adbms consumer bahaviour.ppt

7/29/2019 adbms consumer bahaviour.ppt

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Consumer

BUYER

Behaviour


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Consumer Buying Behaviour refers to

the buying behaviour of final consumers(individuals & households) who buygoods and services for personal

consumption.

We Study consumer behaviour toanswer:

How do consumers respond tomarketing efforts the company might

use?


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Who Buys and Uses the Products

Initiator -who identifies the need forproduct

Influencer -who has informational or

preference input to the decision Deciderwho makes the final decision

through budget authorization

Purchaserwho makes the actualpurchase

User


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Simplified Model

MarketingStimuli

TargetAudienceResponse

BlackBox


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Expanding the Black Box

Intra-Personal,psychologicalInfluences

Inter-Personal,socialInfluences

Decision Process

Motives, perceptions,.. Culture, social class,..

Mediated by

audiencecharacteristics:

Gender,age,

SituationalInfluencesOccasion,usage


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Why Study Consumer Behavior?

To implement the Marketing Concept . . aplan to influence buyer seller exchanges tomeet consumer & organizational goals

To understand complex influences on

consumption processes. To know the whyof consumer behaviour.

To increase a managers confidence to

predict consumer responses to theirmarketing strategy


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Multiple Stimuli BlackBox

MarketingMix

EnvironmentalEvents

Product

Price

Place

Promotion

Economic

Technology

Political

Cultural


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Consumer Benefits People do not buy products or services,

they buy benefits

Hence we make purchases not for theproducts themselves, but for thebenefits of the problems they solve orthe opportunities they offer

e.g., always late so a watch helps solveproblem; has stopwatch feature so nowcan keep track of work out times


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Consumer Benefits Consumers seek bundles of types of

benefits:

Tangible benefits:e.g., a watchkeeps good time; has leather band

Intangible benefits: e.g., the

reliability reputation of the watchmanufacturer; the image of the

watch wearer


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The Consumer Decision-

Making ProcessA consumer decision model is

a means of describing theprocesses that consumers gothrough before, during, andafter making a purchase(choice).


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Factors Influencing BuyerBehaviour

CulturalCulture

Subcult

ure

SocialClass

Social

ReferenceGroups

Family

Roles &

Status

Personal

Age &lifecycle

stageOccupation

Economiccircumstanc

e

Lifestyle

Personality

and Self-

Psychological

Motivation

Perception

Learning

BeliefsandAttitudes

B

U

Y

E

R

www.mba4career.com


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Consumer Decision Making

Process


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Major Causes of ProblemRecognition or Opportunity

Science and Technology Advancements

new products

new informationChanging Consumer Circumstances &

Expectations

improved education family life cycle changes

income adjustments


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Step 2 he information search stage

An internal search involves thescanning of one's memory to recall previousexperiences or knowledge concerningsolutions to the problem-- often sufficient forfrequently purchased products.

An external search may be necessarywhen past experience or knowledge isinsufficient, the risk of making a wrongpurchase decision is high, and/or the cost ofgathering information is low.

Personalsources

(friends andfamily)

Public sources(rating serviceslike Consumer

Reports)

Marketer-

dominatedsources(advertising orsales people)

The evoked set: agroup of brands fromwhich the buyer canchoose


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Information Sources

. Internal Sources (Psychological)

Experience (first preference)

memory storage/retrieval mental processing

External Sources (Social)

- Family (word of mouth)- friends

- professionals


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Information Sources

Public Sources government studies

product testing magazines

media stories

Commercial Sources

advertising (least preference)

sales people

product pamphlets


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Picking Physicians

Surveyed consumers said the mostfrequent sources for selecting a doctor are:

Referral from friend

Referral from another doctor

Referral from family member

General word of mouth

24%

14%

10%

9%

Applied

Marketing

WSJ, Sect.2, pg.37, 24June 1986.


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Influences on Intensity ofInformation Search

Personal factors -ability to process productinformation, physical energy and mobility to search

out alternative information .. Shopping propensity -

special sales, return policies. Social factors - social pressures for right

choice, time pressure on the purchase

Environmental Factors - availability of productsubstitutes, supplier alternatives and resources tosearch, Product life (long or short?)


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Information GapsExamples of DellsCustomer Feedback

- Wheres the power button?

- Wont work after I washed

the keyboard- Wheres the any key?

(Click any key to continue)

- fax wont work

- I refuse to read manual

Applied

Marketing


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Step 3 Evaluation of alternatives

Other people often influence aconsumers purchase decision. Themarketer needs to know whichpeople are involved in the buying

decision and what role each personplays, so that marketing strategiescan also be aimed at these people.

(Kotler et al, 1994).s


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Major Evaluation Criteria

Economic: cost/performance

Behavioural: prestige/status/. sociological: peer influence, lifestyle

Societal

: product externalities

environmental effectssocietys long run welfare

e


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Evaluation Criteria

Principle: Evaluation criteria changeover time and among market segments.

Promotions frame certainproduct attributes (evaluation

criteria) to influence theirperceived relative importance


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Evaluation criteria are the basis ofproduct attitudes

Product Attributes- Price (value),

- Quality,- style, etc.

+ relativeimportance (utility)

= Attitude towardProduct

Retailer Attributes- location,

- credit terms,- return policies,etc.

+ relativeimportance (utility)

= Attitude towardRetailer (Image)


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Buying Process

PurchaseDecision(s)

WHO BUYS?

WHAT?

WHEN?WHERE?

AND WHY?


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Consumer decision makingProblem Solving

Extensive: problem solving occurswhen buyers purchase more

expensive, less frequentlypurchased products in anunfamiliar product category

requiring information search &evaluation


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Limited: problem solving occurs whenbuyers are confronted with an unfamiliarbrand in a familiar product category

Routine: response behaviour occurswhen buyers purchase low cost, low risk,brand loyal, frequently purchased, lowpersonal identification or relevance,items with which they are familiar.


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Three Levels of Problem Solving

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

RoutinizedResponseBehavior

Low involvement

Frequently purchasedInexpensiveLittle riskLittle information

LimitedProblemSolving

ExtensiveProblemSolving

High involvement

Infrequently purchasedExpensive

High riskMuch information

desired

Low involvement High involvement


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Decision Processm

Involvement

LowInvolvement High

Involvement

Weak attitude

Strong attitude

Social Visibility


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Factors affectingConsumer involvement

Previous experience: low level involvement

Interest: high involvement

Perceived risk of negative consequences:

high

involvement

Social visibility: involvement increaseswith product visibility high

involvement

s


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Buying Process

Cognitive dissonance:post-purchase tension .

Post-PurchaseBehavior


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Postpurchase Behavior

EffectiveCommunication

Follow-upGuarantees

WarrantiesUnderpromise &

overdeliver

CognitiveDissonance

?Did I make a good decision?Did I buy the right product?

Did I get a good value?

The Buyer Decision Process


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The Buyer Decision ProcessStep 5. Postpurchase Behavior

Consumers Expectations ofProducts Performance

DissatisfiedCustomer

SatisfiedCustomer!

Products Perceived

Performance

Cognitive Dissonance


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psychological discomfortcaused by inconsistenciesamong a persons beliefs,

attitudes, and actions

varies in intensity based on

importance of issue and degreeof inconsistency

:


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Post Purchase Behavior

Principle: Dissatisfied customerscommunicate more negative word

of mouth than satisfied customers

communicating positive word of

mouth FORD says happy customerstell 8 people while unhappy people

tell 22 people.


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Causes: Perceived Risk Performance risk

Physical risk (wear-out)

High financial commitment

High involvement level

High social visibility

Discrepant information

Information Overload

insufficient time to evaluate

Characteristics Affecting Consumer Behavior


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Characteristics Affecting Consumer Behavior

Buyer

Psychological

Personal

SocialCulture

Factors Affecting Consumer Behavior:


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Factors Affecting Consumer Behavior:

Social

GroupsMembership

Reference

FamilyHusband, wife, kids

Influencer, buyer, user

Roles and Status

Social Factors


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Stages in the Adoption


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Stages in the Adoption

Process

Awareness

Interest

Evaluation

Trial

Adoption


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Adoption of Innovations

innovators

Early Adapters

Late Majority

Early Majority

Laggards

2.5%

13.5%

34%

34%

16%

Influences on the Rate of


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Influences on the Rate of

Adoption of New Products

Divisibility Compatibility

Complexity

RelativeAdvantage

Communicabiliy

ProductCharacteristics


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WantsWants

NeedsNeeds


Psychological Influences within

an Individual

Drives

Consumers seek benefits to matchneeds and wants!

Drives

Maslows Hierarchy of Needs


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Maslow s Hierarchy of Needs

Esteem Needs(self-esteem, status)

Social Needs(sense of belonging, love)

Safety Needs(security, protection)

Physiological Needs(hunger, thirst)

Self

Actualization(Self-development)

P i D i Wh


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Selective

Exposure

Selective

Perception

Selective

Exposure

Selective

Perception


Perception Determines What

Consumers See and Feel

Selective

Retention

O t C diti i (L i )


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DriveDrive

CuesCues

ResponseResponse

Operant Conditioning (Learning)


Reinforcement

Cl i l C diti i (L i )


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UnconditionedStimulus

Unconditioned

Response

Classical Conditioning (Learning)


Conditioned

Stimuluse

Conditioned

Response

I di id l A Aff t d b


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Purchase Reason

Time Available

Purchase

Reason

TimeAvailable

Individuals Are Affected by

the Purchase Situation


PhysicalSurroundi

ngs

Purchase Decesion

Differences Between Organizational


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Forlani, MKTG MGT, UCDHSC 50

Differences Between Organizationaland Consumer Markets

Demand CharacteristicsThe demand for industrial goods and services is:

1. Derived from the demand for consumer goods

and services.2.Relatively inelasticprice changes in the

short run are not likely to significantly affect

demand.

3. More erratic because small increases ordecreases in consumer demand can, over time,

strongly affect the demand for manufacturing

plants and equipment.

4. M r li l.


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Compared to Consumers, Organizational buyers

are:1. Fewer in number.2. Larger in size.

3. Geographically concentrated.

Differences Between Organizational andConsumer Markets (2 of 3)

Market Demographics


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Differences Between Organizational andConsumer Markets (3 of 3)

Characteristics of Buyer BehaviorCompared with markets for Consumer goods,

Organizational markets are characterized by:

1. The use of professional buyingspecialists following prescribed

procedures.

2. Closer buyerseller relationships.3. Presence of multiple individuals in the

buying process (Relevant Others).

More apt to buy on specification than

rice.


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CustomerSatisfactionand Customer

Delight


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Scott Smith

Marketing is not

selling products.It is satisfying

wants

Meaning of Satisfaction &


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Meaning of Satisfaction &

Benefit

Benefit:

Enhance well being

To be helpful or advantageous

To improve or gain advantage

Satisfaction:

To gratify the need, desire or

expectation

To fulfill a need or desire


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What is Customer Satisfaction?

Customer satisfaction not onlyinvolves assuring the quality of

the product or serviceprovided, but also meeting the

consumer's need as anindividual.

Importance of Customer


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Importance of Customer

Satisfaction

Business is made up of thelargest group of volunteers in

the world......customers!

Impact of Dissatisfied


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Impact of DissatisfiedCustomers

Deming proved that a dissatisfiedcustomer tells 16 other people but a

satisfied person only 8 others.

Negative word-of-mouth has blocked

close to 4 million from purchasing

atain product in the .

.


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Impact of Customer Dissatisfaction

No initial sale of the product

No repeat purchase of the product

Negative word-of-mouth advertising

Less referral business


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Impact of Customer

Dissatisfaction Higher employee turnover &

absenteeism

Lower staff moraleLower compliance with instructions

More malpractice suits

Lower profitability


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Satisfaction reflects the total

interactions a customer has witha company and its products

It starts the moment a

customer thinks of yourproduct

It does not end until thecustomer is completelysatisfied with it

Maximizing the Customer


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g

Experience

Addresses 3 QuestionsHow welldo youmeetcustomer

needs?

Howsmoothly doyou solve

yourcustomersrpoblems?

How quickly doyou anticipatewhat theyllwant next?


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Customer satisfaction with any product or survey

reflects the evaluation of the product, service,

company, and environment.

Customer satisfaction is critical to any product or

service because customer satisfaction is a strong

predictor of customer loyalty and productrepurchase.


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Customer Delight

Not Customer

Satisfaction, but...


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Adequate Is Not Acceptable Most of what we do is

adequate

People talk about Customer

Delight People talk about bad service

People dont talk aboutadequate service


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The Truth About Customers

Ten times more expensive toacquire a new customer than

to keep a current customer- Bain & Company Research

Customers are lost primarilydue to indifference (66%)versus dissatisfaction (14%) -WSJ


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The Best

Woo the ability to win others over

Empathy the ability to understand the moodof others

Discipline the ability to work systematicallyand consistently

Command the ability to control a situation

through communication Responsibility the ability to own a problem

until it is solvedGallup Survey of Best Customer Service Representatives


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ActuallyCustomer expectations are typically not

very high

Your job is to surprise themCustomer Delight is doing what theyhavent even imagined

What will cause them to say WOW!

You know what you can do - they dont


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Cusromer Value

The difference between all the benefitsderived from a total product and all the

costs of acquiring those benefits.


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Customer Value

a customer can evaluate a company'svalue-proposition on two broad dimensions

with multiple subsets:

relative performance: what the customergets from the vendor relative to a

competitor's offering;

price: which consists of the payment thecustomer makes to acquire the product or

service; plus the access cost

adbms consumer bahaviour.ppt

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