Consumer Behavior

1. Buyer Behaviour Analysis
 Introduction

2. Buyer Behaviour
 Study of processes involved when
individuals or groups, select, purchase,
use or dispose of products, services,
ideas or experience to satisfy needs and
desires
 It is a process involving factors
influencing consumer before, during
after purchase

3. Perspective
Purchase status Consumers’ perspective Marketers’ perspective
Pre-purchase
issues
 Need of product or
service
 Sources of info
 Alternative choices
 Consumers’ attitude towards
attributes of product or services
 How do consumers infer
superiority
Purchase issues  Purchase experience
(stressful or pleasant)
 What does purchase
reveal about consumer
 Situation factors like display,
proximity etc
 Other factors affecting
customer choice
Post-purchase
issues
 Product performance
 Service facilities
 Environmental
consequences
 Customer satisfaction factor
 Will he/she repurchase
 Will he/she recommend to
others

4. Consumer Purchase Process
 Is a problem solving exercise and
characterised by:
 Cost of products
 Frequency of purchase
 Consumer involvement (selection from
alternatives)
 Product familiarity and brand awareness
 Thought, search or time given to purchase

5. Problem Recognition
 Need recognition:
 Example: need for petrol when you run out of it
 Opportunity recognition:
 Person who craves for a flashier model of car or audio
system
 Exposed to better quality & different products
 Change in circumstances:
 Goes to college from school
 Gets a job after degree
 Purchases are made to adapt to changes
 Advertising that provides information into what is needed to
“live good life”

6. Pre-purchase Information Search
 Internal search:
 Scanning own memory banks of past data
 Experience
 External search:
 Ads
 Friends
 Internet
 People who are knowledgeable
 People who have made similar purchases
 Other information:
 Heuristics (mental shortcuts)
 Brand name
 price
 Simply imitate others

7. Evaluation of Alternatives
 Categorising product evaluation:
 Subordinate level: Individual brands
 Basic level: classifying products/grouping
 Super-ordinate level: more abstract like in case of
dessert, health drink, audio-systems, entertainment etc
Evoked set Inert set Inept set
• Products/brands
already in memory
• Prominent products/
brands consumer like
to consider
• Consumer is aware of, but
would not consider buying
• Not at all in
consumer’s mind

8. Product Categorisation – Strategic Implication
 Product positioning: ex. Pepsi AM
 Identifying competitors:
 Entertainment: dance, drama, bowling
 Not many would consider one as substitution for others; not
a trade-off
 Exemplar products: brands associated with a
category lead the way and occupy a distinct position.
Others caregorised under general category
 Locating products:
 Fitting products into recognisable categories
 Ex: Frozen dog food along with frozen foods

9. Product Choice
 Evaluative criterion would depend more on points of
differences (not similarities) between competing
products/services
 Determinable attributes are differentiated
 Role of cyber-mediaries
 Heuristics
 Common market beliefs:
brand/outlets/prices/discounts/ads/sales
promo/product packaging etc
 Country of origin effect
 Choice of familiar brand: loyalty/habit
 Brand switchers

10. Decision Rules
 Non-compensatory: product with low standing in one
category can not make up by being on another category
 Lexicography rule: select on relatively best attribute
 Elimination-by-aspect rule: select on best attribute by special
cut-offs
 Conjunctive rule: choice by brands instead of product attributes
 Compensatory decision rules: consumers give products
chance to make up for its shortcomings
 Additive rule: choosing products with largest positive attributes
 Weighted additive rule: considers relative importance of
attributes
 Role of internet, e-commerce

11. Consumer Decision Making
 Organisational decision making:
 Involves many people:
 Initiator
 Influencer
 Gate keeper (who does info search)
 Actual buyer
 Users
 Product spec/technology/knowledge have over-riding priority
 Impulse buying is rear
 They weigh alternatives
 Decisions often are risky
 Rupee volume purchases are large
 B2B emphasizes more on personal selling

12. Consumer Decision Making
Type of organisational buying decisions
Buying situation Extent of effort Risk Buyers involved
Straight rebuy Habitual decision making Low Automatic reorder
Modified rebuy Limited problem solving Moderate One or few
New task Extensive problem solving High Many
• B2B e-commerce: involves internet transaction for information exchange,
transaction and after sales service

13. Consumer Decision Making
 Decision making by family:
 House hold needs
 Family size
 Extended family (3 generations)
 Nuclear family
 Family composition/structure
 Traditional
 Non-traditional
 Childless married couple
 Single person
 Single parent
 Room-mate
 Mixed family
 Family life cycle
 Identifying influencers and decision makers:
adults/children/age/earning members

14. Family Life Cycle
Bachelor I Bachelor II Bachelor III
Young couple Childless couple Older couple
Full
Nest
I
(<6)
Full
Nest
II
(>6)
Delayed
Full Nest
III
(<6)
SP I SP II SP III
One adult HH
Two adult HH
Two adult +
Children HH
Youngest child age
One adult +
Children HH
Age of person <35 years 35 to 64 years >64 years
SP: Single parent

15. Life Cycle Effects on Buying
 Young bachelors & newly weds:
 “modern” sex-roles & attitudes
 Bars, concerts, movies, restaurants, branded goods,
above average spending
 Families with young children: health foods, baby
products
 Families with older children: junk foods,
education, games, outings
 Single parents: baby sitters
 Older couples/bachelors: home maintenance, lawn
maintenance, clubs, religious discourses

16. Family Decision Making
(The Intimate Corporation)
 HH decisions:
 Consensual purchase decision:
 Pre-purchase discussions
 Post-purchase responsibilities
 Accommodative purchase decisions: conflict resolution;
prioritize needs & desires
 Interpersonal need (family HH vs bachelor HH)
 Product utility
 Responsibility (for purchase, payment & maintenance)
 Power of influence of some over others within HH

17. Family Decision Making
(The Intimate Corporation)
 Sex-roles & decision making responsibilities:
 “who wears pants” in the HH
 Autonomic decision:
 Car selection – male
 Interior decoration – female
 Syncratic decision: vacation destination
 Identifying decision maker:
 FFO: family financial officer
 Traditional ‘male’/’female’ tasks
 Individual decisions
 High/low class socio-economic
 Purchasing ‘masculine’ & ‘feminine’ products
 Spousal resources (who contributes more)
 Experience of previous purchase

18. Family Decision Making
(The Intimate Corporation)
 Children as decision makers (consumers-in-
waiting):
 Sex-role socialisation by children: pick-up concept of gender
identity at very early age in the choice of:
 Toys
 Games
 Books/Cartoons
 Cognitive development: children pass through distinct stages of
cognitive development in handling info & taking decisions
 Limited: <6 years age – do not employ storage and retrieval
 Cued: between 6 to 12 years – employ storage and retrieval
 Strategic: >12 years age – spontaneously employ storage &
retrieval

19. Internal Variables Affecting
Consumer Decision Making
 Perception
 Learning & memory
 Motivation & values
 The self
 Personality & lifestyles
 Attitudes
 Attitude change & interactive communication

20. Perception
 Is the process by which sensations (sight, sound,
smell & touch) are selected, organised &
interpreted
 Sight: vision – color –
product/packaging/logo/cultural preferences
 Sound: relaxation/stimulate/disturb/annoy/destroy
 Smell: (odor) evoke memories/relieve stress
good/bad feelings
 Brain vs fragrance
 One smell masking other smells (liquor/cigarettes)

21. Perception
 Taste: strong preferences to sweet, sour, spicy,
bitter (macho!), combination tastes
 Smell and taste combination
 Touch: skin sensation at different parts of body
Perception Male Female Remarks
High class Wool Silk Fine
Low class Denim Cotton Coarse

22. Perception
 Sublimal perception:
 Stimulus below level of consumer’s awareness, but
when discovered creates excitement
 Sublimal techniques: in print, sound & images
 Interpretation by consumers to different sensatory
stimulus
 Consumer assigns meanings based on beliefs
 “Eye of the beholder” – interpretational biases
based on color, smell, taste and touch

23. Learning & Memory
 Classical conditioning: (Pavlov theory): combine
sensatory impulses with external influence
(pictures, sound, smell) to condition for products
 Repetition: invokes top of the memory state (only
with a picture/tune recognise brand)
 Consumers associate their likes and dislikes with
brands & companies with repeated positive
experiences
 Instrumental conditioning: experiencing reinforces
perception – car trials, soft drink tasting, perfume
smelling

24. Learning & Memory
 Cognitive learning: observational learning from
role models - young to old
 Role of memory in learning:
 Meanings (sensory)
 Short-term / long-term
 Knowledge structure within persons
 Retrieving information for purchase needs:
 Age dependent
 Familiarity & recall (radio+TV+hoarding)
 Pictorial backed up info has higher recall

25. Motivation & Values
 Motivational strengths:
 Biological vs learned need
 Hunger – type of food – delay to get better food
 Motivational direction:
 Needs vs wants
 Needs depend on history, culture & learning
experiences
 Wants define forms of consumption to satisfy needs

26. Motivation & Values
 Motivational conflicts:
 Approach – approach conflict:
 Making a decision between going home for holidays or go
trekking
 Theory of ‘cognitive dissonance’: resolving conflict between
choices by cognition / previous experience to eliminate
unpleasant tension
 Approach – avoidance conflict: buying with guilt
 Fur coat, ice-creams, cigarettes
 Avoidance – avoidance conflict: caught between two
undesirable choices
 Upgrading an old car or buying a new one

27. Motivation & Values
 Values:
 A belief that some conditions are better than
the opposite
 Core values are those imparted by society
(culture) to its members
 Global values segment ( next slide)

28. Global Values Segments
Segment Profile
Strivers Emphasis on material & professional goals. In Asia 1/3rd
population.
Devotes Tradition & duty are important. Common in Asia, ME & Africa.
22% of adults
Altruists Interested in social issue & welfare of society. Mostly in Latin
America/Russia. 18% of adults.
Intimates Personal relationship & family. Enjoy cooking & gardening.
15% adults.
Fun-seekers Youngest groups. Frequent restaurants, bars, movies etc
Creatives Interest in education, knowledge, technology. More common
in Western Europe/Latin America. 10% of population.
(Ref: Roper Reports)