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					Consumer Behaviour

The customer is the company’s only true profit centre!

The cornerstone of a well-conceived marketing orientation is strong consumer relationships

Don’t think the customer is an idiot. She is your wife!

Organizational charts

What is consumer behavior
Consumer behaviour is the study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants

Determinants of customer-delivered value
Total customer value Customerdelivered value

Product value

Personal value

Total customer cost

Monetary cost

Energy cost

Implications
• Seller must assess total customer value and total customer cost of competitors’ offer to know how his offer rates in buyer’s mind
• Seller who is at customer perceived value disadvantage has two alternatives:
– Increase total customer value – Decrease total customer cost

Customer satisfaction
• Satisfaction is feelings of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to expectations
• Performance = Expectations SATISFIED • Performance < Expectations DISSATISFACTION • Performance > Expectations DELIGHT

Expectations
• How do buyers form their expectations? • From past buying, others’ advice, marketers’ information & promises etc., • If marketers raise expectations too high, the buyer is likely to be disappointed
• If marketers set expectations too low, it won’t attract enough buyers!

Measuring satisfaction
Periodic surveys

Customer loss rate

Mystery shoppers Monitor competitive performance

Brand loyalty

A deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior

Forming strong customer bonds

Add financial benefits
Add social benefits Add structural ties

Consumer: Consuming in the real world
Family
Social class

Values

Object Meaning Rituals

Community

Gender Society

Culture Race / Ethnicity

Reference Groups

Factors affecting consumer decision making
REFERENCE GROUPS

VALUES / ATTITUDES

CULTURE

SITUATIONAL FACTORS

NEEDS
PLEASURE GENDER

EDUCATION

CONSUMER DECISIONS
MARKETERCONTROLLED STIMULI
PAST EXPERIENCE

PERSONALITY

FAMILY
NEWS MAGAZINES RADIO TELEVISION DIRECT MEDIA

MEDIA

SOCIAL CLASS

PRICE PACKAGING ADVERTISING PROMOTION PERSONAL SELLING

LIFE-STYLE

SUBCULTURES

What influences consumer behaviour?

1. Cultural factors

2. Social factors

3. Personal factors

1. Cultural factors

Culture: The fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions

Subcultures
Nationalities

Religions
Racial groups

Geographic regions
Special interests

2. Social factors

Reference groups

Family

Social roles

Statuses

Reference groups
Membership groups

Primary groups
Secondary groups

Aspirational groups
Dissociative groups

Family

• Family of Orientation
– Religion – Politics – Economics

• Family of Procreation
– Everyday buying behavior

Roles and statuses

What degree of status is associated with various occupational roles?

3. Personal factors
Age Selfconcept Life cycle stage

Lifestyle
Values

Occupation
Wealth Personality

Brand personality

Sincerity
Excitement Competence

Sophistication
Ruggedness

Lifestyle influences

Multi-tasking

Time-starved
Money-constrained

Model of consumer behaviour

Key psychological processes

Motivation

Perception

Learning

Memory

Motivation

Freud’s Theory
Behavior is guided by subconscious motivations

Maslow’s Hierarchy of Needs
Behavior is driven by lowest, unmet need

Herzberg’s Two-Factor Theory
Behavior is guided by motivating and hygiene factors

Maslow’s hierarchy of needs

Herzberg’s two-factor theory

Perception
• Perception is the process by which an individual selects, organizes and interprets information to create a meaningful picture of the world
• Perceptions can vary widely among individuals exposed to the same reality • In marketing, perceptions are more important than the reality!

Perception

Selective attention Selective retention
Selective distortion Subliminal Perception

Consumer buying process
Problem recognition

Information search
Evaluation

Purchase decision Post-purchase behaviour

Problem recognition
• Buying process starts when the buyer recognizes a problem or need
• The need can be triggered by internal or external stimuli • Marketers need to identify circumstances that trigger a particular need

Sources of information

Personal

Commercial

Public

Experiential

Successive sets

Evaluation of alternatives
• No single process is used by consumers in buying situations • Some basic concepts will help us understand consumer evaluation process
– Consumer is trying to satisfy a need – Consumer is looking for certain benefits from the product solutions – Consumer sees each product as a bundle of attributes with varying abilities for delivering the benefits sought to satisfy the need

• Consumers prefer attributes that deliver sought-after benefits
– Market for a product can often be segmented according to attributes that are important to different consumer groups

Purchase decisions
• In executing a purchase intention, the consumer can make up to 5 sub-decisions
– Brand – Dealer – Quantity – Timing – Payment method

Stages between evaluation of alternatives & purchase

Post-purchase behaviour
• The marketers’ job does not end with the purchase
– In many instances, it’s just the beginning!

• Need to reinforce consumers’ choice and help them feel good about their brand

Case Study 4

Case study details
• You have been assigned by Odyssey book store chain to suggest a robust system that:
– – – – Constantly monitors consumer behaviour Captures key decision variables Measures customer satisfaction Forges strong customer bonds


				
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posted:8/17/2009
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