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Consumer Behaviour Prof Sameer Kulkarni. Consumer Mind: A Black Box Stimulus Company Controlled Product Price Advertising Promotion Display Distribution.

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Presentation on theme: "Consumer Behaviour Prof Sameer Kulkarni. Consumer Mind: A Black Box Stimulus Company Controlled Product Price Advertising Promotion Display Distribution."— Presentation transcript:

1 Consumer Behaviour Prof Sameer Kulkarni

2 Consumer Mind: A Black Box Stimulus Company Controlled Product Price Advertising Promotion Display Distribution Social Word of Mouth Reference Group Consumer Mind (Black Box) Response Buy No Buy

3 Customer Decision Making Process Media Borderless Competition Technology Development/ New Generations CUSTOMER Awareness Values Differ Pleasure vs. Instant Pleasure Social Structure Individualism vs. Collectivism Personality Assertive Exhibitionist Self Concept Life-Style Aspirations Drivers of Change

4 How they Buy ? High involvement products: High price Complex features Significant differences between alternatives High perceived risk Reflect self concept of buyer E.g. Selection of a Car

5 How they Buy ? Low involvement products Alternatives within the same product class are similar Does not reflect buyers self concept Frequent brand switching behaviour E.g. buying a bathing bar (Toilet Soap)

6 Purchase decision in low involvement products Problem/need Recognition Evaluation of Alternatives Decision

7 Theory of evoked set (Howard & sheths theory) Total Set (All Brands) Awareness Set (Brands aware of) Consideration Set (Brands Considered) Decision Set (Brand Decided) Purchase Set Total Set IFB, Whirlpool LG Samsung Godrej Awareness Set IFB, Whirlpool LG, Samsung Consideration Set Whirlpool, LG Samsung Decision Set Whirlpool, Godrej Purchase Set Godrej

8 Its not product but the Situation Routinized response Limited problem solving Extensive problem solving

9 Types of Buying Behavior High InvolvementLow Involvement Significant Differences Between Brands Complex Buying Behaviour Variety Seeking Buying Behaviour Few Differences Between Brands Dissonance Reducing Buying Behaviour Habitual Buying Behaviour

10 Motivational reasons Sheths consumer motives – Five dimensions of motivation concerning products/services benefits Functional – utility or function performed Aesthetic/emotional – appearance or attractiveness Social – status or esteem value Situational – unexpected benefit Curiosity – interest aroused

11 Purchase decision in high involvement products Need Recognition Development of Decision Criteria Search for Alternatives Evaluation of Alternatives Decision

12 Routinized response (straight re buy) Customer is aware of his /her choice Decision is based on personal experience Spends little /no time in choosing an alternative Perceives low risks

13 Limited problem solving (modified re buy) Launch of a new product which leads in a change in the customers decision criteria. Buying leads to trial purchase Brand extension helps in removing obstacles Perceives moderate risk

14 Extensive problem solving (new task) Requires extensive learning Awareness about alternatives is zero Has no decision criteria Unable to evaluate different brands Relocating to a new & unknown environment

15 Rational behind behaviour Buyer Motivations Economic Factors Psychological Factors

16 Psychological Factors Motivation Learning Perception

17 Motivation (Sigmund Freud) Id (Irrational/emotional) Super Ego (Moral) Socially accepted methods Ego (Extremely rational)

18 Influence on Buyer Behaviour Cultural Culture Subculture Social Class Social Reference Group Family Roles & Statuses Personal Age life cycle state Occupation Economic circumstances Life style personality and self concept Psychological Motivation Perception Learning Beliefs and attitudes Buyer

19 Values motivates in buying Functional value Conditional value Social value Emotional value Knowledge value (according to Sheth, Newman & Gross)

20 Learning Theory Human behaviour is learnt One the pain of punishment the lure of rewards Directing human behaviour is done by developing stimuli and cues which bring to fore the latent need Attractive advertisement, shelf display, packaging, how to use instructions,store layout,availability & sales persons are examples of cues developed by a marketer.

21 Basis of Differences Gender differences – hunter=men, nurse=women Intelligence differences – caste, class, education, etc. Personality differences – job specializations

22 Plato stated more than 2000 years ago: No two persons are born exactly alike; but each differs from the other in natural endowments, one being suited for one occupation and the other for another.

23 Cognitive dissonance theory Leon Festinger-1957,wrote the theory of cognitive dissonance Psychological discomfort caused by inconsistency among a persons beliefs, attitudes / actions e.g. smoking Varies in intensity based on importance of issue & degree of inconsistency

24 Lifestyles (Indian Perspective) IntegratedOuter Driven Internally Driven Need Driven Survivors Sustainers Be longer I-am-me Experiment Socially Conscious Emulator Achiever

25 Buyer lifestyle Survivors: Price conscious, not very knowledgeable, depressed. Sustainers: Strugglers, swayed by brand guarantee, impulse buyers. Belongers: Conventional conservative, nostalgic, unexperimental. Emulators : Ambitious, upwardly mobile, status conscious, buy to impress others. Achievers : Leaders, work in hi tech top line products. I-am-me: Young, Self engrossed, impulsive. Experimental : Pursue a rich inner life, High sense of social resp. Integrate : Fully matured psychologically, combination of best elements


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