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Principle of marketing

  1. Principle Of Marketing Chapter No: 5 Consumer Markets And Consumer Buyer Behavior Assign By: Mam Uzma Naz Submitted By: Zunera, Ammara, Humna, Nida And Shahneela
  3. Model of Consumer Behavior Consumer buyer behavior: it is refers to the buying behavior of final consumers individuals and households who buy goods and services for personal consumption. Consumer market: It is refers to all of the personal consumption of final consumers. or The consumer market pertains to buyers who purchase goods and services for consumption rather than resale. However, not all consumers are alike in their tastes, preferences and buying habits due to different characteristics that can distinguish certain consumers from others.
  4. Consumer Buyer Behavior is a "mystery", because consumers vary greatly in their demographics and individual characteristics. No one buyer is alike another. However some groups of buyers do act similarly to each other. In order to study buyer behavior, we have had to create a model to answer the central question of how consumers will respond to different marketing efforts and stimuli. It's called...the "Model of Consumer Buyer Behavior". [1] Consumers "ingest" marketing and other stimuli [2] the stimuli enters their "buyer black box" [3] the "black box" creates buyer responses.
  5. It starts with marketing and other stimuli. When we consider marketing stimuli, we usually focus on the "4 P's": Product, Price, Place and Promotion. When we are examining other stimuli, we usually look at internal and outside economic, technological, political and cultural factors that influence the buyer. All of that stimuli enters what we call the "buyer black box"... the brain. This "black box" contains all of the characteristics of the buyer. The buyer characteristics influence how he or she perceives the marketing stimuli, and creates a reaction. The "black box" also contains the consumer's individual decision process, which is used to evaluate whether or not they will purchase a product.
  6. Finally, this black box creates the "buyer response". This buyer response influences the choice of product, their individual brand choice, the choice of dealer, the timing of the purchase, and the amount of money they will be spent on the goods and services.
  7. Characteristics Affecting Consumer Behavior
  8. Cultural factors: cultural factors exert a board and deep influence on consumer behavior. There are three cultural factors as below: Culture Subculture Social class
  9. • Culture: culture is the set of values, perception, wants & behavior learned by a member of society from family. Cultural factors have a significant effect on an individual’s buying decision. Every individual has different sets of habits, beliefs and principles which he/she develops from his family status and background. What they see from their childhood becomes their culture.
  10. • Sub culture: A group of people with shared value systems based on common life experience and situation. Each culture further comprises of various subcultures such as religion, age, geographical location, gender (male/female), status etc. Religion (Christianity, Hindu, Muslim, Sikhism, Jainism etc.) Status (Upper Class, Middle class and Lower Class). Gender (Male/Female).
  11. • Social class: Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors Measured by a combination of occupation, income, education, wealth, and other variables.
  12. Social Factors: Social factors play an essential role in influencing the buying decisions of consumers. Such as: Reference Groups Family Roles And Status
  13. • Reference Groups: Every individual has some people around who influence him/her in any way. Reference groups comprise of people that individuals compare themselves with. Reference groups are generally of two types: 1. Primary Group - consists of individuals one interacts with on a regular basis. Primary groups include: Family Members.
  14. 2. Secondary Groups - Secondary groups share indirect relationship with the consumer. These groups are more formal and individuals do not interact with them on a regular basis. Example - Religious Associations, Political Parties, Clubs etc. • Family: Family plays an important role in influencing the buying decisions of individuals. Every individual goes through the following stages and shows a different buying need in each stage: Bachelorhood: Purchases Alcohol, Beer, Bike, Mobile Handsets (Spends Lavishly).
  15. Newly Married: Tend to purchase a new house, car, household furnishings. (Spends sensibly) Family with Children: Purchases products to secure his as well as his family’s future. Empty nest (Children getting married)/Retirement/Old Age: Medicines, Health Products, and Necessary Items.
  16. Roles and status: Role in the Society: Each individual plays a dual role in the society depending on the group he belongs to. An individual working as Chief Executive Officer with a reputed firm is also someone’s husband and father at home. The buying tendency of individuals depends on the role he plays in the society. Social Status: An individual from an upper middle class would spend on luxurious items whereas an individual from middle to lower income group would buy items required for his/her survival.
  17. Personal Factors: A buyer’s decisions also are influenced by personal characteristics such as the …
  18. • Age & life cycle stage: Age and human lifecycle also influence the buying behavior of consumers. RBC Royal Band stages • Youth—younger than 18 • Getting started—18-35 • Builders—35-50 • Accumulators—50–60 • Preservers—over 60 Teenagers would be more interested in buying bright and loud colors as compared to a middle aged or elderly individual who would prefer decent and subtle designs.
  19. • Occupation: The occupation of an individual plays a significant role in influencing his/her buying decision. An individual’s nature of job has a direct influence on the products and brands he picks for himself/herself. • Economic Situation: The buying tendency of an individual is directly proportional to his income/earnings per month. How much an individual brings home decides how much he spends and on which products?
  20. • Life Style: A person’s pattern of living as expressed in his or her activities, interests and opinions. Lifestyle is a person’s pattern of living as expressed in his or her psychographics. Measures a consumer’s AIOs dimension (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment. Activities: work, hobbies. Shopping, sport, social event. Interest: food, family, fashion and recreation. Opinions: about themselves, social issue, business, products.
  21. Personality: An individual’s personality also affects his buying behavior. Every individual has his/her own characteristic personality traits which reflect in his/her buying behavior. a fitness freak would always look for fitness equipment whereas a music lover would happily spend on musical instruments, CDs, concerts, musical shows etc. Brand personality refers to the specific mix of human traits that may be attributed to a particular brand Sincerity Excitement Competence Sophistication Ruggedness
  22. • Psychological Factors: A person’s buying choices are further influence by four major psychological factors.
  23. • Motivation: A motive is a need that is sufficiently pressing to direct the person to seek satisfaction of the need. An individual who is thirsty would definitely not mind spending on soft drinks, packaged water, juice and so on. Recognition and self esteem also influence the buying decision of individuals.
  24. Abraham Maslow’s Hierarchy of Needs People are driven by particular needs at particular times. Human needs are arranged in a hierarchy from most pressing to least pressing.  Psychological  Safety  Social  Esteem  Self-actualization
  25. • Perception: Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. What an individual thinks about a particular product or service is his/her perception towards the same. There are three different processes which lead to difference in perception: Selective Attention - Selective attention is the tendency for people to screen out most of the information to which they are exposed.
  26. Selective Distortion Selective distortion is the tendency for people to interpret information in a way that will support what they already believe Selective Retention Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands • Learning: Learning comes only through experience. An individual comes to know about a product and service only after he/she uses the same. An individual who is satisfied with a particular product/service will show a strong inclination towards buying the same product again.
  27. • Beliefs And Attitudes: Beliefs and attitude play an essential role in influencing the buying decision of consumers. Belief: A descriptive thought that a person holds about something. Which is based on: • Knowledge • Opinion • Faith Attitudes: A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.
  28. Types Of Buying Decision Behavior Buying Decision differs from person to person. Depending upon the need of the person, the decision gets change; Even if the product is small. There are different factors which influences the nature of buying. Hence buying decision has been classified into four different categories. These are classified depending upon the degree of involvement and degree of difference among brands.
  29. Four types of buying decision behavior: Complex buying behavior. Dissonance- reducing buying behavior. Habitual buying behavior. Variety- seeking buying behavior.
  30. 1. Complex Buying Behavior: This situation involves the high level of involvement from consumers and observe significant difference between the brands then the consumer undertake complex buying behavior. These cases arise when the product is of high price, risky, high for servicing, and so on. For Ex: Buying a laptop, Car and house. For final decision about buying product customer seeks information about product features, attributes and quality from print media and electronic media sources.
  31. 2. Dissonance Reducing Behavior: This involves high involvement of the buyer but a less significance difference among the brands. For ex: Buying an Air Conditioner. Here the product is highly priced but almost all every brand gives the same features. Sometimes this may involve the post purchase dissonance behavior. Here the consumer looks at the disadvantages of the product after purchase.
  32. 3. Habitual Buying Behavior: Here there will not be any kind of involvement from the consumer. Here the purchase happens depending upon the Brand familiarity. Here the consumer involvement is low and less differences among brands. This happens based on the habits of buying. For Ex: Buying of a liquid soap . Most of the people prefer Dettol because of the brand. But there are other products like Lifebuoy with less significant difference.
  33. 4. Variety Seeking Buying Behavior: Here the consumer involvement is low but there will be significant difference among brands. For Ex: Biscuits, when we buy a biscuit we do not know the taste hence after consumption only we can tell that whether to go for the brand or not for the next time. Here the companies try to change the nature to Habitual Buying behavior by different strategies. Sometimes this depends upon the retailers too.
  34. The Buyer Decision Process There are five buyer decision process: Need Recognition Information Search Evaluation Of Alternatives Purchase Decision Post purchase Behavior
  35. 1. Need Recognition: The first stage of the buyer decision process in which the consumer recognizes problem or need. Need can be two types:  Internal stimuli.  External stimuli. Internal stimuli when one of the persons normal need. Example: hunger, thirst, emotions. External stimuli a need can be triggered by external stimuli. Example: an advertisements or a discussion with a friend.
  36. 2. Information Search: Information search is the amount of information needed in the buying process and depends on the strength of the drive, the amount of information you start with, the ease of obtaining the information, the value placed on the additional information, and the satisfaction from searching. Sources of information: Personal sources—family and friends. Commercial sources—advertising, Internet. Public sources—mass media, consumer organizations. Experiential sources—handling, examining, using the product.
  37. 3. Alternative Evaluation: The stage of buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. 4. Purchase Decision: The buyer’s decision about which brand to purchase. •May come between purchase intention and decision •Attitudes of others and unexpected situational factors.
  38. 5. Post Purchase Decision: The post-purchase decision is the satisfaction or dissatisfaction the consumer feels about the purchase Relationship between:  Consumer’s expectations  Product’s perceived performance.
  39. • Consumer satisfaction is a function of consumer expectations and perceived product performance. • Performance < Expectations --- Disappointment • Performance = Expectations --- Satisfaction • Performance > Expectations --- Delight Cognitive dissonance is the discomfort caused by a post- purchase conflict. Why is it so important to satisfied the customer? Customer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime value.
  40. The Buyer Decision Process For New Products New Product: New product is a good, service, or idea that is perceived by some potential customers as new..
  41. Adoption Process: Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use. Stages include in Adoption Process. Awareness Interest Evaluation Trail Adoption
  42. Awareness is when the consumer becomes aware of the new product but lacks information about it. Interest is when the consumer seeks information about the new product. Evaluation is when the consumer considers whether trying the new product makes sense.
  43. Trial is when the consumer tries the new product on a small scale to improve his or her estimate of its value. Adoption is when the consumer decides to make full and regular use of the new product.
  44. Individual Differences In Innovation
  45. Individual Differences In Innovation Early adopters are opinion leaders and adopt new ideas early but cautiously. Early majority are deliberate and adopt new ideas before the average person. Late majority are skeptical and adopt new ideas only after the majority of people have tried it. Laggards are suspicious of changes and adopt new ideas only when they become tradition
  46. Influence of Product Characteristics on Rate of Adoption: Is the innovation superior to existing products? Relative Advantage Does the innovation fit the values and experience of the target market? Compatibility Is the innovation difficult to understand or use? Complexity Can the innovation be used on a limited basis? Divisibility Can results be easily observed or described to others? Communicability