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What is consumer behavior?

Consumer Behavior is the study of the process involved whenindividuals or groups select, purchase, dispose of products

or services to satisfy needs and desires

Its a combination of five disciplines

Psychology

Sociology

Anthropology

Economics

Marketing Management

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Complete model of consumer behavior

Search

Need

recognition

Alternative

evaluation

Purchase

Stimuli

(marketer

dominated,

other)

External

search

Memory

Internal

search

Exposure

Attention

Comprehension

Acceptance

Retention Outcomes

Dissatisfaction Satisfaction

Individual

differences

resources

motivation &

involvementknowledge

attitudes

personality,

values, lifestyle

Influences

culture

social class

family

situation

Start

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Who influence a consumer?

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Overall Model Of Consumer Behavior

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Economic Model

Micro economic model:-

Alfred Marshall

ASSUMPTIONS:-

- its not possible to satisfy customers, they have unlimitedneeds and wants

- Customer allot budget to maximize the utility

- No external influence, preference dont change- Customers know the utility of a product hence they know

the level of satisfaction.

- Price determines the purchase.

- Law of Diminishing Marginal Utility.

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PERCEPTION: The process by which an individual selects, organizes, andinterprets stimuli into a meaningful and coherent picture

POSITIONING: Image of the product in the minds of the customer. Image helpsboost sales. Product BENEFITS should be focused more than its physical attributes.

Consumer Imagery: Consumers perceived images about product, services,prices, product quality, retail stores and manufacturers

Halo Effect: Consumers perceive and evaluate product or service based on justone dimension.

Stereotypes: People carrying biased pictures in their minds of the meanings ofvarious stimuli

Subliminal Perception: Message below the threshold levelbelow theconscious level

Umbrella Positioning: selling many related products under a singlebrand

http://marketingfaq.net/2011/11/what-is-a-brand/http://marketingfaq.net/2011/11/what-is-a-brand/

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Perceived Risk: The uncertainty that consumers faces when theycannot foresee the consequences of their purchase decisions:1) Functional

2) Physical 3) Financial 4) Social 5) Psychological 6) Time

Handling risk: select loyal brand, by brand image, store image, mostexpensive, seek information, seek assurance

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Product Repositioning

To face the competitors

To suit the current trend (Changing lifestyle)

To change the target segment To introduce new offerings

To motivate customers to buy

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Perceptual Mapping

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Digital Revolution in the Marketplace

Increased consumer power, access to

information, More products and services,

Interactive and instant exchanges, access to

customer patterns and preferences

Allows customization of products, services,

and promotional messages

Enhances relationships with customers more

effectively and efficiently

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What is consumer behavior? The behavior that consumersdisplay in searching for, purchasing, using, evaluating, and disposing of

products and services that they expect will satisfy their needs

Personal Consumer:The individual who buys goods and servicesfor own/family / household /friends use

Organizational Consumer: An organisation (business/government/other institution that buys the goods, services, and/or equipmentnecessary for the organization to function

Segmentation: process of dividing the market into subsets ofconsumers with common needs or characteristics

Targeting:selecting one ore more of the segments to pursue

Positioning: developing a distinct image for the product in the mind ofthe consumer

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Successful Positioning: Communicating the benefits of theproduct, rather than its features, Communicating a Unique Selling

Proposition for the product.

Loyalists: keep purchasing the brand Apostles:provide word of mouth

Defectors:neutral with brand and stop buying

Terrorists:negative experience and negative WOM

Hostages: not happy still buy product

Mercenaries:very satisfied, no real loyalty.

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Firms Marketing Efforts

1. Product

2. Promotion

3. Price

4. Channels of distribution

Sociocultural Environment1. Family

2. Informal sources3. Other noncommercial sources

4. Social class5. Subculture and culture

Output

Process

Input

Exter

nalInfluence

Postpurchase Evaluation

Purchase

1. Trial

2. Repeat purchase

Need

Recognition

Prepurchase

Search

Evaluation of

Alternatives

Psychological Field

1. Motivation

2. Perception

3. Learning

4. Personality

5. Attitudes

Experience

Figure 1-1:

A Model of Consumer

Decision Making