February 25, 2016

Consumer Behavior


Marketing Management Revision Article Series




Buyer’s needs, characteristics and decision making process interact with the stimuli created by the environment and marketers and buying decisions are made by the buyers.



Hence marketers have to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyer’s purchase decision.
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The field of consumer behavior studies how consumers (individuals and groups) select, buy, use, and dispose of goods, services, ideas to satisfy their needs.

To understand the consumers in the target market, marketing managers rely on the 7 O’s framework of consumer research.

7 Os: Occupants, Objects, Objectives, Organizations, Operations, Occasions, Outlets


Who constitutes the market?   Occupants
What does the market buy?    Objects
Why does the market buy?     Objectives
Who participates in buying?   Organizations
How does the market buy?     Operations
When does the market buy?   Occasions  
Where does the market buy?  Outlets

Buyer’s needs, characteristics and decision making process interact with the stimuli created by the environment and marketers and buying decisions are made by the buyers.

Hence marketers have to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyer’s purchase decision. They must answer two questions:

·        How do the buyer’s characteristics – socio-cultural (sociological), personal, and psychological influence buying behavior?
·        How does the buyer make purchasing decisions?

Socio-cultural (sociological), Personal, and

Psychological Characteristics


Various sociological factors of importance

Cultural Factors

They have  the broadest and deepest influence. 


Culture 
Culture is different for different societies. In the modern days, there are more common elements. Culture is the most fundamental determinant of a person’s wants and behavior.

Subculture 
Culture of a society is not uniform across all groups in the society. There can be subcultures with certain elements differing from other groups’ cultural elements. Many subculture elements make up important market segments. In a country like USA, that allows people from various countries to come and settle in it, subcultures arise due to the original nationality, religion, racial group apart from the geographical subcultures and age group subcultures.

Social class 
Sociology identified that social stratification is common among many societies. Social class is a type of stratification. Social classes are relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behavior.

Social Factors
They include reference groups, family, and roles and statuses of a person.

 Reference groups

Reference groups influence a person’s behavior directly or indirectly.
Groups having a direct influence on a person are called membership groups. People are influenced in the consumption and purchase decisions by groups in which they are members like family, friend circle, neighbors, co-workers, sports teams etc.
People are also influenced by groups to which they do not belong presently, but want to belong in course of time. Such groups are called aspirational groups.
  
Family 
Family members constitute the most influential primary reference group or membership group. Each person has a family of orientation that consists of his parents, brothers and sisters. He has a family of procreation consisting of spouse and children. 

Statuses and roles 
People choose products that communicate their status in society. Marketers have to aware of the status symbol potential of products and brands. Each status has a role or group of activities to be performed. Persons have multiples statuses in different groups to which they belong. Therefore the roles have some bearing on the consumption and purchase decisions.

Personal factors of importance


Age and stage in the life cycle
Children consume baby food. Old people may eat special diets. People diagnosed with specific ailments avoid certain food items. Hence it is easy to conclude thaat people buy different goods and services over their life time. 
Occupation
Occupation determines the types of items people buy. Certain occupations demand simple living  and certain occupations demand display of wealth and prosperity.

Economic circumstances
People’s economic circumstances consist of their disposable or spendable income, assets, debts, and attitude toward spending versus saving. Marketing of income-sensitive goods has to take into consideration the shifts in personal income and savings habits.
Life style
A person’s life style is the person’s pattern of living in the world as expressed in activities, interests, and opinions. People coming from the same subculture, social class, and occupation do lead quite different life styles. 
The life style is reflected in the consumption patterns. different agencies and authors have identified differnet life style categories. McCann Erickson London identifed among British, Avant-Gardians, Pontificators, Chamelons and Sleepwalkers. The advertising agency, D'arcy, Masius, Benton & Bowles identified five categories among Russians, Kuptsi, Cossacks, Students, Business Executives, and Russian Souls. 
Llifestyles among British people.
Avant-Gardians (interested in change)
Pontificators (traditionalists, very British)
Chamelons (follow the crowd)
Sleepwalkers (contented underachievers)

Psychological factors of importance


Personality and self concept 
Personality denotes a person’s distinguishing psychological characteristics that lead to relatively consistent and enduring responses to various stimuli.
Motivation 
Motivation to purchase and consume an item is to be understood by marketers. Need sets up drive that seeks a goal. Marketers want the goal a person desires has to be the product that they are offering. A drive is a strong internal stimulus impelling action.
Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world.
Learning
 Learning involves changes in an individual’s behavior arising from experience. Most human behavior is learned
 Beliefs and attitudes
 A belief is a descriptive thought a person holds about something.
 An attitude is a person’s enduring favorable or unfavorable emotional feelings and action tendencies toward some object or an idea.

The Buying Process


Roles people play in buying process

In the buying decision a person can play any role in the list of roles given below.
 Initiator
He may initiate the purchase by another person by explaining to him the needs served by a product.
 Influencer
He may infuence another by suggesting which brand needs to be bought.

Decider
He is the decider to buy it.
 Buyer
He is the actual buyer who goes into the market and buys. 
User
He is the user of the product.

Example: A school teacher may suggest to a child that he needs to buy a computer. His classmates may tell him that they own a particular brand of computer and they are very happy with its features. His father could be the decider of the purchase. His mother may go to shop and buy the computer. The child is the user.

Buying behavior


Habitual buying behavior
In this buying situation, the purchaser is not involved in the product and there is not much risk and there is no appreciable difference between various brands available. He buys the brand by habit.
Variety seeking buying behavior
In this buying situation also, the purchaser is not that much involved, but likes to try various brands
Complex buying behavior
In this buying situation, the buyer is very involved and spends some time to learn about various alternatives available and buys the product/brand.
Less careful buying behavior with more chance of dissonance
In this buying situation, the differences between brands is not much and customer takes decisions quickly. But there is a possibility that he may experience some disappointment and tries to justify his purchase decision

The stages of buying decision process


Problem recognition
A potential purchaser first recognizes a need for a product

Information search
He goes around searching for information the available alternatives

Evaluation of alternatives
He evaluates the alternatives

Purchase decision
He makes the purchase decision

Post purchase behavior


Post purchase satisfaction
The buyer's satisfaction is a function of the closeness between the buyer's product expectations and the product's perceived performance.
Post purchase actions
If buyers are satisfied they may purchase again.
If they are dissatisfied, they may return the product. They will inform their friends not to buy.
Post purchase use and disposal
The marketer has to be monitor use of the product. If people bought the product but are not using it, sales will not grow. If people are using the product for additional uses not anticipated by the marketer, the information is of value in increasing sales.
 

Consumer Behaviors: Catherine Roe (Google) at TEDxUChicago 2012
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Consumer Behaviour - Full Course - 40 videos
NPTEL - IIT Kharagpur

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References

Philip Kotler, Marketing Management, 9th Edition

Marketing Management Online Text Book by Tanner and Raymond - Principles of Marketing


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Planned Revision schedule for marketing chapters is in February and March

Article on differentiating and positioning http://nraomtr.blogspot.com/2011/11/marketing-strategy-differentiating-and.html

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Article originally posted by me in
http://knol.google.com/k/consumer-behavior


Updated 25 Feb 2016, 3 Dec 2011

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