1. Principles of Marketing SESSION:10-15

2. Model of Consumer Behavior

3. Factors Influencing Consumer Behavior Cultural factors Social factors Personal factors Psychological factors

4. Culture Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions.

5. Subcultures Nationalities Religions Racial groups Geographic regions

6. Fast Facts About American Culture The average American: chews 300 sticks of gum a year goes to the movies 9 times a year takes 4 trips per year attends a sporting event 7 times each year

7. Social Classes Upper uppers Lower uppers Upper middles Middle Working Upper lowers Lower lowers

8. Characteristics of Social Classes Within a class, people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Class designation is mobile over time

9. Social Factors Reference groups Family Social roles Statuses

10. Reference Groups Membership groups Primary groups Secondary groups Aspirational groups Disassociative groups

11. Family Distinctions Affecting Buying Decisions Family of Orientation Family of Procreation

12. Personal Factors Age Life cycle stage Occupation Wealth Personality Values Lifestyle Self-concept

13. Brand Personality Sincerity Excitement Competence Sophistication Ruggedness

14. Lifestyle Influences Multi-tasking Time-starved Money-constrained

15. Psychological Factors Motivation Perception Learning Beliefs & Attitude

16. Motivation Freud’s Theory Behavior is guided by subconscious motivations Maslow’s Hierarchy of Needs Behavior is driven by lowest, unmet need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene factors

17. Maslow’s Hierarchy of Needs Physiological needs Safety needs Social needs Esteem needs Self-actualization needs

18. Perception Selective attention Selective retention Selective distortion Subliminal perception

19. Learning When people act, they learn Four sources of learning: Reading, seeing, Hearing & experiencing. Applying learning theory, marketers can build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement

20. Beliefs and Attitudes A belief is a descriptive thought that a person holds about something. Beliefs may be based on knowledge, opinion, or faith, and they may or may not carry an emotional charge for example, that the impact of country of origin varies with the type of product

21. An attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. People have attitudes toward almost everything: religion, politics, clothes, music, food. Attitudes put them into a frame of mind of liking or disliking an object, moving toward or away from it they are very difficult to change well advised to fit its product into existing attitudes rather than to try to change people’s attitudes

22. Consumer Buying Process Problem recognition Information search Evaluation Purchase decision Postpurchase behavior

23. 1.Need or Problem Recognition: Consumers perceive a need and becomes motivated to solve the problem Is caused by the difference between the consumer’s ideal state and the actual state of mind Sources of problem/Need recognition: Out of stock Dissatisfaction with the current product New needs/want

24. Sources of problem/Need recognition: Related products purchase New products 2.Information Search: Search and gather products/services that will fulfill the need or satisfy the want a. Internal Search: Search for information stored in memory to recall past experiences and/or knowledge regarding various purchase alternatives

25. b. External Search: Personal Sources: Friends, relatives and co-workers Commercial sources: Information from advertisement, sales people, Internet etc Public Sources: Articles in magazines, newspapers and report on TV Personal experience: Examining and testing the product

26. 3.Evaluation of Alternatives: High-Involvement Purchases: Those involving high expenditure or personal risk need to be extensively evaluated. Ex: buying a car, House Low-Involvement Purchases: Involves simple evaluation process. Ex: buying a soft drink, choosing a bottle of Jam etc Alternative brands or products are evaluated with respect to its benefit, features and price etc

27. 4.Purchase Decision: Choosing the product/service that the consumer thinks is the best fit or ideal one is done in this stage. The actual purchase is made here

28. 5. Post-Purchase Evaluation: Consumers in this stage uses the product and check if it does meet the expectation. If the product meet the expectation the consumer is satisfied very much and If it is below expectation the consumer is dissatisfied. Satisfaction leads to future purchases of the product in particular and brand image being built and dissatisfaction leads to disliking

29. Business Buying Decisions Business buying refers to the decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers.

30. Characteristics of Business Markets Fewer, larger buyers Close supplier-customer relationships Professional purchasing Many buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

31. Stages in the Business Buying Process: Buy phases Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review

32. The Buying Participants Initiators Users Influencers Deciders Approvers Buyers Gatekeepers