Consumer Behaviour

Prof Sameer Kulkarni

Consumer Mind: A Black Box

Stimulus

Company Controlled
Product Price Advertising Promotion Display Distribution Social

Buy

Consumer Mind (Black Box)

Response

No Buy
Word of Mouth Reference Group

Customer Decision Making Process

Drivers of Change Borderless Competition

Media

Technology Development/ New Generations

Awareness

CUSTOMER

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 & sheths theory)

Total Set
(All Brands)
Awareness Set
(Brands aware of) Consideration Set (Brands Considered)

Decision Set
(Brand Decided)

Purchase Set

Total Set
IFB , Whirlpool LG Samsung Awareness Set
IFB , Whirlpool LG , Samsung
Consideration Set Whirlpool , LG Samsung Decision Set Whirlpool, Godrej Purchase Set Godrej

Godrej

Its not product but the Situation

Routinized response Limited problem solving Extensive problem solving

Types of Buying Behavior

High Involvement Significant Differences Between Brands Few Differences Between Brands Complex Buying Behaviour Dissonance Reducing Buying Behaviour

Low Involvement Variety Seeking Buying Behaviour Habitual Buying Behaviour

Motivational reasons
Sheths 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

Search for Alternatives

Evaluation of Alternatives

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 customers 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

Psychological Factors

Economic Factors

Buyer
Motivations

Psychological Factors Motivation Learning Perception

Motivation (Sigmund Freud)

Id
(Irrational/emotional)

Ego (Extremely rational)

Super Ego (Moral) Socially accepted methods

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 persons beliefs , attitudes / actions e.g. smoking Varies in intensity based on importance of issue & degree of inconsistency

Lifestyles (Indian Perspective)

Need Driven
Survivors Sustainers Be longer I-am-me Experiment Socially Conscious

Internally Driven

Emulator Achiever

Outer Driven

Integrated

 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

Buyer lifestyle