Consumer Behavior

Kotler

Keller

Chapter Questions
How do consumer characteristics influence buying behavior? What major psychological processes influence consumer responses to the marketing program? How do consumers make purchasing decisions? How do marketers analyze consumer decision making?
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Emerging Trends in Consumer Behavior

Metrosexual Straight urban man who enjoys shopping and using grooming products

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What Influences Consumer Behavior?

Cultural Factors

Social Factors

Personal Factors

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Culture

The fundamental determinant of a persons wants and behaviors acquired through socialization processes with family and other key institutions

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Subcultures
Nationalities Religions Racial groups Geographic regions Special interests
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Social Factors (Contd)

Reference Group Membership Group Primary Group Secondary Group Aspirational Group Dissociative Group Opinion Leader

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Personal factors (contd)

Age & Stage in the life cycle Occupation & economic circumstances Lifestyles & Values Money constrained hand to mouth category (EDLP everyday low pricing, Walmart, Vishal,6Ten, Subhiksha) Time constrained, multitasking category (convenience, home delivery, check pick-up, RTE, RTS, convergent technology, many in one gadgets etc) LOHAS (customers with conscience; Lifestyle of Heallth & Sustainability) Body Shop, PETA, Organic farming, non-azo dye textiles, pesticide free colas, rat dropping free grains!!!
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Personal factors (contd)

can be of religious fervour too (Gulf customers shunning Danish products due to cartoon controversy, some section of Indian population being urged to shun Godrej products for hosting Salman Rushdie etc, some communities being asked not to buy Fida Hussain paintings, Aamir khan film tickets and some other community being asked not to read Rushdie, Manto, Ismat Chugtie, Taslima Nasreen books etc) Convenience Involvement segment precooked packaged food for working moms, cut vegetables in Reliance Fresh & other malls, Meal Kits in Home Core Values

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Social Classes in Western Markets

Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers
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Social Classes in Developing Markets

Upper uppers (Uber Rich) Lower uppers Upwardly Mobile Upper middles Middle class Working class Upper lowers (Aspiring) Lower lowers (BPL Below Poverty Line, Destitute)

In Indian Scenario SEC (socioeconomic classification) is used using Education and earning combination as the deciding metric.
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Characteristics of Social Classes

Within a class, people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Class designation is mobile over time

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Social Factors

Reference groups

Family

Social roles

Statuses

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Reference Groups
Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups
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Family
Family of Orientation Religion Politics Economics Family of Procreation Everyday buying behavior

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Targeting Women and Their Families

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Roles and Statuses

What degree of status is associated with various occupational roles?

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Personal Factors
Age
Selfconcept Lifestyle Values Personality Life cycle stage

Occupation
Wealth

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Behavior changes according to life cycle stage Family Psychological Critical life events

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Brand Personality
Sincerity
Excitement Competence

Sophistication
Ruggedness
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Lifestyle Influences

Multi-tasking

Time-starved
Money-constrained

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Model of Consumer Behavior

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Key Psychological Processes

Motivation

Perception

Learning

Memory

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Motivation
Maslows Hierarchy of Needs Behavior is driven by lowest, unmet need

Freuds Theory Behavior is guided by subconscious motivations

Herzbergs Two-Factor Theory Behavior is guided by satisfiers and dissatisfiers

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Maslows Hierarchy of Needs

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Herzbergs Two-Factor Theory

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Perception
Selective Attention

Selective Retention
Selective Distortion Subliminal Perception
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Dole Mental Map

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Encoding Brand Associations

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Consumer Buying Process

Problem Recognition Information Search Evaluation Purchase Decision Postpurchase Behavior
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Problem Recognition

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Sources of Information

Personal

Commercial

Public

Experiential

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Successive Sets

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Evaluation of Attributes

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Expectancy Value Model

Attribute

Computer Brand A B
C D

Memor Graphi y cs 10 8
6 4

Size & Weight 6 8

10 7

Pric e 4 3
5 8

Perceived value 8 7.8

7.3 4.7

8 9
8 3

Weights: 40 % for memory, 30 % for graphics, 20 % for size & weight and 10 % for price
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Stages between Evaluation of Alternatives and Purchase

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Non-compensatory Models of Choice

Conjunctive Each brand must meet minimum cutoff standard on attribute A and attribute B and attribute C, etc. Lexicographic Chose brand that has the best performance on most important criterion. Elimination-by-aspects Eliminate brands that do not meet minimum standards of performance.
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Perceived Risk
Functional Physical Financial Social

Psychological
Time
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How Customers Use and Dispose of Products

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Other Theories of Consumer Decision Making

Involvement Elaboration Likelihood Model Low-involvement marketing strategies Variety-seeking buying behavior Decision Heuristics Availability Representativeness Anchoring and adjustment

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Mental Accounting
Consumers tend to Segregate gains Integrate losses Integrate smaller losses with larger gains Segregate small gains from large losses

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Marketing Debate

Is Target Marketing Ever Bad?

Take a position: 1. Targeting minorities is exploitative. 2. Targeting minorities is a sound business practice.

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Marketing Discussion

What are your mental accounts?

Do you have rules you employ in spending money? Do you follow Thalers four principles in reacting to gains and losses?

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