Analyzing

Consumer
Markets
PROF DEVASHISH
IIM LUCKNOW
 Significance
 Key to survival of a firm What to Focus Upon
 Helps understand Why Consumers  How consumers think and feel
buy products
about different alternatives (brands,
 What is their expectations
 Helps in understanding the logic of products, services, and retailers)
dealer behaviour  How consumers reason and select
 Its key to marketing strategy success
Why & What  Helps in predicting future market
trends
between different alternatives
 The behaviour of consumers while
researching and shopping
 Helps in retention of customers and
thus maintaining profitability  How consumer behaviour is
 Helps in strategic brand management influenced by their environment
and Positioning strategy (peers, culture, media)
 How marketing campaigns can be
adapted and improved to more
effectively influence the consumer
 Model Of Consumer Behavior

Add 4 Cs PEST
Key
Psychological
Processes
Influencing
Consumer’s
Behaviour
Key Psychological Processes
 Motivation
 A need becomes a motive when it is aroused to a sufficient level of intensity to drive us to act
motivation
Maslow’s Herzberg’s
Freud’s Hierarchy Two-Factor
Theory of Needs Theory

Behavior Behavior Behavior is

is guided by is driven by guided by
subconscious lowest, dissatisfiers
motivations unmet need and
satisfiers
Figure 6.2
Maslow’s Hierarchy Of Needs
Key Psychological Processes
 Perception
 The process by which we select,
organize, and interpret information
inputs to create a meaningful picture
of the world
perception
Selective attention

Selective distortion

Selective retention

Subliminal perception
Key Psychological Processes
 Learning
 Induces changes in our behavior arising from experience
 Drive and cues
 Generalization and discrimination
Key Psychological Processes
 Emotions

 Many different kinds of emotions

can be linked to brands
Key Psychological Processes
 Memory
 Short-term vs. long-term memory
 Associative network memory model
 Brand associations
 Memory encoding
 Memory retrieval
The Buying
Decision Process
 The consumer typically passes through five
stages
 Problem recognition
 Information search
 Evaluation of alternatives
 Purchase decision
 Postpurchase behavior
The Buying
Decision Process
 Problem recognition
 The buyer recognizes a problem/need triggered by internal/external stimuli
The Buying
Decision Process
 Information search

 Personal sources
 Commercial sources
 Public sources
 Experiential sources
Figure 6.5
Sets Involved In Decision Making
The Buying
Decision Process
 Evaluation of alternatives
 Expectancy-value model
The Buying
Decision Process
 Purchase decision
 Compensatory vs. noncompensatory models

Conjunctive heuristic

Lexicographic heuristic

Elimination-by-aspects heuristic
Intervening factors
Types of perceived risk
Functional
Physical risk
risk

Time risk Financial risk

Psychological
Social risk
risk
The Buying
Decision Process
 Postpurchase behavior
 Postpurchase satisfaction

 Postpurchase actions

 Postpurchase uses and disposal

Customer Product Use/Disposal
Moderating Effects on Consumer Decision
Making
 Low-involvement Consumer Decision Making
 Variety-Seeking Buying Behavior
1.Predictably Irrational: The Hidden Forces That Shape Our Decisions (Hardcover) by Dan Ariely
2.Influence: The Psychology of Persuasion (Paperback) by Robert B. Cialdini
3.The Power of Habit: Why We Do What We Do in Life and Business (Hardcover) by Charles
Duhigg
4.Blink: The Power of Thinking Without Thinking (Paperback) by Malcolm Gladwell
5.Hooked: How to Build Habit-Forming Products (Hardcover) by Nir Eyal
6.Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior
by Pamela Danziger
7.The Culture Code: An Ingenious Way to Understand Why People Around the World Buy and
Live as They Do by Clotaire Rapaille
8.Decoding the Irrational Consumer: How to Commission, Run and Generate Insights from
Neuromarketing Research by Darren Bridger
9.Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink
10.Drunk Tank Pink: And Other Unexpected Forces that Shape How We Think, Feel, and
Behave by Adam Alter

RECOMMENDED BOOKS FOR

ADDITIONAL READING ON CONSUMER
BEHAVIOUR
Thank you