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CONSUMER BEHAVIOURCONSUMER BEHAVIOUR

????

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• WHY PEOPLE BUY ? WHAT IS THE PSYCHOLOGICAL PROCESS OF BUYING ?

• HOW PEOPLE BUY?• WHY PEOPLE CHOOSE A PARTICULAR

BRAND OVER OTHER?• HOW THEY BEHAVE AFTER A

PURCHASE?• WHERE THEY BUY?

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What is Consumer What is Consumer Behaviour?Behaviour?

Those activities directly involved in obtaining , consuming and

disposing of products and services, including the decision

processes that precede and follow these actions

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This study draws on concepts from various other disciplines

• Psychology

• Sociology

• Economics

• Marketing

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APPLICATION OF Consumer Behavior Studies

• MARKET SEGMENTATION

• BRAND POSITIONINGBRAND POSITIONING

• MARKETING COMMUNICATION MARKETING COMMUNICATION

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Evolution of Marketing ConceptEvolution of Marketing ConceptEvolution of Marketing ConceptEvolution of Marketing Concept

Production ConceptProduction Concept Product ConceptProduct Concept Product ConceptProduct Concept

Selling ConceptSelling ConceptSelling ConceptSelling Concept

Marketing Concept Marketing Concept Marketing Concept Marketing Concept

I have produced something , Customers will accept it

Let me add few new features to my product

Push the products in the market by sales promotion methods

Focus on what consumers need or want

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FACTORS WHICH AFFECT FACTORS WHICH AFFECT CONSUMER DECISIONCONSUMER DECISION

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• DEMOGRAPHIC VARIABLES

• PSYCHOGRAPHIC VARIABLES

• CULTURAL FACTORS

• SOCIAL FACTORS like INFLUENCE OF REFERENCE GROUPS

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PSYCHOGRAPHIC FACTORSPSYCHOGRAPHIC FACTORSPSYCHOGRAPHIC FACTORSPSYCHOGRAPHIC FACTORS

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HIGH vs. LOW Involvement GOODS or SERVICES

• LOW INVOLVEMENT

FELT NEED Purchase +/-EXPERIENCE (learn)

• HIGH INVOLVEMENT

Need Recognition

InformationSearch

Evaluation of alternatives

Purchase Decision Post purchase

behavious

PSYCHOLOGICAL AND OTHER FACTORS

Repeat PurchaseRepeat Purchase

Attitude

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CONSUMER MOTIVATIONCONSUMER MOTIVATION

Unsatisfied need /unfulfilled NeedUnsatisfied need /unfulfilled NeedUnsatisfied need /unfulfilled NeedUnsatisfied need /unfulfilled NeedDesireDesireDesireDesire

Motive Motive

ACTIONACTIONACTIONACTIONKnown or unknown

Known or unknown

Psychological Psychological PhysiologicalPhysiological

Expressed or Hidden

Expressed or Hidden

Perception, Social Factors, Personal factors, Cultural factors

Marketers Try to stimulate Marketers Try to stimulate this needthis need

Marketers Try to stimulate Marketers Try to stimulate this needthis need

SATISFACTIONSATISFACTION DISSATISFACTIONDISSATISFACTION

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We use our perceptions to minimize load on our Brain because we are unable to process a huge load of information that we receive everyday.

We Are Governed By Our PerceptionsWe Are Governed By Our PerceptionsWe Are Governed By Our PerceptionsWe Are Governed By Our Perceptions

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DEVELOPING Consumer PerceptionDEVELOPING Consumer Perception

PerceptionPerception ACTIONACTION

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ATTITUDEATTITUDEATTITUDEATTITUDE

LEARNINGLEARNINGLEARNINGLEARNING

BELIEFBELIEFBELIEFBELIEF

OTHER FACTORSOTHER FACTORSOTHER FACTORSOTHER FACTORS

PE

RC

EP

TIO

NP

ER

CE

PT

ION

PE

RC

EP

TIO

NP

ER

CE

PT

ION

RE

A

L

WO

R

L

D

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ELEMENTS of PERCEPTIONELEMENTS of PERCEPTION

• SELECTIVE ATTENTION – NEED BASED ATTENTION

• SELECTIVE DISTORTION – PERCEPTUAL BLOCKING

• SELECTIVE RETENTION – ONLY REMEMBERING THAT WHAT WE NEED TO REMEMBER

• JUST NOTICEABLE DIFFERENCE(JND)

• HALO EFFECT

• PERCEPTION OF COLOR , DESIGN etc

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How we perceive things or persons that depends on our attitude , Interest , experience, expectation and on certain attributes of the things

itself. We usually notice things which we have

interest in “ Oh ! This is like my own car !!!”

‘We are influenced by our experiences and experience forms our attitudes ‘- “Kolkata Kolkata Traffic is badTraffic is bad”.

Our Expectations influence our perception towords something. ”The food quality of five star hotel must be good , because we expect high service from them “

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Something that is golden in color seems “precious“. “ Foreign “ means High quality.“ Japanese“ means “Highly technical and good quality ”“ Horse” means speed. “ Fragrance/Perfume “ elicits a feeling of “wellbeing’.“Bright Colors” means ‘exuberance’ or ‘Fun’.“Green” means fresh or young.“ fair complex means beautiful”“ Sony makes good quality Television , their Mobile Phones should be also good” “ Made in India “ confers to compromised quality. “ Athletes make good sales people”“ Anything that is Diamond Shaped evokes a feeling of “preciousness”.“preciousness”. “ “ Anything natural has Anything natural has lowlow side effects” side effects”““ BengalisBengalis are sweet lovers” are sweet lovers”“ “ South IndiansSouth Indians have not much varieties in their food ” have not much varieties in their food ”“ “ Bombay Bombay is a costly city ”is a costly city ”

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MEMORY(EXPERIENCEEXPERIENCE)

Sensory MemoryShort Term

Memory

Long Term Memory

Sensory inputs

Forgotten Material

Rehearsal

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Consumer LearningConsumer Learning

• Classical Conditioning - Pavlov

Beheavioral Learning TheoriesBeheavioral Learning Theories

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APPLICATION OF CLASSICAL CONDITIONINGAPPLICATION OF CLASSICAL CONDITIONING

Natural Stimulus -- Natural Response

Artificial stimulus -- Natural response

Fragrance of Natural Jasmine elicit pleasant feeling

Perfume of Jasmine elicit same pleasant feeling, Picture of Jasmine brings the same feeling

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Consumer Learning

• Operant Conditioning – B. F Skinner

Behaviour elicitedBehaviour elicited

Reward or PunishmentReward or PunishmentReward or PunishmentReward or Punishment

Likelyhood of Likelyhood of increase or increase or Decrease in Decrease in

response response probabilityprobability

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• Positive ( + feeling) Reinforcement –

• “Buy one , get one free”

• Negative (- feeling) Reinforcement –

“ buy Colgate, get rid of bad breath “

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COMBINATION OF Classical COMBINATION OF Classical Conditioning AND Operant Conditioning AND Operant

ConditioningConditioning

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RISK PERCEPTIONRISK PERCEPTION

• PHYSICAL RISK

• PERFORMANCE RISK

• FINANCIAL RISK

• SOCIAL RISK

• Psychological Risk

Risk takers try new products

Risk – avoiders are brand loyal

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CultureCulture

• Cultural influence on purchase

• Sub cultural influence

• Mixed cultural Influence

Subculture• BENGALI,GUJRATI ,Punjabi etc

Mixed Culture

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PERSONAL FACTORS• AGE

• FAMILY LIFE CYCLE

• INCOME

• PERSONALITY AND LIFE STYLE

YOUNG AND SINGLE

JUST MARRIEDMARRIED WITH KID

MARRIED WITHOUT KID

MIDDLE AGED

OLD

KIDS

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PERSONAL FACTORSPERSONAL FACTORSPERSONAL FACTORSPERSONAL FACTORS• CONSUMPTION IS DOMINATED BY THE SOCIAL

CLASSES AND THEIR INCOMESPREVIOUS SOCIAL CLASS STRUCTURES

> UPPER CLASS MIDDLE CLASS LOWER CLASS

MODERN CLASS STRUCTURE Globals (Expats) ( More than Rs. 20 Lakh /annum) Strivers ( Rs 5- 15L / annum) Seekers ( Rs 2- 5L /annum) Aspirers ( Rs 90,000 – 2L/annum ) Deprived ( Less 90,000 / annum)

MIDDLE CLASSMIDDLE CLASS

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CONSUMPTION PATTERN IN INDIA FOR CONSUMPTION PATTERN IN INDIA FOR MIDDLE CLASSMIDDLE CLASS

• GROWTH IN YOUNG WORK FORCE

• WORKING COUPLES WITH NO KIDS

• WORKING COUPLES WITH ONE KID

• INCREASE IN WHITE COLLAR PROFESSIONALS LIKE DOCTORS , IT PEOPLE , ARCHITECTS, FASION DESIGNERS ,BANKERS , LAWERS etc.

THIS CLASS GOES FOR EXPENSIVE ITEMS,EATING OUTS , WANTS TO SHOW OFF , ENJOYS A LOT OF CREDIT FACILITIES –

INDULGE IN ASPIRATIONAL PURCHASESASPIRATIONAL PURCHASES

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DEMOGRAPHIC SEGMENTATION – Source : Mint , March 16 ,2012 , kolkata N=2000 , Citi emerging India Research

Highest Spending segment

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REFERENCE GROUPS

• PRIMARY GROUP or Family of Procreation or family of orientation

• ASSOCIATIVE OR SECONDARY GROUP

• CELEBRITIES

• OPINION LEADERS

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Consumer’s Behavioural Decision Process

FIVE STAGE MODEL

Need Recognition

InformationSearch

Evaluation of alternatives

purchase Decision Post purchase

behaviours

TOTAL SET

CONSIDERATION SET

AWARENESS SET

CHOICE SET DECISION SET

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Post Purchase Behaviour

Performance matches

expectation

Performance exceeds

expectation

Performance below

expectation

Neutral Exit Complain

Negative Word

of Mouth

Cognitive Cognitive DissonancDissonancee

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MODELS OF CONSUMER BEHAVIOURMODELS OF CONSUMER BEHAVIOUR::

1.1. The Nicosia ModelThe Nicosia Model

2.2. The Howard – Sheth ModelThe Howard – Sheth Model

3.3. The EBM ModelThe EBM Model

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The Nicosia ModelThe Nicosia Model

Refer to page -374 ,S S kazmi , Batra book

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The Howard – Sheth ModelThe Howard – Sheth Model

Refer to page -375 ,S S kazmi , Batra book

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ENGEL,BLACKWELL,MINIARD MODELENGEL,BLACKWELL,MINIARD MODELENGEL,BLACKWELL,MINIARD MODELENGEL,BLACKWELL,MINIARD MODEL

Refer to page -376 ,S S kazmi , Batra book

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Diffusion of InnovationDiffusion of Innovation

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• SEGMENTATION IS A PROCESS OF DIVIDING ENTIRE HETEREOGENOUS MARKET IN DIFFERENT CATEGORIES DEPENDING ON THEIR HOMOGENIOUS (SIMILAR) CHARACTERISTICS

3-5 lakh /annum

5- 7 lakh /annum

7- 10 lakh /annum

>10 lakh /annum

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Bases for Segmentation

• Geographic – Location

• Demographic – Age, gender, Income • Psychographic – Personality , Lifestyle

• Behaviorist – Occasion, Benefits sought

• Demographic – Psychographic – Mixture of Demo and Psycho

A Product for eastern India, A product for Old people , A product for teenagers , A product for fun loving people, A product for wedding season

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1.CONSIDER VARIABLES OF 1.CONSIDER VARIABLES OF SEGMENTATIONSEGMENTATION2. EVALUATION of SEGMENTS 2. EVALUATION of SEGMENTS

3. DEVELOP PROFILE FOR EACH 3. DEVELOP PROFILE FOR EACH SEMNENTSEMNENT

SEGMENTATION VARIABLESSEGMENTATION VARIABLES

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MARKET SEGMENATIONMARKET SEGMENATION

Entry Level SegmentEntry Level Segment

Mid Level SegmentMid Level Segment

Upper SegmentUpper Segment

Premium SegmentPremium Segment

MARUTI SUZUKIMARUTI SUZUKI – – Segmentation Segmentation

Based on Price and affordabilityBased on Price and affordability

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