Consumer Behavior & Psychology

Definition Consumer buyer behavior refers to the buying behavior of final consumers- individuals and households that buy goods for consumption- Kotler All these final consumers make up the consumer market It can also be defined as the study of consumers and the processes they use to choose, use (consume), and dispose of products and services.

Model of Consumer Behaviour How do consumers respond to various marketing efforts the company might use?

Characteristics Affecting Consumer behavior

Cultural Factors Culture- set of basic values, perceptions and behavior learned by a member of society from family and other institutions Subculture- a group of people with shared value systems based on common life experiences Social class- relatively permanent and ordered divisions in a society whose members share similar values and behavior

Social Factors Groups- 2 or more people interact to achieve mutual goals. Reference groups serve as points of comparison and influence buyer behavior. Opinion leaders drive trends and influence mass opinion Family- buying roles have changed with evolving consumer lifestyles. Wives, children play a larger role. Roles & Status- a person plays different roles in their lives and is accorded a status based on these roles.

Personal Factors Age & life-cycle stage- impact of the family life cycle needs to be considered. Occupation Economic situation Lifestyle- depicts a persons pattern of living. Lifestyle profiling helps to understand persons method of interaction with the world Personality & self concept- can be used to describe certain characteristics like sociability, aggressiveness, etc.

Psychological Factors Motivation- a need that is sufficiently pressing to direct the person to seek satisfaction Perception- process by which people select, organize & interpret information to form a meaningful picture Learning – changes in an individuals behavior arising from experience Beliefs & Attitudes- belief is a descriptive thought that a person has about something. Attitude describes a persons consistent tendency towards and object/idea. Attitudes are difficult to change

Types of Buying Decision Behaviour

Complex Buying Behaviour eg: Electronics Type of Product Expensive Risky Purchased infrequently Highly self-expressive Brand Must understand the information gathering and evaluation behaviour of buyers Need to help buyers learn about the product –class, attributes and relative importance Describe benefits – Print media Motivate stores sales people and buyers acquaintance to influence the final brand choice

Dissonance-reducing Buying Behaviour Type of product Expensive Risky Purchased infrequently Highly self-expressive Brand Provide a good price Offer convenience Mitigate dissonance - provide after sales communication with evidence and support to help consumers feel good about there product eg; Carpets, Furniture

Habitual Buying Behaviour Type of product In expensive Frequently Purchased Familiar/ loyal Brand Provide a good price Offer Promotions Create top of mind – use colors symbols (TV led advertising) eg; personnel care products

Variety Seeking Buying Behaviour Type of product In expensive Frequently Purchased Familiar Large choice/variety Brand Market Leader – create habitual behaviour Dominating shelf space Stocking up Reminder advertisements Challengers Offers lower price/special deals Coupons, samples Advertising that presence reason for trying something new eg; confectionary

The Buyer Decision Process

The Buyer Decision Process for New Products Consumer go through five stages in the process of adopting a new product: Awareness Interest Evaluation Trial Adoption

Zero Moment of Truth

Individual Differences in Innovativeness Marketing efforts in innovation

Influence of Product Characteristics on Rate of Adoption Relative advantage Compatibility Complexity Divisibility Communicability

Business Buyer Behavior

Major types of Buying situations Straight re-buy- buyer routinely reorders without any modification Modified re-buy- buyer may modify product specs, prices, terms, etc. New task- purchases a product or service for the first time Systems selling- buying a packaged solution from a single seller

Participants in the Business buying Users- Members who will actually use the product Influencers- people who affect the buying decision. Will provide information to evaluate alternatives Buyers- people with authority to select buyer and arrange terms of purchase Deciders – have the power to select/approve the vendor Gatekeepers- control the flow of information to others

Major influences on business buyer behavior

Stages of the business buying process