Reddy MM-2 As per VTU New Syllabus
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Reddy MM-2 As per VTU New Syllabus
- 1. 3-1 3-1 MARKETING MANAGEMENT 12MBA24 Module-2 By: K. Lakshmi Narayana Reddy MBA, M.Phil, PGDFM, (Ph.D)
- 2. 3-2 3-2 Module-2 Understanding Consumer Behaviour
- 3. 3-3 3-3 Contents: Contents: MODULE 2 • Understanding Consumer Behaviour: Buying motives, Factors influencing buying behaviour, Buying habits, Stages in consumer buying decision process, Types of consumer buying decisions, Organizational buying V/s House hold buying. • Consumer Protection Act, 1986 – An Introduction.
- 4. 3-4 3-4 Consumer Buying Behavior Consumer Buying Behavior • Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption. • Study consumer behavior to answer: “How do consumers respond to marketing efforts the company might use?”
- 5. Model of Consumer Behavior Model of Consumer Behavior 3-5 3-5 Product Marketing and Marketing and Economic Other Stimuli Other Stimuli Price Technological Place Political Promotion Cultural Buyer’s Characteristics Decision Buyer’s Black Box Buyer’s Black Box Affecting Process Consumer Behavior Product Choice Purchase Buyer’s Response Buyer’s Response Timing Brand Choice Purchase Dealer Choice Amount
- 6. 3-6 3-6 Buying Motives Buying Motives • Defined as all the impulses, desires, and considerations which persuade or motivate a buyer to purchase a specific products. • Types 1. Product Motives: Are the impulses, desires, and considerations which makes people to buy a specific Product. 2. Patronage Motives: There are 2 types: a. Emotional Motives: Motives Urges the buyer to do impulsive purchases without reason & logic. b. Rational: Involves a logical analysis & reasoning of the purchases before deciding.
- 7. 3-7 3-7 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • A senior wants to impress his date at the prom . His primary motive is …? Psychological
- 8. 3-8 3-8 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • A girl wants to remember her grandmother on her birthday. Her primary motive is…? Psychological
- 9. 3-9 3-9 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • A homemaker needs a new washing machine and has had good experiences with Sears. Her primary motive is …? Functional
- 10. 3-10 3-10 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • A teacher wants to buy a practical car to be used for family transportation. Her/His primary motive is …? Functional
- 11. 3-11 3-11 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • A career woman always buys Liz Claiborne clothes. Her primary motive is…? Psychological
- 12. 3-12 3-12 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure. His primary motive is…? Functional
- 13. 3-13 3-13 Examples of Buying Motives: Examples of Buying Motives: Psychological or Functional? Psychological or Functional? • A homeowner needs to mow their lawn. Their primary motive is…? Functional
- 14. 3-14 3-14 Factors Affecting Factors Affecting Consumer Behavior Consumer Behavior
- 15. Factors Affecting Factors Affecting 3-15 3-15 Consumer Behavior Consumer Behavior Culture Social Personal Psychological Buyer Buyer
- 16. 3-16 3-16 Factors Affecting Consumer Behavior: Factors Affecting Consumer Behavior: Culture Culture •• Most basic cause of a person's wants and Most basic cause of a person's wants and behavior. behavior. •• Values Values •• Perceptions Perceptions Subculture Subculture Social Class Social Class ••Groups of people with shared Groups of people with shared ••People within a social class People within a social class value systems based on common value systems based on common tend to exhibit similar buying tend to exhibit similar buying life experiences. life experiences. behavior. behavior. ••Hispanic Consumers Hispanic Consumers ••Occupation Occupation ••African American Consumers African American Consumers ••Income Income ••Asian American Consumers Asian American Consumers ••Education Education ••Mature Consumers Mature Consumers ••Wealth Wealth
- 17. Factors Affecting Consumer Behavior: Factors Affecting Consumer Behavior: 3-17 3-17 Social Social Groups Groups ••Membership Membership ••Reference Reference Family Family ••Husband, wife, kids Husband, wife, kids Social Factors Social Factors ••Influencer, buyer, user Influencer, buyer, user Roles and Status Roles and Status
- 18. Factors Affecting Consumer Behavior: Factors Affecting Consumer Behavior: 3-18 3-18 Personal Personal Personal Influences Personal Influences Age and Family Life Cycle Age and Family Life Cycle Occupation Occupation Stage Stage Economic Situation Economic Situation Personality & Self-Concept Personality & Self-Concept Lifestyle Identification Lifestyle Identification Activities Activities Opinions Opinions Interests Interests
- 19. Factors Affecting Consumer Behavior: Factors Affecting Consumer Behavior: 3-19 3-19 Psychological Psychological Motivation Motivation Beliefs and Beliefs and Psychological Factors Perception Perception Attitudes Attitudes Learning Learning
- 20. The Buyer Decision Process The Buyer Decision Process 3-20 3-20 Need Recognition Need Recognition Information Search Information Search Evaluation of Alternatives Evaluation of Alternatives Purchase Decision Purchase Decision Post purchase Behavior Post purchase Behavior
- 21. The Buyer Decision Process The Buyer Decision Process 3-21 3-21 Step 1. Need Recognition Step 1. Need Recognition Need Recognition Need Recognition Difference between an actual state and a desired state Difference between an actual state and a desired state Internal Stimuli Internal Stimuli External Stimuli External Stimuli •• Hunger Hunger ••TV advertising TV advertising •• Thirst Thirst •• Magazine ad Magazine ad •• A person’s normal A person’s normal •• Radio slogan needs Radio slogan needs ••Stimuli in the Stimuli in the environment environment
- 22. The Buyer Decision Process The Buyer Decision Process 3-22 3-22 Step 2. Information Search Step 2. Information Search Personal Sources •Family, friends, neighbors Personal Sources •Most influential source of information •Advertising, salespeople Commercial Sources Commercial Sources •Receives most information from these sources Public Sources •Mass Media Public Sources •Consumer-rating groups •Handling the product Experiential Sources Experiential Sources •Examining the product •Using the product
- 23. 3-23 The Buyer Decision Process The Buyer Decision Process 3-23 Step 3. Evaluation of Alternatives Step 3. Evaluation of Alternatives Product Attributes Product Attributes Evaluation of Quality, Price, & Features Evaluation of Quality, Price, & Features Degree of Importance Degree of Importance Which attributes matter most to me? Which attributes matter most to me? Brand Beliefs Brand Beliefs What do IIbelieve about each available brand? What do believe about each available brand? Total Product Satisfaction Total Product Satisfaction Based on what I’m looking for, how satisfied Based on what I’m looking for, how satisfied would IIbe with each product? would be with each product? Evaluation Procedures Evaluation Procedures Choosing a product (and brand) based on one Choosing a product (and brand) based on one or more attributes. or more attributes.
- 24. The Buyer Decision Process The Buyer Decision Process 3-24 3-24 Step 4. Purchase Decision Step 4. Purchase Decision Purchase Intention Purchase Intention Desire to buy the most preferred brand Desire to buy the most preferred brand Attitudes Unexpected of others situational factors Purchase Decision Purchase Decision
- 25. The Buyer Decision Process The Buyer Decision Process 3-25 3-25 Step 5. Post purchase Behavior Step 5. Post purchase Behavior Consumer’s Expectations of Consumer’s Expectations of Product’s Performance Product’s Performance Product’s Perceived Performance Satisfied Satisfied Dissatisfied Dissatisfied Customer! Customer! Customer Customer Cognitive Dissonance
- 26. Types of Buying Decisions Types of Buying Decisions 3-26 3-26 High Low Involvement Involvement Significant Complex Variety- differences Buying Seeking between brands Behavior Behavior Few Dissonance- Habitual differences Reducing Buying between Buying brands Behavior Behavior
- 27. 3-27 3-27 Buying Habits Buying Habits • Purchase of the same brand over and over again, more due to absence of dissatisfaction than because of a positive loyalty. Habit buying is associated usually with low involvement products such as toothpaste or shoe polish. • Buying habits may shift over time with an individual's or society's changing needs. • Marketing is an attempt to influence buying habits.
- 28. 3-28 3-28 Organizational V/S House Holding Buying Organizational V/S House Holding Buying Decision Variables Organizational Holding Buying Appeal Rational Dramatic Platform Logical Emotional Brand Excitement Not Desired Imperative Brand Personality Mostly Corporate Both product & Corporate Pre Launch Research Not Vital Vital Span of distribution control Narrow Wider Number of orders Small Large Size of the orders Large Very Small Cost of order Processing Low High Nature of the products Depends on Volume Depends on Volume
- 29. Major Influences on Major Influences on 3-29 3-29 Business Buying Business Buying Environmental Environmental Economic, Technological, Political, Competitive & Cultural Economic, Technological, Political, Competitive & Cultural Organizational Organizational Objectives, Policies, Procedures, Objectives, Policies, Procedures, Structure, & Systems Structure, & Systems Interpersonal Interpersonal Authority, Status, Empathy & Authority, Status, Empathy & Persuasiveness Persuasiveness Individual Individual Age, Education, Job Position, Personality & Age, Education, Job Position, Personality & Risk Attitudes Risk Attitudes Buyers Buyers
- 30. Participants in the Business Buying Participants in the Business Buying 3-30 3-30 Process: The Buying Center Process: The Buying Center Gatekeepers Users Buying Buying Deciders Center Center Influencers Buyers
- 31. 3-31 3-31 Introduction to Introduction to Consumer Consumer Protection Protection Act 1986 Act 1986
- 32. 3-32 3-32 Introduction to Consumer Protection Introduction to Consumer Protection Act 1986 Act 1986 (a)Protect from hazard to health & safety; (b)Promote & protect economic interests; (c)Provide adequate information for informed choice as per individual wish & need; (d)Consumer education including environmental, socio-economic impacts of choice, teaching a value system on wisely using money & goods, complaining effectively; (e)Provide effective redress—formal and informal procedures that are fast, fair, cheap, accessible;
- 33. 3-33 3-33 (f) Encourage Business Chambers to resolve consumer disputes through advisory services & informal complaint handling mechanisms; (g) Freedom to form groups & present views in decision-making affecting consumers; (h) Promote sustainable consumption patterns.
- 34. 3-34 3-34 Laws to protect consumers Laws to protect consumers Laws like the • Indian Penal Code • MRTP-1969 • Industries Development & Regulation Act-1951 • Indian Contract Act, • Sale of Goods Act, • Drugs and Cosmetics Act, • Agricultural Produce (Grading and Marking) Act, have existed since pre-independence, but none enshrine Rights of Consumers, nor provide swift remedy.
- 35. 3-35 3-35 Who is a Consumer? Who is a Consumer? Any person (firm, HUF, co- operative, association) who buys any goods or hires any service (fully or partly paid for). NOT goods or services obtained for resale or for any commercial purpose (except self-employment). NOT any service free of charge or under a contract of personal service.
- 36. 3-36 3-36 Consumer's Rights S.6 C.P. Act Consumer's Rights S.6 C.P. Act 1. Right to SAF T against hazardous EY goods and services 2. Right to be INF ORM D about quality, E quantity, purity, standard, price 3. Right to CHOOSE from a variety at competitive prices 4. Right to B H ARD E E 5. Right to seek RE DRE SSAL 6. Right to CONSUM R EE DUCAT ION
- 37. 3-37 3-37 THANK U
Hinweis der Redaktion
- Consumer Behavior Consumer behavior refers to the buying behavior of final consumers -- individuals and households who buy goods and services for personal consumption. Model of Consumer Behavior Marketers control the stimuli or inputs consisting of the four Ps: Product, Place, Price, and Promotion. Environmental and situational influences, though perhaps beyond the control of the marketer, also influence many consumer choices. But what happens between the marketing stimuli input and the buyer’s response or output? That “black box” processing is the central question for marketers. Teaching Tip: You may wish to discuss the “buyer’s black box” in more detail at this stage. Students sometimes become involved in the controversy regarding the presence or absence of consciousness in consumers. Consider using a two-side in-class discussion: Side A: Experimental psychologists argue that what we call consciousness is merely a set of complex learned responses -- an ordinary physiological function. Side B: Sociologists and social psychologists argue that consciousness is greater than the sum of its physiological parts. For marketers, the issue is sometimes linked to free will: Do marketers create needs by conditioning consumers? Do marketers offer need-fulfillers to needs consumer’s create in their “black box?” Model of Consumer Behavior This CTR corresponds to Figure 5-1 on p. 135 and to the material on pp. 134-135.
- Characteristics Affecting Consumer Behavior This CTR relates to Figure 5-2 on p.135 and previews the material on pp. 135-150. Influences on Consumers Cultural . Culture is the most basic influence on a person's values, priorities, and beliefs. Cultural shifts make marketing opportunities although most such changes are in secondary rather than core cultural values. Subcultures are important markets as these groups are often significantly different in their needs to warrant different marketing approaches. Social. Social class is determined by a combination of income, occupation, education, wealth and other variables. Social factors within one's class that affect consumer behavior include reference groups & aspirational groups. Families also exert strong social influences. Finally, each relationship a person has with his or her group carries with it certain roles and status that may carry consumptive responsibilities. Personal . Major personal factors are age and life cycle stage, occupation, economic situation, life style and personality/self-concept. Texts vary in their treatment of the PLC stages but it is clear that singles buy different products than do young marrieds with small children. Occupations differ in time constraints and social pressures to conform that affect consumption decisions. Lifestyles measured by AIO or VALS typologies can reveal different consumption patterns across otherwise dissimilar groups. The unique characteristics of each person that make up their personality also affect behavior. Psychological . Maslow's hierarchy reminds marketers that need states vary in their intensity or motivation. Perception is the process of organizing stimuli and is influenced by selective exposure, distortion, & retention. Learning occurs in response to the presentation of information linked to relevant drives, cues, responses, and reinforcement only some of which is under the control of the marketer. Beliefs and attitudes, though shaped by cultural and social forces, may vary considerably on the individual level.
- Social Factors This CTR relates to the material on pp. 140-142. Group Influence on Brand Choice Groups vary in their influence on product and brand purchases as illustrated on the CTR. Consumers belong to several different membership groups. Primary Groups. Primary groups are those with which we have regular but informal interaction. These include family, friends, neighbors, and co-workers. Secondary Groups. Secondary groups are those with which we have more formal and less regular interaction such as religious groups, professional associations, and trade unions. Reference Groups. These groups serve as direct (face-to-face) or indirect points of comparison and evaluation in a person’s formation of attitudes or behavior. Aspirational Groups. This type of group is one to which the individual wishes to belong and emulates in adopting behaviors appropriate to that group. Opinion Leaders. These are people within a reference group who exert influence over others due to special knowledge, skill, personality, or other characteristic.
- Factors Affecting Consumer Behavior: Personal This CTR corresponds to Table 5-2 on p. 142 and the material on pp. 142-146. Personal Factors Age and Family Life-Cycle Stage. Buyers’ choices are affected by changes in their age and family structure over time. Young singles have different tastes in clothes, furniture, food, and recreation than do middle aged persons with their own children. Older consumers continue to change in their preferences and additionally acquire new buyer needs such as increased health care needs. Occupation. A person’s occupation carries with it distinct consumptive needs. White collar workers need different clothes than blue collar workers. Also, occupations usually carry their own subcultural norms and values that influence buyer behavior. Economic Situation. Means constrain buyer behavior for almost everyone except for the most wealthy. Personality and Self-Concept. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting response to one’s own environment. Self-concept is the basic perception that people have about who they are. Lifestyle Lifestyle is a person’s pattern of living as expressed in her or his activities, interests, and opinions. Determining lifestyle involves measuring AIO dimensions -- the Activities , Interests , and Opinions of consumers. Psychographics. Lifestyle measures combined with demographic information can identify distinct market segments for consumer products and services. The best known of these methods, VALS 2, is addressed on the following CTR.
- The Buyer Decision Making Process This CTR corresponds to Figure 5-6 on p. 153 and relates to the material on pp. 152-156. Teaching Tip: Consider asking students to describe some of their purchases decisions made at the beginning of the term and link them to steps in the process. Stages in the Buyer Decision Process Need Recognition. Problems are recognized when people sense a difference between an actual state and some desired state. Problem recognition can be triggered by either internal or external stimuli. Information Search. Consumers vary in the amount of information search they conduct. Information search may be a survey of information stored in memory or may be based upon information available externally. Search effort varies from heightened awareness corresponding to increased receptivity for relevant information to active information search modes where the person expends some energy to obtain information that is desired. External information vary in their informational and legitimizing characteristics. Riskier decisions usually elicit more search behavior than non-risky decisions. Evaluation of Alternatives. Following information search, the person compares decisional alternatives available. Criterion for evaluation compares product attributes of the alternatives against degrees of importance each attribute has in meeting needs, beliefs about the product or brand's ability and utility, and an evaluation procedure that ranks the alternatives by preference that forms an intention to buy. Purchase Decision. - The individual buys a product. Purchasing other than the intended product may be due to attitudes of others exerted after the evaluation of alternatives is completed or unexpected situational factors such as point of purchases promotions that affect the alternatives' ranking. Post-purchase Behavior. This involves comparing the expected performance of the product against the perceived performance received. Cognitive dissonance describes the tendency to accentuate benefits and downplay shortcomings.
- Types of Buying Decisions This CTR corresponds to Figure 5-5 on p. 151 and relates to the material on pp. 151-152. Types of Buying Decision Behavior Complex Buying Behavior. Consumers undertake this type of behavior when they are highly involved in a purchase and perceive differences among brands. Involvement increases with the product is expensive, infrequently purchased, risky, and highly self-expressive. Dissonance-Reducing Buying Behavior. Consumers engage in this behavior when they are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. Without objective differentiation to confirm the purchase, buyers often seek support to reduce postpurchase dissonance -- the feeling they may have made the wrong decision. Habitual Buying Behavior. This behavior occurs under conditions of low consumer involvement and little significant brand differences. Consumers do not search extensively for information about brands. Brand familiarity aids in promoting products under essentially passive learning conditions. Variety-Seeking Buying Behavior. Consumers may seek variety when involvement is low and there are significant perceived differences among brands. Differences may be product features -- new taste, improvements, extra ingredients -- or promotional benefits such as coupons, rebates, and price reductions.
- Major Influences on Business Buying This CTR corresponds to Figure 6-2 on p. 178 and the material on pp. 177-179. Major Influences on Business Buying Environmental Factors. Industrial Buyers are heavily influenced by the economic environment especially the level of primary demand, economic outlook, and the cost of money. Materials shortages are also increasing in importance. Organizational Factors . These factors stem from each organization's objectives, policies, procedures, and ways of doing business. Marketers must identify how each of these elements are manifest in a particular company. Interpersonal Factors . Interpersonal influences center on group dynamics and the interplay of personalities and organizational roles. Buyer roles within the buying unit may differ not only from organizational factors but from the interpersonal interaction of the individuals involved as well. Individual Factors. A person's age, status, education, professional specialty, and overall personality and attitudes affect how they participate in organizational buying decisions. It may be difficult for the marketer to identify individual factors directly.
- Buying Centers This CTR relates to the material on pp. 175-177. Participants in Business Buying Centers Users . These are members of the organization who will use the product or service. Users often initiate the buying proposal and help define product specifications. Influencers . These are people who affect the buying decision. They often help define specifications and provide information for evaluating alternatives. Technical personnel are particularly important influencers. Buyers . These are the people with the formal authority to select the supplier and arrange terms of purchase. Buyers may influence product specifications, but their major role is in selecting vendors and negotiating. Deciders . These are the people who have the formal or informal power to select or approve the final suppliers. Gatekeepers . Gatekeepers are those people who control the flow of information to others. Gatekeepers are extremely important to anyone trying to gain the cooperation of buying center members, especially in widely-dispersed organizations.
- Selling your ideas is challenging. First, you must get your listeners to agree with you in principle. Then, you must move them to action. Use the Dale Carnegie Training® Evidence – Action – Benefit formula, and you will deliver a motivational, action-oriented presentation.