Chapter 6

An Introduction toConsumer Behaviour

Made by Bhupinder KaurS.D.College, Ambala cantt

“Remember Me?”

I'm the fellow who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the fellow who goes into a department store and stands quietly while the sales clerks finish their little chitchat. I'm the man who drives into a gasoline station and never blows his horn, but waits patiently while the attendant finishes reading his comic book.

"Yes, you might say, I'm a good guy. But do you know who else I am? I am the fellow who never comes back, and it assumes me to see you spending thousands of dollars every year to get me back into your store, when I was there in the first place, and all you had to do to keep me was to give me a little service; show me a little courtesy.“

Defining Consumer BehaviorConsumer Behavior is the Process

Involved When Individuals or Groups Select, Use, or Dispose of

Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires.

Implications of our Definition

• Totality of Decisions (all decisions)– Whether?– What?– Why?– How?– When?– Where?– How much?– How often?

The Buyer Decision Process

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior

The Buyer Decision ProcessStep 1. Need Recognition

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

Internal Stimuli

• Hunger

• Thirst

• A person’s normal needs

Need RecognitionDifference between an actual state and a desired state

The Buyer Decision ProcessStep 2. Information Search

•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

Personal Sources

Commercial Sources

Public Sources

Experiential Sources

The Buyer Decision ProcessStep 3. Evaluation of Alternatives

Product AttributesEvaluation of Quality, Price, & Features

Degree of ImportanceWhich attributes matter most to me?

Brand BeliefsWhat do I believe about each available brand?

Total Product SatisfactionBased on what I’m looking for, how satisfied

would I be with each product?

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

The Buyer Decision ProcessStep 4. Purchase Decision

Purchase IntentionDesire to buy the most preferred brand

Purchase Decision

Attitudes of others

Unexpected situational factors

The Buyer Decision ProcessStep 5. Postpurchase Behavior

Consumer’s Expectations of Product’s Performance

Dissatisfied Customer

Satisfied Customer!

Product’s Perceived Performance

Cognitive Dissonance

1. Family • Role of the family members InitiatorInfluencer Decider User

2. Reference groups • Primary group – interact with on regular basisFriends Family members Relatives Co workers Example: Avneet wanted to purchase a laptop. She

went to the nearby store and purchased a dell laptop. The reason why she purchased because all her friends were using the same model.

STAGES SHOW DIFFERNT BUYING NEEDS

• Bachelorhood : bike ,smart phones ( spend lavishly).

• Newly married : purchase a new house, car, household furnishing (spends sensibly).

• Family with children : purchase products to secure his as well as family future.

• Empty nest : medicines, health , necessary items.

Secondary groups • Religious groups• Associations • Political parties • Clubs

Example • McDonald’s is a brilliant example of adaptation to

the specificities of each culture and each market. Well aware of the importance to have an offer with specific products to meet the needs and tastes of consumers from different cultures, the fast-food giant has for example: a McBaguette in France (with french baguette and Dijon mustard), a Chicken Maharaja Mac and a Masala Grill Chicken in India (with Indian spices) as well as a Mega Teriyaki Burger (with teriyaki sauce) or Gurakoro (with macaroni gratin and croquettes) in Japan

Psychological factors Perception perception and communication Product and brand perceptionPrice perception Store perceptionPerceived risk

Contd.

• Attitude • Personality• Learning : For example, if you are sick after

drinking milk, you had a negative experience, you associate the milk with this state of discomfort and you “learn” that you should not drink milk. Therefore, you don’t buy milk anymore

Learning model

6 - 27

Learning Model of Buyer Behavior

Economic Model• In this model, consumers follow the principle of

maximum utility based on the law of diminishing marginal utility. Economic man model is based on the following effects −

• Price Effect − Lower the price of the product more will be the quantity purchase.

• Substitution Effect − Lower the price of the substitute product, lower will be the utility of the original product purchase.

• Income Effect − When more income is earned, or more money is available, quantity purchased will be more. The economic theory of buyer’s decision-making was based on the following assumptions:

Chapter 21 - Consumer Choice 29

Utility Theory• Utility

– The want-satisfying power of a good or service

• Utility Analysis– The analysis of consumer decision making based on utility

maximization

• Util– A representative unit by which utility is measured

Chapter 21 - Consumer Choice 30

Utility Theory

• Marginal Utility

– The change in total utility due to a one-unit change in the quantity of a good or service consumed

Marginal utility =Change in total utility

Change in number of units consumed

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ObserveDiminishing

MarginalUtility

• As consumer resources are limited, he would allocate the available money which will maximize the satisfaction of his needs & wants.

• Consumers have complete knowledge about the utility of each product and service, i.e., they are capable of completing the accurate satisfaction that each item is likely to produce.

• As more units of the same item are purchase the marginal utility or satisfaction provided by the next unit of the item will keep on decreasing, according to the law of diminishing marginal utility.

• Price is used as a measure of sacrifice in obtaining the goods or services. The overall objective of the buyer is to maximize his satisfaction out of the act of purchase

The psychoanalytical model

ID : PERSUADER

S

SUPER EGO : DISSUADERS

EGO MODERATED ACTION