Study of how individuals , groups and organization select, buy, use and dispose of goods , services, ideas, or experiences to satisfy their needs and wants.

Influenced by several factors.

CULTURAL

SOCIAL

PERSONAL

Culture of US will be different to that of India.

Cultures are further divided into subcultures.

Human societies exhibit social stratification.

Depiction of social classes into seven classes.

People within each class behave alike.

Social classes differ in speech, dress, etc.

They are indicated by cluster of variables.

They show distinct brand or product prefrence.

It includes :

• Reference groups

• Family

• Social roles and status

All groups that have a direct (face to face) or indirect influence on their attitudes or behavior.

groups having direct influence-MEMBERSHIP GROUPS.

It includes:

primary groups- family , friends, neighbors etc.

Secondary groups- religious , professional, trade union groups etc.

Aspiration groups- those a person hopes to join.

Dissociative groups- those whose values or behavior an individual rejects.

most important consumer buying organization.

two families in buyer’s life:

• Family of orientation-parents and siblings.

• Family of procreation- one’s spouse and children.

A role consists of the activities a person is expected to perform.

Each role carries a status.

People choose products that reflect and communicate their role and actual or desired status in the society.

Age and Stage in Life Cycle

Occupation and Economic Circumstances

Personality and Self Concept

Lifestyle and Values

People buy different goods and service over a lifetime.

Consumptions is shaped by the family life cycle.

Different stages of career resulted in different opportunities at different stage in the consumer life cycle.

Critical events or transitions give rise to new needs.

Occupation influence consumption patterns.

Product choice is greatly affected by economic circumstances; spendable income, saving and assets and attitude towards spending and saving.

In recession market re-price their products to offer value to target customers.

Each person has personality characteristics that influence his or her buying behavior.

Consumer often choose and use brands that have brand personality consistent with their own actual self concept.

Many people choose brands whose personalities fit the consumption situation.

People form the same subculture, social class and occupation may lead quite different lifestyle.

Lifestyle are shaped partly by whether consumers are money constrained or time constrained.

Consumer decision of buying may also influenced by core values.

16

The starting point for understanding consumerbehavior is the stimulus-response model:

17

Four key psychological processes fundamentallyinfluence consumer responses to the variousmarketing stimuli:

Motivation

Perception

Learning

Memory

18

A need becomes a motive when it is arousedto a sufficient level of intensity. A motive is aneed that is sufficiently pressing to drive theperson to act.

Three theories of human motivation

Sigmund Freud

Abraham Maslow

Frederick Herzberg

19

Sigmund Freud assumed that thepsychological forces shaping people'sbehavior are largely unconscious, and that aperson cannot fully understand his or herown motivations.

20

Human needs are arranged in a hierarchy.

21

People will try to satisfy their most importantneeds first.

Maslow's theory helps marketers understandhow various products fit into the plans, goals,and lives of consumers.

Learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement.

• a drive is a strong internal stimulus impelling action.

• cues are minor stimuli that determine when, where, and how a person responds.

• discrimination means we have learned to recognize differences in sets of similar stimuli and can adjust our responses accordingly.

Learning theory teaches marketers that they can build demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement.

• Long-term memory and short-term memory

• long term memory- a more permanent, essentially unlimited repository.

• short-term memory- a temporary and limited repository of information.

• This model views LTM as set of nodes and links.

• Nodes are stored information connected by links that vary in strength.

• in this model, we can think of consumer brand knowledge as a node in memory with a variety of linked associations.

• brand association consists of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes and so on that become linked to the brand node.

• marketing is a way of making sure consumers have the right types of product experiences to create right brand knowledge structures and maintain them in memory.

• Memory is a very constructive process.

• memory encoding describes how and where information gets into memory.

• the strength of the resulting association depends on how much we process the information at encoding and in what ways.

• repeated exposures to information provide greater opportunity for processing and thus the potential for stronger associations.

It is the way information gets out of memory.

Three factors are particularly important:

Presence of other product information in memory can cause us to either overlook or confuse new data.

Time between exposure to information and encoding matters- the longer the time delay, the weaker the association.

Information may be available in memory but not accessible without proper retrieval cues or reminders.The more cues linked to a piece of information, greater

the likelihood that we can recall it.

It is an important psychological process in understanding how consumers actually make their buying decisions.

Marketing scholars have developed a “stage model” .

The consumer has to pass through 5 stages.

However, they sometimes do not pass through all the five stages in buying a product. They might skip or reverse some.

PROBLEM RECOGNITION

INFORMATION SEARCH

EVALUATION OF ALTERNATIVES

PURCHASE DECISION

POST PURCHASE BEHAVIOUR

The process starts when the buyer recognizes a problem.

Or need triggered by internal or external stimuli.

Need rises to a threshold level and becomes a drive.

Eg- seeing a new television at neighbor's place and triggers a need to buy.

Marketers need to identify the circumstances that trigger a particular need by gathering information about a number of consumers.

Particularly of discretionary purchases such as luxury goods, vacation packages, entertainment options etc.

Heightened

attention

Active information search

Consumers often search for limited amounts of information.

Two levels of information

Person simply becomes more receptive to information about a product.

Looking for reading material, phoning friends, going online, and visiting stores to learn. About a product.

The major sources of information are:

Personal: family, friends, neighbors, acquaintances.

Commercial: Advertising, websites, salesperson

Public: Mass media, consumer rating organization

Experiential: Handling, examining, using the product.

TOTAL SET AWARENESS SET CONSIDERATION SET CHOICE SET DECISION

APPLEDELL

HEWLETT-PACKARDTOSHIBACOMPAQ

NEC...

APPLE DELL HEWLETT-

PACKARDTOSHIBA

COMPAQ

APPLE DELL TOSHIBA

APPLE DELL

?

Consumer Evaluation Processes –

Consumer is satisfying the need.

The consumer is looking for certain benefits from the product.

The consumer sees each product as a bundle of attributes with varying abilities.

For eg :1. Hotels2. Mouthwash3. Tiers

A belief is a descriptive thought that a person

holds about something.

Attitudes are a person’s enduring favorable or

unfavorable evaluations, emotional feelings and

action tendencies towards some object or idea

BELIEFS AND ATTITUDES

The consumers evaluate products and services by

combining their brand beliefs - the positives and

negatives – according to the importance.

Strategies to stimulate interest in other product :

real repositioning.

psychological repositioning.

competitive depositioning.

alter the importance weights.

call attention to neglected attributes.

shift the buyer’s ideals.

Factors that intervene between purchase intention and purchase decision

Attitude of others

a) The intensity of others person’s negative attitude towards our preferred alternatives.

b) Our motivation to comply with the other person’s wishes.

Unanticipated Situation Factors

These factors may erupt to change the purchase intention.

Such as losing a job, some other purchase becomes important or store sales man turns you off.

A consumer’s decision to modify,postpone or avoid a purchase decision is highly inflenced by perceived risk.

Functional Risk- The product does not perform up to expectation.

Physical Risk- The product poses a threat to the physical well-being or health of the user or others.

Financial Risk- The product is not worth the price paid.

Social risk- The product result in embarrassment from others.

Psychological Risk- The product affects the mental well-being of the user.

Time risk- The failure in the product results in an opportunity cost of finding another satisfactory product.

Postpurchase behaviour is defined as the experience which the customer has after the purchase noticing certain disquieting features or hearing favourable things about other brands and will be alert to information that supports his or her decision.

Marketing communications should supply beliefs and evaluations that reinforce the consumer’s choice and help him feel good about the brand.

The Marketer’s job doesn’t end with the purchase. He should take care of the following factors:

Postpurchase satisfaction Postpurchase actions Postpurchase product users

Satisfaction is defined as the function of the closeness between expectations and the product’s perceived performance.

If the performance falls short of expectations, the consumer is disappointed., and if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted.

These feelings decide whether the customer buys the product again and talks favourably or unfavourably about it to others.

If the customer is satisfied, she is more likely to purchse the product again and also tend to say good things about the brand to other.

Dissatisfied ones may abandon or return the product or seek information that confirms its high value.

Some may make public actions by complaining to companyuct, going to the lawyer or complaining to other groups.

Private actions include deciding to stop buying the product or warning friends.

Marketers should also monitor how buyers use and dispose the product.

Product consumption rate- the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it.

If consumers throw the product away, the marketers need to know how they dispose of it especially like batteries, beverage containers, electronic equipment and disposable diapers- it can damage the environment.

All the theories we are going to discuss revolve around the level of consumer involvement.

CONSUMER INVOLVEMENT

Level of engagement.

Active processsing in responding to marketing stimulus.

Put forward by Richard Petty & Cacioppo.

An influential model of attitude formation and change.

Describes how consumers make evaluations in both high and low involvement circumstances.

Two means of persuation- Central Route & Peripheral Route.Consumers follow central root only if they possess sufficient motivation , ability and opportunity.

Low involvement and absence significant brand difference.

Link the product with some involving issue.

Link the product with some personal situation.

Design advertising to trigger strong emotion.

Add an important feature.

Marketers must pay special attention to giving consumers one or more positive cues to justify their brand choice.

Buying situation is characterized by low involvement but significant brand differences.

Lot of brand switching is being done by consumers.

Market strategies are differently defined by Market leaders and minor brands.

Market leaders try to encourage habitual buying.

Challenger firms will encourage variety seeking by offering lower price, discount, deals, coupons, etc. basic reason is that consumers try new products.

Heuristics refers to experience based techniques or predictions for problem solving , learning and discovery.

Biases refers to prejudice in favor of or against one thing , person or group compared with another.

Since consumers don’t always process information or make decisions in a deliberate & rational manner.

“MARKETING INSIGHT” that is how consumers really make decision.

It highlights and Identifies many different Heuristics and Biases in everyday consumer decision making.

They come into play when consumers forecast the likelihood of future outcomes or events.

Consumers base their predictions on the quickness and ease.

If an example comes to mind too easily consumers might overestimate the likelihood of its happening.

EXAMPLE: A recent product failure may lead a consumer to inflate the likelihood of a future product failure.

Thus it make him more inclined topurchase a product warranty.

Consumers base their predictions on how representative or similar the outcome is to other examples.

One reason that package appearances is so similar for different brand in the same product category is that they want to be seen as representative of the category as a whole.

Consumers arrive at an initial adjustment and then adjust is based on initial performance.

It is all about the first impression that a particular product make, that would reflect the behavior of consumers towards the other product of same category.