Consumer Behaviour Models UNIT-2

Dr. Urvashi Makkar Professor & Chairperson- Marketing, IMS, Ghaziabad

Agenda
           

Consumer Decision Making Framework Reference Groups Various Layers of Consumers Variables having Impact on Market-Driven Approach Kotlers Consumer Behaviour Model Stages in Buyer Decision Making Pre-Purchase Information Search Factors affecting Process of Decision Making in PrePurchase Search Post- Purchase Decision Choice Criteria depends on 3 levels of Decision Making Cognitive Dissonance Howard-Sheth Model of Consumer Behaviour Consumer SegmentationAn Important Tool to Understand Consumer Decision Making Consumer Profiling

Consumer Decision Making Framework

Social Factors
Family Influence, Reference group influences, Roles and Status

External

Cultural Factors

Culture, Sub-Culture, Social Class

Consumer as Decision Maker Psychographics,Motivation ,Personality, Occupation, Economic circumstances, Age and family life cycle

Beliefs and Attitude, Learning

Psychological Factors

Internal

Personal Factors

Reference Groups

Reference Groups: Primary/ Secondary Formal / Informal  Membership/ Symbolic

Individual Family Friends Social Class

Various Layers of Consumers Variables having Impact on MarketDriven Approach

Market Driven Approach

Motivational Layer Attitudinal Layer Behavioral Layer Demographic Layer

Kotlers Consumer Behaviour Model

Step I
Input/ External Influences
Marketing Stimulus (i)
 Product  Price

Step II
Process/ Consumer Decision Making
Buyer Characteristics (i) Psychological Personal Culture Buyer Decision Process (ii)

Step III
Output/ Consumer Decisions/ Actions Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

Other Stimulus (ii)

 Economic

Technological Promotion Political  Channels Social Culture of Distribution

Stages in Buyer Decision Making (Buyer Decision Process)

Problem Recognition Pre-Purchase Information Search Evaluation of alternatives

Purchase Decision Post- Purchase Decision

Kotlers Consumer Behaviour Model

External Influences
Firms Marketing Efforts (Stimuli) Social/Cultural Environment
- Family -Informal Sources - Social Class - Culture

Input

- Product - Promotion - Price - Channels of Distribution

Consumer Decision Making Information Processing Frame work Need Recognition

Pre-Purchase Search

Psychological Field
Motivation, ,Perception, Learning, Personality, Attitude Experience

Process

Evaluation of Alternatives

Post-Decision Behaviour
Purchase

Output

Post-Purchase Evaluation

-Trial -Repeat Purchase

Purchase Satisfaction

Pre-Purchase Search

Post-Purchase Behaviour

Cognitive Dissonance

Factors affecting Process of Decision Making in Pre-Purchase Search

Involvement  Differentiation  Time Pressure


Factors affecting Process of Decision Making(contd.)

Involvement
High Low

Differentiation

Highly High Differential/ Complex Buying Behaviour DissonanceReducing Low Behaviour

Variety Seeking Behaviour

Habitual Buying Behaviour

Choice Criteria depends on 3 levels of Decision Making

Extensive Problem Solving Limited Problem Solving Routinized/Habitual Response Behaviour

Purchase Satisfaction

Pre-Purchase Search

Post-Purchase Behaviour

Cognitive Dissonance

Purchase Satisfaction

The feeling on part of the customer that the decision to buy was appropriate because the product met his expectations. expectations.

Cognitive Dissonance The tension that results from holding two conflicting ideas or beliefs at the same time, in terms of Consumer Behaviour The negative feelings that a consumer may experience after making a commitment to purchase. purchase.

Consumers Response to Dissatisfaction A dissatisfied consumer decides to: to: Take no action. action. Discontinue purchasing a product

Cognitive Dissonance The tension that results from holding two conflicting ideas or beliefs at the same time, in terms of Consumer Behaviour, the negative feelings that a consumer may experience after making a commitment to purchase. purchase.

Different Types of Consumers Based on Post Purchase Behavior

High

Profitability

Butterflies

True Friends

Strangers
Low

Barnacles

Low

Loyalty

High

Consumers log on to Net for research on goods Writankar Mukherjee KOLKATA

Economic Times Business of Brands August, 19,2008,Tuesday

 INDIAN

consumers are using internet for not just research into financial products but even purchasing them. A latest study indicated that about 18% of all financial products are sold online in India. However, using internet for research on products still takes centrestage. Nearly 68% of consumers go online to research on products that interest them.

 The

study was conducted by Google and implemented by the strategic market research firm Media Screen LLC to gain deeper understanding of the Indian consumer behaviour in the online space. The encouraging trend is that such activities are not just limited to the urban pockets.

 Using

internet for such transactions is more skewed towards metros due to the greater penetration of internet. But, there is an equally optimistic demand arising from smaller towns. As regulations on selling financial products become more relaxed in India, the number of online transactions will increase manifold, Google India business head (financial services) Sridhar Seshadri told ET.

The study highlighted that comparing costs and product details are the two most common online financial research activities. Between the two, comparing costs have become more important than evaluating product details (48% vs 42%). The financial company websites are the most important online source when making the final decision, said Mr Seshadri.

 However,

search engines play a major role in accessing other websites and nearly 67% of respondents use them for financial product research. Some 30% of consumers use search engines to become aware of special rates/promotions and to access expert advice. Around 55% see an online advertisement and click on them to learn more.

 Coming

to the specifics, consumers undertaking research for banking services, for instance, get such information from TV advertisements (41%), search engines (69%) and banks website (47%). Credit card shoppers, too, use comparison shopping sites for gathering information. Those seeking new loans rely as much on online sources as on advice from friends, family or colleagues, the Google study noted.

Howard-Sheth Model of Consumer Behaviour

Four Sets of Variables
    Inputs Perceptual and Learning constructs Outputs Exogenous or External Variables

Inputs
Stimulus Display i. Significative a. Quality b. Price c.Distinctiveness d. Service e. Availability

Perceptual constructs
Overt search

Learning Outputs constructs

Intention Confidence Purchase

Intention

ii. Symbolic a, b, c, d, e,

Attitude Stimulus Ambiguity Attitude

Choice Criteria
Brand Comprehension

iii. Social a. Family b. Reference groups c. Social class

Motives Perceptual Bias

Brand Comprehension

Attention

Attention

Satisfaction

Exogenous or External Variables

Importance of Purchase Personality Variables Social Class Culture Time Pressure Financial Status

Consumer SegmentationAn Important Tool to Understand Consumer Decision Making

Consumer Segmentation
Demographics  Behavioral  Geographic  Socio-Economic  Benefit Segmentation  Segmentation Based on

Psychographics Life Styles/AIOs

Consumer Profiling & Adv. Analysis



Consumer-Profile in terms of
Demographics, Behavioral and Psychographics Socio-economic Classification (SEC)
SEC A SEC B SEC C SEC D

Demographics

Lifestyle and Psychographics Demographics Consumer Lifestyle Media Habits Benefit Sought Purchase

Psychographics

Brand attitudes & Beliefs Purchase Behaviour, etc.

Personality

Consumer Lifestyle
Consumer Lifestyle is function of AIOs Activities Interests Opinions

Current Trends having Impact on Consumer Decision Making Process

The rise of Young/Children as Direct Consumer  Changed Family Buying Behavior


Changed Family StructuresJoint/Nuclear Families Increasing Influence of Children in Decision Making Women as Consumer

Marketers waking up to 8-year-old gadget gurus

Savitha V & Sushmita Mohapatra ET, 5/11/2007

Children in the age group of 8 to 14 years play consultants to parents in buying mobile phones, computers and TV

They do in-depth research on the Net, study the specifications, compare product features and act as consultants. They are the young savvy consumers who know exactly what they want. We mean really young, 8 to 14 years of age, to be precise. The recent survey done by Walt Disney Company and Group M shows that children in this age group function as consultants to their parents when it comes to buying mobile phones, computers and TV sets. Up to 76% of the children surveyed display high involvement in mobile phone purchases and 61% in computers. They know the brands, they know the features and they know what works.

In lots of categories, we found kids are the consultants for parents. They do a lot of research and are highly informed on the attributes and specifications of a product.  They are also very finicky about brands. The 1314-yearolds are more brand conscious than the younger ones, says Antoine Villeneuve, senior vice-president and managing director, Walt Disney Television International (India).


 

Mr Villeneuve attributes this level of involvement mainly to the influence of media. There is a lot of media consumption within this age group. They get a lot of information from the internet, news papers and news channels, he says. And its this age group that the companies are targetting with their communication messages. The age group 10-20 is one that is curious about technology. They are more exposed to advertisements and are probably more social when compared to their parents. They inevitably pick up the latest news about phones, says Ish Bawa, marcom head, BenQ India. BenQ targets this audience through the internet and also holds college road shows.

We have seen that parents depend a lot on children particularly for comparison of one product to another. Our products have technology at its core and children probably understand it better than their parents. They have a good say especially when it comes to entertainment products, says V Ramachandran, director (marketing & sales), LG. The web has become an important tool for marketing, especially to the young generation. LG has put a strong focus on its web site, targetting teenagers and young adults, Mr Ramachandran says. Companies also tap the teenager market with targetted content. Although we have not launched any communication targetting the 8-14 age group primarily. We address our communication to kids above 14-15 years of age, who we identify as pioneer young.

Economic Times Business of Brands (22-07-08)

Economic Times Business of Brand (August,27,2008, Wednesday)