Consumer Behaviour Unit 3.ppt
- 1. Consumer Behaviour UNIT III PGDM Batch 2020-22 Dr Arpita Srivastava 1
- 2. Learning Objectives After studying this chapter, you should be able to: •Classify customer value •Analyze the characteristics of customer value •Understand the concept of customer satisfaction and customer delight •Learn the basics of consumer behavior • Factors effecting Consumer Behaviour
- 3. Few Jargons • Customer value and satisfaction. • Total Customer Value, economic, functional and psychological benefits, • Total customer cost, • Customer roles, Payer, User, Gate Keeper • Perceived Value, Benefits, Consumers,
- 5. • A customer expects different kinds of benefits in purchasing a product. • The basic benefit is the feature or physical product benefit. • When he is buying a brand, he is also getting some amount of brand and company name benefits. • Emotional Benefit: Benefits that are specifically attached to brands, their particular features, and advertising, which arouses the customer’s interest in buying that product or availing the services. • Made in India, Cadbury Chocolates, Tanishq, Malabar, Kalyan Jewellers 02-09-2022 Consumer Benefits Expectations
- 6. • Service Benefit: Benefit derived from a service which provide the customer time, place and ease of task as the convenience in form of benefit. - LG India, ATM (24*7), Paytm, Airtel Payment Bank etc. • Performance Benefits: Benefits on the basis of which a customer can measure the value of product. Customer lays various attributes of a product based on which he compares his purchase with the ones of competitor. Those attributes defines the performance of the product. • Asian Paints, Uflex wires, Syka Lighting Solutions 02-09-2022 Consumer Benefits Expectations
- 7. • Brand/Company Benefits: The benefits offered by the company’s brand name, symbols, product attributes, and the distinct features which make the product/service distinct from that of competitors product is the brand/company benefit. • McDonalds, Starbucks, A TATA Product, Michael Kors • Product Benefit: Actual factor of product i.e. its design, usage and performance and the perceived factors of a product i.e. its brand image, popularity etc. when satisfies customer’s needs and wants is termed as product benefit. 02-09-2022 Consumer Benefits Expectations
- 10. • Value is defined as the net of customer’s expected benefits over the cost of the product or services • Customer Delivered Value • It is the difference between total customer value and the total customer cost. Total customer value is the bundle of benefits that customers expect form given product or service. • Total Customer Cost • It is the bundle of costs customer expect to incur in evaluating, obtaining, using, and disposing of the product or service. 02-09-2022 Value, Customer Value
- 11. • Customer choices rests on following premises; • Consumer choice is a function of a small number of consumption values. • Specific consumption values make differential contributions in any given choice of situations. • All the consumption values are independent of each other. 02-09-2022 Rationale for Consumer Choices
- 12. • Value is also defined as a quantitative measure of the power one good or service has to attract another good or service in an exchange. But this definition is very primitive and is defined in the context of a physical exchange, known as barter system. • Customer value is summarized as ‘the be all and the end all’ of business activity; the only purpose of all organizations, all business enterprises. It is the only path for sustained growth and for winning the battle for market leadership. A market value is the potential of a product or service to satisfy consumer needs and wants. Customer value is created only if the product or service has the capability to satisfy a customer’s needs and wants. A product may be very valuable for one customer and less for another, so it is difficult to standardize the offer for all. The marketer can look at majority of customers and create a customer context to make the product more valuable. 02-09-2022 Value & Customer Value
- 13. • Functional Value: The functional value of a consumer choice is the perceived functional, utilitarian or physical performance utility received from the choice product’s attributes. It is associated with economic utility theory, popularly expressed in terms of rational economic reason. At the heart of such a value definition is the set of attributes like reliability, durability and price. • Toothpaste, Any smart mobile phone, Milk, Soap 02-09-2022 Consumer Value Classification
- 14. • Social Value: The social value of a choice is the perceived utility acquired because of the associations between one or more specific social groups and consumer choice. A consumer’s choice gains social value by being linked with positively or negatively stereotyped demographic socio-economic and cultural- ethnic groups i.e. reference groups. • Choices involving highly visible products like bicycles and food, and services to be socially shared like gifts, products used in entertainment are often driven by social values. 02-09-2022 Consumer Value Classification
- 15. • Emotional Value: The emotional value of a choice is the perceived utility acquired from its capacity to stimulate the consumer’s emotions or feelings. A choice acquires emotional value when associated with specific feelings or when it triggers or sustains those feelings. Products and services are frequently associated with emotional responses. What can be the emotional value associated with a detergent cake? It is definitely related to the health of the consumer’s children and the protection that it provides to his/her family members. - A consumer buying ‘Dettol’ or ‘Lifebuoy’ soap in lieu of safeguarding the health of his children is an emotional value of the product. 02-09-2022 Consumer Value Classification
- 16. • Epistemic Value: The epistemic value of a choice is the perceived utility that comes from the choice’s ability to foster curiosity, provide novelty and satisfy a desire for knowledge. • New purchase and consumption experiences, especially, offer epistemic value. However, even a simple change like a shift from one ice cream flavor to another also provides the consumer with epistemic value. Since all new products provide some novelty, marketers should try to build some novelty around the product. - Milk, flavored milk, yoghurt, fruit flavored yoghurt. 02-09-2022 Consumer Value Classification
- 17. • Conditional value: Conditional value of a choice is the perceived utility acquired by a choice as an outcome of some particular situation or circumstances facing the customer. • Products associated with a particular time or event like coffee at breakfast. - Sunscreen lotion, Body lotion, Visit to hospital in case of medical emergency, Chyawanprash, sanitizers, 02-09-2022
- 19. • The value expectation may undergo a change depending on what role the consumer is playing. • According to Seth and Mittal, customers can play three roles namely user, payer and customer. • The user is the person who actually consumes the product or receives the benefits of the product and service. • The payer is the person who finances the purchase and the buyer is the person who participates in the procurement of the product from the marketplace. • Each of these roles may be carried out by same person or can be done by different people. • A person can be a buyer for the family and pay the money whereas a child may be the user of the product. • Marketers are aware about such roles and target their marketing programs to each of the roles. Customer value can be classified on the basis of customer roles and values. 02-09-2022 Consumer Role
- 20. 02-09-2022 Classification on Values and Customer Roles
- 21. • Customer profitability (CP) is the profit the firm makes from serving a customer or customer group over a specified period of time, specifically the difference between the revenues earned from and the costs associated with the customer relationship in a specified period. • The specific amount of profit you stand to gain from each of your customer groups or personas is known as customer profitability. • https://www.youtube.com/watch?v=F_MhHzVRf5k 02-09-2022 Customer profitability (CP)
- 22. • Let's imagine two customers, Parag and Prayas and pretend you sell a particularly Sugar Free Juice “SugNil”. • Parag buys your “SugNil” in bulk — so much so that you wonder if he's using it recreationally or something because nobody has that many juice pack requirement. He's never returned an order and he rarely calls customer support. He's a low maintenance, loyal customer. • Prayas, on the other hand, buys his orders in small quantities. He prefers several tiny, individual boxes of “SugNil” as opposed to larger orders — more than half of which he returns immediately. He's constantly calling customer support about how to keep the juices fresh till long." In all, Prayas is a loyal customer, but his loyalty isn't cheap. • You, the “SugNil” mogul, stand to make more money from one of those customers than the other. If their buying patterns hold true, Who is a more valuable customer and Why???. 02-09-2022 Lets Understand CP
- 24. Consumer Advocacy • https://www.youtube.com/watch?v=bd55n4FwaRs • https://www.youtube.com/watch?v=JJcD-bE6uHg
- 25. Consumer Behavior 25 Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services, also includes factors that influence purchase decisions and the product use.
- 26. 26 Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW
- 27. Consumer Decision-Making Process 27 A five-step process used by consumers when buying goods or services.
- 28. Consumer Decision-Making Process 28 Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps
- 29. Need Recognition 29 Result of imbalance between actual and desire states.
- 30. Need Recognition 30 Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State
- 31. Recognition of Unfulfilled Wants • When a current product isn’t performing properly • When the consumer is running out of a product • When another product seems superior to the one currently used 31
- 32. Information Search 32 Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled
- 33. External Information Searches 33 Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence Less Risk More knowledge More product experience Low level of interest Confidence in decision Need Less Information
- 34. Evoked Set 34 Group of brands resulting from an information search, from which a buyer can choose.
- 35. Evaluation of Alternatives and Purchase 35 Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria
- 36. Purchase 36 To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice
- 37. 37 Consumer Decision-Making Process CULTURAL SOCIAL PSYCHOLOGICAL INDIVIDUAL Need Recognition 1 Information Search 2 Evaluate Alternatives 3 Purchase 4
- 38. Postpurchase Behavior 38 Explain the consumer’s postpurchase evaluation process.
- 39. Cognitive Dissonance 39 Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.
- 40. Postpurchase Behavior Consumers can reduce dissonance by: • Seeking information that reinforces positive ideas about the purchase • Avoiding information that contradicts the purchase decision • Revoking the original decision by returning the product 40 Marketers can minimize through: Effective Communication Follow-up Guarantees Warranties Service during and after the sale
- 41. Consumer Buying Decisions and Consumer Involvement 41 More Involvement Less Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making
- 42. Five Factors of Consumer Involvement 42 1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered
- 43. Continuum of Consumer Buying Decisions 43
- 44. Routine Response Behavior • Little involvement in selection process • Frequently purchased low cost goods • May stick with one brand • Buy first/evaluate later • Quick decision 44
- 45. Limited Decision Making • Low levels of involvement • Low to moderate cost goods • Evaluation of a few alternative brands • Short to moderate time to decide 45
- 46. Extensive Decision Making • High levels of involvement • High cost goods • Evaluation of many brands • Long time to decide • May experience cognitive dissonance 46
- 47. Factors Determining the Level of Consumer Involvement 47 Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience
- 48. Marketing Implications of Involvement 48 High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers
- 49. Factors Influencing Buying Decisions 49 Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY
- 50. Cultural Influences on Consumer Buying Decisions 50 Identify and understand the cultural factors that affect consumer buying decisions.
- 51. Culture 51 Sets of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next.
- 53. Culture is. . . 53 Learned Functional Pervasive Dynamic
- 54. Value 54 Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.
- 56. Subculture 56 Subculture- A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.
- 57. Social Class 57 A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms.
- 58. Social Class Measurements 58 Wealth Other Variables Income Education Occupation
- 59. The Impact of Social Class on Marketing 1. Indicates which medium to use for advertising 2. Helps determine the best distribution for products 59
- 60. Social Influences on Consumer Buying Decisions 60 Identify and understand the social factors that affect consumer buying decisions.
- 62. Reference Group 62 A group in society that influences an individual’s purchasing behavior.
- 63. Reference Groups 63 Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational
- 64. Influences of Reference Groups 1. They serve as information sources and influence perceptions. 2. They affect an individual’s aspiration levels. 3. Their norms either constrain or stimulate consumer behavior. 64
- 65. Opinion Leaders 65 An individual who influences the opinion of others.
- 66. Opinion Leaders 66 Teenagers Movie stars Sports figures Celebrities Marketers are looking to Web logs, or blogs, to find opinion leaders
- 67. Family 67 Initiators Influencers Decision Makers Purchasers Consumers Purchase Process Roles in the Family
- 68. 68 Social Factors Direct Indirect Reference Groups Primary Secondary Aspirational Nonaspirational Opinion Leaders People you know Socialization Process Family Celebrities Initiators Decision Makers Consumers Influencers Purchasers
- 69. Individual Influences on Consumer Buying Decisions 69 Identify and understand the individual factors that affect consumer buying decisions.
- 71. Psychological Influences on Consumer Buying Decisions 71 Identify and understand the psychological factors that affect consumer buying decisions.
- 72. Psychological Influences Perception Motivation Learning Beliefs & Attitudes Copyright 2012 by Cengage Learning Inc. All Rights Reserved
- 73. Perception 73 The process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.
- 75. Motivation 75 Maslow’s Hierarchy of Needs- A method of classifying human needs and motivations into five categories in ascending order of importance.
- 76. Maslow’s Hierarchy of Needs 76
- 77. Types of Learning 77 Experiential Conceptual An experience changes behavior Not learned through direct experience
- 78. Beliefs and Attitudes 78 Belief Attitude An organized pattern of knowledge that an individual holds as true about his or her world. A learned tendency to respond consistently toward a given object.
- 79. 79 Psychological Factors Learning Stimulus Generalization Stimulus Discrimination Selective Exposure Perception Selective Retention Selective Exposure Needs Motivation Psychological Esteem Safety Social Self- Actualization Beliefs & Attitudes Changing Beliefs about Attributes Changing Importance of Beliefs Adding New Beliefs
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