CONSUMER BEHAVIOUR

Name- Kalpen Joshi Course- PGDBM Semester-II

G.R. No- D20101110020

ANSWER- 1

Consumer Behaviour
What is Consumer Behaviour

Buying Behaviour is the decision processes and acts of people involved in buying and using products. Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. A firm needs to analyze buying behavior for: Buyers reactions to a firms marketing strategy has a great impact on the firms success.
The marketing concept stresses that a firm should create a

Marketing Mix that

satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.

The decision processes and acts of final household consumers associated with evaluating, buying, consuming, and discarding products for personal consumption Consider the purchase an automobile. You generally will not consider different options until some event triggers a need, such as a problem needing potentially expensive repair. Once this need has put you "on the market", you begin to ask your friends for recommendations regarding dealerships and car models. After visiting several dealerships, you test drive several models and finally decide on a particular model. After picking up your new car, you have doubts on the way home, wondering if you can afford the monthly payments, but then begin to wonder if instead you should have purchased a more expensive but potentially more reliable model. Over the next five years, the car has several unexpected breakdowns that lead you to want to purchase a different brand, but you have been very happy with the services of the local dealership and decide to again purchase your next car there.

Stages of Consumer Buying Behaviour.

In this particular case, the following generic model of consumer decision making appears to hold: The 6 stages are:

GROUP INFLUENCES ON CONSUMER BEHAVIOR

Culture the set of basic values, beliefs, norms, and associated behaviors that are learned by a member of society Note that culture is something that is learned and that it has a relatively long lasting effect on the behaviors of an individual. As an example of cultural influences, consider how the salesperson in an appliance store in the U.S. must react to different couples who are considering the purchase of a refrigerator. In some subcultures, the husband will play a dominant role in the purchase decision; in others, the wife will play a more dominant role. Social Class A group of individuals with similar social rank, based on such factors as occupation, education, and wealth Reference Groups Groups, often temporary, that affect a person's values, attitude, or behaviors

E.g., your behaviors around colleagues at work or friends at school are probably different from your behaviors around your parents, no matter your age or stage in the family life cycle. If you were a used car salesperson, how might you respond differently to a nineteen year old prospect accompanied by her boyfriend from one accompanied by two girlfriends?

Opinion leader A person within a reference group who exerts influence on others because of special skills, knowledge, personality, etc.
o

You might ask the webmaster at work for an opinion about a particular software application. Software manufacturers often give away free beta copies of software to potential opinion leaders with the hope that they will in turn influence many others to purchase the product.

Family A group of people related by blood, marriage, or other socially approved relationship

ENVIRONMENTAL / SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOR

Circumstances, time, location, etc. Do you like grapes? Do you like peas? You might like grapes as a snack after lunch, but probably not as a dessert after a fancy meal in a restaurant. You might like peas, but probably not as a topping on your pancakes. Everyday situations cause an interaction between various factors which influence our behaviors. If you work for tips (a form of incentive related to commission) as a waiter or waitress, you must certainly be aware of such interactions which can increase or decrease your sales. If you are doing your Saturday grocery shopping and are looking for orange juice, you are probably much more sensitive to price than if you stop at the quick store late at night, when you are tired and cranky, after a late meeting at the office. A prospect shopping for a new automobile while debating the wisdom of a necessary expensive repair to his car might be more interested in what cars are on the lot than in shopping for the best deal that might involve a special order.

INTERNAL INFLUENCES ON CONSUMER BEHAVIOR Personality

A person's distinguishing psychological characteristics that lead to relatively consistent and lasting responses to stimuli in the environment We are each unique as individuals, and we each respond differently as consumers. For example, some people are "optimizers" who will keep shopping until they are certain that they have found the best price for a particular item, while other people are "satisficers" who will stop shopping when they believe that they have found something that is "good enough." If you are a salesperson in a retail shoe store, how might you work differently with these two personalities?

Lifestyle and Psychographics

lifestyle is a pattern of living expressed through a person's activities, interests, and opinions

psychographics is a technique for measuring personality and lifestyles to developing lifestyle classifications

Motivation: Multiple motives

Consumers usually have multiple motives for particular behaviors. These can be a combination of:

manifest known to the person and freely admitted latent unknown to the person or the person is very reluctant to admit

Note: different motives can lead to the same behavior; observing behavior is not sufficient to determine motives.

Luxurious Car

Luxury Car can be defined in a number of ways depending on the expectations of the people. Some people define luxury car for its brand value while others define it for their hi-tech features. Many consider it a luxury for its looks and superior performance. But majority of the people defined it as a comfort. 60% of the people would define it for its brand whereas 53% would define for its looks.

Factors that influence purchase decision of a car

Family Members Relatives 14%

Just like a car can be purchased with many different there are reasons, number of

32%

Peer Groups / Reference Groups 15% Friends 22% Dealer 17%

factors buy. mostly

which Since car

may is for

affect his decision to bought

family use, 32% of people said their family members influence them the most to buy a particular car. Next factor was friends with 22% people voting for it. Dealers and peer groups got 17% and 15% respectively.

It is important to understand the role that a car fulfils in an individuals life. A car may be used for a variety of reasons. Nearly 63% of people feel driving their car gives them immense pleasure while 53% people feel they feel comfortable using the car. 53% of people also feel their car gives them satisfaction of owning it. Another 33% people feel they use their car for showing off their status.

TYPES OF CONSUMER PROBLEM-SOLVING PROCESSES Routinized

used when buying frequently purchased, low cost items used when little search/decision effort is needed e.g., buying a quart of orange juice once per week

Limited Problem Solving

used when products are occasionally purchased used when information is needed about an unfamiliar product in a familiar product category

Extended problem solving

used when product is unfamiliar, expensive, or infrequently purchased e.g., buying a new car once every five years

Under what sorts of conditions would the assistance of a salesperson be needed? Not needed?

POST-PURCHASE CONSUMER BEHAVIOR Satisfaction

After the sale, the buyer will likely feel either satisfied or dissatisfied. If the buyer beleives that s/he received more in the exchange than what was paid, s/he might feel satisfied. If s/he believes that s/he received less in the exchange than what was paid, then s/he might feel dissatisfied. Dissatisfied buyers are not likely to return as customers and are not likely to send friends, relatives, and acquaintences. They are also more likely to be unhappy or even abusive when the product requires post-sale servicing, as when an automobile needs warranty maintenance. The above idea can be modeled as Homans' basic exchange equation:
Profit = Rewards - Costs

Unfortunately, even a buyer who "got a good deal" with respect to price and other terms of the sale might feel dissatisfied under the perception that the salesperson made out even better.

Cognitive dissonance
It has to do with the doubt that a person has about the wisdom of a recent purchase It is very common for people to experience some anxiety after the purchase of a product that is very expensive or that will require a long term commitment. Jane and Fred, for example, signed a one year lease on an apartment, committing themselves to payments of $1500 per month. A week later, they are wondering if they should have instead leased a smaller $900 apartment in a more rough part of town; they are not sure if they really can afford this much of a monthly obligation. Dick and Sally, on the other hand, ultimately rented the $900 apartment, and now are

wondering if the savings in rent will be offset by noisy and sometimes unsafe conditions in this neighborhood. Perhaps neither couple would be experiencing this anxiety if their landlords had given them just the smallest of assurances that they had made a good decision. After a close on products that are expensive or that require a long term commitment, the salesperson should provide the prospect with some reasons to be happy with the decision. Allow the car buyer to reinforce her own positive feelings by calling her a week after the purchase to ask how things are going. Call the new life insurance policy holder after two months to see if there are any questions; a lack of questions can only help the buyer to convince himself that he did the right thing.
Methodology

The study is based on primary data collection with a sample size of 100 respondents residing in National Capital Region of New Delhi, India. The questionnaire used for the sample survey is a structured and non-disguised questionnaire and consisted of two major sections. The first section intended to collect the various demographic factors; the second section intended to collect the various opinions containing questions about the various factors affecting the car purchasing decision. A five point Likert scale was used to capture the consumers responses ranging from strongly agree to strongly disagree. The different statements regarding the various factors affecting the car buying behavior of customers were generated based on literature review as well as expert opinion in an iterative manner. It could be therefore said that the itemized scale in this case actually asks the respondents to rank their opinions in a decreasing order of importance. Data analysis was done using SPSS software. The statistical analysis methods employed was factor analysis. To study the impact most frequently indulged in weighted average method was used. Data collection

The study entailed data collection with the help of a questionnaire from the residents of National Capital Region of New Delhi, India. Data was collected by personally contacting the respondents and explaining in detail about the survey. A total of 120 customers from different areas were contacted and 100 correctly completed questionnaires were obtained from all the customers

RESEARCH

Primary Research: Methods

Primary research was done in two steps.
Qualitative Research Depth Interview Method

Quantitative Research Survey Method

1) Qualitative Research:

For qualitative research, few high income people were asked open ended questions which were formulated based on the secondary research and in line with the hypothesis. Depth interview of 10 people were taken which gave an insight into their purchase behavior and their decision making process for a luxury good. Based on this interviews and a further review of the secondary research reports, a final survey questionnaire was prepared.

2) Quantitative Research:
For quantitative research, after making the initial questionnaire it was pretested with 5 participants and was improvised. The final sample was 30 with target group being A and A+ socio-economic class people.

Purpose
Based on the existing data and the findings of the survey, it can be understood what influences a consumer to buy a luxury product and how to reach a consumer. The different perspectives of luxury products from a consumers point of view can be understood giving a detailed insight as to how to position a product as luxury product. Consumers expectations from a luxury product will help us to understand the modifications needed in a product to be categorized as luxurious product.

Sampling
Sampling procedure:
The sample is selected in a random way, but those having a car with nearly worth more than

5lakhs. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared.

Sample size:
The sample size of my project is limited to 30 only.

Sample design:
Data has been presented with the help of bar graph, pie charts, stacked graphs etc.

Limitation:
Time limitation Research has been done only at Mumbai Some of the persons were not so responsive Possibility of error in data collection Possibility of error in analysis of data due to small sample size.

ANSWER- 2

There are 4 factors which explain the Psychological Factor of consumer buying behaviour. The same are mentioned below

PSYCHOLOGICAL FACTORS Motivation Learning Perception Beliefs & Attitudes What is Motivation? : Motivation refers to an activated state within a person that leads to goal-directed behavior. It is an inner drive that reflects goal-directed arousal. In a consumer behavior context, the results is a desire for a product, service, or experience. It is the drive to satisfy needs and wants, both physiological and psychological, through the purchase and use of products and services. It consists of the drives, urges, wishes, or desires that initiate the sequence of events leading to a behavior. It begins with the recognition of a need.. Consumer Motivations: Consumer Motivations Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption. It Gives insights into why people buy certain products Stems from consumer needs: industries have been built around basic human needs.

This ad demonstrates a product meeting physiological and social needs

Maslows Hierarchy of Needs

Learning Learning describes changes in an individuals behavior arising from experience -Learning occurs through Drives -Internal stimulus that calls for action Stimuli -Objects that move drive to motive Cues -Minor stimuli that affect response Reinforcement -Feedback on action

Eg- you try a hamburger and learn that it satisfies your hunger and tastes good, and the next time you are hungry, you may consider another hamburger.

Perception Perception is the process by which people select, organize, and interpret information. The process by which an individual selects, organizes, and interprets inputs to create a meaningful picture of the world. Perception Includes:

Selective attention Consumers screen out information Selective distortion People interpret to support beliefs Selective retention People retain points to support attitudes

Doves Campaign stresses the everyday women. The perception- It is not necessary that only beautiful women can use Dove product. The ad shows that this product can be used by all age group and skin color.

Beliefs & Attitudes A belief is a descriptive thought that a person has about something. A person may believe that a certain cooking oil 'x' has the lowest fat content and is best for health. This belief may be based on some real facts or it i my merely be a notion or opinion that the person has. The belief that the customer has about a brand is important because it determines his behaviour towards buying and using it. The beliefs constitute the brand image, and if the customer has the wrong beliefs he is likely to generate a negative image about the brand. The marketer must ensure that consumers have all relevant and correct information about the brand to facilitate formation of a positive brand image.

Attitude is a person's enduring feeling, evaluation and tendency towards a particular idea or object. Starting from childhood, attitudes develop over the time with each fresh knowledge input, experience and influence. Attitudes get settled into specific patterns and are difficult to change. It is easier to market a product which fits in well with the existing patterns of attitudes rather than change the attitudes to fit a new product concept.

What Can Attitudes tell us about Consumers? Consumers who like sushi are likely to eat it Consumers who like rich ice cream are likely to eat it Consumers who like to eat healthy will be likely to eat things that are not high in calories

THANK YOU