MF 1063

Principles of Marketing

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 Lecture 2

Consumer Behavior

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 Consumer Vs Customer
Customers and consumers are used frequently to define the same individual but
there is a difference.

Consumer: Who finally consume the product

Customer: Who purchase for final consumption
: Ex : A mother purchases Pampers diapers for her 6 months
old baby

 What is consumer behavior?

“The study of how individuals, groups and organizations
select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants.”
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 Types of consumer buying
behavior
Buyer involvement
High Low

Significant Complex buying Variety-seeking

differences behavior buying behavior
between brands

Few differences Dissonance- Habitual buying

between brandsreducing buying behavior
behavior

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 Habitual buying behavior

Customers spend very little time deciding whether

or not to purchase these items and don't typically
need to read reviews or consult with friends for
their opinions before they make routine purchases.

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 Dissonance-reducing buying behavior

Cognitive Dissonance
Cognitive dissonance refers to a situation involving
conflicting attitudes, beliefs or behaviors.

Dissonance-reducing buying behavior

Dissonance-reducing buying behavior occurs when the
consumer is highly involved but sees little difference
between brands.

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 Variety-seeking buying
behavior
Variety-seeking buying behavior occurs when the
consumer is not involved with the purchase, yet there
are significant brand differences.

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 Complex buying behavior

Complex buying behavior occurs when the consumer

is highly involved with the purchase and when there
are significant differences between brands.

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 What influences consumer behavior?

 Cultural factors
 Social factors
 Personal factors

Cultural factors
1. Culture
 Fundamental determinant of person’s wants and behavior
 Child acquires values, preferences, & behaviors through
family & other institutions
2. Subculture
 Provide more specific identification and socialization for
members
 Multicultural marketing 9
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 Cultural factors
3. Social classes

Relatively homogeneous and enduring divisions in a society

which are hierarchically ordered and whose members share
similar values, interests, and behavior.

 Education level, occupation and income are used to classify the

social classes

 Characteristics of a social class

 Those within the social class tend to behave more alike
 Persons are perceived as occupying inferior or superior positions
according to social class
 Social class is indicated by a cluster of variables
 Individuals can move up or down 11 the social-class ladder
 Social Factors
REFERANCE
GROUPS
All the groups that have a direct
or indirect influence on the (1)Primary: Daily
person‘s attitudes and
family,
family, friends,
friends, neighbors
neighbors
behaviors
a. Direct
(2)Secondary:
religious,
religious, professional
professional groups
groups
Types of
Reference (1) Aspirational (+ve)
“Want-to-Be”

Groups Steve
Steve Jobs
Jobs
b. Indirect
(2) Non-inspirational (-
ve)
“DON’T Want to Be”
Gangsters
Gangsters
 Opinion leader
 The person who offers informal advice or
information about a specific product such as which
of several brands is best or how a particular product
may be used.

 Opinion leaders are often highly confident, socially

active and frequent users of the category.
Marketers try to reach them by identifying their
demographic and psychographic characteristics,
identifying the media they read, and directing
messages to them.

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 Social factors
Family
 Family orientation: Consist 0f parents and siblings.
 Family procreation: The person’s spouse and
children.

Roles and status

 Role: Includes the activities a person is expected to
perform
 Status: each role carries a status
 People choose products that reflect and
communicated their role and actual or desired status.
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 Personal factors
 Age and stage in the life cycle

 Occupation and economic circumstances

 Personality and self-concept

 Brand personality: Consumers likely to choose
brands whose personalities match with them
 Consumers choose brands which are consistent
with their own self-concept

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 Personal factors
Lifestyle and values
 Lifestyle: A person’s pattern of living in the world
as expressed in activities, interests, and opinions
- Standardize products according to life style

Teenagers and
younger generation
have same set of
characteristics
Indians Sri
Lankans

 Core values: The belief systems that underlie

attitudes and behaviors
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 Motivation: Maslow’s theory
 Explain why people are driven by particular needs
at particular times

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 Motivation: Herzberg’s
theory
MOTIVATIONAL FACTORS
 Achievement Employees are satisfied and
motivated
 Recognition
 Work Itself
 Responsibility MOTIVATIONAL
 Promotion FACTORS
 Growth
Employees are satisfied, but
demotivated
HYGIENE FACTORS
 Pay and Benefits
 Company Policy and
Administration HYGIENE FACTORS
 Relationships with co-workers
 Physical Environment Employees are dissatisfied and
 Supervision 18 demotivated
 Status , Salary
Perception

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 Perception
“Perception is the process by which an individual selects,
organizes, and interprets stimuli in to create a meaningful
picture of the world”
 People can have different perceptions of the same thing due to three
perceptual processes

 Selective attention : Selective attention means that marketers must

work hard to attract consumers’ notice. This is the process of selecting
some inputs to attend to while ignoring others.

 Selective distortion: The tendency to interpret information in a way

that fits consumer’s preconceptions. An individual usually change or
twist information when it is inconsistent with personal feelings or
beliefs.
 Selective retention: is remembering20 information that supports
personal feelings and beliefs and forgetting inputs that do not.
 Learning
Learning induces changes in behavior arising from
experience
Memory
Short term memory:
temporary & limited repository
of information
Long term memory: more
permanent, essentially
unlimited repository
Creation of brand
associations
E.g: all brand related thoughts,
feelings, perceptions, images,
experiences, beliefs, attitudes
and so on. 21
 Model of consumer
behavior
Consumer
Psychology
Motivation
Perception
Learning
Memory
Marketing Other Buying
Stimuli Stimuli Decision Purchase
Product Political Process Decision
Price Economic
Place Social Consumer
Promotion Technological Characteristics
Cultural
Social
Personal

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Consumer buying decision
process
Problem
Recognition

Information
search

Evaluation of
alternatives

Purchase decision

Post purchase
behavior
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 Problem recognition
 Buyer recognizes a problem or need triggered
by internal or external stimuli
 Simple Problem (Internal stimulus):
These problems occur frequently and solve
automatically.
Ex : A person become thirsty and so he drinks water.

 Complex problem (External stimulus):

These problems can simply explained as the deviation of
desired state and actual state. These problems will be
Desired
supported by external stimulus.
state Complex
problem
Actual state
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 Information search
 Information sources:
 Personal: family, friends, neighbors, coworkers
 Commercial: advertising, web, salespersons, dealers,
packaging, displays
 Public: mass media, consumer rating organizations
 Experiential: handling, examining, using the product

 In the process of information search , consumers are

facing two main problems
1. What to purchase?
2. From where to purchase?

These problems will create perceived risk which can be

identified under six types of risks
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in consumer mind.
 Types of perceived risk in
buying and consuming a
product
 Functional risk : Product will not performed, as expected.

 Physical risk :Damages that cab happen to people as well

as near items.

 Financial risk : The product is not worth the price paid.

 Social risk : The product results in embarrassment in front of

others.

 Psychological risk : The product affects the mental well –

being of the users (Cognitive dissonance)
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 Time risk :Any risk related to time factor.
 Successive sets involved in
consumer decision making

Total Awareness Consideratio Choice Decisio

set set n set set n

Apple Apple
Dell Apple Apple
Dell HP
HP HP HP
HP
Toshiba Toshiba
Toshiba
Compaq Compaq
NEC
Singer

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 Evaluation of
alternatives
 Consumer evaluation process
1. Consumer is trying to satisfy a need
2. Looking for certain benefits from the product solution
3. See each product as a bundle of attributes with
varying abilities

 The attributes of interest to buyers vary by product

 A consumer’s evaluative criteria represent both the

objective and subjective attributes of a brand used
to compare different products and brands.
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 Purchase decision
Purchase
decision

Attitudes of Unanticipated
others Situational factors

Purchase
intention Two factors intercede between
purchase intentions and the
actual decision:
Evaluation of 1. Attitudes of others
2. Unexpected
alternatives
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 Post purchase behavior
 Cognitive dissonance : Psychological discomfort that a
consumer would feel after purchasing a product.

 Post purchase satisfaction

 Disappointed, satisfied & delighted customers

 Post purchase actions

 Managing dissatisfied customers
 Customer relationship management (CRM) programs

 Post purchase use & disposal

 Marketers need to monitor how buyers use and dispose the
product 30
 Review questions

What is consumer behavior?

Discuss the consumer buying behavior
model.
Explain the steps in the consumer buying
decision process.

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