Study of consumer behavior, a vital part of marketing as marketing aims to meet the needs and wants of the consumer

Give the Consumer what she/he wants serves as the evergreen dictum for smart marketing In mass marketing understanding what each individual requires is not possible. How does the consumer make the value selection and goes for a particular Brand. Lot of research done on the Psychological process that guides consumer behavior. E.g. The value buyer seeks in a Car Functional value, Social value, Status value, Economic value

Consumer Characteristics
Psychological process Underlying Buyer behavior

Buying Habits Buying Motives

Stages in Buying process Participants & roles

BUYING BEHAVIOR

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Personal Factors a. Personal Demographics b. Personal Psychographics Socio Cultural Factors a. Cultural b. Social Groups/Personal Groups

Age, Gender
Selfconcept Lifestyle Values Personality Life cycle stage

Occupation
Income

Includes Age, Gender, Stage in Life Cycle, Education, Occupation, Economic Position etc. His Personal Bio Data, decides what & where he will buy. Income related example Tea (A buyer from a low income group may buy an unbranded local product from a ration shop, lower middle class low priced A1 tea from a Kirana shop, middle class reasonable good brand from Margin free chain, an upper middle class may go for Tetley from a high end retail store.)

Gender Men and women differ in their preference of perfume / Deodorant, watches, clothes etc. Age Preference of TV channels, clothes etc Occupation Formal Clothes may be purchased according to the occupation, Magazines etc

Individuals may differ based on Personality, Lifestyle, self concept, value system, etc which impact buying behavior. Difficult to understand. 1. Personality: Extrovert (impulsive, easily swayed by friends and peer opinions), Introvert (slow in taking decisions, likes to be alone). Compliance individuals (prefer known brands and like to conform to accepted norms) , Aggressive individuals (like to attract attention by using specific brands ) and Detached individuals (no particular pattern). Determinants of personality are heredity, environment, and situations 2. Life Style: Life Aspirations. Status & material prosperity. Pace of life e.g. Club, Hotel, Dress, Jewelry purchase will be affected by life style factors.

3. Values A child growing up in U.S is exposed to the

following values: freedom, material comfort, humanitarianism etc. A child growing up in India is exposed to integrity, respect for elders, collectivism etc. 4. Self Concept How we view ourselves. Consumers choose brands that are consistent to their self concept. A housewife may hesitate buying readymade curries because it may be inconsistent with her concept of herself being a hardworking housewife. A social worker may choose khadi clothes.

Multi-tasking

Time-starved
Money-constrained

Cultural Factors: Acquired mostly in the Childhood. Culture includes religion, Caste, Language, Tradition etc. Influences buying behavior deeply. Cultural diversity operates in dress, eating habits, marriage practices, festivals etc. Specially in the rural areas. Culture influences Individuals life style. Subculture (caste, sub sect) influences the individual more deeply.

Man is influenced by the society and he influences the Society. Performs different Roles in the family, at office, as a part of a professional group etc. A persons reference group are all the groups that have a direct or indirect effect on his behavior Three Consumer Reference Groups 1. Primary group(Intimate Group) family, friends, neighbors 2. Secondary Group Religious, professional groups 3. Large Social Class - Working class, Upper class, middle class

1. Intimate Group: Family (family of orientation and family of procreation), Peer Group, friends, close colleagues. face to face & Frequent interaction. Deep influence. 2. Secondary Group: Larger & less intimate. Occupation, Professional group, Place of Residence, Club etc. May exhibit similar buying habits. 3. Larger Social Class: Influence of Income Class, Occupation, Position, Area etc. Similar buying behavior.

An opinion leader are influential members of a group to whom others turn for advice regarding specific products. They are highly confident, socially active, and involved with the particular product category. Marketers try to reach out to the opinion leaders by identifying their demographic and psychographic characteristics, identifying the media they read and directing messages at them Every group has opinion leaders example -Village leaders, Church priests etc. Opinion leaders play a special role in rural marketing

Consumer decision is in response to some stimulus. Psychological Process pertaining to decision making, including -Motivation (Springs from his motives) -Perception (his interpretation) -Learning (what he understands) -Memory (Stays in his mind)

Motivation

Perception

Learning

Memory

Freuds Theory Behavior is guided by subconscious motivations

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

Herzbergs Two-Factor Theory Behavior is guided by motivating and hygiene factors

A motivated person is ready to act next comes how the consumer views the market place. Her perception is more important than the reality Perception is defined as the process by which an individual selects, organizes and interprets stimuli into meaningful pictures Buyer makes sense out of the information she receives. E.g. House the information coming from builder, upcoming projects, feedback from friends etc. People are selective in 3 aspects with respect to perception. - Selective in Attention (voluntary and involuntary attention, an average person is exposed to about 1500 brand communications) - Selective in Distortion (tendency to interpret the information in a way that suits our preconceptions) - Selective in Retention

Learning Individuals acquire the product and consumption knowledge and experience that they apply to future purchase behavior. Marketer has a great role to play.

All info gets deposited and comes as a flash back with the stimuli. Lot of research done by marketers. Catchy & Repeat messages.

How, when and where do they buy. The types of consumer goods purchased - Convenience Goods - Shopping Goods - Specialty Goods

Convenience goods: Purchased often as a routine. No planning involved. Recurring need. Many outlets. Substitute brand is possible. Example Bread, milk, tea powder etc. Shopping goods: Not required so frequently. Clothes, Shoes, electrical appliances. Considerable expenditure. Limited outlets. Specialty goods: High Priced e.g. cars, Jewelry, Club Membership etc. Very limited outlets, mostly direct. Customer gives lot more thought and time. Selective distribution and Showrooms. Entire family may be involved in decision making

Store Loyals shop at the same outlet most of the time Store Switchers shop at different stores Cherry Pickers extremely price sensitive, they are out and out for saving money. They shop at many outlets to get the best bargains. Empty nesters prefer convenience of home delivery / direct marketing

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Problem Recognition (Need) Awareness (Information Search) Comprehension (evaluate the alternatives) Attitude (favorable or unfavorable) Legitimization (actually go for it or not) Trial Adoption (Purchase decision) Post Purchase decision (restlessness)
e.g. Bike or a house (or college selection).

This model works more for high volume purchase, which is more complex, Individual buyer and buying situation.

Innovators Early Adaptors Early Majority Late Majority Laggards

Innovators constitute 2.5% of the market. High risk taking individuals and opinion leaders. Early adopters Constitute 13.5% of the total market. Have same characteristics as the innovators and are price insensitive. Early Majority comprise of 34% of the total market. Shift to new product after taking the opinion of innovators and early adopters. Moderate risk takers. Late Majority 34% of the market. Conservative and slow decision makers. Laggards Constitute 16% of the market. loyal to existing brands. Very conservative. Buy the new products when price comes down.

Initiators Influencers Deciders Payer Users Role of tweens as influencers has become prominent in household purchases

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Product Motives Emotional product motives Rational product motives Patronage motives Emotional patronage motives Rational patronage motives

What are the personal demographic and psychographic factors which affect a consumers buying behavior? What are the consumer reference groups? Who is an opinion leader? What are the types of consumer goods? What are the stages that consumer goes through in buying decisions? List the consumer behavior types as far as adopting new products is concerned.