Chapter-5 consumeuhgui vtyguyr mkt (1).ppt
- 1. Chapter-5: Consumer Markets and Consumer Buyer Chapter-5: Consumer Markets and Consumer Buyer Behavior Behavior Consumer behavior is a broad Consumer behavior is a broad field that studies how individuals, field that studies how individuals, families and groups acquire, families and groups acquire, consume and dispose of goods, consume and dispose of goods, services, experiences and ideas. services, experiences and ideas. The principles of consumer The principles of consumer behavior are useful to business behavior are useful to business managers, government managers, government regulators, non-profit regulators, non-profit organizations and everyday organizations and everyday people people Think about the capsule one that Think about the capsule one that shows the features of Village shows the features of Village Phone by Grameen Phone. In Phone by Grameen Phone. In Bangladesh most of the people Bangladesh most of the people are living in rural areas with a low are living in rural areas with a low purchasing power. Understanding purchasing power. Understanding their purchasing pattern and their purchasing pattern and offering them a package of Village offering them a package of Village Phone shows the consumer Phone shows the consumer behavior understanding capability behavior understanding capability of Grameen Phone. That of Grameen Phone. That understanding is still giving a understanding is still giving a continuous growth in GP’s continuous growth in GP’s revenue base. revenue base.
- 2. Chapter objectives Chapter objectives After the successful completion of this chapter, students will be After the successful completion of this chapter, students will be able to: able to: Offer a framework and appropriate tools for analyzing Offer a framework and appropriate tools for analyzing consumers consumers Define the consumer market and construct a simple model of Define the consumer market and construct a simple model of consumer buyer behavior consumer buyer behavior Name the four major factors that influence consumer buyer Name the four major factors that influence consumer buyer behavior behavior Offer a way to think about and analyze consumer behavior and Offer a way to think about and analyze consumer behavior and marketing strategy relationships marketing strategy relationships Encourage a holistic perspective that integrates our own Encourage a holistic perspective that integrates our own consumption approaches consumption approaches List and understand the major types of buying decision behavior List and understand the major types of buying decision behavior and the stage in the buyer decision process. and the stage in the buyer decision process. Describe the adoption and diffusion process for new products Describe the adoption and diffusion process for new products
- 3. Model of Consumer Behavior Model of Consumer Behavior consumer buying behavior is consumer buying behavior is "The study of individuals, groups, or "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." the impacts that these processes have on the consumer and society." Although it is not necessary to memorize this definition, it brings up Although it is not necessary to memorize this definition, it brings up some useful points: some useful points: Behavior occurs either for the individual, or in the context of a group Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products organization (people on the job make decisions as to which products the firm should use). the firm should use). Consumer behavior involves the use and disposal of products as well as Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. best positioned or how we can encourage increased consumption. Consumer behavior involves services and ideas as well as tangible Consumer behavior involves services and ideas as well as tangible products. products. The impact of consumer behavior on society is also of relevance. For The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the marketing of easy credit, may have serious repercussions for the national health and economy. national health and economy.
- 4. Consumer behavior model Consumer behavior model
- 5. What Influences Purchasing What Influences Purchasing 1. 1. INTERNAL INFLUENCES INTERNAL INFLUENCES a a. . Perception: Perception: It is how an individual It is how an individual evaluates a certain situation evaluates a certain situation b. By b. By learning learning we mean how someone we mean how someone changes what they know, which in changes what they know, which in turn may affect how they act. turn may affect how they act. c. c. Knowledge Knowledge is the sum of all is the sum of all information known by a person information known by a person d. In simple terms d. In simple terms attitude attitude refers to refers to what a person feels or believes what a person feels or believes about something. about something. e. e. Personality and self-concept: Personality and self-concept: An An individual’s personality relates to individual’s personality relates to perceived personal characteristics perceived personal characteristics that are consistently exhibited, that are consistently exhibited, especially when one acts in the especially when one acts in the presence of others. presence of others. f. f. Lifestyle: Lifestyle: In simple terms it is what In simple terms it is what we value out of life. we value out of life. g. g. Roles Roles: Roles represent the position : Roles represent the position we feel we hold or others feel we we feel we hold or others feel we should hold when dealing in a group should hold when dealing in a group environment. environment. h. h. In addition motivation and emotion In addition motivation and emotion
- 6. What Influences Purchasing What Influences Purchasing 2. 2. EXTERNAL INFLUENCES EXTERNAL INFLUENCES a. a. Culture: Culture is the way of Culture: Culture is the way of doing things. Culture represents doing things. Culture represents the behavior, beliefs and, in many the behavior, beliefs and, in many cases, the way we act learned by cases, the way we act learned by interacting or observing other interacting or observing other members of society. members of society. Culture is Culture is comprehensive comprehensive. (2) Culture is . (2) Culture is learned learned rather than being rather than being something we are born with. We something we are born with. We will consider the mechanics of will consider the mechanics of learning later in the course. (3) learning later in the course. (3) Culture is manifested within Culture is manifested within boundaries boundaries of acceptable behavior. of acceptable behavior. Subculture Subculture refers to a culture within a refers to a culture within a culture. For example, Muslims, culture. For example, Muslims, Hindu, Buddhist, Christians and Hindu, Buddhist, Christians and some other religion follower live in some other religion follower live in Bangladesh can be called sub- Bangladesh can be called sub- culture of Bangladeshi. culture of Bangladeshi. b. Social Class b. Social Class – represents the social – represents the social standing one has within a society standing one has within a society based on such factors as income based on such factors as income level, education, occupation. level, education, occupation. Products and services of GrameenPhone Ltd reflect their concentration on different social class.
- 7. What Influences Purchasing What Influences Purchasing c. c. Family Family : Purchasing decision of a simple pain killer may : Purchasing decision of a simple pain killer may be guided by the family. be guided by the family. d. d. Reference groups Reference groups – most consumers simultaneously – most consumers simultaneously belong to many other groups with which they associate belong to many other groups with which they associate or, in some cases, feel the need to disassociate. or, in some cases, feel the need to disassociate. e. e. Situation: Situation: A purchase decision can be strongly affected A purchase decision can be strongly affected by the situation in which people find themselves by the situation in which people find themselves f. There are some other influential variables like, f. There are some other influential variables like, Profitability of the item, Discount deals available, Profitability of the item, Discount deals available, Advertising and promotion support programs, Free Advertising and promotion support programs, Free goods available, Personal buyer/seller relationships goods available, Personal buyer/seller relationships
- 8. What Influences Purchasing What Influences Purchasing Internal (psychological) External (sociological) culture social class reference groups family marketing mix needs motives wants awareness perception attitude preference b e h a vi o r learning personality Figure: Behavioral Model
- 9. Types of Buying Decision Behavior Types of Buying Decision Behavior High Involvement Low Involvement Significant differences between brands Complex Buying behavior Example, Car, PC Variety seeking buying behavior. Example, Cookies Few differences between brands Dissonance Reducing buying behavior. Example, Bank, private universities Habitual buying behavior. Example, Salt, Soft drinks
- 10. The Buyer Decision Process The Buyer Decision Process First stage: Need recognition First stage: Need recognition: In : In the first step the consumer has the first step the consumer has determined that for some reason determined that for some reason he/she is not satisfied (i.e., he/she is not satisfied (i.e., consumer’s perceived actual consumer’s perceived actual condition) and wants to improve condition) and wants to improve his/her situation (i.e., consumer’s his/her situation (i.e., consumer’s perceived desired condition). perceived desired condition). Second stage: Information search: Second stage: Information search: Assuming consumers are motivated Assuming consumers are motivated to satisfy his or her need, they will to satisfy his or her need, they will next undertake a search for next undertake a search for information on possible solutions information on possible solutions Third stage: Evaluation of Third stage: Evaluation of alternatives alternatives : : Consumers’ search Consumers’ search efforts may result in a set of options efforts may result in a set of options from which a choice can be made. from which a choice can be made. Fourth stage: Purchase decision: Fourth stage: Purchase decision: In many cases the solution chosen In many cases the solution chosen by the consumer is the same as the by the consumer is the same as the product whose evaluation is the product whose evaluation is the highest highest Fifth stage: Post purchase Fifth stage: Post purchase evaluation evaluation Figure: Consumer Buying Decision Process
- 11. Steps between evaluation of alternatives and Steps between evaluation of alternatives and a purchase decisions a purchase decisions Evaluation of alternatives Purchase intention Attitudes of others Unanticipated situational factors Purchase decisions
- 12. Buyer Behavior—New Products Buyer Behavior—New Products "A good, service or idea that is “perceived” by some potential "A good, service or idea that is “perceived” by some potential customers as new. It may have been available for some time, customers as new. It may have been available for some time, but many potential customers have not yet adopted the but many potential customers have not yet adopted the product nor decided to become a regular user of the product" product nor decided to become a regular user of the product" Research suggests that customers go through five stages in the Research suggests that customers go through five stages in the process of adopting a new product or service: these are process of adopting a new product or service: these are summarised below: summarised below: (1) Awareness (1) Awareness - the customer becomes aware of the new - the customer becomes aware of the new product, but lacks information about it product, but lacks information about it (2) Interest (2) Interest - the customer seeks information about the new - the customer seeks information about the new product product (3) Evaluation (3) Evaluation - the customer considers whether trying the new - the customer considers whether trying the new product makes sense product makes sense (4) Trial (4) Trial - the customer tries the new product on a limited or - the customer tries the new product on a limited or small scale to assess the value of the product small scale to assess the value of the product (5) Adoption (5) Adoption - the customer decides to make full and/or regular - the customer decides to make full and/or regular use of the new product use of the new product
- 13. Buyer Behavior—New Products Buyer Behavior—New Products Plasma TV is not still that much popular in Bangladesh due to its huge price line showing A slow adoption by the consumers Ten million copies of the new Harry Potter series were expected to be sold worldwide within 24 Hours. BBC News
- 14. Influence of product characteristics on Influence of product characteristics on rate of adoption rate of adoption 1. Relative advantage: 1. Relative advantage: It shows the It shows the degree to which the innovation degree to which the innovation appears superior to existing appears superior to existing products. Wheel soap is now products. Wheel soap is now available in a plastic transparent available in a plastic transparent package that may convince the package that may convince the people that its quality is now people that its quality is now more protected by plastic pack. more protected by plastic pack. 2. Compatibility 2. Compatibility: The degree to : The degree to which the innovation fits the which the innovation fits the values and experience of the values and experience of the potential customers. For potential customers. For example, people are now using example, people are now using handy cam because it is handy cam because it is portable. Instead of using portable. Instead of using machine cracked masala, office machine cracked masala, office going couple are using Radhuni going couple are using Radhuni Masala Mix that fits better with Masala Mix that fits better with their experience and their experience and expectations. expectations.
- 15. Influence of product characteristics on Influence of product characteristics on rate of adoption rate of adoption 3. Complexity: The degree to which the innovation is difficult to 3. Complexity: The degree to which the innovation is difficult to understand or use. The new product must be designed in a way understand or use. The new product must be designed in a way that consumer can use it easily. For example, consumers are that consumer can use it easily. For example, consumers are using shaving foam that is easier to use than shaving cream. using shaving foam that is easier to use than shaving cream. 4. Divisibility: The degree to which the innovation may be tried on a 4. Divisibility: The degree to which the innovation may be tried on a limited basis. To facilitate this the marketer must introduced limited basis. To facilitate this the marketer must introduced product in different sized pack. Igloo introduced “Kulfi Ice Cream” product in different sized pack. Igloo introduced “Kulfi Ice Cream” both in stick worth of taka 6 and in pack worth of taka 150. both in stick worth of taka 6 and in pack worth of taka 150. 5. Communicability: It shows the degree to which the results of using 5. Communicability: It shows the degree to which the results of using an innovation can be observed or described to others. People can an innovation can be observed or described to others. People can easily explain what are the new features and benefits in digital easily explain what are the new features and benefits in digital camera phone. How a Canon digital camera can make life easy in camera phone. How a Canon digital camera can make life easy in taking emotional moments can be easily communicated to others. taking emotional moments can be easily communicated to others.