What is consumer behavior?

Consumer Behavior is the study of the process involved when

individuals or groups select, purchase, dispose of products or services to satisfy needs and desires
Its a combination of five disciplines Psychology Sociology Anthropology Economics Marketing Management

Complete model of consumer behavior

Start
Need recognition Internal search Exposure Stimuli (marketer dominated, other) Attention Comprehension Acceptance Retention Memory Purchase Individual differences resources motivation & involvement knowledge attitudes personality, values, lifestyle Alternative evaluation Influences culture social class family situation

Search

Outcomes

External search

Dissatisfaction

Satisfaction

Who influence a consumer?

Overall Model Of Consumer Behavior

Economic Model
Micro economic model: Alfred Marshall

ASSUMPTIONS:- its not possible to satisfy customers, they have unlimited needs and wants - Customer allot budget to maximize the utility - No external influence, preference dont change - Customers know the utility of a product hence they know the level of satisfaction. - Price determines the purchase. - Law of Diminishing Marginal Utility.

 PERCEPTION: The process by which an individual selects, organizes, and

interprets stimuli into a meaningful and coherent picture

POSITIONING: Image of the product in the minds of the customer. Image helps boost sales. Product BENEFITS should be focused more than its physical attributes. Consumer Imagery: Consumers perceived images about product, services,
prices, product quality, retail stores and manufacturers

Halo Effect: Consumers perceive and evaluate product or service based on just one dimension. Stereotypes: People carrying biased pictures in their minds of the meanings of various stimuli Subliminal Perception: Message below the threshold level below the
conscious level

Umbrella Positioning: selling many related products under a single brand

 Perceived Risk: The uncertainty that consumers faces when they

cannot foresee the consequences of their purchase decisions:1) Functional 2) Physical 3) Financial 4) Social 5) Psychological 6) Time

Handling risk: select loyal brand, by brand image, store image,

expensive, seek information, seek assurance

most

Product Repositioning
To face the competitors To suit the current trend (Changing lifestyle) To change the target segment To introduce new offerings To motivate customers to buy

Perceptual Mapping

Digital Revolution in the Marketplace

Increased consumer power, access to information, More products and services, Interactive and instant exchanges, access to customer patterns and preferences Allows customization of products, services, and promotional messages Enhances relationships with customers more effectively and efficiently

 What is consumer behavior? The behavior that consumers

display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs

Personal Consumer: The individual who buys goods and services

for own/family / household /friends use

Organizational Consumer: An organisation (business/

government/other institution that buys the goods, services, and/or equipment necessary for the organization to function

Segmentation: process of dividing the market into subsets of

consumers with common needs or characteristics

Targeting: selecting one ore more of the segments to pursue Positioning: developing a distinct image for the product in the mind of
the consumer

 Successful Positioning: Communicating the benefits of the

product, rather than its features, Communicating a Unique Selling Proposition for the product.

Loyalists: keep purchasing the brand

Apostles: provide word of mouth

Defectors: neutral with brand and stop buying

Terrorists: negative experience and negative WOM Hostages: not happy still buy product Mercenaries: very satisfied, no real loyalty.

External Influence

Input

Firms Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channels of distribution

Sociocultural Environment 1. Family 2. Informal sources 3. Other noncommercial sources 4. Social class 5. Subculture and culture

Need Recognition Process Prepurchase Search Evaluation of Alternatives

Psychological Field 1. Motivation 2. Perception 3. Learning 4. Personality 5. Attitudes Experience

Output

Purchase 1. Trial 2. Repeat purchase Postpurchase Evaluation

Figure 1-1: A Model of Consumer Decision Making