Consumer Behavior

Semester -3

What is Consumer Behavior

The Behavior that consumers display in searching for , purchasing , using , evaluating , and disposing of products , services , and ideas to satisfy certain needs or desires . Personal Consumer / Organizational Consumer

Case studies: Why study Consumer Behavior ?

Growth of Shopping Malls in India Internet Marketing

Why study consumer Behavior

Shorter Product Life cycle Eg : mobile phones , cameras etc. Evolving consumer Preferences
Eg : Herbal Products

Environmental Concerns
Green Products , Electric cars etc .

Changing Lifestyles
Sugar free drinks , Diet food etc .

Faster technology adoption

Online shopping etc .

Why study consumer Behavior

To understand issues like
How consumers think , feel , reason and select among different alternatives ( eg: brands & products ) How consumers are influenced by their environment ( eg: culture , family , peer group , and media ) The behavior of consumers while shopping or making any choice decisions How marketers can adapt and improve their marketing campaigns or strategies to quickly penetrate into the market .

Understanding consumer and market segments

Market Segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix .

Bases for Segmentation

Geographic Segmentation- Region , citywise , climate etc . Demographic Segmentation Age , sex, marital status , Income , Education , Occupation etc . Psychological Segmentation needs motivation , personality , attitude , perception etc . Psychographic Life style segmentation

Bases for Segmentation Contd..

Socio cultural cultural , religion , sub culture , social class , family life cycle Use Related Usage rate , awareness status etc . Use situation segmentation eg: time, objective , location etc. Benefit Segmentation Hybrid Segmentation psychographicdemographic , geodemographic

Micro factors influencing Consumer Behavior

Social Factors Social Class Reference Group Personal Factors Age & Life cycle stage Occupation Personality Lifestyle

Family
Roles & Status

Buyer
Psychological Factors
Cultural Factors

Motivation

Culture
Sub culture

Perception
Beliefs & Attitudes Learning

Assignment/ Presentation
Surf Internet and write short notes on the following(with examples )
VALs Psychographic analysis (AIO) Hybrid Segmentation Baby Boomers

Pick atleast two print advertisements of any product / brand from a magazine /newspaper and give atleast 5 reasons( in points) why did it appeal to you,as a consumer . Mention the name of the magazine/newspaper and paste the Ad(or photocopy ) in your assignment .

Culture
Culture is the set of basic values , perceptions , wants and behaviors learned by a member of society from family, place of residence and other important institutions . Culture is the most basic cause of persons wants and behavior Every group or society has culture and cultural influences on buying behavior may vary greatly from country to country .

Culture
Enculturation : Learning of ones own culture is known as enculturation Acculturation : The learning of new or foreign culture is known as acculturation

Culture is learned , shared , has language & symbols , rituals , dynamic .

Sub Culture
It provides more specific identification and socialization for members belonging to a particular religion , racial group ,and geographic regions .

Emergence of New Consumer culture

Eating out grows in Urban India Pub culture in its infancy Women gain confidence with color cosmetics Fair skin on the wishlist Films dictate fashion PC games attracting younger generation /PSPs Saving rates dropping

Example : Rituals ( America)

Wedding White gown Birth of Child Silver spoon Birthday Cake , party , candles Graduation Pen , card Valentines day Card , Flowers , Roses New Years Eve Champagne , party Going to the Gym Towel, water , special clothes , wrist band

Example :American Core Values

Value
Achievement and success , Activity

General Features
Hard work is good , Keeping busy is healthy and natural

Relevance to Consumer Behavior

Justification of acquisition of goods ( You deserve it ) Time saver products , enhance leisure time Stimulates acceptance of customized or unique products that enable to express his or her own identity) Fosters interest in wide product lines and differentiated products Stimulates acceptance of products that provide the illusion and maitaining or fostering youthfulnss

Individualism

Being oneself ( self reliance , self interest , self esteem)

Freedom

Freedom of choice

Youthfulness

A state of mind that stresses being young at heart and having youthful apperance

Few Indian Examples : Handouts

Companies Maggi Ads catch up with new trends Industry Food Industry / Fashion Industry / Gadgets Geographies Delhi / Tamil Nadu / Gujarat

Groups

A group consist of people who have a sense of relatedness as a result of interaction with each other .

Groups
Type Distinction

Formal vs Informal

Formals Groups have clearly specified goal , structure etc . Informal groups are loosely structured
Primary Groups are involved in gace to face interaction ;secondary groups interact less intensely Aspirational Groups are those which an individual wishes to join ;dissociative group is one that an individual wishes to avoid

Primary vs Secondary

Aspirational vs Dissociative

Reference Group
A person or group that serves as a point of comparison (or reference) for an individual in the formation of either general or specific values ,attitudes or behavior

Consumption related Reference Groups

Primary Groups: Secondary Groups: Aspirational Reference / Dissociative Formal/Informal Official Groups Implicit Groups Virtual Groups /Communities Consumer Action Forums Shopping Groups

Influence & Extent of RG on Consumption

Compliance : Acceptable ways to behave .Eg : Formal dress for a job Identification : Eg : if a group of friends think that pepsi is good , he will have that although personal choice may be Thumbs up . Internalization : Values are followed even in the absence of the group . Eg : One may like to drive abike as this is what boys of his age do .

Extent of Reference Group Infuence

Visibility of Consumption Commitment to Group Conformity Requirement Capability to take independent decisions

Marketing startegies & Reference Groups

Personal Selling Strategies Advertising Strategies Celebrity Endorsement / Emotional Appeal / aspirational appeal / peer appeal /expert appeal

Referent Group Appeal

Situation/ Product Urmila in Lux ad Appeal Element Film Star Types of Appeal Aspirational Aim of Communication Increase brand awareness& reduce perceived risk Increase Brand wareness & create favorable attitude Reduced perceived risk from consumption

Aamir Khan in Coke Ad Colgate Total/ Indian Dental Association

Film Star

Aspirational

Association Backing

Expert

Wheel Detergent showing poor wash quality if wheel not used

A typical middle class housewife

Peer Group

Branf awareness/ creation of favorable brand attitude /creation of purchase intention

Effectiveness of Endorsement
Credibility Attention PR Coverage Higher Recall Associative benefit

Family / Household decision making

Roles
Information gatherer Influencer Gatekeepers Decision makers Purchasers Users Maintainers Disposers

Family Life Cycle

Stage 1 Bachelorhood Stage 2- Honeymooners Stage 3- Parenthood
Full nest 1 Full nest 2 Full nest 3

Stage 4- Postparenthood Stage 5- Dissolution

Bachelorhood
Employed , graduates , college going Young single Adults spend on rent , automobiles , travel , entertainment , clothing , assesories Niche segment for travel agents , housing developments , health clubs , sports clubs , magazines etc. To be married market bridal industry ( wedding sites , special parlours , special markets , products etc .)

Honeymooners
Young married couples Start up expenses house , major/minor appliances , furniture , utensils ,etc .) Special magazines Goodhousekeeping, Betterhomes etc .

Parenthood
Sometimes called Full nest stage usually extends over 20 years Full nest 1: immediately afetr the first child is born.many wives stop working reduction in family income .new purchases like baby clothes , food , health products etc .choice of vacations , restaurants , automobiles etc . Full nest 2: Financial position improves with career advancement of husband wife may return to workless influenced by advertising with experience Full nest 3 : familys income continues to grow .children also employed .influence by ads almost negligible.replacement of old items , more tasteful furniture , cars , luxury items , vacations etc .

Post Parenthood
Children have left home empty nest stage Comfortable stage for parents to spend on themselves , travel , extended holidays higher disposable income because of savings.. Empty nest 1: satisfactory financial position .spendings on gifts , vacations Empty nest 2: Income is drastically cut , expenses on medical care , products that aid their health , sleep , digestion etc .

Dissolution
Death of one spouse Simple living and economical

Marketing applications Household Buying

Understand difference in consumption patterns of different households Develop product and promotional startegies with recognition of changing gender roles and responsibilities Use of concept of family life cycle as basis of market segmentation Target products and services properly for the family roles in decision making

Social Factors
This is relatively homogeneous and enduring divisions of the society as all societies exhibit social stratification Social Class is usually determined by a cluster of variables rather than single variable (occupation , income , wealth , education etc .) Marketers must be careful about the kind of advertisements /communication they make as per the target audience ( language prefernces / lifestyle differences etc .)

Handouts & Discussion on Ads on social Class

Luxaflex Citibank etc .

Personal Factors
Age and Stage in the Life cycle
Tastes and preference in food , clothes , furniture , color and recreation are all age related Early stage of career , Marriage , childbirth , career change , divorce etc .

Occupation and Economic Circumstances

laborers/ Executives Spendable income

Personality and Self Concept

Self confidence , sociability , adaptability etc. Eg : Levis Ruggedness, MTV- Excitement etc .

Lifestyle and Values

Consumer Motivation

Consumer Motivation
Consumer Motivation is one of the driving forces of Consumer Behavior Consumers buy and use products because they are motivated by the need and desire to do so . The Primary objective of Marketing and Marketing Communication is to motivate consumers to prefer and purchase one product and a specific brand over other

Motives
Motive is a construct representing an unobservable inner force that stimulates and compels a behavioral response and provides specific directions to that response

Consumer Motives
Motives Functional Explanation Involves utility of the product/service or the function it performs Involves the appearance or attractiveness of product /service Reflected in the status and esteem value Example : Car Purchase of a car because of its fuel efficiency, space , reliability Purchase of a car because of its color , shape , style etc . Purchase of a car because it shows that the buyer is a cut above

Aesthetics /emotional Social

Situational
Curiosity

Unexpected benefit of a product and service : Discounted price etc .

Interest arises by a product and service

Freebies along with purchase

Purchase of a sports car because it will be a new experience

Arousal of Motives
Physiological arousal
Hunger need

Emotional arousal
Daydreaming , desires etc .

Cognitive arousal
Advertisements call up parents when you see ads of telecom operators etc .

Environmental/Situational arousal
6oclock smell of bakery food arouse need for food

Role of Motives
Role of Motives in Consumer Behavior is to arouse and direct the behavior of Consumers. Defining Basic Striving :Motives influence consumers to develop and identify their basic striving which includes general goals .safety, affiliation ,achievement etc . Example : You cant imagine how fast it will help you grow in life !!! Aptech Certified Internet Professional Aptech Computer Education

Role Of Motives ..Contd

Identifying Goal Objects Consumers view products or services as means by which they can satisfy their motives ..Consumer Illusion Example: By Wearing Reid and Taylor , you can personify James Bond or Amitabh Bachchan

Role Of Motives ..Contd

Influencing Choice Criteria Motives themselves can guide consumers to buy a certain product and not the other

Classification Of Motives
Strong vs Weak Positive vs Negative Rational vs Emotional Latent vs Manifest Motives

Strong vs Weak Motive

Strong Motives : Consumers are well aware of the importance of the buying decision ..in favor of marketers Weak Motive : Consumer ignorant of the importance of buying decision ..marketers need to facilitate consumers action to reach desired goal . Air Conditioners /Referigerators etc .

Positive and Negative Motivation

Positive : When consumer feel a driving force towards an object or condition..also known as need Negative : When they feel a driving force away from an object /condition.fear/aversion Ad by VLCC.Before-95 Kgs /After- 70 Kg . Two photographs of the same person are given such that the negative motive of not being fit will make you attracted to avail the services rendered by VLCC. Ad by Neutrogena Now get a perfect sunless tan instantly (model smiling) Dermatologist Report : A year of incidental Sun equals Baking for a week at the Beach !

Rational vs Emotional
Rational : When the consumers buying behavior is a carefully chosen and well considered one Consumers selection is based on objective evaluation : size , weight , price etc . Emotional : If the consumer is emotionally guided in selecting the object .pride , emotion ,status etc . Personal /Subjective criteria : pride , fear , affection , status etc .

Latent vs Manifest
Manifest motives: These motives are known to customers and he openly admits to being influenced by them ..conform to societys prevailing value system Latent motives are unknown to customers customer is reluctant to admit their influence on him in front of others Eg : Why did you buy Lux Soap ?
for healthy skin , fragrance etc .manifest Because I want to have skin as beautiful as Aishwarya Rai ..latent

Example

Manifest Motives

Consumption Behavior

Latent

It is a hi Tech Car Its large size is comfortable It is a fault free engineering marvel

Purchase a Mercedes Benz

It will demonstrate my success I can make others feel envious

Consumer Buying Process

Need Recognit ion

Product Awaren ess/ Informat ion Search

Interest

Evaluati on and Intentio n

Purchase

Decision

Post Purchas e Behavio r

Need Recognition
Need arousal
Internal stimulus : hunger, thirst etc External stimulus : display of an item

Marketer must identify the drive Timing of need arousal is important

Maslows Hierarchy of Needs

Self-Actualization

Esteem Needs (Prestige , status)

Social Needs( affection , friendship, belonging) Safety Needs( protection, security )

Physiological Needs(food , water , air etc )

Maslows Needs Exemplified

Physiological Needs

Products
Marketing themes

Vitamins, herbal supplements, medicines, food, exercise equipment, fitness clubs

Pepfiz antacidJust one and heartburns done Jiyo Jee Bhar Ke, Thodi si Pet PoojaKabhi bhi kahin bhi ., Safety Needs

Products

Cars and car accessories, burglar alarm systems, retirement investments, insurance, medicines,Cement

Marketing themes

Jeetey Raho VolvoProtect the body. Ignite the soul.

Contd..
Belongingness

Products Marketing themes

Beauty aids, entertainment, clothing, cars Old Spice The Mark of a Man Loreal .Because I am worth it Esteem Needs

Product Marketing themes

Clothing, cars, jewelry, hobbies, beauty spa services Toyota : Quality Revolution kitchen appliancesThe sign of a great cook. Diamonds are Forever , Reid n Taylor ,Tag Heur Watches Self-Actualization

Products Marketing themes

Education, cultural events, sports, hobbies, luxury goods, technology, travel Nike Just Do it An evening with Jagjit Singh ,

Needs
Every individual has needs :some are innate , others are acquired Innate : food , water , air clothing , shelter ,sex .needed to sustain biological life .Primary needs or motives Acquired needs : Need for self esteem , prestige, affection , power , learning .psychological .Secondary needs or motives .

Product Awareness/ Information Search

Consumer gathers information
Heightened attention : consumer more receptive and alert to the information Active information search : tries to collect information Sources of information Personal : family , friends , neighbors etc . Commercial: Advertisement, sales men , dealers etc . Public Sources: mass media ,consumer rating organization etc . Experiential Sources :handling , examining , using the product .

Stages of Information Processing

Exposure Attention Comprehension Acceptance Retention

Interest
State of mind that exists when a consumer perceives a need and /or is aware of alternative products capable of satisfying that need . If attention is diverted , buying process is broken down

Evaluation and Intention

Stage of mental trial of the product Draws conclusions about their relative satisfaction giving potential value . Develops the intention to either purchase /reject the brand/ product

Evaluation of Alternatives
Options available to the marketer :
Modify the Product : Redesign Altering beliefs about the brand Altering beliefs about the competitors brand Calling attention to neglected attributes Shifting the buyers ideals

Purchase Decision
Consider attitudes of others : negative attitude or consumer motivation Anticipated Situational factors : family income Unanticipated situational factors : accidents , illness , travelling etc . 5 purchase decisions :
Brand decision Vendor decision Quantity Decision Timing Decision Payment method decision

Purchase
Trial / adoption .accumulates experience about the product purchased If positive experiencethen satisfaction derivedrepeat purchase

Types of Buying Decisions

RRB/ habitual buying LPS buying EPS buying

Post Purchase feelings/Behavior

Consumer is satisfied if the product matches his expectations Highly satisfied , if exceeds expectations Repeat Purchase word of mouth . Our best advertisement is a satisfied customer Dissonant Customer : Return the product or seek information that confirm its high value .Action: Complaining Post purchase disposal

Needs
Every individual has needs :some are innate , others are acquired Innate : food , water , air clothing , shelter ,sex .needed to sustain biological life .Primary needs or motives Acquired needs : Need for self esteem , prestige, affection , power , learning .psychological .Secondary needs or motives .

Marketing Strategy and consumer Behavior

Marketing Analysis consumer, conditions ,competitor , company Marketing Segmentation Marketing Strategy-4 Ps Consumer Decision Process Outcomes-customer satisfaction, sales , Product/brand image

Unit 2
Individual Determinants of Buying Behavior

Consumer Personality
Personality is an internal system which includes all those aspects of a person that are inherited and all those aspects that are learned . Those inner psychological characteristics that both determine and reflect how a person responds to his or her environment .
Inner characteristics : those specific qualities ,attributes ,traits ,factors ,and mannerisms that distinguish one individual from other individuals

Aggressive , friendly , moody, arrogant

Sources of Influence
Inherited from parents Influenced by the environment in which the person is brought up Own individuality

Personality and Consumer Behavior

Optimal Stimulation Level (OSL)
Physically stimulating , emotionally energizing Golfer vs Polo Player /Bunjee jumping etc . Innovators (first consumers to buy ,seek information about new products etcmore curious , buy products with greater risks

Dogmatism
Tendency to resist change /new ideas

Need for Cognition

Effortful thinking, deliberating , contemplating

Susceptibility to influence
Desire to enhance their self image as observed by others .Consumers with lower information procewssing confidence tend to be more influenced by ads ,relative to those with higher self confidence.

Example
Women around the world dont hesitate to do it .Why should I ? Beautiful women around the world over are opting for the Gillette Satin Care Ready shaver .A smart choice since its an international razor designed exclusive for women . Its special features include :.

Traits and Consumer Behavior

Trait Aggressiveness High Self confidence Attention to Social comparison High need for Cognition High optimum stimulation level Effect on Consumer Behavior Preference for Products with high status and success images Early adopters of new products ;tendency against store loyalty Tendency to choose brands preferred by others Tendency to choose brands preferred by others Easily bored by repetitive advertising ,tendency to seek more information

Self consciousness

Tendency to use products in amnner that coveys what they feel is appropriate self image

Characteristics of Personality: Marketers Perspective

Marketers use personality to differentiate individuals and then only group them as per their behavioral similarity Marketer cannot change personality he has to appeal to the relevant personality traits inherent in target customer group Learning contributes to personality ,which is a continuous process , hence Personality also changes in response to situations and over time . It is not merely personality traits that dictate an individuals purchase behavior its an important determinant ,but not the only one

Marketing Applications of Personality

Position Brands as per the consumer personality type Avoid targetting innovative products to rigid consumers and consumers with low tolerance for ambiguity Identify the extent to which consumers of the product category are prone to discounts /rebates and how value conscious they are ,then market accordingly

Theory of Self Concept

Dimensions Private Self

Actual Self concept How I actually see myself

Ideal Self Concept How I would like to see myself How I would like others to see me

Social self

How others actually see me

Example : Ad by Nike
Got what it takes It takes courage to fight the odds ,stamina to lat forever ,conviction from within and a dream to be victorious The new winter line from NIKE, fights defeat ,absorbs victory . Just do it !!!!! Most of us constantly strive to bridge gap between our private actual self and ideal self .Thus ,those who dont exercise know that excercising is good ,and ideally would like to .This ad is exhorting them to go ahead and take theprepatory step, i.e to buy a track suit

Actual and Desired Concepts

Actual Self Concept : Private / Social

Product Media Services

Desired Self Concepts : Private /Social

Attitude

Attitude is a learned predisposition to behave in a consistently favorable or unfavorable way with respect to a given object /stimuli.

Characteristics of Attitude
Attitudes have an object
Focal point physical object ,or a service or an action

They have direction , intensity , and degree

For or against ,extent of like /dislike , how strongly a person feels about his conviction

They have structure

Consistent , generalizable towards a class of object

They are learned

Direct /indirect experiences

Sources of Attitude Development

Personal experience
Needs Selective Perception/interpretation Personality

Group Associations (family , work and peer groups etc.) Influential others (experts , opinion leaders ,relatives ,celebrities etc.)

Components of Attitude
Cognitive Component Affective component Behavioral Component

Cognitive Component
Consumers Belief about an object Eg : Dettol Soap is antibacterial , is effective , not perfumed These beliefs may or may not conform to reality More the number of positive beliefs about the brand , greater the positiveness of each positive belief ,more favorable the overall cognitive component of attitude

Affective Component
A consumers feelings or emotional reactions to the object represent the affective component . May be a result of cognitive evaluation Emotional or effective evaluation of products /brands Amul Cheese vs Britannia Cheese

Behavioral/Conation Component
Ones tendency to respond in a certain manner towards an object or activity Recommendations to friends etc . Actual behavior

Attitude Components & Manifestations

Beliefs about specific attributes or overall object

Stimuli Products Situations Retail Outlets Sales People Ads Other Objects

Cognitive

Affective

Behavioral

Emotions or feelings about specific attributes or overall objects Behavioral intentions with respect to specific attributes or overall objects

Overall orientation towards an object

Attitude Behavior Consistency

Factors influencing Attitude Behavior consistency : Consumer Influences
Consumers access to resources Consumers past experience with the brand Action/inertia orientation of the Consumer

Situational Influences
Time gap between positive attitude formation and actual opportunity to buy Message repetition Social Influence

Modification of Attitude
A Change in attitude is ensured through : Appropriate Source of Communication Appeal Characteristics

Source of Communication
Source Credibility
Credible Sources like BIS( Bureau of Indian Standards ),ISO 9001, Indian Dental Association etc.

Celebrity as source
Shahrukh Mayur Khan , Aamir Khan for Tata Sky , Amitabh Bachchan for Reid n Taylor , Sachin Tendulkar for Boost

Appeal Characteristics
Fear Appeal
Accidents in case of Drunken driving ,social fears like bad breath , body odor, bacterial infections etc

Humor appeal
Bingo , Centre shock etc. Attracts attention, does not generally increase persuasion ,increases liking of the ad .

Appeal characteristics Contd.

Comparisons
Ads by Detergents ( Rin vs Tide )

Emotional appeal
Ads by Insurance Companies Attracts attention , memorable etc .

Value expressive vs Utilitarian approach

Creates an image for the product user Ads for Perfumes , cosmetics etc.

Strategies adopted by Marketers to bring Attitudinal Change

Change Consumers basic motivational function
Utilitarian function The Ego defensive function The Knowledge function Eg : Ad by NDDB for milk promotion Eg: How much is calcium requirement in a body ?

Associate the product with the admired group

Cause related ads -Blind Relief association , Old age Homes etc .

Strategies .contd
Resolving conflicting attitudes
Navratri special food in Nirulas , special vegfood in Pizza Hut , Sugarfree etc.

Change beliefs about the product /brand

Adding an attribute Tanishq jewellery for Woking women, Citizen Watches ad by Kareena Kapoor

Changing beliefs about the Competitors Brands

Tricomponent Model

Conation Behavior/ac tion /intention to buy

Affect

Positive/ne gative feelings

Cognition Beliefs

Attitude- towards- the- Ad Model

Impact of Advertising or some other promotional vehicle ( eg: a catalogue ) Consumer forms various feelings (affect) and judgments ( cognition) as a result of exposure to Ads These feelings and judgements in turn affect the consumers attitude toward an ad and beliefs about the brand

Attitude Toward- the -Ad Model

Exposure to an Ad

Judgments about the Ad (Cognition)

Feelings from the Ad (Affect)

Beliefs about the brand Attitude toward the Brand

Attitude toward the Ad

Nicosia Model
Developed by Fransisco Nicosia There are four basic Fields in the model Assumption : Neither the buyer nor the seller has had any previous experience directly related to the product /brand The model is viewed as representing a situation where a firm is designing communications(ads, products etc)to deliver to consumers , whose response will influence subsequent actions of the firm .

Nicosia Model Contd.

FIELD ONE: From the source of message to the consumers attitude Firms Attribute s
Message exposure

Consumer s attributes

Attitude

Search and Evaluation Experience

FIELD FOUR:Feedback

FIELD TWO:Search and evaluation of means/end relations

Motivation Consumption Purchasing Behavior Decision (Action)

FIELD THREE: Act of Purchase

Nicosia Model : Explained

Field 1 represents the output of commercial message from the firm in form of advertising or other form of promotions .this becomes input for field 2 Field 2: Evaluation by the consumer of the product and other alternatives ..If there is favorable attitude and motivation to buy , it becomes input for Field 3 Field 3 : Represents act of purchase Field 4 : Includes
use and storage of the product , retention of experience by the consumer as an influencing factor in future purchase Feedback of sales

Howard Sheth Model

The model explains the buyer decision process using 6 sets of variables : 1. Input variables 2. Behavioral determinants 3. Perceptual Reaction 4. Processing Determinants 5. Inhibitors 6. Output Variable

Howard Sheth Model

Inhibitors Price of the product /brand Availability of product/brand Financial status of individual Time constraints on individual

Behavioral Determinants Personality Culture Social Class Importance of purchase decision

Inputs
Products , services , brand Facts , Images , feelings

Perceptual reaction
Perceptual bias Sensitivity to information Filtering of information

Processing
Determinants Purchase motivation Avalilable satisfactions Judgemental criteris

Outputs
Attention Understanding Attitudes Purchase intention /purchase behavior/decision

Actual Purchase Or no purchase or delay

Post Purchase Behavior

Consumption
Consumption, in its broadest and simplest form , means possession and/or use of goods and services

Consumers post purchase behavior

Consumption No consumption Disposition Repeat purchase Recommend the product / brand to others .

Confirmation/Disconfirmation
Confirmation : Product performance is as good as expected Disconfirmation :
Positive : When the product performance is better than expected Negative : Performance at lower level than that expected.

Marketing implications
Consumer Satisfaction is critical as it leads to repeat purchase , brand loyalty and positive Word of mouth (WOM). It is less expensive to service existing customer than to make a new one . A marketer should not raise too high expectations leads to customer dissatisfaction Feel Good factor after purchase is critical .Eg : being greeted nicely and cheerfully by Mc Donalds boys /girls .

Consumer expectation & Satisfaction

Satisfaction is very crucial element in the evaluation stage Expectations may be about :
Nature and performance of product and service Costs and efforts to be expended before obtaining product or service Social benefits or cost accruing to the consumer as a result of the purchase .

Consumer Satisfaction
Is difficult to measure because :
Means different things to different people Level of satisfaction can change over period of time ..with tastes and preference also changing with changing lifestyles ..

Post Purchase dissonance

Did I make the right decision? Should I have done / bought something else ?

Feeling of uncertainty about whether right choice is being made.. Occurs before the consumer is determined about the satisfaction

PPD is a function of :
Importance of Purchase decision Consumers tendency toward anxiety Finality of the purchase decision Clarity of the final purchase choice

Reducing Dissonance : Attempt by Consumer

Change his evaluation of alternatives: Selected Retention Seeking new information : To reassure Changing attitudes

Marketing Applications : Consumer satisfaction and Dissonance

Confirming expectations Inducing attitude change: Promotional techniques like free Samples , sachets etc . Reinforcing buyers

Marketing Applications of Post Purchase behavior

Encourage brand and outlet loyalty Respond promptly to dispel rumors and other negative communications Offer redress to consumers who complain and thereby regain a positive brand or outlet image Use feedback from both positive and negative post purchase behaviors to improve products and promotions

Communication
Communication is defined as transmitting , receiving and processing information

Communication Process

Example
Senders : are the companies that manufacture shoes like Reebok , Nike etc .( the firms hire adbertising agencuies to construct messages ) Encoding : Taking the idea and transforming it into an attention getting form , through an ad or some other verbal . The ad creative performs this role Message Channel :The channel may be television carrying an ad , billboard , newspaper etc . Decoding : occurs when the message touches the receivers senses in some way. Some consumers will hear and see a TV ad ..smell perfume reading coupon offer etc .

Example : Contd ..
Quality marketing communication occurs when the recievers decode or understand the message as it was intended by the sender Noise is anything that distorts or disrupts the message . Can occur at any stage Clutter : exists when consumers are exposed to hundreds of marketing messages per day , and most are tuned out . Feedback : takes form of purchases , inquiries , complaints , questions , visits to the store or likes or hits on the websites / Social networking sites

Process of Marketing Communication

Channel Media Encoding Advertising /Publicity /Sales Presentatio n Sender

Ad media ( Print/Electro nic /Direct) Sales man PR

Decoding Target Audience Interpretati on Receiver

Marketing Manager or Company

Feedback (Marketing Research Sales Reports )

Consumer ( Target Audience

Barriers to Communication
Between individuals ( age , gender, social status , personality etc ) Within companies ( poor downward/ upward/lateral flow etc .) Between Companies ( poor selling techniques , poor media choices , unfocussed advertising , failure to find correct contact persons )

Marketing Communication
The marketing communication mix(also called promotion mix )consists of four major tools:
Advertising Sales Promotion Publicity Personal Selling Public Relations

Objectives of Marketing Communication

Informing Persuading Reminding

Integrated Marketing Communication

IMC is the coordination and integration of all marketing communication tools , avenues and sources within a company into a seamless program that maximizes the impact on consumers and other end users at minimal cost

IMC contd.
According to American Marketing Association . IMC is a planning process designed to assure that all brand contacts received by the customer or prospect for a product ,service , or organization are relevant to that person and consistent over time

Factors in setting the Communication mix

Type of Product Market Push or Pull Strategy
Push strategy :
When there is no Brand loyalty Product is an impulse item

Pull strategy :
When there is high brand loyalty High involvement category

Buyer readiness stage Product Life Cycle stage The Companys market rank

Buyer Readiness Stage

Advertising & Publicity play the most important role in awareness building stage Customer comprehension is affectd by advertising & personal selling Customer conviction : Personal selling Closing of sale : Personal selling & Sales promotion Repeat purchase : Personal selling , sales promotion , remider advertising

PLC
Introduction Stage : Advertising & Publicity have the highest cost effectiveness followed by personal selling / Sales promotion to induce trial Growth Stage : all tools are toned down as WOM gains momentum Maturity Stage : Sales Promotion / advertising / personal selling all grow important Decline : Sales promotion / advertising & Pubilicity are reduced

Companys Market rank

Impact on the target audience is measured by asking :
Whether they recognize / recall the brand How many times they saw the message How they felt about the message The previous and current attitudes towards the product and company

4Ps vs 4 Cs
Product vs Consumer Price vs Cost Place vs Convenience Promotion vs communication