Consumer Behaviour

Prof Sameer Kulkarni

Consumer Mind: A Black Box

StimulusCompany Controlled

ProductPrice

AdvertisingPromotion

DisplayDistribution

Social

Word of MouthReference

Group

Consumer Mind(Black Box)

Response

Buy

No Buy

Customer Decision Making Process

TechnologyDevelopment/

New Generations

CUSTOMERAwareness

Values•Differ Pleasure vs.•Instant Pleasure

Social Structure•Individualism vs.•Collectivism

Personality•Assertive•Exhibitionist•Self Concept•Life-Style•Aspirations

Drivers of Change

How they Buy ?

• High involvement products:High priceComplex featuresSignificant differences between alternativesHigh perceived riskReflect self concept of buyerE.g. Selection of a Car

How they Buy ?

• Low involvement productsAlternatives within the same product class are

similarDoes not reflect buyers self conceptFrequent brand switching behaviour• E.g. buying a bathing bar (Toilet Soap)

Purchase decision in low involvement products

Theory of evoked set (Howard & sheth’s theory)

Its not product but the Situation

• Routinized response • Limited problem solving• Extensive problem solving

Types of Buying Behavior

High Involvement Low Involvement

Significant DifferencesBetween Brands

Complex BuyingBehaviour

Variety Seeking BuyingBehaviour

Few DifferencesBetween Brands

Dissonance Reducing BuyingBehaviour

Habitual BuyingBehaviour

Motivational reasons

• Sheth’s 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

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 customer’s 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

Motivation

Learning

Perception

Motivation(Sigmund Freud)

Influence on Buyer Behaviour

Values motivates in buying

• Functional value• Conditional value• Social value• Emotional value• Knowledge value• (according to Sheth , Newman & Gross)

Learning Theory• Human behaviour is learntOne learns @ the pain of punishmentOr @ 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 person’s beliefs , attitudes / actions e.g. smoking

• Varies in intensity based on importance of issue & degree of inconsistency

Lifestyles(Indian Perspective)

Buyer lifestyle• 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