Understanding Consumer

Buying behavior

Module III

Faculty- Rema Gopalan

 Studying Buyer Behavior?

e s ti on s?
fe w Q u

 What motivates
the buyer?
 few
Questions?

 Why does he
buy a specific
brand?
 few
few
Questions?
Questions?

 Why does he
react to a new
product?
 few
Questions?
 How he decides
to buy?
Buyer, a Riddle

Buyer is a highly
complex entity
What is Consumer Behavior?
Consumer behavior: . . . is defined as
the study of the buying units and the
exchange processes involved in
acquiring, consuming, and disposing of
goods, services, experiences, and ideas.
Buyer Behavior Models
 The Economic Model
 The Learning Model
 The Psychoanalytical Model
 The Sociological Model
 The Nicosia Model
 The Howard-Sheth Model
The Economic Model

 The buyer is a rational man

 His buying decisions are totally

governed by the concept of utility.
The Learning Model

 Buyer behavior can be influenced by

manipulating the drives, stimuli and
responses
The Psychoanalytical Model

 Buyer has complex set of deep seated

motives that drive him towards certain
buying decisions.
The Sociological Model

 The buyer is influenced by the society-

by the intimate groups and the social
classes.
 The Nicosia Model
 Francesco Nicosia in 1966 proposed
this model.
 It establishes the link between a firm
and the consumer.
 Human is analyzed as a system with
stimuli as input and behavior as the
output of the system.
The Howard-Sheth Model
 John Howard and Jagdish Sheth proposed
the model in 1969
 There are inputs in the form of stimuli
 There are outputs beginning with attention
to a given stimulus and ending with
purchase
 In between the inputs and outputs, there are
variables affecting perception and learning.
Factors Influencing Consumer
Behavior
 Cultural factors

 Social factors

 Personal factors

 Psychological factors
Buying Decisions
Buying roles are the roles, a person or a group of
persons , play in purchasing and using the product
Different roles assumed by people:
 Initiator

 Influencer

 Decider

 Buyer

 User

 Maintainer

 Disposer
Types of CDM or Buying Behavior
Types of CDM or Buying Behavior
1. Nominal/ Routinized Response Behavior
• Its also known as habitual decision making.
• It occurs when there is very low involvement with the
purchase.
• Consumers are not that much particular- price, brand.
Ex- daily ration purchase.
2. Variety Seeking Behavior
• Consumers have established the basic criteria for
evaluating the product category and various brands.
• But they are not sure of final preference.
• They look for more additional information i.e. fine tuning
Ex- switching over from Tata Tea to Red Label.
Contd.

3. Extensive Problem Solving Buying Behavior

 Very narrow knowledge about products.
 In this consumers need a great deal of
information to establish their evoked set.
Ex- purchase of computers, cars etc.
4. Dissonance Reducing Buyer Behavior
• There is very high involvement with the purchase.
• The purchase is fairly quickly because the brand
differences are not pronounced.
Ex- Carpet, Diamonds
Consumer Decision-Making Process

Identify
Identifythe
theproblem/
problem/
Need
NeedRecognition
Recognition

Information
InformationSearch
Search
Cultural,
Cultural,Social,
Social,
Individual
Individualand
and
Psychological Evaluation
Evaluation
Psychological of
Factors
Factors ofAlternatives
Alternatives
affect
affect
all
allsteps
steps
Purchase
Purchasedecision
decision

Post-purchase
Post-purchase
Behavior
Behavior
The Buyer Decision Process
 Needs can be
Process Stages triggered by:
 Need recognition • Internal stimuli
 Information search • Normal needs
become strong
 Evaluation of
enough to drive
alternatives behavior
 Purchase decision • External stimuli
 Post purchase • Advertisements
behavior • Friends of friends
The Buyer Decision Process

Process Stages
 Primary source of
information:
 Need recognition
 Information search

 Evaluation of
 Internal
alternatives Retrieval and
 Purchase decision cognitive process
 Post-purchase
behavior  External
 The information search stage

An internal search involves the Personal sources

scanning of one's memory to recall (friends and family)
previous experiences or knowledge
concerning solutions to the problem--
Public sources (rating
often sufficient for frequently
services like
purchased products.
Consumer Reports)

An external search may be necessary Marketer-dominated

when past experience or knowledge is sources (advertising
insufficient, the risk of making a wrong or sales people)
purchase decision is high, and/or the
cost of gathering information is low.
The evoked set: a group
of brands from which the
buyer can choose
The Buyer Decision Process

Process Stages  List of brands from

which consumer plan
 Need recognition to make their
 Information search
selection (evoked
set)
 Evaluation of
 The criteria consumer
alternatives
use to evaluate each
 Purchase decision
brand.
 Post-purchase
behavior
 Evaluation of
Alternatives

Total set Awareness Consideration Choice

set Decision
set set

Lenovo Lenovo
?
Lenovo Lenovo
Apple Apple
Apple Apple
Dell Dell
Dell Dell
Hp
Hp HCL
Toshiba
HCL
Compaq
Compaq
HCL
Acer
LG
…….
…….
The Buyer Decision Process

Process Stages  Trail purchase

 Need recognition
 Information search
 Repeat purchase
 Evaluation of
alternatives
 Purchase decision

 Post-purchase
 Long term commitment
behavior purchase.

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The Buyer Decision Process
 There are three outcomes-
Process Stages 1. Actual performance matches
expectations , leading neutral
 Need recognition feelings.
 Information search 2. Performance exceeds
expectations, causing positive
 Evaluation of
disconfirmation of expectations.
alternatives 3. Performance below the
 Purchase decision expectations, causing negative
disconfirmation of expectations
 Post-purchase
and dissatisfaction.
behavior  Post purchase cognitive
dissonance