Consumer Behavior. INTRODUCTION Consumer behavior is 'the process and activities people engage...

Consumer Behavior

INTRODUCTIONConsumer behavior is 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'.'

Consumer behavior(in consumer business context) referred to as the study of when, why, how, where and what people do or do not buy products. It blends elements from psychology, sociology,social psychology, anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer.

Relationship marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. Social functions can be categorized into social choice and welfare functions. Each method for vote counting is assumed as a social function but if Arrow’s possibility theorem is used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonic, unanimity, homogeneity and weak and strong Paretooptimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer.

Internal influences

Consumer behavior is influenced by: demographics, psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, and feelings. consumer behavior concern with consumer need consumer actions in the direction of satisfying needs leads to his behavior of every individuals depend on thinking process

External influences

Consumer behavior is influenced by: culture,sub-culture, locality, royalty, ethnicity, family, social class, reference groups, lifestyle, and market mix factors.

Consumer Markets

Consumer Buying Behavior

Level of Involvement and Consumer Problem-Solving Processes

• Level of Involvement– High– Low– Enduring– Situational

• Routinized Response Behavior• Limited Problem Solving• Extended Problem Solving• Impulse Buying

Consumer Buying Decision Process

Problem RecognitionProblem Recognition

Problem RecognitionProblem Recognition

Information SearchInformation Search

Consumer Buying Decision Process

Information Search

• Internal

Information Search

• Internal • External

Problem RecognitionProblem Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

Consumer Buying Decision Process

Evaluation of Alternatives

Consideration Set (Evoked Set)

Evaluative Criteria

Problem RecognitionProblem Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

PurchasePurchase

Consumer Buying Decision Process

Postpurchase EvaluationPostpurchase Evaluation

Problem RecognitionProblem Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

PurchasePurchase

Consumer Buying Decision Process

Postpurchase Evaluation

Cognitive Dissonance

Did I Do the Right Thing?

SITUATIONALSITUATIONAL INFLUENCES INFLUENCES

• Physical Physical Surroundings Surroundings• Social SurroundingsSocial Surroundings• TimeTime• Purchase ReasonPurchase Reason• Buyer’s Mood and Buyer’s Mood and Condition Condition

Consumer Buying Decision ProcessConsumer Buying Decision Process

Possible Influences on Consumer Buying

Decisions

SITUATIONALSITUATIONAL INFLUENCES INFLUENCES

• PhysicalPhysical Surroundings Surroundings• Social SurroundingsSocial Surroundings• TimeTime• Purchase ReasonPurchase Reason• Buyer’s Mood and Buyer’s Mood and Condition Condition

PSYCHOLOGICALPSYCHOLOGICAL INFLUENCESINFLUENCES

• PerceptionPerception• MotivesMotives• LearningLearning• AttitudesAttitudes• Personality andPersonality and Self-concept Self-concept• LifestylesLifestyles

Consumer Buying Decision ProcessConsumer Buying Decision Process

Possible Influences on Consumer Buying Decisions

Psychological Influences on the Buying

Decision Process

• Perception– Information Inputs– Selective Exposure– Selective Distortion– Selective Retention

• Motives– Maslow’s Hierarchy of Needs– Patronage Motives

Maslow’s Hierarchy of Needs

Esteem Needs

Social Needs

Safety Needs

Psychological Needs

Self-Actualization

Psychological Influences on the Buying

Decision Process

• Learning• Attitudes• Personality and

Self-Concept• Lifestyles

SITUATIONALSITUATIONAL INFLUENCES INFLUENCES

• Physical Physical Surroundings Surroundings• Social SurroundingsSocial Surroundings• TimeTime• Purchase ReasonPurchase Reason• Buyer’s Mood and Buyer’s Mood and Condition Condition

SOCIAL SOCIAL INFLUENCES INFLUENCES

• Roles Roles • FamilyFamily• Reference Groups Reference Groups and Opinion Leaders and Opinion Leaders• Social ClassesSocial Classes• Culture andCulture and Subcultures Subcultures

PSYCHOLOGICALPSYCHOLOGICAL INFLUENCESINFLUENCES

• PerceptionPerception• MotivesMotives• LearningLearning• AttitudesAttitudes• Personality andPersonality and Self-concept Self-concept• LifestylesLifestyles

Consumer Buying Decision ProcessConsumer Buying Decision Process

Possible Influences on Consumer Buying Decisions

Social Influences

• Roles • Family Influences

– Consumer Socialization

• Reference Groups and Opinion Leaders

• Social Classes

Social Class Behavioral Traits and Purchasing Characteristics

Income varies among the groups, Prize quality merchandise but goals are the same Favor prestigious brandsVarious lifestyles: preppy, conven- Products purchased must re- tional, intellectual, etc. flect good tasteNeighborhood and prestigious Invest in art schooling important Spend money on travel,

theater, books, tennis, golf, and swimming clubs

Upper Class (14% of Population)Includes upper-upper, lower-upper, upper-middle

Behavioral Traits Buying Characteristics

Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp. 265-80, with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Class Behavioral Traits and Purchasing Characteristics

Often in management Like fashionable itemsConsidered white collar Consult experts via books,Prize good schools articles, etc., before Desire an attractive home in a purchasing nice, well-maintained Spend for experiences they neighborhood consider worthwhile for their Often emulate the upper class children (e.g., ski trips, college Enjoy travel and physical activity education)Often very involved in children’s Tour packages, weekend trips school and sports activities Attractive home furnishings

Middle Class (32% of Population)

Behavioral Traits Buying Characteristics

Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp. 265-80, with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Class Behavioral Traits and Purchasing Characteristics

Emphasis on family, especially for Buy vehicles and equipment economic and emotional support related to recreation, camp- (e.g., job opportunity tips, help in ing, and selected sports times of trouble) Strong sense of valueBlue collar Shop for best bargains at off- Earn good incomes price and discount storesEnjoy mechanical items and Purchase automotive equip- recreational activities ment for making repairs Enjoy leisure time after working Enjoy local travel, hard recreational parks

Working Class (38% of Population)

Behavioral Traits Buying Characteristics

Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp. 265-80, with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Class Behavioral Traits and Purchasing Characteristics

Often down and out through no Most products purchased are fault of their own (e.g., layoffs, for survival company takeovers) Ability to convert good Can include individuals on discards into useable items welfare and the homelessOften have strong religious beliefsMay be forced to live in less desirable neighborhoodsIn spite of their problems, often good- hearted toward othersEnjoy everyday activities when possible

Lower Class (16% of Population)

Behavioral Traits Buying Characteristics

Source: Adapted with permission from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, Dec. 1983, pp. 265-80, with data from J. Paul Peter and Jerry C. Olson, Consumer Behavior: Marketing Strategy Perspective (Homewood, Ill.; Irwin, 1987), p. 433

Social Influences

• Culture and Subculture– African-American Subculture– Hispanic Subculture– Asian-American Subculture