Consumer Behavior

Consumer Behavior

The mental and emotional processes and

physical activities people engage in when they
select, purchase, use, and dispose of products
or services to satisfy particular needs and
desires
Factors Influencing Buying Decisions
 Cultural Factors
Culture: set of values, norms, attitudes & other meaningful symbols
that shape human behavior and their artifacts or products of that
behavior as they are transmitted from generations.

Subcultures Asian Africans, Anglo-Indians etc.,

Social class [based on wealth, education and job]

 Social Factors
Reference Groups: Membership groups- (Primary groups, Secondary groups),
Aspirational groups, Dissociative groups, Opinion leader

Family: Family of orientation, Family of procreation

Roles and status

 Personal Factors
Age and stage in the family life cycle

Occupation and Economic circumstances

Personality and Self-concept ( own self-concept, ideal self concept, others self
concept)

Lifestyle and Values (Indian males- Traditional, Pleasure-seeker, Social Chameleon,

Intrinsic Progressive)
 Psychological Factors
Motivation Motive is a need that is sufficiently pressing to drive the person to act
Freuds theory: Psychological forces shaping peoples behavior are largely unconscious.
Maslows theory: Human needs are arranged in a hierarchy from the most pressing to the least
pressing needs.
Herzbergs theory: Two factor theory that distinguishes dis-satisfiers and satisfiers.
Perception- the process by which an individual selects & interprets information inputs to
create a meaningful picture of the world.(Selective- attention, distortion, retention)

Learning

Memory
 Buying roles

Initiator
Influencer
Decider
Buyer
User
Buying Behavior
Buying Decision Process
 Need recognition/Problem recognition
Information search (Sources- Personal, Commercial, Public, Experiential)
Evaluation of Alternatives (Beliefs and Attitudes)
Purchase decision- Expectancy value model- compensatory model( good things over bad
things)
Non compensatory models- conjunctive heuristic, lexicographic heuristic, elimination by aspects
heuristic
Intervening factors- Attitude of others, Unanticipated situational factors,
Perceived risks ( Functional risks, physical risk, financial risk, social risk, psychological risk, time risk)
Post Purchase Behavior Post purchase satisfaction, Post Purchase actions, Post
Purchase use and disposal
 Organizational Buying

The decision making process by which formal

organizations establish the need for purchased
products and services and identify, evaluate, and
choose among alternative brands and suppliers.
 Business Market Vs Consumer Market
Fewer, Larger buyers
Close supplier-customer relationship
Professional Purchasing
Several buying influences
Multiple sales calls
Derived demand
Inelastic demand
Fluctuating demand
Geographically concentrated buyers
Direct purchasing
 Buying Situations

Straight Rebuy

Modified Rebuy

New Task
 Systems Buying : Buying a total solution to a problem
from one seller.

Systems Selling: A single supplier provides the buyer

with his or her entire requirement of maintenance,
repair, operating supplies.
Participants in the Business buying process
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
 Types of Business Customers
1. Price-Oriented Customers : Price is everything (Transactional
Selling)
2. Solution-Oriented Customers: Want lower costs but will respond to
arguments about lower total cost or more dependable supply or
service.(Consultative Selling)
3. Gold- Standard Customers: Want the best performance in terms of
product quality, assistance, reliable delivery and so on. ( Quality
Selling)
4. Strategic Value Customers: Want a fairly permanent sole-supplier
relationship. (Enterprise Selling)
 Types of Purchasing Approaches
Routine products: These products have low value and cost to the customer
and involve little risk.

Leverage products: These products have high value and cost to the
customers but involve little risk of supply.

Strategic products: These products have high value and cost to the
customer and also involve high risk.

Bottleneck products: These products have low value and cost to the
customer but they involve some risk.
Organizational Buying Process
 Problem recognition: Need could be triggered either by an internal
stimuli or an external stimuli.

General need description: Buyer determines the needed items

general characteristics and required quantity.

Product Specification: Check for reliability, durability, and technical

specifications. (Product Value Analysis- An approach to cost reduction in
which components are studied if they can be redesigned, standardized or made
by cheaper methods)
 Supplier search: Try to identify most appropriate suppliers through
sources like trade directories, contacts, trade- advertisements, trade
shows
E-Procurement has become common
Proposal Solicitation: Buyer invites qualified suppliers to submit
proposals.
Supplier selection
Order Routine Specification
Performance Review