1. Amity School of Business 1 Amity School of Business Marketing Management - I Module – IV Ruchi Khandelwal

2. Amity School of Business 2 Consumer Behavior The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose off products, services, experiences, or ideas to satisfy needs and the impacts that these processes have.

3. Amity School of Business 3 Marketing and Other Stimuli Marketing and Other Stimuli Buyer’s Response Product Price Place Promotion Economic Technological Political Cultural Characteristics Affecting Consumer Behavior (Cultural, social, Personal, Psychological Buyer’s Decision Process Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount Buyer Model of Consumer Behavior

4. Amity School of Business 4 Factors influencing Consumer Behavior Cultural Social Personal Psychological

5. Amity School of Business 5 Cultural Factors Includes: –Culture –Sub Culture –Social Class Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions.

6. Amity School of Business 6 Cultural Factors Each culture consists of smaller sub cultures that provides more specific identification for their members. When sub cultures grow large companies often design specialized marketing programs to serve them, such programs are known as diversity marketing. Multicultural marketing grew out of careful marketing research, which revealed that different ethnic and demographic niches did not always respond favorably to mass market advertising.

7. Amity School of Business 7 Cultural Factors Social Class –Indian marketers use a term called Socioeconomic Classification (SEC), which uses a combination of the education and occupation of the chief wage earner of the household to classify buyers in the urban areas. This classifies all the urban households into eight broad categories namely A1, A2, B1, B2, C, D, E1, and E2;with A1 signifying the highest purchase potential and E2 signifying the lowest. –People behave similarly within a particular social class. –Social classes differ in dress, speech patterns, recreational preferences etc. –Individuals can move up or down the social ladder. –Social classes show distinct product and brand preferences, differ in media preferences.

8. Amity School of Business 8 Social Factors Includes –Reference Groups –Family –Social Role –Status Reference Groups: –All the groups that have a direct or indirect influence on person’s attitude and behavior. –Expose people to new behavior, lifestyles and influence attitude and self concept. –Create pressure for conformity.

9. Amity School of Business 9 Social Factors Direct Influence: Membership Groups –Primary Groups –Secondary Groups People are also influenced by groups to which they do not belong. –Aspirational Groups –Dissociative Groups Opinion leader- a person in informal, product-related communications who offers advice or information about a specific product or product category.

10. Amity School of Business 10 Social Factors Family: –Two families in a buyers life can be distinguished: Family of orientation: Family of procreation: Roles and Status: –A person participates in many groups- family, clubs, organizations. –Person’s position in each can be defined in terms of role and status. –Role consists of activity a person is expected to perform. –Each role carries a status.

11. Amity School of Business 11 Personal Factors Includes –Personality and Self Concept –Age and Stage in Lifecycle –Occupation & Economic circumstances –Lifestyle Personality & Self-Concept –Personality is a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environment stimuli. –Consumers often use and choose brands that have a brand personality consistent with their own actual self-concept, ideal self-concept or other’s self-concept. Age and Stage in Lifecycle: –People buy different goods and services over a lifetime. –Consumption is shaped by family life cycle.

12. Amity School of Business 12 Personal Factors Bachelor Stage Newly Married couple Full nest I Full Nest II Young, Single, Few Financial Burdens, Fashion Opinion leaders. Buy Basic Home equipment, Car, Furniture, Vacations Young, No children, Highest purchase rate and highest average purchase of durables: cars, appliances, furniture Youngest Child under 6. Home purchasing at Peak. Liquid assets low. Buys: washers, Dryers, Baby Food, Toys, Skates. Youngest child 6 or over. Financial Position better. Less influenced by advertising,. Buy Larger size packages. Buy: many foods, Bicycles, music lessons, pianos Stages in Family Life Cycle

13. Amity School of Business 13 Personal Factors Full Nest III Empty Nest I Empty Nest II Solitary Survivor Old married Couples with dependent children. Some children gets jobs. Hard to influence with advertising. High average purchase of durables, unnecessary appliances. Older married couples. No children living with the. Head of household working. Most satisfied with financial position and money saved. Interested in travel, recreation, making gifts and contributions. Buy: vacations, home improvements. Older married. Head of household retired. Drastic cut in Income. Keep home. Buy; Medical Care products Retired. Same medical and product needs. Special need for attention, affection and security. Stages in Family Life Cycle

14. Amity School of Business 14 Personal Factors Occupation and Economic Circumstances: –Occupation also influences consumption patterns. –Some organizations tailor their products to suit certain occupational groups. –Economic Circumstances: Disposable Income, savings and assets, attitude towards spending and saving. Lifestyle –A lifestyle is a person’s pattern of living in the world as expressed in his or her activities, interests and opinions (AIO dimensions).

15. Amity School of Business 15 Personal Factors SRI Values and Lifestyles Typology (VALS 2) –Classifies people according to how they spend their time and money –Divides consumers into eight groups based on two major dimensions: primary motivation and resources –Primary Motivation groups include Ideals-oriented consumers Achievement-oriented buyers Self-expression-oriented buyers –Consumers within each orientation are further classified into those with abundant resources and those with minimal resources depending on whether they have high or low levels of income, education, health, self- confidence, energy and other factors.

16. Amity School of Business 16 VALS Lifestyle Classification

17. Amity School of Business 17 Personal Factors LOHAS –Consumers who worry about the environment, want products to be produced in a sustainable way, and spend money to advance their personal development and potential have been named “LOHAS” (Lifestyles of Health and Sustainability) –The market for LOHAS products encompasses things like organic foods, energy-efficient appliances, alternative medicine, yoga tapes, ecotourism etc.

18. Amity School of Business 18 Psychological Factors Includes –Motivation –Perception –Beliefs & Attitudes –Learning Motivation –A person has many needs Biogenic: Physiological Psychogenic: Psychological –When aroused to a sufficient level of intensity that drives a person to act, need becomes a motive. –Maslow’s Theory –Herzberg’s Theory

19. Amity School of Business 19 Psychological Factors Perception: –Process by which an individual selects, organizes and interprets information. –People may have different perceptions of the same object because of: Selective attention Selective distortion Selective retention

20. Amity School of Business 20 Psychological Factors Beliefs and Attitudes: –Belief is a descriptive thought that a person holds about something. –People belief about a product will influence their buying decisions. –Attitude is a person’s enduring favorable or unfavorable evaluations, feelings and action tendencies towards some object or idea. Learning –The interplay of drives, stimuli, cues, responses and reinforcement.

21. Amity School of Business 21 Buying Roles BUYING ROLES InitiatorInfluencer User BuyerDecider

22. Amity School of Business 22 Types of Buying Behavior (Model given by Henry Assael) Complex Buying Behaviour Variety-Seeking Buying Behaviour Habitual Buying Behaviour Dissonance-reducing Buying Behaviour Significant differences between brands Few differences between brands High Involvement Low Involvement

23. Amity School of Business 23 Buying Decision Process Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behavior

24. Amity School of Business 24 Product Get rid of it temporarily Get rid permanently Keep It Rent it Lend it Use it to serve original purpose Convert it to serve a new purpose Store it Give it away Trade it Sell it Throw it away To be resold To be used Direct to consumer Through middlemen To intermediary

25. Amity School of Business 25 Profiling the Customer Buying Decision Process Introspective method Retrospective method Prospective method Prescriptive method