Analyzing Consumer Markets Consumer Buying Behavior Consumer Buying

Analyzing Consumer Markets

Consumer Buying Behavior ► Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption. ► Study consumer behavior to answer: “How do consumers respond to marketing efforts the company might use? ”

Model of Consumer Behavior Product Price Marketing and Other Stimuli Economic Technological Place Political Promotion Cultural Buyer’s Decision Process Product Choice Brand Choice Dealer Choice Buyer’s Black Box Buyer’s Response Characteristics Affecting Consumer Behavior Purchase Timing Purchase Amount

Culture The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society. When to eat, Where to eat, What to eat for each meal, What to serve guests at a dinner party, picnic, or wedding. Sub-Culture – More specific identification and socialization for their members

Marketing Mix Adaptation In India, Mc. Donald’s serves chicken, fish, and vegetable burgers, and the Maharaja Mac—two all-mutton patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun. 3 -6

Traditionally , Jewellery and Mehndi are very important for Brides in India Cultural Values help marketers to plan their Marketing Mix accordingly. Multicultural Marketing in recent years

Sub cultures: Targeting Hindi speaking belt of North India

Sub-cultures: During Navaratri , most Hindus observe Fast and stay vegetarian. This Ad is meant to attract particularly this group and others who are vegetarian

Cultural Shifts

Factors Affecting Consumer Behavior: Social Factors Groups • Membership • Reference Family • Husband, wife, kids • Influencer, buyer, user Roles and Status Social Factors

Reference Group’s Influences on Consumer Seek expert advice from sources such as friends , neighbors rather than Advertising ► Compare their attitudes with those of the members of important groups. ► Expose them to new behaviors & lifestyle ► They create pressure for conformity that effect actual Product and brand choice ► Marketers use spokesperson perceived by consumers similar to them Like Lalitaji in the Ads of Surf viewed as typical housewife

Actual referent , a “typical “ consumer” “Bhai Sahab Surf ki Kharidari mein hi Samajhdari Hai”

WOM and Buzz Marketing Word-of-mouth influence and buzz marketing § Opinion leaders are people within a reference group who exert social influence on others § Also called influentials or leading adopters § Marketers identify them to use as brand ambassadors ► P&G Tremour ► Kit-Kat Kubes Nestle hired a agency to create buzz among Opinion leaders in the age of 16 -25 market A database of about 20, 000 was sent Text messages to 100 Opinion leaders. They were sent large box of Kit-Kat ►

► Normative Influence : Conformity to behave in the way as the group behaves Marketers try to show that people patronize brands approved by the group e. g. Mobile phones , bikes become status symbol for youngsters Fear appeals : Colgate Suraksha Chakra , Pimple remedies , anti- Dandruff shampoos , Toothpaste to stop bad breadth , Orient PSPO

Households Family Households: Married couple, Nuclear family, Extended family Households Non-Family Households: Unmarried couples, Friends/ Roommates, Boarders

Functions of the Family ► ► ► They are the most important consumer buying organization in society Husband wife Involvement Men now doing 40% of food shopping Women today now involve in more technology purchase Children have strong influence on family ‘s buying decision

Factors Affecting Consumer Behavior: Personal Factors Personal Influences Age and Family Life Cycle Stage Economic Situation Occupation Personality & Self-Concept

Age and life-cycle stage ► RBC Royal Band stages § Youth: younger than 18 § Getting started: 18– 35 § Builders: 35– 50 § Accumulators: 50– 60 § Preservers: over 60

Occupation and economic circumstances ► Marketers should try identify the occupational groups that have interest in their products and services ► Product choice is greatly affected by the economic circumstances – spendable income , savings Brands like Gucci , Prada , Loui Vouiton in economic downturn

Personality & Self concept What is Personality? The inner psychological characteristics that both determine and reflect how a person responds to his or her environment.

Personality Traits ► Levis with ruggedness , MTV with Excitement , CNN with competence ► Levis – Youthful , fashion. Conscious ► Company utilizes product features , services and image making to transmit the product’s personality ► Consumers choose brand personality consistent with their own actual self concept (how one views oneself), Consumer's ideal concept ( how one would like o view oneself) or even other’s self concept (how one thinks others sees one ) rather than actual self image

Life-style and values It is person’s pattern of living in the world as expressed in activities , interests , and Opinions e. g Mountain Dew , Kure – Teda hai par Mera Hai , Kit – Kat , Wal Mart & Big bazaar with EDLP for Money constrained consumers , Ready made food for Time constrained consumers ► Marketers even uncovers new trends in consumer lifestyles – e. g Atkins Food for Diet conscious , green customer ►

Factors Affecting Consumer Behavior: Psychological Motivation Beliefs and Attitudes Psychological Factors Learning Perception

Maslow’s Hierarchy of Needs Why people are driven by particular needs ? What consumer products might fulfill multiple levels of the Hierarchy of Needs? Self Actualization (Self-development) Esteem Needs (self-esteem, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst) High –tech products such as computers or sound systems and luxury products such as furs , big cars or expensive furniture All personal care and grooming products e. g. cosmetics , mouthwash, shaving cream, clothes insurance , preventive medical services and home security systems health foods , medicines and low fat and diet products Help marketers understand how various products fit into plans and lives of consumers

Perception is the process by which individual selects , organizes and interprets information inputs to create a meaningful picture of the world ► Three Perceptual processes § Selective attention – 50 -100 Ads - some stimuli will be screened out § Selective distortion- tendency to interpret information in a way that will fit our preconceptions § Selective retention – fail to register much information and retain to what supports them. We remember good pts of product we like and § Subliminal perception – Consumers are not consciously aware , but yet they affect their behavior ►

Influencing Buyer Behavior § Learning - Changes in Individuals behavior arising from experience Learning occurs through interplay of Drive , Stimuli, Cues , responses and reinforcement § Beliefs and Attitudes: Mc Donald's adapting to religion and family orientations

Types of Buying Decisions High Involvement Low Involvement Significant differences between brands Complex Buying Behavior Variety. Seeking Behavior Few differences between brands Dissonance. Reducing Buying Behavior T. V Automobiles Habitual Buying Behavior Cookies Salt

The Buyer Decision Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behavior

The Buyer Decision Process Step 1. Need Recognition Difference between an actual state and a desired state Internal Stimuli External Stimuli • Hunger • TV advertising • Thirst • Magazine ad • A person’s normal needs • Radio slogan • Stimuli in the environment

The Buyer Decision Process Step 2. Information Search Personal Sources • Family, friends, neighbors • Most influential source of information Commercial Sources • Advertising, salespeople • Receives most information from these sources Public Sources Experiential Sources • Mass Media • Consumer-rating groups • Handling the product • Examining the product • Using the product

Figure : Successive Sets Involved in Customer Decision Making

The Buyer Decision Process Step 3. Evaluation of Alternatives Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes.

The Buyer Decision Process Step 4. Purchase Decision Purchase Intention Desire to buy the most preferred brand Attitudes of others Unexpected situational factors Purchase Decision

The Buyer Decision Process Step 5. Post purchase Behavior Consumer’s Expectations of Product’s Performance Product’s Perceived Performance Satisfied Customer! Dissatisfied Customer Cognitive Dissonance

Stages in the Adoption Process Awareness Interest Gillette Mach 3 Evaluation Trial Adoption

Early Majority Innovators Percentage of Adopters Adoption of Innovations Early Adopters 34% Late Majority 16% 13. 5% 2. 5% Early Laggards 34% Time of Adoption Late

► Relative Advantage ► Compatibility ► Complexity ► Divisibility ► Communicability