brand, that brand will not be considered among the alternatives that you evaluate during your decision process.

33. APPLICATIONS OF CONSUMER BEHAVIOUR IN MARKETING Analyzing Market Opportunity: Study of consumer behaviour helps in identifying needs and wants which are unfulfilled. This is done by examining trends in income, consumer lifestyles and emerging influences. The rapidly rising sales graph in these categories is an indication of how well the product has satisfied the consumer’s need.

34. Selecting the Target Market: Knowing who these groups are, how they behave, how they decide to buy enables the marketer to market products/services especially suited to their needs. All this is made possible only by studying in depth the consumer and his purchase behaviour .

35. Determining the Product Mix: Product: The marketer has the product that will satisfy hitherto unfulfilled consumer need, but he must decide the size, shape and attributes of the product Price: What price should the marketer charge for the product? Should it be the same as that of the competing product or lower or higher? Should the price be marked on the product or left to the discretion of the retailer to charge what he can from the customer?

36. Distribution: Having determined the product size, shape, packaging and price, the next decision the marketer has to make is regarding the distribution channel. What . type of outlets including the online ones should be used to sell the products? Should it be sold through all the retail outlets or only through a selected few? Should a mix of online and offlinebe used?

37. Promotion: The marketer here is concerned with finding the most effective methods of promotion which will make the product stand out amongst the clutter of so many other brands, and products, which will help attain the sales objective and yet be within the budget. This is possible only when the marketer knows who his target consumers are,where are they located, what media do they have access to, what is their preferred media and what role does advertising play in influencing the purchase decision?