Role of Consumer Buying Behavior in CRM

Consumer Behavior
The behavior that consumers display in
searching for, purchasing, using, evaluating,
and disposing of products and services that
they expect will satisfy their needs.
Personal Consumer
The individual who buys goods and services
for his or her own use, for household use,
for the use of a family member, or for a
friend.
Organizational Consumer
A business, government agency, or other
institution (profit or nonprofit) that buys the
goods, services, and/or equipment necessary
for the organization to function.
Factors influences the consumer behavior
Reference Group and Family References
Cultural
SocialClass
Cross-cultural
 Only those groups
with which a person
Reference interacted on a direct
Group basis (such as family
and close friends)
 Broad Categories of
Reference Groups
Normative Reference
Groups
Comparative
Reference Groups
 Individuals or groups
with whom a person
identifies but does not
Indirect
have direct face-to-face
Reference
contact, such as movie
Groups
stars, sports heroes,
political leaders, or TV
personalities.
Major Consumer Reference Groups
 The process by which
children acquire the
Consumer
skills, knowledge, and
Socialization
attitudes necessary to
function as consumers.
 Eight Roles in the Family Decision-Making Process

ROLE DESCRIPTION
Influencers Family member(s) who provide information to other members about a
product or service
Gatekeepers Family member(s) who control the flow of information about a product
or service into the family
Deciders Family member(s) with the power to decided by one or jointly whether
to shop for, purchase, use, consume, or dispose of a specific product or
service
Buyers Family member(s) who make the actual purchase of a particular product
or service
Preparers Family member(s) who transform the product into a form suitable for
consumption by other family members
Users Family member(s) who use or consume a particular product or service

Maintainers Family member(s) who service or repair the product so that it will
provide continued satisfaction.
Disposers Family member(s) who initiate or carry out the disposal or
discontinuation of a particular product or service
 The Family Life Cycle
Traditional Family Life Cycle

◦ Stage I: Bachelorhood( single adult living with parents)

◦ Stage II: Honeymooners(newly married couples)
◦ Stage III: Parenthood(married couple with at least one child
living at home
◦ Stage IV: Postparenthood( an older married couple with no
children living at home)
◦ Stage V: Dissolution( one surviving spouse)
 Factors influences the consumer
behavior

• Reference Group and Family

References
• Cultural
• Social class
• Cross-cultural
 The sum total of learned
beliefs, values, and
customs that serve to
Culture
regulate the consumer
behavior of members of
a particular society.
Culture divided in 3 categories
Supranational level-
When you cross national boundaries/cross
cultural boundaries.
National level-
when u share core value, customs, personalities,
other factors with in national.
Group level-
Various subdivisions of a country or society into
small groups.
Why we need Culture
 Culture satisfies needs of the people within a society. It
offer order, direction and guidance in all phase of human
problems. For example culture provide standards and
rules about when to eat, where to eat, what to eat, what
to wear, how to respect other, what is suitable dress at
which situation.
 Enculturation
◦ The learning of one’s own culture
 Acculturation
◦ The learning of a new or foreign culture
The Measurement of Culture
Content Analysis
Consumer Fieldwork
 A method for
systematically analyzing
the content of verbal,
Content written or symbolic
Analysis communication. The
method is frequently
used to determine current
social values of a society.
 A cultural measurement
technique that takes
place within a natural
Field environment that
Observation focuses on observing
behavior (sometimes
without the subjects’
awareness).
 Factors influences the consumer
behavior

• Reference Group and Family

References
• Cultural
• Social class
• Cross-cultural
 The division of
members of a society
into a hierarchy of
distinct status classes,
Social Class
so that members of
each class have either
higher or lower status
than members of other
classes.
The Consumption Patterns of Social Classes
 The Upper Class
◦ View themselves as thinker, liberal, political and socially aware. This
image leads to an increase in behaviours such as theater attendance,
investment in art, purchases of books, travel (esp. foreign), donations to
good causes, prestige schooling and membership in private clubs.

 The Middle Class

◦ Want to ‘do the right thing’, ‘buy what’s popular’, ‘do what’s good for the
children’ and ‘be fashionable’
◦ Likely to spend on education, shop at somewhat expensive clothing
stores with quality brand names, stick with liked brands, be concerned
about home furnishings and buy on credit

 The Working Class

◦ Mainly represented by blue-collar workers; heavy dependence on family
members for both economic and social support;
◦ More likely to judge product quality on the basis of price, shop in mass
merchandise or discount stores, and have less product information when
purchasing
 The Homeless
◦ Second-hand consumers because they consume what others have
disposed of
Percent Distribution of Five-Category
Social-Class Measure

SOCIAL CLASSES PERCENTAGE

Upper 4.3
Upper-middle 13.8
Middle 32.8
Working 16.8
Lower 32.3
Total percentage 100.0
Social Class Measurement

 Subjective Measures
 individuals are asked to estimate their own social-class
positions

 Objective Measures
 individuals answer specific socioeconomic questions and
then are categorized according to answers
 Objective Measures
Single-variable Composite-variable
indexes indexes
◦ Occupation ◦ Index of Status
◦ Education Characteristics
◦ Income ◦ Socioeconomic Status
◦ Other Variables Score
 ISC measure 4
socioeconomic
variables:
occupation,
Index of Status source of income
Characteristics (not amount of
(ISC) income),
house type,
dwelling
area(quality of
neighborhood)
 SES which combines 3
basic socioeconomic
Socioeconomic
variables:
Status Score
family occupation,
(SES) family income, and
family education
The Affluent Consumer
Especially attractive target by
marketers

Growing number of households can

be classified as “mass affluent” with
incomes of at least Rs 50,000

Different lifestyle and psychographic

factors in addition to income
Have different buying habits than the
general population
 What Is the Middle Class?
 In “middle” class 50 percent of family members
involve in earnings

Households made up of college-educated adults who

use computers, and are involved in children’s education
There is evidence that the middle class is slowly
disappearing in the Developed countries.

Growth of middle class in some Asian and Eastern

European countries

Many companies offering luxury products for

middle class point of view
The Techno Class
Having competency with technology

Parentsare seeking computer

exposure for their children

Highlyinvolved in internet based

shopping

Dependable on using Cards shopping

 A distinct cultural group
that exists as an
Subculture particular segment
within a larger, more
complex society.
 parameter for Major Subcultural
Categories
CATEGORIES EXAMPLES
Nationality Indian, Pakistani, Afgani, Irani,
Religion Hindu, Muslim, Sikh, Christian
Geographic region Eastern, Southern, western, Northern

Race Bihari, Poorvi, Himachali, Kashmiri,

Punjabi, orria,
Age Teenagers, Adults, Elderly
Gender Female, male
Occupation Driver, cook, scientist, teacher,
Social class Govt/Pvt Govt/Pvt
Lower, middle, Job
upper
 Religious Subcultures
 200+ organized religious groups in the India
 Primary organized faiths include:
 Diwali
 Christmas
 Id
 Gurupurab
 Pongal
 Chaath puja
 Consumer behavior is directly affected by religion in terms of
products that are symbolically and ritualistically associated with
the celebration of religious holidays.
Regional Subcultures
 Many regional differences exist in
consumption behavior
 Southern people have a rice and sambhar
(AP, TN, Kerala)
 Westerners have dishes with of sweetness
(MH, Gujarat, Goa)
 Fish and Chicken are commonly consumed in the
Eastern part of India
(WB, Assam, Orissa)
 pulse and whole wheat are preferred on the Northern
people
Major Age Subcultures

Generation X Generation Y
Market Market

Seniors Baby Boomer

Market Market
 Individuals born
between 1946
Baby and 1964
Boomers (approximately 45
percent of the
adult population).
 Born between 1965
and 1979; post baby
boomer segment (also
Generation X
referred to as Adults
or busters
Consumers).
 Born between 1977
and 1994; also called
Generation
echo boomers and
Y
millennium
generation.
 Buyer Decision Process

Need
Need Information
Information Evaluation
Evaluationofof Purchase
Purchase Postpurchase
Postpurchase
recognition
recognition search
search alternatives
alternatives decision
decision behavior
behavior
 Need Recognition & Information Search
 Theneed can be triggered by internal stimuli when one of the
person’s normal needs – hunger, thirst, to a level high enough to
become a drive.
 A needcan also be triggered by external stimuli. e.g. word-of-
mouth, advertisements.
 Postpurchase Behavior
 The answer to whether the buyer is satisfied or dissatisfied with a
purchase lies in the relationship between the consumer’s
expectations and the product’s performance.

 Company’s sales come from two basic groups – new customers and
retained customers.
 A satisfied customer tell 3 people about a good product experience,
a dissatisfied customer gripes to 11 people.
 Some 96 percent of unhappy customers never tell the company
about their problem.
 Major Types of Buying Situation

 Straight rebuy – a business buying situation in which the buyer

routinely reorders something without any modifications.

 Modified rebuy – a business buying situation in which the buyer

wants to modify product specifications, prices, terms, or suppliers.

 New task – a business buying situation in which the buyer

purchases a product or service for the first time.
Time of adoption of innovation
Innovators
Early Adopter
Early Majority
Late Majority
laggards