consumer behaviour

Team Members:

Khurram KhanShahid AliRiaz SaleemArshad KhanRehan Ahmed

Team Members:

Khurram KhanShahid AliRiaz SaleemArshad KhanRehan Ahmed

Consumer Behavior: The buying behavior of final consumers,

individuals & households who buy goods & services for personal consumption.

Customers vs. Consumers:

Customer: customer means who purchases the product from the marketer or from the retailer or from the wholesaler. Here we don’t bother about who uses the product.

Consumer: consumer means who uses the product of course purchased by the customer. Here we consider finally who is going to use the product we call them as consumer.

The Ultimate Consumer:Those individuals who purchase for the purpose of individual or household consumption.

Significance in Daily Lives:

Much of our time spent directly in the Marketplace, shopping or engaging in other activities.

A large amount of additional time is spent thinking about products & services, talking to friends about them.

Seeing or hearing advertisements about them.

Consumers are often studied because certain decisions are significant affected by their behavior or expected actions. For this reason, Consumer behavior is said to be “Applied Discipline”.

Advertising Managers, product managers, product designers and many others in profit-oriented businesses are interested in understanding consumers in order to be more effective at their tasks and earn more profit for their Organizations.

Consumers collectively influence economic and social conditions

within an entire society.

Consumer purchases are highly influence by two factors.

Motivation

Motive or (drive) A need that is sufficiently pressing to direct the person to seek satisfaction of the need.

Perception

The process by which people select, organize and interpret information to from a meaningful picture of world.

Learning

Changes in an individual’s behavior arising from experience.

Beliefs

A descriptive thought or conviction that a person holds about something.

Attitude

A person’s relatively consistent evaluation, feelings and tendencies towards an object or an idea.

Age and life cycle

Occupation

Economic Situation

Culture

The set of basic values, perceptions, wants and behavior by a member of society from family and other important institution

Sub-Culture

A group of people with shared value system based on common life experiences and situation.

Social Class

Relatively permanent and ordered divisions in a society whose members share similar values, interests and behavior.

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The consumer market buy goods for their personal consumption.

Consumer vary tremendously in Age, Income, Education, Taste & other factors.

Buyers may pass quickly or slowly through these stages and much depends on the nature of buyer, the product, and the buying situation.

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A new product, a good service or idea that is perceived by some potential customers as new.

Adoption Process, the mental process through which an individual passes from first learning about an innovation to final adoption

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Awareness: Consumer becomes aware of new product, but lacks information about it.

Interest: Consumer seeks information about the new product.

Evaluation: Consumer considers whether trying new product makes sense.

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Trial: Consumer tries new product on a small scale.

Adoption: Consumer decides to make regular use of the new product.

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Innovators (2.5%): They try new product or adopts a new idea.

Early Adopters (13.5%):Opinion leaders in their communities.

Early Majority (34%):They adopt new idea before average person.

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Late Majority (34%):They adopt idea after a majority of people have tried it

Laggards (16%):They adopt when it becomes tradition.

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DivisibilityCan the innovation

be used on a trial basis? Complexity

Is the innovation difficult to

understand or use?

Communicability Can results be easily

observed or described to others?

CompatibilityDoes the innovation

fit the values and experience of the

target market?

Relative AdvantageIs the innovation

superior to existing products?

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It is difficult enough for companies marketing within the borders of a single country. For operating in many countries, understanding & serving the needs of consumers can be daunting.

Although some countries may have some things in common ,their values, attitudes and behaviours often vary greatly. So, international marketers must understand their differences and adjust their products & marketing program accordingly.

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Shaking heads from side to side means ‘NO’ in most countries but ‘YES’ in Bulgaria & SriLanka.

In South America, southern Europe & many Arab countries ,touching another person is a sign of warmth & friendship. In the Orient, it is considered an invasion of privacy.

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In Norway or Malaysia, it is rude to leave something on your plate when eating but in Egypt, it is rude not to leave something on your plate..

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BuyingDecision

Influencer

Initiator

User

Buyer Decider

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The person who first suggests or thinks of the idea of buying a particular product or service.

INFLUENCERINFLUENCERA person whose views or advice carry some weight in making the final buying decision.

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The person who ultimately makes a buying decision or any part of it- whether to buy, what to buy, how to buy or where to buy .

BuyerBuyerThe person who makes an actual purchase.

UserUserThe person who consumes or uses a product or service.

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Post purchaseBehavior

PurchaseDecision

InformationSearch

Need Recognition

Evaluationof Alternatives

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The first stage of the buyer decision in which

the consumer recognizes a problem or need.

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The stage of the buyer decision process

in which the consumer aroused to

search for more information; the

consumer may simply have heightened

attention or may go into active

information search.

Personal Sources:

(family, friends, neighbors etc)

Commercial Sources:

(Advertising, Sales people, Dealers etc)

Public Sources:

(Mass Media, Consumer Rating Organization)

Experimental Sources:

(Handling, Examining, Using the product)

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The stage of the buyer decision process

in which the consumer uses information to

evaluate alternative brands in the choice set.

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The stage of the buyer decision process in which the consumer actually buys the product.

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The stage of the buyer decision process in

which the consumer take further action after

the purchase, based on their satisfaction or dissatisfaction.

Sigmund Freud(1856-1939)

sought to explain: People are largely unconscious

about the real psychological forces shaping their behaviour

As persons grows, repressing many urges

Urges are never eliminated or under perfect control Why?

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B/c they emerge:

• in dreams

• in slips of tongue

• in neurotic – worried about smthg.

• obsessive behaviour – mind is filled with one particular thing

• ultimately in psychoses – mental illness that effects the whole personality

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Various ‘project techniques’ to throw the ego off guard for e.g.,

1) word associations

2) sentence completion

3) picture interpretation

4) role playing

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• Interesting & odd conclusions from researchers about buyer’s mind regarding certain purchases

For e.g.,• A/c to one classic study concluded:• Consumer resist ‘prunes’ b/c they’re wrinkled • and remind people of sickness and old age

- Motivation research remains a useful tool for marketers seeking a deeper understanding of consumer behaviours

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Abraham Maslow(1908-1970 ) sought to explain:

Why people are driven by particular needs at particular times?

Why does one person spend much time and energy on:

Personal safety ?

On gaining the esteem of others?52

Human needs are arranged in Hierarchy

i.e.

“From the most pressing to the least pressing”

From Bottom to Top

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In order of importance they are:1. Physiological needs (hunger, thirst)

Daily usage commodities, for e.g.*wheat *milk *water etc.

2. Safety needs (security, protection)* Health Protection *Insurances *Provident Funds etc.

3. Social needs (sence of belonging, love)How s/he is seen in: * Get togethers * Festivals * Attending Parties

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4. Esteem needs: (self-esteem, recognition, status)

• Occupation & Designation?

• Part of organization & his/her performance?

• Shaping Livings standards accordingly

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5. Self-actualization needs: (Self-development & realization)

Self-development• Latest happenings in the art world?• Do I invest my money in starting a

business?• What are the trends to make ROI’s?

Realization• How to minimize risks?!• Why not to invest in a running business?

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Perception:“To form a meaning full picture of the world”Two people with similar motivation might act quite differentlyFor e.g.

* Buyer A of Stereo System considers a fast talking sales person loud or insincere.

* Buyer B of Stereo System considers the same person intelligent & helpful.

Why perceptions are different of Buyer A & B?

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B/c of the Flow of Information through our five senses:

•Sight •Sound•Smell•Touch•Taste

These five senses receives in an individuals way using:

* Short-term memory * Long-term memory

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Three perceptual processes:

1. Selective exposure - consumer’s attention For e.g., a person exposed to more than 1500 ads a day – be precise/specific.

2. Selective distortion – understanding consumer’s mindsets For e.g., Nike Australia’s Annual sales from 500K to 1.3M in reducing their joggers prices.

3. Selective retention – retain info. that supports people’s attitude & beliefs.For e.g., Nokia makes mobile sets for all age, group peoples.

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SUBLIMINAL PERCEPTION – CAN CONSUMERS BE AFFECTED WITHOUT KNOWING IT?

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Lets watch a case study!

This case study is available on YouTube as well:

http://www.youtube.com/cssubliminalads