Buyer Behavior

Prof. Sushant Nanda

Learning Goals
1. Define market and construct a model of
Consumer/ Business buyer behavior
2. Name the factors that influence buyer
behavior
3. List and understand the types of buying
decision behavior and stages in the process
4. Show how consumer behaviour relates to
marketing decision-making.
 Caselet : Levis jeans.
 The marketer has to learn about the needs and changing of
the consumer behaviour and practice the Marketing Concept. Levi
strauss & Co. were selling jeans to a mass market and did not
bother about segmenting the market till their sales went down.
 The study into consumer behaviour showed their greatest
market of the baby-boomers had outgrown and their NEEDs had
changed. They therefore came out with Khaki or dockers to
different segments and comfortable action stocks for the
consumers in the 50 age group.
 Thus by separating the market and targetting various groups and
fulfilling their needs, they not only made up for the lost sales but
far exceeded the previous sales.
 They also targeted the women consumers for jeans and both men
and women started wearing jeans in greater numbers. The offering
given by the company must be enlarged to suit various segments .

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The different Cohorts
“ Understanding different generation of consumers gives marketers
a way of researching buying habits and will aid in forecasting future
product trends and that may apply to future promotional strategies”.
Schewee and Meredith.
An age cohort consisting of similar ages have similar experiences –
“Soloman -2010
P1 “:Baby busters are less likely than baby boomers to model
themselves after parental consumption pattern
 P2 “ baby busters are more likely than boomers to use TV advts for
their consumption pattern
 P3: Baby busters are more likely to model themselves peer

consumption pattern. Advances in Consumer Research Volume 21, 1994

Pages 470-476 COHORT GENERATIONAL INFLUENCES ON CONSUMER
SOCIALIZATION ,Aric Rindfleisch, University of Wisconsin-Madison
“Gen X more family oriented and casual lives”. Foley & Lefever 2001.
Gen Y is believed to be more optimistic and entrepreneurial.
Galagon, 2006.
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 Some examples of age cohorts are Baby Boomers,
Generation X , and Generation Y.

 Baby Boomers are people who were born between 1946

and 1964.(Light1988,Mills1997) Iyer R & Resienitz T-2009
 (referred to as the Me generation: returned from world war II,
produced lot of children)

 People born between 1965 and 1985 are considered

Generation X,

 while people born between 1986 and 2002 are considered

members of Generation Y (Solomon, 2010).

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Definitions
 Consumer behaviour is the activities people undertake when
obtaining, consuming and disposing of products and services.
(Blackwell et al. 2001)
 Critics of Marketing Mix : These are the things done to the
consumer rather than for the consumer.
 We talk about consumption of promotion. Transactional
relationships are giving way to relationship. Micro aspects of
Mktg.
 a child who promises to keep his room tidy in exchange for a
new video game is clearly obtaining a product, but this is not
usually regarded as part of a study of consumer behaviour.
 Other issues in the ‘obtaining’ category might include the
ways in which people pay for the products (cash, credit card,
bank loan, hire purchase, interest-free credit,and so forth),
whether the product is for themselves or is a gift, how the new
owner takes the purchases home, and how the decisions are
affected by branding, and by social elements such as the
respect of friends. Ref: meta-marketing by Sawney.
May we now define CB as a decision making
process and physical activity involved in
searching,acquiring, evaluating,
consuming/using, and disposing of goods
and services.
It is not only what and how much but where
and when depends on perception, self
concept, social and cultural background,
age, family cycle, attitudes, beliefs & values,
motivation, personality, social class and
many other factors.

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Model of Buyer Behavior
Customer Value Perception
Attitudes/Needs

culture

Emotions Sub
culture Situations

Percept
ions Problem Recognition
Values
Lea Consumer
rni Information
Processing Information Search
ng
me Social
mo status Evaluation/Selection
ries
Referenc
Motives Personali e groups Outlet selection &
ty Purchase

Demogra Post Purchase evaluation

phics
Experiences
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 Consumer problem:
 Discrepancy between ideal and actual state--e.g.,
consumer:
 Has insufficient hair
 Is hungry
 Has run out of ink in his or her inkjet cartridge

 Problems can be solved in several ways--e.g.,

stress reduction <----- vacation, movie, hot bath, medication
CONSUMER DECISIONS:
Theory and Reality in Consumer Buying

PROBLEM
RECOGNITION
INFORMATION
SEARCH

EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/ Theory
BEHAVIORS
Complications
Options Identified and Considered

UNIVERSAL SET
All possible options

RETRIEVED SET
Options that readily
come to mind

EVOKED SET
Options that will be
considered by the
consumer

Note: Retrieved and evoked sets will vary among different consumers
Routinized Response Behavior

The consumer problem-solving process

used when purchasing frequently
purchased, low-cost items needing very
little search-and-decision effort.

(consumer heuristics)
Limited Problem Solving

The consumer problem-solving process

employed when buying occasionally or
when they need to obtain information
about an unfamiliar brand in a familiar
product category.
Extended Problem Solving

A consumer problem-solving process

employed when purchasing unfamiliar,
expensive, or infrequently bought products.
Impulse Buying

An unplanned buying behavior resulting

from a powerful urge to buy something
immediately.
Consumer Buying Decision Process/Possible
Influences on the Process
Problem Recognition

Difference between desired state and

actual condition.
Aspects Of Information Search

 Internal Search
 External Search
Internal Search

An information search in which buyers

search their memories for information about
their products that might solve their problem.
External Search

An information search in which buyers seek

information from sources other than memory.
Evaluation Of Alternatives

 Consideration Set
 Evaluative Criteria
 Framing Alternatives
 Cognitive Dissonance
• A buyer’s doubts shortly after a purchase about whether the decision
was the right one.

• Psychologists refer to this vulnerability as the "willful suspension of

disbelief,“

• Cognitive dissonance most often occurs after the purchase of an

expensive item such as an automobile. A consumer who is
experiencing cognitive dissonance after his or her purchase may
attempt to return the product or may seek positive information about it
to justify the choice.

• If the buyer is unable to justify the purchase, he or she will also be less
likely to purchase that brand again. Advertisers of high-priced durable
goods say that half of their advertising is done to reassure consumers
that in purchasing their product the right choice was made
• What is Cognitive Dissonance?

• Simply put, cognitive dissonance theory states that when you have two
opposing ideas (or ideologies) at the same time, you will act upon the one that
causes the less distortion to your ego.

• When "Robbie" the robot was told to shoot a weapon at a man in the movie
Forbidden Planet, his electronic brain sparked and short-circuited. His creator
had programmed him to never harm a human and so the conflicting ideas
paralyzed him.

• Human beings often are presented with opposing thoughts also, but our brains
have developed a way of resolving these conflicts through a process call
cognitive dissonance.

• We are taught, like "Robbie," that killing is prohibited -- but what about war?
And many anti-abortionists support the death penalty... conflicting behavior is
all around us. So how exactly does that work?
Situational Influences

Influences resulting from circumstances, time,

and location that affect the consumer buying
decision process.
Categories Of Situational Factors
 Physical Surroundings
 Social Surroundings
 Time Perspective
 Reason For Purchase
 Buyer’s Mood/Condition
Psychological Influences

Factors that in part determine people’s

general behavior, thus influencing their
behavior as consumers.
Types Of Perception

 Information Inputs
 Selective Exposure
 Selective Distortion
 Selective Retention
Motives

An internal energizing force that directs a

person’s behavior toward satisfying needs or
achieving goals.

Motive for buying organic foods

Attitude

An individual’s enduring evaluation of

feelings about and behavioral tendencies
toward an object or idea.
Components Of Attitude

 Cognitive- knowledge or information

 Affective- feelings or emotions
 Behavioral- actions regarding object
or idea
Personality And Self-Concept

 Personality – internal traits and

behavioral tendencies
 Self-Concept – perception or view
of oneself
Lifestyle

An individual’s pattern of living expressed

through activities, interests, and opinions.

Examples: Villas/townships/spas/luxury
hotels
Lifestyle Affected By:

 Age
 Education
 Income
 Social Class
Role

Actions and activities that a person in a

particular position is supposed to perform
based on expectations of the individual
and surrounding persons.
Consumer Socialization

The process through which a person

acquires the knowledge and skills to
function as a consumer.
Types Of Family Decisionmaking
Reference Group

A group that a person identifies with

so strongly that he or she adopts the
values, attitudes, and behavior of
group members.
Types Of Reference Groups

1. Membership
2. Primary
3. Secondary
4. Aspirational
5. Disssociative
Opinion Leader

A member of an informal group who provides

information about a specific topic to other
group members.
Opinion Leaders And Topics
Social Class

An open group of individuals with similar

social rank.
Social Class
Behavioral
Traits/Purchasin
g
Characteristics
Culture

• A learned behaviour

• The accumulation of values,

knowledge, beliefs, customs, objects,
and concepts of a society.
Subcultures

A group of individuals whose characteristic

values (religion, etc.) and behavior patterns
are similar and different from those of the
surrounding culture.
Ethnic Subcultures

 African American
 Hispanic
 Asian American
 Describe the Indian Sub Cultures
Characteristics Affecting
Consumer Behavior
 Age and life cycle
Key Factors  Occupation
 Economic situation
 Cultural  Lifestyle
Activities, interests and
 Social opinions
 Personal Lifestyle segmentation

 Psychological  Personality and self-concept

Stages in family life cycle:

1.bachelor stage

2.newly married couples, no children

3.full nest 1; youngest child under 6

4.full nest 2; youngest child 6 or over

5. full nest 3; older married couples with dependent children

6.empty nest 1; older married couples no children with them

7. empty nest 1; older married couples no children at home;retired

8.solitary survivor, working

9.solitary survivor, retired

Personal Factors

 Personality ğ a person’s unique

characteristics that lead to relatively consistent
and lasting responses to his environment

 Self-concept ğ the self image or general

picture that people have of themselves
Values and Lifestyles (VALS)

Actualizers
Actualizers High Innovation
High Resources

Fulfilleds
Fulfilleds Achievers
Achievers Experiencers
Experiencers

Believers
Believers Strivers
Strivers Makers
Makers

Strugglers
Strugglers
Low Resources Low Innovation
Brand Personality Dimensions

 Sincerity  Excitement
 Ruggedness  Competence
 Sophistication
Characteristics Affecting Consumer
Behavior
 Motivation
Key Factors  Perception
 Learning
 Cultural
 Beliefs and attitudes
 Social
 Personal
 Psychological
Maslow’s Hierarchy of Needs
This ad
demonstrates a
product meeting
physiological
and social
needs
Discussion
What consumer
products might fulfill
multiple levels of the
Hierarchy of Needs?
Psychological Factors
Perception
 Perception is the process by which people select,
organize, and interpret information.
 Perception Includes:
 Selective attention
 Consumers screen out information
 Selective distortion
 People interpret to support beliefs
 Selective retention
 People retain points to support attitudes
Psychological Factors
Learning
 Learning describes changes in an individual’s
behavior arising from experience
 Learning occurs through
 Drives
 Internal stimulus that calls for action
 Stimuli
 Objects that move drive to motive
 Cues
 Minor stimuli that affect response
 Reinforcement
 Feedback on action
Psychological Factors Beliefs
and Attitudes
 Belief
a descriptive thought about a brand or service
 may be based on real knowledge, opinion, or
faith
 Attitude
 describes a person’s evaluations, feelings and
tendencies toward an object or idea
 They are difficult to change
Types of Buying
Decision Behavior
 The Buying Roles
 5 roles people might play in a buying decision
 Initiatorğ who first gives the idea of buying the
product or service
 Influencer ğwhose view or advice influences the
decision
 Decider ğwho decide on any component of buying
decision
 Buyer ğwho makes the actual purchase
 User ğwho uses the product or sevice purchased
The Buyer Decision Process
Decision Making Sets

Total
Set Aware-
Consid-
ness
eration Choice
Set
Set Set Decision
The Buyer Decision
Process
 Needs can be triggered by:
Process  Internal stimuli


Stages
Need recognition
 Normal needs become

strong enough to drive

 Information search behavior
 External stimuli
 Evaluation of
 Advertisements
alternatives
 Friends of friends
 Purchase decision
 Postpurchase behavior
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The Buyer Decision
Process
 Consumers exhibit
Process heightened attention or
actively search for

Stages
Need recognition information
 Information search
 Sources of information:
 Personal
 Evaluation of
alternatives  Commercial
 Purchase decision  Public
 Postpurchase behavior  Experiential
 Word-of-mouth
Information Search

Personal
Personal Sources
Sources •Family, friends, neighbors
•Most effective source of
information
Commercial
Commercial Sources
Sources •Advertising, salespeople
•Receives most information
from these sources

Public
Public Sources
Sources •Mass Media
•Consumer-rating groups

•Handling the product

Experiential
Experiential Sources
Sources •Examining the product
•Using the product
The Buyer Decision
Process
 Evaluation procedure
Process depends on the consumer


Stages
Need recognition
and the buying situation.
 Most buyers evaluate
 Information search multiple attributes, each of
 Evaluation of which is weighted
alternatives differently.
 Purchase decision  At the end of the evaluation
 Postpurchase behavior stage, purchase intentions
are formed.
Evaluation of Alternatives

Consumer
Consumer MayMay Use
Use Careful
Careful
Calculations
Calculations && Logical
Logical Thinking
Thinking
Consumers
Consumers May
May Buy
Buy on
on Impulse
Impulse and
and
Rely
Rely on
on Intuition
Intuition
Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
on
on Their
Their Own.
Own.
Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
Only
Only After
After Consulting Others..
Consulting Others

Marketers Must Study Buyers to Find Out

How They Evaluate Brand Alternatives
Buyer Decision Process for
New Products

 New Products
 Good, service or idea that is perceived by
customers as new.
 Stages in the Adoption Process
 Marketers should help consumers move
through these stages.
 Stages in the Adoption Process
Awareness
Awareness::Consumer
Consumer isisaware
awareof
of
product,
product,but
butlacks
lacks information.
information.
Interest
Interest:: Consumer
Consumer seeks
seeks
Information
Informationabout
aboutnew
new product.
product.

Evaluation
Evaluation::Consumer
Consumerconsiders
considers
trying
tryingnew
new product.
product.
Trial: Consumer tries new
product on a small scale.

Adoption: Consumer decides

to make regular use of product.
Buyer Decision Process for
New Products

 Individual Differences in Innovativeness:

 Consumers can be classified into five

adopter categories, each of which behaves
differently toward new products
Adopter Categories
Percentage of Adopters

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5%
Early Time of Adoption Late
Buyer Decision Process for
New Products
 Product Characteristics influencing the adoption rate:

 Relative Advantage ğ Is the innovation superior to

existing products?
 Compatibility ğ Does the innovation fit the values and
experience of the target market?
 Complexity ğ Is the innovation difficult to understand
or use?
 Divisibility ğ Can the innovation be used on a trial
basis?
 Communicability ğ Can results be easily observed or
described to others?