Module 1 Introduction to Consumer Behavior.pptx

Consumer behaviour

1. Consumer Behaviour

2. Chapter 1 Introduction

3. Consumer Behaviour: Meaning/Definition Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

4. Definition 1. According to Engel, Blackwell, and Mansard, ‘consumer behaviour is the actions and decision processes of people who purchase goods and services for personal consumption’. 2. According to Louden and Bitta , ‘consumer behaviour is the decision process and physical activity, which individuals engage in when evaluating, acquiring, using or disposing of goods and services’.

5. FACTORS INFLUENCING CONSUMER BEHAVIOUR: a. Marketing factors -product design, price, promotion, packaging, positioning and dis­tribution. b. Personal factors - age, gender, education and income level. c. Psychological - buying motives, perception of the product and attitudes towards the product. d. Situational factors - physical surroundings at the time of purchase, social surroundings and time factor. e. Social factors - social status, reference groups and family f. Cultural factors - religion, social class, caste and sub-castes.

6. Consumers Perspective on Consumer Behaviour Managers seek product information so as to come out with product offerings, which will work as vehicles of influences. Whereas, consumers tend to evaluate information for the purpose of making better decisions on purchase choices. Marketing managers workout strategies which are product or brand specific. While the consumers have the tendency to evaluate various brands before actually purchasing products. Further, the consumers choice, although may not appear to be related but in reality could be a reflection of their desires and lifestyle. Managers may view competition as a threat. Whereas, for the consumer, availabilty of more brands ( i.e., more competition) will work as an opportunity to compare, have more choices and get a few products at lower prices too.

7. A Managerial Perspective   Enables managers to define strategic applications for/of consumers behaviour. Describes the information required to understand consumer behaviour. Consider different approaches in the way we study consumer behaviour. Considers the importance of the use of the Web in providing consumers with information and empowering them to make a better and informed decision Provide managers to review and embrace changes and trends that are taking place within a particular market. https://www.youtube.com/watch?v=o68yjceUciw

8. Managers are now concerned with; Delivering benefits to consumers. Learning more about the changing behaviour and attitudes of consumers. Infrastructure Influencing consumers perceptions.

9. Importance of Consumer Behaviour to business managers To design the best possible product or service that fully satisfies consumer’s needs and demands. To decide where the service or product would be made available for easy access of consumers. To decide the price at which the consumers would be ready to buy that product or service. To find out the best method of promotion that will prove to be effective to attract customers to buy a product. To understand why, when, how, what and other factors that influence buying decision of the consumers.

10. Importance of Consumer Behaviour to Marketers To understand Buying Behaviour of consumers To create and retain customers though online stores To Understand the factors influencing Consumer’s buying Behaviour To understand the consumer’s decision to dispose a product or services To increase the knowledge of sales person influence consumer to buy product To help marketers to sale of product and create focused marketing strategies https://www.youtube.com/watch?v=60eRK7AwgwM

11. Applications of Studying Consumer Behavior The most obvious is for marketing strategy—i.e., for making better marketing campaigns. A second application is public policy.  it is important to please initial customers, since they will in turn influence many subsequent customer’s brand choices.   Social marketing involves getting ideas across to consumers rather than selling something

12. Howard-Seth Model John Howard and Jagadish Sheth introduced the Howard Sheth Model in the year 1969. The concept was published in their book ‘The Theory of Buyer Behavior’. Definition The Howard Sheth Model is an approach for analyzing the combined impact of the social, psychological and marketing factors on the buying behavior or preference of the consumers and the industrial buyers into a logical order of information processing .

13. Input Variables : There can classified further as follows: Significant Stimuli : The significant stimuli are the physical traits of the product and the brand . It includes the product’s price, quality, availability, distinctive characteristics and service. Symbolic Stimuli : The marketing strategies like advertisement and publicity creates psychological impact on the buyer’s perception of a product’s rhetorical and visible features . https://www.google.com/search?q=advertising+and+publicity+creates+psychological+impact+tvs+motord+ms+dhoni&source=lmns&tbm=vid&bih=565&biw=1266&rlz=1C1CHBD_enIN1033IN1033&hl=en&sa=X&ved=2ahUKEwjbldHA3YaDAxV0SWwGHe2bBqgQ0pQJKAR6BAgBEAo#fpstate=ive&vld=cid:3486fd34,vid:-ZfTJNoKT-Y,st:0 Social Stimuli : The social stimuli comprises of the various environmental factors which are considered as a source of information for the buyers . It includes family, social class and reference groups .

14. Perceptual Constructs These components define the consumer’s procurement and perception of the information provided at the input stage . Sensitivity to Information: The buyer’s level of understanding or openness towards the information received by him/her . Perceptual Bias: On the grounds of individual perception of each brand, the buyer is partial towards a particular brand . Search for Information: The buyer also seeks for more information to ensure the right decision-making.

15. Learning Constructs Motive: The specific goal or purpose for which the product purchase is carried out. Choice Criteria: The set of principles or benchmarks defined for product selection. Brand Comprehension: The information about the product or brand pertained by the buyer. Attitude: The buyer’s perspective and willingness to purchase a product of a particular brand defines his/her attitude. Confidence: The trust or faith of the buyer in a specific brand and its products builds his/her confidence. Intention: The buyer’s purchase motive, preference criteria, brand comprehension, consumer attitude and confidence, results in the selection of a particular brand. Satisfaction: After-purchase, the buyer evaluates his/her level of contentment, to find out whether the product has fulfilled the expectations or not.

16. Output Variables It consists of five major components which are arranged systematically. Attention: The buyer’s level of concentration and alertness with which he/she understands the information provided, is termed as attention. Brand Comprehension: The awareness of the buyer regarding a particular brand and its products is known as brand comprehension. Attitude: The buyer’s evaluation of a brand in terms of individual likes and dislikes, determines his/her behaviour , interest and awareness towards it. Intention: The aim or objective of the buyer for purchasing a product can be seen as the buying intention. Purchase Behavior : All the above elements result in the actual purchase of a product by the buyer.

17. The   Howard Sheth model of consumer behavior suggests three levels of consumer decision making. three levels of decision making

18. The Howard Sheth model of consumer behavior is a model that attempts to explain the buyer's rationality behind purchases .  The model was presented in 1969 by John Howard and Jagadish Sheth The model is based on the idea that the buyer's journey is a rational and methodical decision-making process .  The model analyzes the combined impact of social, psychological, and marketing factors on the buying behavior of consumers.  The model also differentiates between the levels of decision making, such as:

19. The Engel- Kollat -Blackwell (EKB) model is a consumer behavior model that helps predict what customers are going to buy .  It was developed in 1973 by Engel, Kollat , and Blackwell.  The model is a "road map of consumers" that can help guide product mix, communication, and sales strategies. 

20. The EKB model has five core stages of the decision-making process: 

21. Online Consumer behavior and its Diffusion in India With the evolution of online communication through internet, customers now see online advertisements of various brands . It is fast catching up with the buying behavior of consumers and is a major source of publicity for niche segments. This is the new way of digital revolution and businesses worldwide have realized their worth . Examples − Online catalogues, Websites, or Search engines. When customers have sufficient information, they will need to compare with the choices of products or services.

22. Online Customer Behavior Process According to the above figure, in the search stage, they might look for the product reviews or customer comments. They will find out which brand or company offers them the best fit to their expectation. During this stage, well-organized web site structure and attractive design are important things to persuade consumers to be interested in buying product or service. Stage 1 The most useful characteristic of internet is that it supports the pre-purchase stage as it helps customers compare different options . Stage 2 During the purchasing stage, product assortment, sale services and information quality seem to be the most important point to help consumers decide what product they should select, or what seller they should buy from.

23. Stage 3 Post-purchase behavior will become more important after their online purchase . Consumers sometimes have a difficulty or concern about the product, or they might want to change or return the product that they have bought. Thus , return and exchange services become more important at this stage.

24. Factors of Online Customer Behavior The first elements to identify are factors that motivate customers to buy products or services online. They are divided into two categories − external factors and internal factors. The External Factors are the ones beyond the control of the customers. They can divide into five sectors namely demographic, socio-economic, technology and public policy; culture; sub- culture; reference groups; and marketing. Internal Factors are the personal traits or behaviors which include attitudes, learning, perception, motivation, self image. The Functional Motives is related to the consumer needs and include things like time, convenience of shopping online, price, the environment of shopping place, selection of products etc. The Non-Functional Motives related to the culture or social values like the brand of the store or product.

25. Filtering Elements Customers use these three factors to filter their buying choices and decide on the final selection of stores they are willing to purchase from. They use the knowledge to filter their purchase options by three factors − Security Privacy Trust and Trust worthiness