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Consumer Behavior – you are what you buy…!

Consumer Behavior – you are what you buy…!. Think of a recent important purchase– briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase What influenced you at each step? >>Assuming the following:

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Consumer Behavior – you are what you buy…!

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  1. Consumer Behavior– you are what you buy…! • Think of a recent important purchase– briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase • What influenced you at each step? • >>Assuming the following: • It Consists of all the individuals and households who buy or acquire goods and services or personal consumption

  2. Consumer Market • Consists of all the individuals and households who buy or acquire goods and services for personal consumption

  3. Consumer Decision-Making Process Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Information Search Evaluation of Alternatives Purchase Postpurchase Behavior

  4. How do you know when to shop? What are the triggers that initiate an awareness & search? • What are the internal & external sources of these triggers?

  5. Factors Influencing Consumer Behavior >> Personal >> Psychological >> Social >> Cultural

  6. Personal Factors • Age • Life-Cycle Stage • Occupation • Economic Circumstances • Life Style

  7. Psychological Factors “Wants” Based on a want or desire to have something. Not a necessity

  8. Psychological Factors Motivation: • Freud • Id ("pleasure principle”) • Ego (“reality principle”) • Super Ego (“Super-ego aims for perfection so called Conscience to kill the mis-behavior/guilt ”) • Maslow • Hierarchy of Needs (survival, comfort, psychological, self- esteem, self- actualization)

  9. Psychological Factors • Perception • The process by which an individual selects, organizes, and interprets inputs to create a meaningful picture of the world. • Selective Exposure: people are only open to messages they want to receive. • Selective Distortion: shows how people change messages to match their self-concept or twist them to match their perception of reality. • Selective Retention: shows that people remember only what they want to remember. • Learning • Changes in an individual’s behavior arising form experience

  10. Beliefs • Descriptive thoughts that a person holds about something • Functional Factors “Needs” Need over wants. Delivers to a real “need” to have something.

  11. Social Class • Relatively homogenous, enduring divisions in a society, hierarchically ordered with members sharing similar values, interests, and behaviors • Upper Upper 1% • Lower Upper 2% • Upper Middle 12% American • Middle 32% Social • Working 38% Classes • Upper Lower 9% • Lower Lower 7%

  12. Group Influences Brand Choice Strong Weak • Strong • Weak Product Choice

  13. Family Influence on Buying Behavior • Husband-Dominant • Wife-Dominant • Equal Culture & Subcultures • Cultures • The accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment • Subcultures • Groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.

  14. Adoption Process • Awareness • Interest • Evaluation • Trial • Decision • Confirmation

  15. Examples of Buying Motives:Psychological or Functional? • A senior wants to impress his date at the prom . His primary motive is …? Psychological

  16. Examples of Buying Motives:Psychological or Functional? • A girl wants to remember her grandmother on her birthday. Her primary motive is…? Psychological

  17. Examples of Buying Motives:Psychological or Functional? • A homemaker needs a new washing machine and has had good experiences with Sears. Her primary motive is …? Functional

  18. Examples of Buying Motives:Psychological or Functional? • A teacher wants to buy a practical car to be used for family transportation. Her/His primary motive is …? Functional

  19. Examples of Buying Motives:Psychological or Functional? • An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is…? Functional

  20. Why is this important? To learn Consumer Behavior • Out of 11000 products launched by 77 companies, only 56% are present five years later – Kuczmaski & Associates • Only 8% of new product concepts offered by 112 leading companies reached the market. Out of this 83% failed to reach marketing objectives – Group EFO Ltd., Marketing News, Feb 1, 1993, Pg2

  21. Dominant forces shaping Consumer Research • Factors that move an economy from Production-driven to Market-driven • Level of sophistication with which human behaviour is understood in psychology and other behavioural sciences

  22. Overall Model of Consumer Behavior Decision Processes External Influences Self-Concept & Learning Culture and Subculture Demographics Social Status Reference Groups Family & Marketing Activities Problem Recognition Information Search Internal Influences Perception Alt Eval & Selection Learning Memory Motives Outlet select & Purchase Personality Emotions Postpurchase Processes Attitudes

  23. The Types of Buying Decisions Complex Buying Behavior Variety- Seeking Behavior High Involvement Low Involvement Reduced Buying Behavior Habitual Buying Behavior Significant differences between brands Few differences between brands

  24. The Short falls:-Telemarketing Fraud • The elderly are vulnerable to fraud by telemarketers. • A program to combat this fraud is the Know Fraud Program. • Many Organizations have to fight this happening.

  25. Negligent Consumer Behavior • Negligent behavior is composed of actions and inactions that may negatively affect the long-term quality of life of individuals and society. • This type of behavior can occur in two different contexts: • Product Misuse • Consumption of Hazardous Products

  26. Many injuries result from misuse of a safe product - not from product defects. • Using a cell phone while driving is being outlawed in some areas. • “The most dangerous component is the consumer, and there’s no way to recall him.”

  27. Corporate Social Responsibility • Firms have become viewed as responsible for more than generating profits. • “Corporate social responsibility” refers to the idea that firms have an obligation to help the larger society by offering some of their resources.

  28. Some Pictures!

  29. Movie time on Consumer Behavior! Followed by Feedbacks!!!

  30. Some recent news and events! New Delhi Dazzles The World With Commonwealth Games Opening Ceremony (Video) Happy 25th Birthday, Nintendo! October 18th, 1985... Xbox 360 Users Now Get Internet TV Service

  31. Expand human resource pool in science, technology: PM Bangladesh for common stance on Asian migrant workers The tremendous growth of India's economy over the last decade has put more money in the pockets of the country's middle class, prompting retailers to target this group of consumers. ''PROHIBITING THE USE OF AGRICULTURAL LAND FOR INDUSTRIES IS ULTIMATELY SELF-DEFEATING' Nobel laureate AmartyaSen speaks to SambitSaha of The Telegraph on land acquisition for industrialisation..

  32. Bajaj Auto Q2 net jumps, maintains sales outlook- Bangalore: Bajaj Auto, India’s No. 2 motorcycle maker, posted a 69% jump in quarterly profit on Tuesday and demand is expected to remain robust on the back of festivals when sales usually rise. • Bill Gates’ successor at Microsoft to retire - The move signals a new phase in Microsoft’s move into cloud computing, which chief of the software Ray Ozzie championed, and a new focus on entertainment at the world’s largest software company

  33. Apple net profit up 70 %, 4.19 million iPads sold- The closed approach regarding softwares enables Apple to make products they believe create the best customer experience. • India for accelerated deployment of green technologies- The quickest way of lowering the cost of many renewable options is to scale up their rate of deployment and diffusion in developing countries, minister of state for environment and forests JairamRamesh said

  34. Starwood Opens First of Fifteen New Hotels in India- SINGAPORE -- Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today announces the opening of The Westin PuneKoregaon Park - the first of six new Westin Hotels to open in India over the next three years and the brand's 25th Hotel in Asia Pacific. The hotel is illustrative of Starwood's overall growth in India with 24 existing hotels and plans to grow its footprint by 60 percent by 2012.

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