Dynamics of Consumer Behavior

Dr. G.D Samarasinghe Department of Management of Technology

University of Moratuwa

MN 3052:

Leaning Outcomes

• Define consumer markets

• Construct simple models of consumer buyer behaviour

• Analyze factors influencing consumer behavior

• Explain the buyer decision process

• Differentiate the types of buying behavior

• Apply concepts in the Sri Lankan and Global markets

Consumer Buying Behavior

• Consumer Buying Behavior refers to the buying behavior of final consumers -individuals & households - who buy goods and services for personal consumption.

• These final consumers make up the consumer market.

• The central question for marketers is:– “How do consumers respond to various

marketing efforts the company might use?”

Model of Buyer Behaviour

ProductProductPricePricePlacePlacePromotionPromotion

Marketing andMarketing andother stimuliother stimuli

EconomicEconomicTechnologicalTechnologicalPoliticalPoliticalCulturalCultural

Buyer’s responsesBuyer’s responses

Buyer’s black boxBuyer’s black boxProduct choiceProduct choiceBrand choiceBrand choiceDealer choiceDealer choicePurchase timingPurchase timingPurchase amountPurchase amountBuyerBuyer

characteristicscharacteristics BuyerBuyerdecisiondecisionprocessprocess

Consumer Behaviour Influences

Cultural

Culture

Sub-culture

Socialclass

Social

Referencegroups

Family

Rolesand

status

Personal

Age andlife-cycle

OccupationEconomicsituationLifestyle

Personalityand

self-concept

Psycho-logical

MotivationPerceptionLearning

Beliefs andattitudes

Buyer

Culture

• Culture can be defined as the sum of learned beliefs, values, and customs that serve to direct consumer behavior of members of a particular society.

Subculture

– Group of people

– With shared value systems

– Based on common life experiences

– And situations

Ex: Based on religion, age, race

Social Class

• Relatively permanent

• Ordered divisions in a society

• Whose members share similar:– Values– Interests– Behaviors

Ex : Based on income & occupation (Lower – lower, lower – middle, lower – upper etc.)

Social Factors

• Groups– Membership - primary and secondary– Reference and aspirational– Opinion leaders

• Family– Most important consumer influence– changing family roles and evolving lifestyles– children may influence strongly

Social Factors

• Roles– Activities people expected

to perform by others

• Status– Each role carries a status

reflecting the general esteem society gives it

Personal Factors

• Age

• Life-cycle stages -

• Occupation

• Economic situation

• Lifestyle

• Personality

Age & Life Cycle Stages

• Bachelor Stage : young, single people not living at home

• Newly Married Couples : Young, no children

• Full nest 1 : Youngest child under 6 yrs• Full nest 2 : Youngest child 6 or over 6 yrs• Full nest 3 : Older marries couples with

dependent children

Contd..

• Empty Nest 1 : Older married couples, no children living with them, Head of household is in labor force

• Empty Nest 2 : Same as above and head retired

Personal Factors

• Occupation– May determine goods or services purchased– Identify occupations with product need– Specialized professional products

• Economic situation– Affects product choice– Indicator for income sensitive products

Personal Factors

• Lifestyle– A person’s pattern of living as expressed by

psychographics– Profiles a person’s whole pattern of acting and

interacting with the world– Lifestyle classifications

Personal Factors

• Personality– Unique psychological characteristics leading

to relatively consistent and lasting responses to one’s own environment

– Traits– Product and brand choices

• Self-concept– Self-image– Possessions reflect identity

Psychological Factors

• Motivation

• Perception

• Learning

• Beliefs

• Attitudes

Psychological Factors

• Motivation– Biological needs– Psychological needs

• Motive– Need sufficiently pressing– To drive a person to seek satisfaction

Psychological Factors

1. Freud’s Theory of Motivation– Largely unconscious– Repression of urges– A person does not fully understand their own

motivation

2. Maslow’s Hierarchy of Needs

Physiological needs

Safety needs

Social needs

Self-actualization needs

Esteem needs

Psychological Factors

• Perception– Process by which people:– Select, organize and interpret information– To form a meaningful picture of the world

• Selective attention

• Selective distortion

• Selective retention

Psychological Factors

• Learning

– Changes in individual behaviour– Arising from experience– Most human behaviour is learned

Psychological Factors

• Beliefs– A descriptive thought that a person holds about

something

• Attitudes– A person’s consistently favorable or

unfavorable evaluations, feelings, and tendencies toward an object or idea

The Buyer Decision Process

Needrecognition

Purchasedecision

Purchasedecision

Evaluation ofalternatives

Evaluation ofalternatives

Post purchasebehaviour

Post purchasebehaviour

Informationsearch

Consumer Buying Roles

• Initiator• Influencer• Decider• Buyer• User

Discussion on Contemporary Issues of CB in Sri Lankan and Global Context

• Green Consumerism

•Sacred Values and Ethics

•Impulse Buying in Retailing

•Ethnocentrism and Postmodernism