Consumer Behaviour Prof Sameer Kulkarni

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

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

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

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)

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

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

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

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

Motivational reasons Sheth’s 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

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

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

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

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

Rational behind behaviour Buyer Motivations Economic Factors Psychological

Psychological Factors Motivation Learning Perception

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

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

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

Learning Theory Human behaviour is learnt One learns @ the pain of punishment Or @ 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.

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

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.”

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

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

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