Consumer Buying Behavior

How do consumers respond to marketing efforts the company might use?

Consumer Buying Behavior

refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption.

Consumer Market
Consists of all the individuals and households who buy or acquire goods and services for personal consumption.

Business Market
Org. who buy for the prod. Or assembling of goods or services to be sold to consumers/ other org.

Stimulus Response Model of CB

Product Price Place Promotion

Marketing and Other Stimuli

Economic Technological Political Cultural

Buyers Decision Process

Buyers Black Box

Characteristics Affecting Consumer Behavior

Product Choice Brand Choice

Buyers Response

Purchase Timing Purchase Amount

Dealer Choice

Characteristics affecting consumer behaviour

Culture
Social Personal Psychological

Buyer

Factors Influencing Consumer Behavior

Personal Psychological Social Cultural

Culture & Subcultures

Cultures
The accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment

Subcultures
Groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.

Most basic cause of a person's wants and behavior. Values Perceptions

Social Class
Subculture
People within a social class tend to exhibit similar buying behavior.

Factors affecting CB : Culture

Groups of people with shared Occupation value systems based on common life experiences. Income Education Wealth

Social Class
Relatively homogenous, enduring divisions in a society, hierarchically ordered with members sharing similar values, interests, and behaviors.

Social Classes
Upper Upper Lower Upper Upper Middle Middle Working Upper Lower Lower Lower 1% 2% 12% 32% 38% 9% 7%

Social Factors
1. Reference Groups
2.Primary groups 3.Secondary Groups

Factors Affecting Consumer Behavior: Social

Groups
Membership Reference

Family Husband, wife, kids Influencer, buyer, user

Social Factors

Roles and Status

Personal Factors
Age Life-Cycle Stage

Stages in Family Life-Cycle

1. 2. 3. 4. 5. 6. 7. 8. 9. Single Newly Married Couples Full Nest I Full Nest II Full Nest III Empty Nest I Empty Nest II Solitary Survivor Solitary Survivor, Retired

Personal Factors
Age Life-Cycle Stage Occupation Economic Circumstances Life Style

Factors Affecting Consumer Behavior: Personal

Personal Influences
Age and Family Life Cycle Stage
Economic Situation Occupation

Personality & Self-Concept

Lifestyle Identification
Activities Opinions

Interests

AIO Framework
Activities Work, Hobbies, Social events, vacation, Entertainment, clubs, community, shopping, sports Interests Family, Home, Job, community, recreation, fashion, food, media, achievements Opinions themselves, social issues, politics, business, eco, education, products, future, culture

VALS
Principle Oriented

Actualizers Status Oriented

Abundant Resources Action Oriented

Fulfilleds

Achievers

Experiencers

Believers

Strivers

Makers

Strugglers Minimal Resources

Types of Buying Behavior

Routine Response Limited Decision Extension Decision Impulse Buying

Buying Roles
Initiator Influencer Decider Buyer User

Types of Buying Decisions

High Involvement Significant differences between brands Few differences between brands

Low Involvement

Complex Buying Behavior DissonanceReducing Buying Behavior

VarietySeeking Behavior Habitual Buying Behavior

Complex buying situation

purchase of a car, house, computer etc.,

Dissonance reducing buying situation purchase of carpets Variety seeking buying purchase of cookies, perfumes
Habitual buying situation purchase of salt, sugar etc.,

Factors Affecting Consumer Behavior: Psychological

Motivation

Beliefs and Attitudes

Psychological Factors

Perception

Learning

Psychological Factors
Wants
Based on a want or desire to have something. Not a necessity.

Psychological Factors
Motivation:
Freud
Id Ego Super Ego

Maslow
Hierarchy of Needs

Psychological Factors
Motivation Perception

The process by which an individual selects, organizes, and interprets inputs to create a meaningful picture of the world.
Selective Exposure Selective Distortion Selective Retention

Selective exposure theory is a theory of communication, positing that individuals prefer exposure to arguments supporting their position over those supporting other positions. It has been discussed by communication scholars for decades. Since excessive amount of media choices are available, media consumers have more privileges to expose themselves to selected medium and media contents.

Selective Distortion is a term that refers to the tendency of people to interpret information in a way that will support what they already believe. This concept, along with selective attention and selective retention, makes it hard for marketers to get their message across and create good product perception

Selective retention is the process when people remember messages that are closer to their interests, values and beliefs more accurately, than those that are in contrast with their values and beliefs, selecting what to keep in the memory, narrowing the informational flow.

Psychological Factors
Motivation Perception Learning
Changes in an individuals behavior arising form experience

Psychological Factors
Motivation Perception Learning Beliefs
Descriptive thoughts that a person holds about something

Psychological Factors
Motivation Perception Learning Beliefs Attitudes

Enduring favorable or unfavorable cognitive evaluations emotional feelings and action tendencies

Functional Factors
Needs
Need over wants. Delivers to a real need to have something.

Family Influence on Buying Behavior

Husband-Dominant Wife-Dominant Equal

Examples of Buying Motives: Psychological or Functional?

A senior wants to impress his juniors. His primary motive is ?

Psychological

Examples of Buying Motives: Psychological or Functional?

A girl wants to remember her grandmother on her birthday. Her primary motive is?

Psychological

Examples of Buying Motives: Psychological or Functional?

A homemaker needs a new washing machine and has had good experiences with LG. Her primary motive is ?

Functional

Examples of Buying Motives: Psychological or Functional?

A teacher wants to buy a practical car to be used for family transportation. Her/His primary motive is ?

Functional

Examples of Buying Motives: Psychological or Functional?

A career woman always buys branded clothes. Her primary motive is?

Psychological

Examples of Buying Motives: Psychological or Functional?

An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is?

Functional

Examples of Buying Motives: Psychological or Functional?

A homeowner needs to mow their lawn. Their primary motive is?

Functional

Consumer Buying Behavior Competency

Functional Motive
The price is 40 cents off the regular price. It never needs ironing. Diamonds are forever. Serving you since 1971.

Psychological Motive

Ninety-day warranty.

Consumer Buying Behavior Competency

Functional Motive
Running shoe with built-in arch.
Its all the rage colored action wear and style. Wheatiesthe breakfast of champions! Steel-belted radial tires warranted for 40,000 miles A watcha gift she will treasure always.

Psychological Motive

Consumer Buying Decision Process

Problem Recognition Information Search Evaluation of Alternatives

Purchase Decision

Post-Purchase Evaluation

The Buyer Decision Process

Need Recognition Information Search

Evaluation of Alternatives
Purchase Decision Postpurchase Behavior

The Buyer Decision Process

Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state

Internal Stimuli Hunger

Thirst

External Stimuli
TV advertising

Magazine ad

A persons normal needs

Radio slogan
Stimuli in the environment

The Buyer Decision Process

Step 2. Information Search
Personal Sources Commercial Sources
Family, friends, neighbors Most influential source of information Advertising, salespeople Receives most information from these sources Mass Media Consumer-rating groups Handling the product Examining the product Using the product

Public Sources

Experiential Sources

The Buyer Decision Process

Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand? Based on what Im looking for, how satisfied would I be with each product?

Total Product Satisfaction

Evaluation Procedures
Choosing a product (and brand) based on one or more attributes.

The Buyer Decision Process

Step 4. Purchase Decision
Purchase Intention Desire to buy the most preferred brand

Attitudes of others

Unexpected situational factors

Purchase Decision

The Buyer Decision Process

Step 5. Postpurchase Behavior
Consumers Expectations of Products Performance Products Perceived Performance

Satisfied Customer!

Dissatisfied Customer
Cognitive Dissonance

Adoption Process
1. 2. 3. 4. 5. 6. Awareness Interest Evaluation Trial Decision Confirmation

Stages in the Adoption Process

Awareness Interest

Evaluation
Trial Adoption

Influences on the Rate of Adoption of New Products

Communicability
Can results be easily observed or described to others?

Relative Advantage
Is the innovation superior to existing products?

Divisibility
Can the innovation be used on a trial basis?

Product Characteristics

Compatibility
Does the innovation fit the values and experience of the target market?

Complexity
Is the innovation difficult to understand or use?

Adoption of Innovations
Percentage of Adopters

Early Majority Innovators

Late Majority

Early Adopters
13.5%

34%

34%

Laggards

16%

2.5%

Time of Adoption

Early

Late