Consumer Behaviour- Decision Making

8/8/2019 Consumer Behaviour- Decision Making

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Consumer Behavior

Consumer Decision Making


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Opinion Leadership What is opinion leadership?

Opinion leadership is the process by which one

person(opinion leader) informally influences theactions and attitudes of others, who may be

opinion seekers or merely opinion receipiences.

Informal communication of consumption related

influence between two people is referred as word

of mouth.


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Opinion Leader One of the parties in an informal product

related communications encounter usually

offers advise or information about a specific

product orproduct category such as which

brand is best. This person is called opinion

leader.


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Opinion Seeker Individuals who actively seek information

and advise about products sometimes are

called opinion seekers.


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Dynamics of the opinion

leadershipprocess The opinion leadershipprocess is very dynamic.

Opinion leaders are persuasive: Opinion leaders

are remarkably effective due to the followingreasons:

a) Credibility: Opinion leaders are highly crediblesources ofproduct-related information because

they ususally are perceived as objectiveconceiving the information. Their intentions areperceived as being in the best interest of theopinion receivers.


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Contd., B) Positive and Negative information: Information

provided by marketers is invariably favorable to

theproduct. Thus the very fact the opinion leadersprovide both favorable and unfavorableinformation adds to their credibility.

C) Information and advice: Opinion leaders are

source of both information and advice. They maysimply talk about experience with the product,relate what they know about the product andadvice others either to buy or avoid.


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Contd., D) Opinion leaders is category specific: Opinion

leadership tends to be category specific ie opinion leadersoften specialize in certainproduct categories about which

the offer information and advices. When otherproducts arediscussed , they reverse their roles and become opinionreceivers.

E) Opinion leaders is a two street:- Consumers who areopinion leaders in certain product situation may bereceivers in another situation for the same product. Eg.Lawn mover before purchase to reduce in decision ofwhich brand to buy. Once a brand is choosen to reduce

postpurchase dissonance they may seek opinion to favourhis decision.


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The motivation behind opinion

leadership The need of opinion leader: What

motivates a person to talk about a product

or advice . Motivation theory suggest that

people may provide information or advice

to others to satisfy some basic need of their

own. Opinion leaders may simply be tryingto reduce own post purchase dissonance.

This is called self involvement.


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Contd., In addition to self involvement opinion leader may

also be motivated by product involvement , social

involvement and message involvement. Product involvement: They are pleased that they

talk about theproduct to others.

Social involvement: Need to shareproduct related

experience with friends and relatives.


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The need of opinion receivers Opinion receivers satisfy a variety of needs by

engaging in product related conversations.

1) They obtain new product or new usageinformation.

2) They reduce theirperceived risk by receivingfirst hand knowledge from the user of a specific

product. 3) They reduce the search time entailed in the

identification of a neededproduct or service.


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Contd., Opinion receivers can be certain of

receiving the approval of the opinion

leaders if they follow that persons product

endorsement of advice and purchase the

product.

For all the above, people often look forfriends and neighbours.


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The Diffusion Process The diffusion process is concerned with

how innovations spread and how they are

assimilated within a market. It is a process

of acceptance of an innovation.

This has got 4 steps:- 1) The innovation 2)

Channels of communication 3) The socialSystem 4) Time


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The innovation We can classify them as 1) Firm- oriented

definition 2) Product oriented 3) Market

oriented 4) Consumer oriented .

1) Firm Oriented innovation: This approach

treats the newness of a product from the

perspective of the company producing ormarketing it. When it is new in the

consumer.


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Contd., 2) Product oriented innovation: Product itself is

new.

A) Continous innovation: Modification rather thena newproduct windows95 to windows XP.

B) Dynamically continous innovation: Somewhatdisruptive than continous Eg. Casetteplayer to CD

player. C) Discontinous innovation: Consumers have to

adopt new behaviour. Eg. Cellphone


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Contd., 3) Market Oriented Definitions: Newness

based on how much exposure consumer

have . Eg. Pizza to India.

4) CosumerOriented Definition: Consumer

judges few products to be new. Eg.

Computers.


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Product characteristics that

influence diffusion All products that are new do not have equal

potential for consumer acceptance . Some catch on

fast and some would take a long time. Eg.Cordless took fast, dishwasher- took long.

This depends on 1) Relative advantage 2)

Compatibility 3) Complexity 4) Triability5)

Observability ( early to explaining the attribute)


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The channels of communication For innovation to spread there should be

communication between marketer and

consumer and between consumer ( word of

mouth.)

Eg. TV, CD, internets etc.


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Social system It is the physical , social or cultural

environment to which people belong and

with in which they function.

1) Apositive attitude toward change

2) An advanced technology

3) A general respect for education and

science.


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Time Time is a back bone of diffusion process.

1) The amount ofpurchase time.

2) Identification of adopter categories

3) The rate of adoption

Purchase time refers to the amount of time

that elapses between consumers initialawareness of a new product or service andthe point at which they purchase or reject it.


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Adopter Categories Five adopter categories are frequently cited

in the diffusion process.

1) Innovation Very eager to try new ideas, risk takers 2.5 % people are in thiscategory.

2) Early Adopters- Respect more integratedinto the social system. 13.5 % people are inthis category.


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Contd., C) Early majority: Adopt new ideas just

priory to the average time . 34 %

D) Late majority- Adopt new ideas just after

average time. 34 %

E) Laggards- Last people to adopt . 16 %


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Rate ofAdoption How long it takes a new product or service

to be adopted by members of a social

system.

year

No. ofpeople

01970 2004

10lac


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Innovation Decision Process Knowledge: Consumer is exposed to the innovations

existence and gains some understanding of how it

functions.

Persuasion: (Attitude formation). Consumer forms

favorable or unfavorable attitude towards innovation.

Decision: Consumers engages in activities that lead to a

choice to adopt or reject innovation.

Implementation: Consumerparts innovation in use.

Confirmation: Consumers seeks reinforcement for the

innovation decision.


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Adoptionprocess and

information sources Friends

Mass media( magazines, radio, TV,

publicity)

Sales people


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What is decision It is the selection of an opinion from two or more

alternative choices

Levels of consumer decision making: 1) Extensive Problem solving: What consumers

have no established criteria for evaluating aproduct category or specific brands in that

category or have not narrowed the number ofbrands they will consider to a small, manageablesubset, their decision making efforts can beclassified as extensiveproblem solving. Lot ofinformation is needed to establish a set of criteria.


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Contd., 2) Limited Problem solving: Consumer

already have established the basic criteria

for evaluating the product category and thevarious brands in the category. However

they have not fully established preferences

concerning a select group of brand.


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Contd., 3) Routinized Response Behavior: At this

level, consumers have some experience

with the product category, and a wellestablished set of criteria with which to

evaluate the brands they are considering.


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Consumer Gifting Behaviour

It is defined as the process of gift

exchange that takes place between a giver

and a receipient.

They are 5 gifting sub divisions:-


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Gifting Behaviour

Receiver

Giver Individual Group Self

IndividualInterpersonal

GiftingI

n

t

er

Intercategory

Gifting

Intrapersonal

Gifting

GroupIntercategory

Gifting

Intergroup

Gifting

Intra group

Gifting


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5 Gifting Subdivisions 1) Intergroup Gifting behaviour occurs whenever on group

exchanges get with another group. EG. One family toanother.

2) Intercategory gifting either an individuals is giving a giftto a group . Eg. Singly friend to a couple for anniversary.

3) Intragroup is group giving gift to its self. Eg. Husbandgifting to wife.

4) Interpersonal gifting when just two individualsexchange gift.

5) Intrapersonal gifting occurs when giver and receiver arethe same person.

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Consumer Behaviour- Decision Making

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