Customer Psychology & Buyer Behaviour

Presented by - Susheel RacherlaRoll # - 1215

Understanding Customer Buyer Behaviour

Why is it Important ????

It helps to understand the target Market & its Buying Behaviour.

It is more complex than it appears.

Individuals are not predictable, groups are.

3 key questions before any IMC can be carried out

1 Who is the buyer ???(target market profiles and decision-making

units)?

2 Why do they buy (or not buy) a particular brand or

product?

3 How, when and where do they buy?

Why buy a burger?

Pavlov’s dog effect.

McDonald’s logo acts as a stimulus to customers to remind them of food and arouse feelings of hunger.

Maslows Need effect

A teenage burger buyer prefers McDonald’s because friends hang out there and it feels nice to be in with the in-crowd.

Choice is often influenced

By familiarity with the brand or sometimes the level of trust in a

brand name.

Front-of-mind Awareness.

Who is the customer?

Many organizations do not know who their customers are.

Companies spend a lot of time and effort constantly researching and analyzing exactly who is their target market (in great detail)

Who knows you’re a dog online? (25 y male, 21 f)Guy from new york girl frm miami, meet at JFK……..

50% British companies do not know who their customers are?

Decision-making units

Several individuals are involved in any one person’s decision of purchasing a product

(Eg: Choice of a Family Car)

Why do they buy?

Customers do not even know the real reasons they buy

Some reasons are rational, and some are emotional

The split between the two is called the emotional–rational dichotomy (Clash)

UK customers

Are prepared to pay 800 per cent more for the ‘The Real thing’

A 2-litre bottle of Coca-Cola 1.2 pounds while on same shelf Asda will sell for .15 pounds.

Coca-Cola’s ‘core concept is product engagement

Customers prefer Coca-Cola despite High Price

Kevin Roberts CEO of Saatchi & Saatchi says….

80 % of decisions are Emotional

Rational Decision making

Conclusion

Emotional decision making Action

There’s an Emotional

connection through the

packaging, advertising and

through your memory that you

make

Americans may buy iPod - to listen to their favourite music without being disturbed by others

Japanese buy iPods to listen to their favourite music without disturbing others.

Customers Buythe same product for different

reasons.

Sigmund Freud

Suggested that the mind was like an iceberg

The tip represents the conscious part of the mind while the greater submerged

part is the unconscious.

Even long-forgotten childhood experiences

can affect Buying behaviour

Penn (4 big ideas in brain science)

Unconscious mind accounts for most of what we think, feel & do.

Conscious reasoning may account for only a small part of our ‘thinking.

Emotion precedes our conscious feelings and works in tandem with rational thinking to help us make (better)

decisions.

The interconnectedness of the thinking and

feeling parts of the facilitates

the interaction of rationality & emotion in

Decision making….

Marketers have to know their

customersbetter than the customers know

themselves.

Before launching its Fresh & Easy chainA team of 20 executives was dispatched to the

United States

The company hired a team of anthropologists to live with consumers for 2 weeks and analyze what they

bought and why?

It also built a mock store and asked selected customersto try it.

Tesco

Tesco discovered that US consumers

were less bothered by the selection of

wines on offer, but wanted better-quality

meat than UK consumers.

What customers are buying & not buying?

Young mothers bought fewer baby products in its stores because they trusted pharmacies more.

So Tesco launched Baby Club to provide expert advice and targeted coupons.

Survey at Tesco (UK)

Results

Its share of baby product sales

in the UK grew from 16% to 24% over 3 years.

New task buying - The organization has no experience of the product or service and is buying it for the first time. Modified rebuy - Situation is where the industrial buyer has some experience of the product or service.

Straight rebuy - is where the buyer, or purchasing department, buys on a regular basis.

How do they buy?

Surprisingly many customers trust a website more than a person.

People trust well-known and well-respected brands

In the UK, several major brands score higherin trust than the church and the police.

Trust is increasingly important.

Well managed brands are trusted as long as their promise is never broken.

How does it feel when a website remembers your name?

And when it remembers your preferences?

It seems customers are happy to have unconscious relationships with brands.

Trust

Relationship

What is it called when people visit to the website again & again?

Remember, the 2nd visit is the start of the

Relationship.

Buying Process for High Involvement Purchase

Attitudes towards high/low involvement purchases

Attitudes towards low-involvement brands

can be formed after the brand experience.

In high-involvement purchases attitudes are formed after awareness but before

any purchasing behavior actually occurs.

Relief purchases require a more of a rational approach

Reward purchases is more of a

emotional approach.

Marketers need to understand their customers

buying process, whether online, offline or a mixture

of both.

Response Hierarchy Model

Black-box models

Messages and images are not always perceived in the manner intended by the advertiser.

Perception is selective & biased by Motivation.

We see what we want to see.

Colour affects our perception (Red is a colour that makes food smell better.)

Perception

Simple test on Perception

Smokers can you recall exactly what the health warning says on the side of their packet of

cigarettes?

Very Few will be able to tell you the exact words.

Smokers screen out messages or stimuli that may cause dis-comfort, tension or cognitive dissonance

It causes discomfort every time a cigarette is taken, since the box will give the smokers an unpleasant

message.

In order to reduce this tension, the smokers have two options:

1) Change behaviour (stop smoking) 2) Screen out the message and continue the behaviour (smoking).

Humans are conditioned by music

High tempo music in fast food restaurants encourages faster knife and fork activity,

leading to quicker table turnover.

Customers buy more expensive wines in a retail

environment playing classical music rather than

pop music.

Younger shoppers spend more time in a retail environment playing loud

music

Shoppers aged 50 and over spend more in an environment with quiet

background music.

Maslow’s Hierarchy Needs

Which communications tools do what??

Conclusion

Buying behaviour is complex.

There are many different approaches to buying models.

Marketers need a continual feed of information on customer behaviour..

Emotional influences in decision making are still dominant in B2C and exist in B2B markets

Marketers must understand how the intervening

psychological variables influence buyer

behaviour.