Consumer Behavior

Why we need to study CB-: To identify and understand the consumer behavior both Household Market and Business Market. Allowing the students to see how an understanding of Consumer Behavior is crucial to successful Marketing Programs. Consumer v/s Customer: An individual who uses products or services for personal use and not for manufacture or resale is called Consumer whereas an individual who buys or uses a product for their own or for friends, family members is called Customer. A consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements whereas Customer can be/ cant be consumer. Definitions of C.B:

Consumer Behavior is defined as the behavior that consumers display in searching for purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs and wants. (Schifferman & Kanuk). Sheth, Mittal, and Newman (1999) define customer behavior as the mental and physical activities undertaken by household and business customers that result in decisions and actions to pay for, purchase, and use products and services. CB Activities

Mental activities include such things as:

assessing the suitability of a product or service brand evaluating actual experiences with the product. Physical activities include such things as: visiting stores reading Consumer Reports

 talking to salespeople issuing a purchase order Questions.

Why do we buy? How do we buy? Where do we buy from? How much do I buy? For whom do I buy? How often do I buy? What brand do I buy?

Marketing Strategy and Consumer Behavior: Customer value is the difference between all benefits derived from a total product and all the costs of acquiring those benefits. A firms marketing strategy involves selection of target market(s) and the marketing mix elements designed to satisfy those customers.

Marketing Strategy and Consumer Behavior:

Market Analysis Components: Customers Company Competition

These are the components to analysis market because all 3 are complementary to each other. first of all we need to analysis our own company vision and mission accordingly find out our target customer for satisfying their needs and wants, offer best possible products, services and ideas to our target customer. We also need to study our competitor strategy so that we would provide offer best to our customers among all of them.

Market Segmentation:

Identify product-related need sets Group customers with similar need sets Describe each customer set Select attractive segment(s) to target

Marketing Mix Elements: Product anything that is offered to a market to meet a need or want. Price the value exchanged for the product. Distribution (Place) movement of a product from point of production to the customer. Promotion marketing communications.

Consumer Buying Decision Process:

Consumer buying decision process includes five stages. They are: Problem Recognition Information Search Evaluation of alternatives Purchase Decision Post-Purchase Evaluation

Evauation of alternatives is done by various attributes E.g.-: Comparison b/w Chevrolet Spark & Maruti Suzuki WagonR Through this comparison we get to know about which brand we need to buy and also get the answer of why do we buy:

What products do customers usually buy???

Customers usually buy two kinds of products like: High Involvement products and low Involvement products Involvement means how much time, energy, thought and other resources put into the purchase decision.

High Involvement Products-: High involvement products are those product which are expensive, take more time in the stage of alternative evaluation and it involves high risk. E.g.-: Car, Diamond, Furniture etc. Beliefs (Awareness)-> Attitude> Behavior

Low Involvement Products-: Low involvement products are those products which are frequently buy user or buyer, it takes less time in alternative evolution stage and it involves less risk. E.g.-: Salt, Newspaper, Regular usage clothes etc. Low involvement products are usually unplanned.

Beliefs (Awarness) > Behavior> Attitude

Types of buying behavior 1. Routine or programmed-: Buying low involvement, frequently purchased, low cost. Examples: Soft drinks, snack foods, milk etc.

2. Limited decision making-: Buying product occasionally. That is when you need to obtain information about unfamiliar brand in a familiar product category. Example: Clothesknow product class but not the brand.

3. Extensive decision making-: Complex high involvement, unfamiliar, expensive and infrequently bought products. Spend a lot of time seeking information and deciding. High degree of risk. Example: Cars, homes, computers, education.

4.

Impulse buying-: No conscious planning

E.g-: enter into showroom to buy a shirt but he also buy tie without having any plan for buying it just as it catch to your eyes and stimuli you for it.

Five types of buyers 1. Innovators The number of this segment is very small. It represent on 2 per cent of our market These are people who have a desire to buy a new product. They ready to take risk which is associated with new product (whether satisfy or dissatisfy). They generally go through on journal, magazine and internet for getting the idea about innovative idea. They are willing to get an experiment on new products or services. They have a high degree of self-confidence and are turned on by new widgets representing the latest technology. If your product turns them on, they are sold. If they are resellers, they can readily develop their own program to sell to their own customers. They may influence other buyers in their same group, but their purchases do not lead to a widespread trend. 2. Adopters The next group is the early adopters. This group represents true opinion leaders who set examples by their decisions. They are respected change agents and are willing to try a new product if it will significantly improve their lifestyle or allow a quantum improvement for their business. They need to understand the benefits and will seek out references from other satisfied users before making a purchase. They typically represent about 15 percent of our market. 3. Early majority The next group is the early majority. This group is sky in nature to adopt new products, entering into the market only after their peers have actively embraced the product. They are far more pragmatic and less technology-driven than the previous groups. They are looking for modest

productivity improvement, and they want highly establish product from the market. They usually represent 39 percent of the market. 4. Late majority Next is the late majority. This group makes its purchases late in the cycle, often after the innovators and early adapters have moved on to new product forms. They wait until prices fall and the product has become the universally accepted solution. They are most concerned with low cost and customer support, and they rely on the mass media for purchasing information. They represent another 39 percent of the market. 5. Excessive traditionalists Finally come to the last one but not the least one, who are excessive traditionalists. They wait until price has bottomed out, competition is intense, and the product has become an absolute need. They tend to purchase products the other groups would consider obsolete. If they are in the approval cycle for new products in a business, they will try to block the purchase of products the other groups might buy. Luckily, they represent only 5 percent of any market.