Consumer Industrial Buyer Behaviour Ppt

7/21/2019 Consumer Industrial Buyer Behaviour Ppt

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CONSUMER/INDUSTRIAL

BUYER BEHAVIOUR

MMM SEM IV (2014)


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SYLLABUS

Introduction - why consumer behaviour including economics of consumerbehaviour?

Social psychology and its impact on marketing

Influence on consumer behaviour, environmental and individual determinants;organizational influence.

Models and theories of consumer behaviour.

Consumer research and market segmentation.

Specifics of decision process:

(a) Problem recognition.

(b) Search and evaluation of alternatives.

(c) Purchase behaviour.

(d) Post purchase behaviour

Consumerism in India.


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In our factory, we make

lipstick. In our advertising,

we sell hope.

~Charles RevsonRevlon Cosmetics


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Remember Me?

I'm the fellow who goes into a restaurant, sits down and patiently

waits while the waiter do everything but take my order. I'm the fellowwho goes into a department store and stands quietly while the sales

attendants finish their little chitchat. I'm the man who drives into a

petrol pump and never blows his horn, but waits patiently while the

attendant finishes reading his comic book.

"Yes, you might say, I'm a good guy. But do you know who else I am?

I am the fellow who never comes back, and it amuses me to see you

spending thousands of rupees every year to get me back into your

store, when I was there in the first place, and all you had to do to keepme was to give me a little service; show me a little courtesy.


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What Is Marketing?

Planning and executing the conception, pricing,

promotion, and distribution of ideas, goods, and

services to create exchanges that satisfy individualand organizational objectives

Finding a need and filling it!

OR


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Introduction - why consumer

behaviour including economicsof consumer behaviour?


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Behavior occurs either for the individual, or in thecontext of a group (e.g., friends influence what kinds ofclothes a person wears) or an organization (people onthe job make decisions as to which products the firm

should use). Consumer behavior involves the use and disposal of

products as well as the study of how they arepurchased.

Product use is often of great interest to the marketer,because this may influence how a product is bestpositioned or how we can encourage increasedconsumption.


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Consumer behavior involves services and

ideas as well as tangible products.

The impact of consumer behavior on society is

also of relevance. For example, aggressive

marketing of high fat foods, or aggressive

marketing of easy credit, may have serious

repercussions for the national health andeconomy.


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Need to study ?

You cannot take the consumer for granted

any more

Therefore a sound understanding of

consumer behaviour is essential for thelong run success of any marketing program


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Perspectives

Logical Positivism

1. Understanding and predicting consumerbehaviour

2. Cause and effect relationships that governpersuasion and/or education

Post Modernto understand consumption

behaviour without any attempt to influence it


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Why is this important?

Out of 11000 products launched by 77

companies, only 56% are present five years

laterKuczmaski & Associates

Only 8% of new product concepts offered by

112 leading companies reached the market.

Out of this 83% failed to reach marketing

objectivesGroup EFO Ltd., Marketing News, Feb 1, 1993, Pg 2


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MEET THE NEW CONSUMER

and smile when you do because sheis your boss. It may not be the

person you thought you knew.

Instead of choosing from what you

have to offer, she tells you what she

wants. You figure it out how to giveit to her.

-Fortune Editor


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A new product must satisfy

consumer needs, not the needs andexpectations of management.

Understanding and adapting toconsumer motivation and behaviour is

not an optionit becomes a necessityfor competitive survival


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Consumer Behaviour The study of consumer behavior focuses on how

individuals make decisions to spend theiravailable resources (time, money, effort) on

consumption-related items (Schiffman andKanuk, 1997).

According to Solomon (1996), consumer behavioris a study of the processes involved when

individuals or groups select, purchase, use, ordispose of products, services, ideas, orexperiences to satisfy needs and desires.


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Based on concepts from

Psychology

Sociology

Anthropology Marketing

Economics


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Failure rates of new products

introduced

Out of 11000 new products introduced by 77

companies, only 56% are present 5 years later.

Only 8% of new product concepts offered by

112 leading companies reached the market.

Out of that 83%reached the market failed to

meet marketing objectives.


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Can Marketing be

standardised?

No. Because cross - cultural styles,

habits, tastes, prevents suchstandardization


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Customer vs. Consumer Behaviour

Customer behaviour:abroad term that covers

both individual consumers who buy goods and

services for their own use and organizational

buyers who purchase business products

Consumer behaviour: the process through

which the ultimate buyer makes purchase

decisions


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Consumer behaviour

Consumer behaviour is the study of how people

buy, what they buy, when they buy and why they

buy.

It attempts to understand the buyer decisionmaking process, both individually and in groups.

It studies characteristics of individual consumers

such as demographics, psychographics, andbehavioural variables in an attempt to understand

people's wants.


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Buyer characteristics

Cultural

Social

Personal Psychological


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Buyers Decision

Product Choice

Brand Choice

Dealer Choice Purchase Timing

Purchase Amount


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Cultural factors

Culture

Subculture

Social Class


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Cultural Influences

Culture: values, beliefs, preferences, and

tastes handed down from one generation to the

next

It is important to recognize the concept of

ethnocentrism, or the tendency to view your

own culture as the norm, as it relates to

consumer behavior


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Core Values in the Culture

While some cultural values change over time, basiccore values do not

Examples of core values include:

Importance of family and home life

Education

Youthfulness

Individualism

International Perspecti e on C lt ral


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International Perspective on Cultural

Influences

Cultural differences are particularly important

for international marketers

Successful strategies in one country often

cannot extend to other international markets

because of cultural variations


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Subcultures: subgroup of culture with its own,distinct modes of behaviour

Cultures are not homogeneous entities with

universal values. Subcultures can differ by:

Ethnicity or Nationality

Age or Gender Religion

Social class or Profession


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Social Influences

Group membership influences an individual'spurchase decisions and behavior in both overt andsubtle ways.

Norms: are the values, attitudes, and behavioursthat a group deems appropriate for its members

Status: is the relative position of any individualmember in a group

Roles define behaviour that members of a groupexpect of individuals who hold specific positionswithin the group


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Reference groups: groups whose value

structures and standards influence a person's

behaviour

Requires two conditions:

The purchased product must be one that others can

see and identify

The purchased item must be conspicuous; it muststand out as something unusual, a brand or product

that not everyone owns


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Social classes: groups whose rankings aredetermined by occupation, income, education,family background, and residence location.

Upper-upper Lower-upper

Upper-middle

Lower-middle Working class

Lower class


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Opinion leaders: trendsetters who purchase newproducts before others in a group and then influenceothers in their purchases

Family Influences

Autonomic role is when the partners independentlymake equal numbers of decisions.

Husband-dominant role is when the husband makesmost of the decisions.

Wife-dominant role is when the wife makes most of thedecisions.

Syncratic role is when both partners jointly make mostdecisions.


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Children and Teenagers in Family

Purchases

Growing numbers are assuming responsibility

for family shopping

They also influence what parents buy

They represent sizeable consumers in their

own right


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Personal Factors

Family Life Cycle

Occupation and Economic circumstances

Lifestyle Personality and self - concept


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Psychological Factors

Motivation

Perception

Learning Beliefs and Attitudes


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Buying Roles

Initiator

Influencer

Decider Buyer

User


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Buying Behaviour

Complex

DissonanceReducing

Habitual Variety seeking


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Computer-Mediated Buying

Consumer computer-mediated buying, or online

buying, is the use of Internet technology to:

a. Seek information

b. Evaluate alternatives &

c. Make purchase decisions

This technology also allows marketers to customizetheir offering to the specific needs of individuals,

thereby increasing customer value and satisfaction.


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Post - Purchase Behaviour

Satisfaction

Actions

Use and Disposal


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Cognitive Dissonance

Cognitive Dissonance is a feeling of post-purchase psychological tension or anxiety.

To alleviate cognitive dissonance,

consumers often search for information to

reinforce their purchase decision.


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Maslows Hierarchy of Needs


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Perception

Process by which an individual selects,

organizes, and interprets information to form a

cohesive picture about an entity

Perceptions affect consumer behavior

However, remember that individuals can perceive

the same entity in different ways


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Perception

Selective Retention: Though people fail to registermuch information, they retain information thatsupports their attitudes and beliefs

Remember good points about products we like and forget

good points about competing products

Works to the advantage of strong brands

Explains why marketers repeat messagesforreinforcement


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Perception

Selective Distortion: Tendency to interpret/distort

information to be consistent with prior brand and

product beliefs

Taste tests: Blind taste tests showed equal split; Opentests showed preferences

Can work to the advantage of marketers of strong brands

A car may seem to drive smoother

A beer may taste better


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Subliminal Perception

Subliminal perception means that you see or hear

messages without being aware of them.

The presence and effect of subliminal perception

on behaviour is a hotly debated issue, with morepopular appeal than scientific support.

Evidence suggests that subliminal messageshave some effect on behavior. If so, is their use

an ethical practice


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Perceived Risk

Perceived Risk represents anxieties felt because theconsumer cannot anticipate the outcomes of apurchase but believes that there may be negativeconsequences.

Perceptions of greater perceived risk are usuallyaccompanied by a more extensive externalinformation search concerning a purchase.

Types of Perceived Risk:

financial

physical

psychosocial


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Attitudes

A persons enduring favorable orunfavorable

evaluations, emotional feelings, or action

tendencies toward some object or idea

Attitude components:

Cognitive

Affective

Behavioural


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Changing Consumer Attitudes

Attempt to produce consumer attitudes that willmotivate the purchase of a particular product

Evaluate existing consumer attitudes and thenmake the product characteristics appeal to them

Modifying the Components of Attitude

Attitudes change in response to inconsistenciesamong the three components

Marketers can work to modify attitudes byproviding evidence of product benefits and bycorrecting misconceptions


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Learning

An immediate or expected change in behavior

as a result of experience.

The learning process includes the component

of:

Drive

Cue

Response

Reinforcement


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Brand Loyalty

Brand Loyalty is a favorable attitude toward andconsistent purchase of a single brand over time.

It results from positive reinforcement of previous

actions. There is evidence of brand loyalty in many

commonly purchased products in the U.S. and

the global marketplace.

P l D i f C


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Personal Determinants of Consumer

Behaviour - Needs and Motives

Need: an imbalance between a consumer's

actual and desired states

Motives: inner states that direct a person

toward the goal of satisfying a felt need

Shaping: process of applying a series

of rewards and reinforcements to permit more

complex behavior to evolve over time


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Self-Concept: A persons multifaceted picture

of himself or herself, composed of the:

Real self

Self-image

Looking-glass self

Ideal self


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Buying Process

Problem Recognition

Information Search

Evaluation Alternatives

Purchase Decision


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Problem or Opportunity Recognition

Consumer becomes aware of a significant

discrepancy between the existing situation and

the desired situation

Motivates the individual to achieve the desired

state of affairs


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Search

Consumer gathers information related to theirattainment of the desired state of affairs

Identifies alternative means of problem solution

May cover internal or external sourcesof information

Brands that a consumer actually considers buyingbefore making a purchase decision are known asthe evoked set


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Driving Search

Need More

Informat ion

More RiskLess knowledge

Less product experienceHigh level of interest

Less RiskMore knowledge

More product experienceLow level of interest

Need Less

Informat ion


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Evaluation of Alternatives Consumer evaluates the evoked set

Difficult to completely separate the second andthird steps, since some evaluation takes place asthe search progresses

Outcome of the evaluation stage is the choice of abrand or product (or possibly a decision to renewthe search)

Evaluative criteria : features that a consumerconsiders in choosing among alternatives


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Purchase Decision and Purchase Act

Consumer narrows the alternatives down to

one

The purchase location is decided


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Post purchase Evaluation

After the purchase, consumers areeither satisfied or experience post-purchase

anxiety Cognitive dissonance:

Post-purchase anxiety that results from an

imbalance among an individuals knowledge,beliefs, and attitudes after an action or decisionis taken

TYPES OF CONSUMER BUYING


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TYPES OF CONSUMER BUYING

BEHAVIOUR

There are four types of consumer buying

behavior, they are :

Routine Response/Programmed Behaviour

Limited Decision Making

Extensive Decision Making

Impulse buying

ROUTINE


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RESPONSE/PROGRAMMED

BEHAVIOUR Buying low involvement, frequently

purchased, low cost items.

Examples : Soft drinks, snack foods, milk etc.


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LIMITED DECISION MAKING

Buying product occasionally.

That is when you need to obtain information

about unfamiliar brand in a familiar product

category.

Example: Clothes--know product class but not

the brand.


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EXTENSIVE DECISION MAKING

Complex high involvement, unfamiliar,

expensive and infrequently bought products.

Spend a lot of time seeking information and

deciding. High degree of risk.

Example: Cars, homes, computers, education.


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IMPULSE BUYING

No conscious planning. The purchase of the same product does not always elicit the

same Buying Behaviour. Product can shift from onecategory to the next.

For example: Going out for dinner for one person may beextensive decision making (for someone that does not goout often at all), but limited decision making for someoneelse. The reason for the dinner, whether it is an anniversarycelebration, or a meal with a couple of friends will alsodetermine the extent of the decision making.

Documents

Consumer Industrial Buyer Behaviour Ppt