THEORIES OF Consumer Behavior

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THEORIES OF Consumer Behavior. The factors that affect the demands of the consumers. Trends in the consumer behavior in 2011- 2012. HON. EDUARDO G. ONG BSC, MBA, LLB, PhD, DPA, DBA Diplomate in Business Education Fellow in Personnel Management Fellow in Real Estate Management - PowerPoint PPT Presentation

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  • The factors that affect the demands of the consumers Trends in the consumer behavior in 2011- 2012

    HON. EDUARDO G. ONGBSC, MBA, LLB, PhD, DPA, DBA

    Diplomate in Business EducationFellow in Personnel ManagementFellow in Real Estate ManagementManagement & Academic ConsultantProfessor of Business & Public AdministrationChairman Professional Board of Real Estate Service-PRCPresident Phil. Association of Professional Regulatory Boards

  • Involves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which brand and where). Interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

  • Consumer Buying Behavior Refers to the buying behaviorof final consumers individuals& households who buy goodsand services for personalconsumption.

  • CONSUMERPERCEPTION/SENSATIONCOGNITIONAFFECTBELIEFSSOCIAL ANDOTHER INFLUENCEINFOSEARCHCHOICESPREFERENCESCOMMUNICATIONMARKETRESEARCHSTRATEGY

  • If you have bad breath, you cannot smell it yourself.If you eat a balanced diet, you do not need vitamin supplements.Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation.Dell Computers tend to be of higher quality than those made by HP and Sony.Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.

  • Are veggie burgers actually healthy?What makeup should you use to get an even skin tone?Do I get any useful benefits from spending more than Php 5,000.00 on a digital camera?Should I get a make-over? What am I looking for? What should I do?Is my mechanic honest?Which tie should I wear for a job interview?Should I give my wife roses, chocolate, or software?

  • Consumer problem: Discrepancy between ideal and actual state--e.g., consumer:Has insufficient hairIs hungryHas run out of ink in his or her inkjet cartridge

    Problems can be solved in several ways--e.g., stress reduction

  • INFORMATIONSEARCHPROBLEMRECOGNITIONEVALUATION OFALTERNATIVESPURCHASEPOSTPURCHASEEVALUATION/BEHAVIORSTheory

    Complications

  • INTERNALEXTERNALMemoryThinkingWord of mouth, media,store visits, trialCATALOG

  • UNIVERSAL SETRETRIEVED SETEVOKED SETAll possible optionsOptions that readily come to mindOptions that will be considered by the consumerNote: Retrieved and evoked sets will vary among different consumers

  • For low involvement products, efforts aimed at affecting internal search tend to be more effectivethe consumer is usually not willing to expend energy on external search.

    External search is more likely for higher involvement products.

  • Involvement levelTemporaryEnduringConsumer locus of controlInternalExternalProduct category complexityConsumer knowledge

  • Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones)Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission)Hybrid: Combination of the two (e.g., one non-compensatory measure, then compensatory tradeoffs on other attributesAbandoned strategy: Consumer finds initial criteria unrealistic and proceeds to less desirable solutionIMPORTANTLESSIMPORTANT

  • If either Coke or Pepsi is on sale, buy that brand; otherwise, buy Coke

    The larger the navels, the better the orange

    The larger package is likely to offer a lower unit price (not true in reality)

  • BELIEFSAFFECT(FEELING)BEHAVIORALINTENTIONS

  • BeliefsCan be positive, negative, or neutralMay or may not be accurateMay contradict other beliefs held by the other personAffectMay be positive or negativeMay take on specific dimension (e.g., pleasure, disgust)Behavioral IntentionsAn individuals plan or expectations of what he or she will doMay appear inconsistent with beliefs May not predict well what the individual will do in reality

  • Statements must bePerceivedComprehendedRememberedBelieved (at least in part)

  • Model of Buyer Behavior

    Marketing andOther Stimuli

    Buyers Black Box

    Buyers Response

    ProductPricePlacePromotionEconomicTechnologicalPoliticalCulturalBuyer CharacteristicsBuying Decision ProcessProduct ChoiceBrand ChoiceDealer ChoicePurchase TimingPurchase Amount

  • Factors Influencing Consumer Behavior

    Culture

    Subculture

    SocialclassSocial

    Referencegroups

    Family

    Rolesandstatus

    Individual/Personal

    Age andlife-cycle

    Occupation

    Economicsituation

    Lifestyle

    Personalityandself-conceptPsychological

    Motivation

    Perception

    Learning

    Beliefs andattitudesBuyerCultural

  • Social ClassSocietys relatively permanent & ordered divisions whose members share similar values, interests, and behaviors.Measured by: Occupation, Income, Education, Wealth and Other Variables.

    CultureMost basic cause of a person's wants and behavior.

    SubcultureGroups of people with shared value systems based on common life experiences.Hispanic ConsumersAfrican American ConsumersAsian American ConsumersMature Consumers

  • In Filipino Culture everything new and shiny is attractiveCELL PHONE CRAZE

  • GroupsMembershipReference Factors Affecting Consumer Behavior: Social FamilyHusband, wife, kidsInfluencer, buyer, userRoles and Status

    Social Factors

  • Reference Group are groups that have direct (face to face)or indirect influence on the persons attitudes or behavior People are often influenced by reference groups to whichthey do not belong

  • Family members can strongly influenceBuyer behaviorRole consists of the activities people areexpected to perform accordingto the persons around them

    Each role carries a status reflecting thegeneral esteem given to it bysocietyPeople often choose products that show their status in society

  • Factors Affecting Consumer Behavior: Individual/ PersonalPersonal InfluencesAge and Life CycleStageOccupationEconomic SituationLifestyle IdentificationActivitiesOpinionsInterestsPersonality & Self-Concept

  • Factors Affecting Consumer Behavior: PsychologicalPsychological FactorsMotivationPerceptionLearningBeliefs and Attitudes

  • BELIEFS & ATTITUDE

    A persons beliefs and attitude are acquired through acting and learning.

    A belief is a descriptive thought that a person has about something

    An attitude is a persons consistency favorable orUnfavorable evaluations , feelings and tendenciesToward an object or idea.

  • PERCEPTION

    Is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

    The marketer must remember that two people with the same motivation and in the same situation may act differently because they perceive the situation differently.

  • LEARNING

    Is described as changes in an individual behavior arising from experience.

  • MOTIVATION

    The process of motivation is initiated by the Tensions an unsatisfied want creates motive (drive) is a need that is sufficiently pressing to direct the person to seek satisfaction of the need.

  • Sigmund Freud's Theory

    Assumes that people are largely unconscious about thereal psychological forces shaping their behavior. Accordingly, a person does not fully understand his or her motivation.

    id - is an important part of our personality because as newborns it allows us to get basic needs

  • Sigmund Freud's Theory Ego-based on reality principle the ego understands that other people have needs and desires and that something being impulsiveor selfish can hurt us in a long run

    Superego moral parts of us are develops due to moral and ethical restraints placed on us by our caregivers

  • The role of the unconscious is only one part of the model. Freud also believed that everything we are aware of is stored in our conscious. Our conscious makes up a very small part of who we are. In other words, at any given time, we are only aware of a very small part of what makes up our personality; most of what we are is buried and inaccessible.The final part is the preconscious or subconscious. This is the part of us that we can access if prompted, but is not in our active conscious. Its right below the surface, but still buried somewhat unless we search for it. Information such as our telephone number, some childhood memories, or the name of your best childhood friend is stored in the preconscious.

  • HENRY MURRAYs THEORY

    Henry Alexander Murray (May 13, 1893 June 23, 1988) was an American psychologist who taught for over 30 years at Harvard University. He was founder of the Boston Psychoanalytic Society and developed a theory of personality based on "need" and "press". He also is developer of the Thematic Apperception Test (TAT) which is widely used by psychologists.

  • Murray classified needs as being either:

    Primary needs (which are biologically based): food, water, air, sex, avoidance of pain

    Secondary needs (which either derive from our biological needs or are inherent in our psychological nature): achievement, recognition, acquisition dominance, aggression, autonomy affiliation, play, cognizance (asking questions of others) Murray believed that stronger needs are expressed more often over time and lead to more intense behaviour.

  • WILLIAM MCGUIRE

    William McGuire has described the steps an individual must be persuaded to