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Consumer Behavior

Consumer Behavior (outline)


Factors Buying Decision Process Types

Problem Routine
Psychological
Recognition Programmed

limited decision
Social Information Search
making

Evaluation of extensive decision


Cultural
Alternatives making

Economic Purchase Decision Impulse buying

Post-purchase
Personal
Behavior
Factors affecting consumer buying behavior
1. Internal or Psychological factors
 Motivation

 Perception
 selective attention

 selective distortion

 selective retention

 Learning

 Beliefs & attitudes


2. Social factors
 Family:
 Family influence on the individual personality, characteristics, attitudes.

 References:
 Group of people with whom an individual associates

 This group of people strongly influence a person's attitudes value and


behavior directly or indirectly
2. Social factors
 Role and status:
 person participate in many groups like family, clubs, organization

 The person's position in each group can be defined in tern of role and status

 Peoples choose products that communicate their role and status in society
3. Cultural factors
 We have to know the differences of; Culture, sub-culture, social class
influence the consumer behavior when buying good and service
Culture
 is fundamental determinant of person wants and behavior
 affect people in Egypt of what they would like to wear and what they
would like to eat

 Preferences, habits, customs are needed to be understood to provide


the product and service that will suite this culture
3. Cultural factors
Sub-cultures:
 each cultures it consists of Sub-cultures provide more specific
identification and socializations of their members
 Ex. There is different in habits between those who lives in Cairo and
those who lives in Alexandria and we have to consider when offering
the product and service
3. Cultural factors
Social Classes:
 in any society there is social classes, in Egypt there is 3 classes: The
upper Class, the middle Class & the lower class

 each of this class have it preferences and to many product in different


areas
 Ex: cars, clothes, furniture
 N.B. Advertising that target a specific class must be in their way of
language and features in order to reach this class easily
4. Economic factors
 The Economic Factors are the factors that talk about the level of sales
in the market and the financial position of the consumer,

 i.e. how much an individual spends on the purchase of goods and


services that contribute to the overall sales of the company.

 The following are the main economic factors that greatly influence
the consumer buying behavior
4. Economic factors
1. Personal Income:
The personal income of an individual influences his buying behavior as it
determines the level to which the amount is spent on the purchase of goods and
services. The consumer has two types of personal incomes; disposable income and
discretionary income.

2. Family Income:
The family income refers to the aggregate of the sum of the income of all the
family members. The total family income also influences the buying behaviors of
its members. The income remaining after meeting all the basic necessities of life
can be used for the purchase of shopping goods, luxury items, durable goods, etc.
4. Economic factors
3. Income Expectations:
An Individual’s expectation with respect to his income level in the future influences his buying
behavior today. Such as, if a person expects his income to increase in the future, then he will
spend more money on the purchase of the luxury goods, durables and shopping goods. And on
the contrary, if he expects his income to fall in the future his expenditure on such items also
reduces.

4. Consumer Credit:
The credit facility available to the consumer also influences his buying behavior. If the credit
terms are liberal, and EMI scheme is also available, then the customers are likely to spend
more on the luxury items, durable goods, and shopping goods. This credit is offered by the
seller either directly or indirectly through the banks and other financial institutions.
4. Economic factors
5. Liquid Assets:
The liquid assets with the consumer also influences his buying behavior. The liquid assets
are the assets that are readily convertible into the cash. If the customer has more liquid
assets, then he is likely to spend more on the luxury items and the shopping goods. On the
other hand, if the liquid assets are few then the expenditure on luxury items also reduces.

6. Savings:
The amount of savings out of the personal income also influences the consumer buying
behavior. Such as, if the customer decides to save more for a particular period, then his
expenditure on the other items will be less and in case the savings are less the expenditure
on other items increasestions.
5. Personal factors
 Personal characteristics that influence a buyer’s decision include

1. Age and stage in the life cycle,

2. Occupation,

3. Economic circumstances (Income)

4. Personality and self-concept

5. Lifestyle and values.


5.1 AGE AND STAGE IN THE LIFE CYCLE
 Taste in food, clothes, furniture, and recreation is often related to the
age.

 Family life cycle is also shaped the Consumption.

 Psychological life-cycle stages have a great affection in the consumer


behavior.

 Critical life events or transitions changing the consumer needs with a


new ones.
5.2 OCCUPATION
 Occupational groups have above-average interest in specific products
and services

 Some marketers try tailors products for certain occupational groups.

 For example, Computer software companies design different


products for brand managers, engineers, lawyers, and physicians.
5.3 ECONOMIC CIRCUMSTANCES (INCOME)
 Choosing product and brand affected greatly by economic
circumstances: spendable income, savings and assets, debts,
borrowing power, and attitudes toward spending and saving.
 Luxury-goods makers (Gucci, Prada, and Burberry) are vulnerable to an economic downturn.

 In case of a recession, marketers redesign, reposition, and reprice


their products.
 Some firms are well-positioned to take advantage of good and bad economic times to begin
with.
5.4 PERSONALITY AND SELF-CONCEPT
 Each person has personality characteristics; self-confidence, dominance,
autonomy, deference, sociability, defensiveness, and adaptability.

 Brands also have personalities, and consumers are likely to choose


brands whose personalities match their own.

 Some well-known brands tended to be strong on one particular trait:


Levi’s on “ruggedness”; MTV on “excitement”; CNN on “competence”;
and Campbell’s on “sincerity.”
5.5 LIFESTYLE AND VALUES
 A lifestyle is a person’s pattern of living in the world as expressed in
activities, interests, and opinions.
 Marketers search for relationships between their products and
lifestyle groups.

 For example: most computer buyers are achievement-oriented, so a


computer manufacturer aims the brand more clearly at the achiever
lifestyle.
The Buying Decision Process:
The Five-Stage Model
1. Problem Recognition
 The buying process starts when the buyer recognizes a problem or
need triggered by internal stimuli (normal needs) or external stimuli
(TV ad).
 Marketers need to identify the circumstances that trigger a particular
need by gathering information from a number of consumers.

 They can then develop marketing strategies that spark consumer


interest.
2. Information Search
 We have two types of Information Search:
Internal search (Memory)

External Search: Friends & Relatives (Word Of Mouth)


3. Evaluation of Alternatives
 How does consumers process competitive brand information and make the final
value judgments?

 There is no single process used by the consumer however most of the models
sees that consumers judgment is based on their conscious and rational basis.

 Basic concept to understand the consumer’s evaluation process

1. Consumer wants to satisfy his/her needs.

2. Consumer looks at certain benefit from each product solution

3. Consumer sees the benefit as a bundle of attributes with varying ability to deliver benefits
3. Evaluation of Alternatives
 Example:
 Car’s: safety, comfortable, motor power or gas efficiency usage (cost wise)

 New Flat : security around , size space ,location , view , price

 All this consider as attributes

 Marketer can use this attribute to segment the market according to


the benefit group
Beliefs and attitudes influence the buyer behavior
 Beliefs is a descriptive thoughts that customer hold about something.

 Attitudes is a person enduring favorable or unfavorable evaluations,


emotional feeling and action tendencies toward some object or idea

 People have Attitude toward almost everything; religion, politics,


music, food
Beliefs and attitudes influence the buyer behavior
 E.x.: who knows Sainsbury super market that was providing goods and services with low
price however fake news was popped that it was a Jewish… what was the attitudes of
people toward this news and what makes it get out of Egypt after 4 years beside the
competition

 E.x.: attitude toward a music & food.

 Because attitude economize on energy and thought it’s difficult to change and
its advised that company should fit its product toward attitude rather than
changing it
 Ex : domino’s Pizza (discuss)
Expectancy Value Model
 Consumer evaluate products and service by combining their brand beliefs
-positives and negatives – according to importance
 If we take an example of restaurants as per below table and if the weight of our
attribute as follow:
 30 % for the diversity
 40 % for the quality of foods & service
 30% for the price

Restaurants Diversity (food) Quality(food) Price


Spectra 8 6 7
Steak out 9 8 5
Planet Africa 7 9 6
Expectancy Value Model
 What restaurant to choose?
 Spectra =0.3(8)+0.4(6)+0.3(7) = 6.9
 Steak out =0.3(9) +0.4(8)+0.3(5)= 7.4
 The choose is Steak out for sure, but what marketing manager of
spectra have to do?
 Alter belief about brand : psychological repositioning
 Alter belief about competitor’s brand: Competitive repositioning
 Alter the importance of weight
 Call attention to the neglected attributes
 Shift the buyer ideals
4. Purchase Decision
 The buying (purchase) decision process is the decision-making
process used by consumers regarding market transactions before,
during and after the purchase of a good of a service.
5. Post-purchase Behavior
 Some consumers feel dissonance,
 acquiring drawbacks of the chosen brand

 losing the benefits of the brands not purchased

 The marketer’s job does not end when the product is bought.
 Reinforce consumer’s choice & help him feel good about the brand.

 monitor post-purchase satisfaction, actions, and product uses and disposal.


Post-purchase SATISFACTION
 After purchasing the product, the consumer will either be
satisfied or dissatisfied.
 If the product falls short of expectations, the
Product
consumer is disappointed (dissatisfied); exceeds
Product expectations,
 if the product meets expectations, the product falls meets the
short of expectations consumer is
consumer is satisfied; expectations, , the delighted
the consumer consumer is
is
 if the product exceeds expectations, the disappointed
satisfied
disappointed
consumer is delighted.
Post-purchase ACTIONS
 Satisfied consumer will purchase the product again & saying good to others.

 Dissatisfied consumers…

 deciding stop buying the product or warning friends,

 abandon or return the product,

 take public action by complaining to the company or other groups (government agencies).

 Example; Computer companies: send letter to new owners congratulate and thanks
to select their brand, place ads for satisfied owners, list locations of services.
Post-purchase USES AND DISPOSAL
 Products are disposed of in a number of ways, e.g. sold, thrown away, rented,

converted to another purpose. Marketers have to understand consumer behavior in


this stage and communicate to consumers. E.g. Batteries need to be disposed in a
environmentally acceptable manner.

 From an organizational perspective, the importance of product disposal is that it is

linked with product consumption rate. E.g. the faster the buyer consumes the
product, the faster they need to repurchase another one. Marketing strategies can
be designed to attract consumers to repurchase their brand.
6. Post-Purchase Evaluation
 Just because a purchase has been made, the process has not ended.

 In fact, revenues and customer loyalty can be easily lost.

 After a purchase is made, it’s inevitable that the customer must


decide whether they are satisfied with the decision that was made or
not. They evaluate.
Types of consumer behavior
 Routine Programmed

 limited decision making

 extensive decision making

 Impulse buying
CONCLUSION
 For a successful consumer oriented market, service provider should
work as psychologist to procure consumers.

 That’s by keeping in mind affecting factors, things can be made


favorable and goal of consumer satisfaction can be achieved.

 Also study of consumer buying behavior is gate way to success in


market.

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