CONSUMER BEHAVIOR AND DECISION MAKING

Reported by:

MARIA CHRISTINA M. PAREDES

THANAWAN

CONSUMER BEHAVIOR

Consumer
The end buyer of a product In general buys for his ownself or for his familys benefit For organizational purchases the word customer is used

Consumer behavior

The action that a person takes in:

Purchasing & using products & services - The mental & social processes that proceed and follow these actions
-

We are concerned with

Why consumers make the purchases that they make What factors influence consumer purchases? Who buys? What are their choice criteria? When do they buy? How do they buy? Where do they buy? Likely buyers reaction to a marketing strategy

Model of buyer behavior

Marketing & other stimuli Marketing
Product Price

Buyers blackbox

Buyer responses

Others
Economic Technolo-

Buyer Characteristics

Buyer decision process

Product choice Brand choice Dealer choice Purchase timing Purchase amount

gical
Place Promotion Political Cultural

Characteristics affecting consumer behavior

Cultural Social

Personal
Culture Reference groups Age & life cycle stage Occupation Psychological Motivation Perception B U

Subculture

Family

Economic situation
Lifestyle

Learning
Beliefs & attitudes

Y
E R

Social class

Roles & status

Personality & self concept

ANALYZING CONSUMER BEHAVIOR

ANALYZING CONSUMER BEHAVIOR

FACTORS INFLUENCING CONSUMER BEHAVIOR BUYING ROLES TYPES OF BUYING BEHAVIOR THE BUYING DECISION PROCESS

FACTORS INFLUENCING CONSUMER BEHAVIOR

CULTURAL FACTORS:

Culture

Sub-culture Social Class

SOCIAL FACTORS:

Reference groups

Family Roles & statuses

Characteristics affecting consumer behavior Culture: Set of basic values, perceptions, wants & behaviors learned by a member of society from family & other institutions - Cultural shift. Subculture: Group of people with shared value systems based on common life experiences & situations Social class: Measured by occupation, income, education & wealth

Characteristics affecting consumer behavior

Social factors:

influencers Family e.g. purchase of a car Roles & Status e.g. Director Marketing

Reference groups Aspiration groups /

Social influences
Culture Behavior is learned so the traditions, values, attitudes of society all influence it Has a major influence on consumers behavior Formal or informal groups to which we belong.

Social class Reference groups

Family
Personal influences

Key group in terms of attitudes, beliefs & learned behavior

Personal characteristics such as age, occupation, family lifestyle, lifestyle

FACTORS INFLUENCING CONSUMER BEHAVIOR(2)

PERSONAL FACTORS Age and Life-Cycle Stage Occupation Economic Circumstances Lifestyle Personality & Self-concept

Personal factors:

Characteristics affecting consumer behavior

Age & life cycle stage Tastes in food,
clothes, furniture, recreation change with age Occupation e.g. purchase of rugged clothes by a laborer

Economic situation Life style Lifestyle of a celebrity Personality & self-concept

FACTORS INFLUENCING CONSUMER BEHAVIOR (3)

PSYCHOLOGICAL FACTORS

Motivation Learning Perception

Beliefs

& Attitudes

Maslows hierarchy of needs

Maslows theory applies to all aspects of human motivation The needs change with different levels i.e. a person moves up once his need at the bottom level is satisfied

Maslows hierarchy of needs

Learning attitudes & beliefs

Learning relates to any changes in the long term & is associated with how the information is processed - Conditional learning: reinforcement is
-

necessary to develop attitudes & beliefs Social learning: learning from others behavior Cognitive learning: use of positive powers of

reasoning to develop attitudes & beliefs about a product (Particularly important for high involvement products)

Roles in the buying process

A no. of different individuals might contribute in the consumer market in the buying decision. Marketers need to be aware of the order inorder to exert influence: Initiator suggests the purchase Influencer has knowledge & personal authority influences the outcome Decider decides what, where & how to buy. Buyer makes the purchase End user

Types of buyers
Opportunist a switcher Dealer seeks the best deal Creative asks for a customized product Trader asks for extras Negotiator seeks discounts

TYPES OF BUYING BEHAVIOR

DEGREE OF INVOLVEMENT HIGH LOW

HIGH

DEGREE OF DIFFERENCES IN BRANDS

COMPLEX BUYING BEHAVIOR DISSONANCEREDUCING BUYING BEHAVIOR

VARIETYSEEKING BUYING BEHAVIOR HABITUAL BUYING BEHAVIOR

LOW

TYPES OF BUYING BEHAVIOR

COMPLEX BUYING BEHAVIOR: High

involvement, very expensive, infrequently purchased,very risky, selfexpressive products (designer jewelry, custom-designed sports cars, housing).

DISSONANCE REDUCING BUYING BEHAVIOR: High involvement,

expensive, infrequently purchased, selfexpressive products (furniture, white goods, PCs).

TYPES OF BUYING BEHAVIOR (CONTD)

VARIETY

frequently purchased, inexpensive products (pastries, biscuits, snacks). HABITUAL BUYING BEHAVIOR: Low involvement, frequently purchased, inexpensive products (sugar, salt, flour, commodities).

SEEKING BUYING BEHAVIOR: Low involvement,

CONSUMER DECISION MAKING

Consumer Decision-Making Process

Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

Consumer Decision-Making Process

Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior

PROBLEM/NEED RECOGNITION

From Internal Stimuli:

Hunger Thirst Fear

From External Stimuli:

Neighbors Purchases Advertisements Window Shopping Newspapers & Magazines

Consumer Decision-Making Process

Need Recognition - Result of an imbalance between actual and
desired states.

Marketing helps consumers recognize an imbalance between present status and preferred state

Internal Stimuli and External Stimuli

Preferred State

Present Status

Consumer Decision-Making Process

Information Searches

Internal

Process of recalling past information stored

in the memory.

External

Process of seeking information in the outside environment.

INFORMATION SEARCH
From

Personal Sources:

From

Family Friends Neighbors Acquaintances

Commercial Sources:

Advertisements

Dealers
Salespersons Packaging Displays

INFORMATION SEARCH (CONTD)

From

Commercial Sources:

Advertisements Dealers

Salespersons
Packaging

Displays

INFORMATION SEARCH (CONTD)

From Mass

Public Sources:

From

Media Chambers of Commerce Consumer Rating Magazines

Experiential Sources:

Handling

Product Examining the Product Using the Product

the

Consumer Decision-Making Process

Evoked Set
Analyze product attributes

Use cutoff criteria

Rank attributes by importance

Purchase!

Consumer Decision-Making Process

Purchase

To buy or not to buy...

Determines which attributes are most important in influencing a consumers choice

PURCHASE DECISION
Interfering

Factors: Attitudes of Others: Opposing and intense opinions of family members, close friends and acquaintances Unanticipated situational factors: Changes in income, job transfer, loss of employment, change of priority e.g. sudden payment of educational fees etc.

Consumer Decision-Making Process

Postpurchase Behavior

Cognitive Dissonance

Did I make a good decision? Did I buy the right product? Did I get a good value?

Can minimize through: Effective Communication Follow-up Guarantees Warranties

POSTPURCHASE BEHAVIOR
Post

purchase Satisfaction:

Keep

the Product Store the Product Convert to a Second Use

Post Try

purchase Dissatisfaction:

to return the product/take legal recourse Rent it Get rid of it/Throw it

Five Factors Influencing Decisions

1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered

Types of Consumer Buying Decisions

Routine Response Behavior Limited Decision Making Extensive Decision Making

Less Involvement

More Involvement

Routine Response Behavior

Little involvement in selection process Frequently purchased low cost goods

May stick with one brand

Buy first/evaluate later Quick decision

Limited Decision Making

Low levels of involvement

Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide

Extensive Decision Making

High levels of involvement High cost goods Evaluation of many brands

Long time to decide

May experience cognitive dissonance

Factors Influencing Buying Decisions

Cultural Factors

Social Factors

Individual Factors

Psychological Factors

CONSUMER DECISIONMAKING PROCESS

BUY / DONT BUY

Video for Consumer decision making

Reference from youtube

Ads that illustrate the concepts in slides