2. Chapter 7 Analyzing Consumer Markets and Buyer Behavior

3. A Model of Consumer Behaviour Marketing stimuli Product Price Place Promotion Other stimuli Economic Technological Political Cultural Buyer ’ s characteristics Cultural Social Personal Psychological Buyer ’ s decision process 1.Problem recognition 2.Information search 3.Evaluation 4.Decision 5.Post purchase behavior Buyer ’ s decision 1.Product choice 2.Brand choice 3.Dealer choice 4.Purchase timing 5.Purchase amount

4. Major Factors Influencing Buying Behaviour Cultural factor Social factor Personal factor Psychological factor

5. Cultural Factors Culture Subculture Social Class Buyer

6. Social Factors Reference groups Reference groups -- (membership groups; non-membership groups: aspirational and disociative groups) Family Family -- (family of orientation, family of procreation) Roles and status

7. Personal factors Age and Stage in Life cycle Occupation and Economic circumstance Lifestyle Personality and Self-concept

8. Personality and self-concept Personality Personality: what u r Self-image Self-image: the way u see yourself Actual self-concept Actual self-concept (how u see yourself) Ideal self-concept Ideal self-concept (how you ’ d like to see yourself) Others-self-concept Others-self-concept (how u think others see you)

9. Psychological factors MotivationMotivation PerceptionPerception Beliefs & Attitudes Attitudes LearningLearning

10. Motivation 3 Theories of Motivation Freud ’ s Theory of Motivation Maslow ’ s Theory of Motivation Herzberg ’ s Theory of Motivation

11. Freud ’ s Theory of Motivation Assumption: the real psychological forces shaping people ’ s behavior are largely unconscious. Hence, a person cannot fully comprehend his or her own motivations.

12. Maslow ’ s Theory of Motivation Helps you answer a question of why you have different needs at different times. Answer: Answer: Human needs are arranged in hierarchy, from the most urgent to the least urgent.

13. Maslow ’ s Heirarchy of Needs Psychological needs (food, water, shelter) Psychological needs (food, water, shelter) 1 Safety needs (security, protection) Safety needs (security, protection) 2 Social needs (sense of belonging, love) Social needs (sense of belonging, love) 3 Esteem need (self-esteem, recognition) Esteem need (self-esteem, recognition) 4 Self- actualization (self-development and realization) Self- actualization (self-development and realization) 5

14. Herzberg ’ s Theory of Motivation 2-factor Theory Dissatisfiers Dissatisfiers e.g., absence of basic factors, poor performance on service, etc. Satisfiers Satisfiers (motivator of buying)

15. Perception Selective Attention: selectively pay attention Selective Distortion: twist info in a way that support your fixed idea Selective Retention: selectively retain info

16. Learning When people act, they learn. Learning involves changes in an individual ’ s behavior arising from experience. Generalization: Generalization: u assume that all similar pdts which come from the company that u have had a good/bad experience are also good/bad. Discrimination

17. Beliefs and Attitudes Beliefs: Beliefs: descriptive thoughts, no emotion Pizza Hut delivers its product within 30 mins. Pizza Hut delivers its product within 30 mins. Attitudes: Attitudes: positive or negative evaluations, emotional feelings Pizza Hut provides the quickest and best service in pizza industry. Pizza Hut provides the quickest and best service in pizza industry.

18. Buying Process Buying Roles Buying Behavior Buying Process

19. Buying Roles Initiator: suggesting the idea of buying the product Influencer: viewing or advising influences the decision Decider: deciding on any component of a buying decision Buyer: making the actual purchase User: consuming the product/services

20. Four Types of Buying Behavior SignificantdifferencesbetweenbrandsFewdifferencesbetweenbrands Complex Buying Behavior Dissonance- Reducing Buying Behavior Variety- Seeking Behavior Habitual Buying Behavior High Involvement Low Involvement

21. Complex Buying Behavior Significant differences between brands Product is expensive, bought infrequently, risky, highly self- expressive. Consumers don ’ t know much about the product category. e.g., passenger cars, pianos

22. Dissonance-Reducing Buying Behavior High-involvement purchase Few differences between brands Expensive, infrequent, and risky buying e.g., Mattress(Dunlop vs Slumberland), Furniture(Index vs SB furniture)

23. Habitual Buying Behavior For low-cost, frequently purchased products Few differences between brands Brand familiarity rather than Brand conviction Use price and sales promotion to stimulate product trial e.g., sugar, milk, salt, cooking oil, etc.

24. Variety-seeking buying behavior Low-involvement Significant brand differences A lot of brand switching e.g., shampoo, confectionery, etc.

25. Consumer ’ s Buying Process ProblemrecognitionInformationsearch Evaluation of alternatives Purchasedecision Post purchase behavior

26. 1. Problem Recognition difference actual state and a desire need. A buyer must sense a difference between his or her actual state and a desire need. internal or external stimuli. The need can be aroused by internal or external stimuli.

27. 2. Information Search Sources of info: Personal sources Personal sources (e.g., word of mouth) Commercial sources Commercial sources Public sources Public sources (e.g., ABAC poll) Experimental sources (e.g., a test drive)

28. Decision Making Set Total Set Aware- ness Set Consid- eration Set Choice Set Decision

29. 3. Evaluation of Alternatives Identify attributes of the products Assign weights to each attribute Find perceived value of each attribute for a particular brand Sum up the points

30. 3. Evaluation of Alternatives (2) Evaluate the attributes of a product Available strategies to stimulate interest Modify the product(Real Repositioning) Modify the product (Real Repositioning) Alter beliefs about the brand (Psychological repositioning) Alter beliefs about the brand (Psychological repositioning) Alter beliefs about the competitors ’ brands (Competitive Depositioning) Alter beliefs about the competitors ’ brands (Competitive Depositioning) Alter the important weights Alter the important weights Call attention to neglected attributes Call attention to neglected attributes

31. 4. Purchase Decision Evaluationofalternatives Purchaseintention Unanticipatedsituationalfactors Attitude of others Purchasedecision

32. 5. Postpurchase Behavior Postpurchase Satisfaction Pospurchase Actions Exit option Voice option Postpurchase Use and Disposal

33. How Customers Use or Dispose of Products Product Get rid of it temporarily permanently Keep it Loan it Rent it Give it away Trade it Sell it Throw it away Store it Convert to new purpose Use for originalpurpose To be used (re)sold Direct to consumer Tointermediary Throughmiddleman