Consumer Purchase Behavior

Consumer Purchase Behavior

 Why and how consumer make purchasing decisions

 ‘Buyer Behavior Story’ – to improve customer experience

 Help understand unique customer base – how to attract, engage and retain
them
Why Consumer Behavior Analysis is
Important
 Predicting Customer Value

 Personalizing customer experience

 Improving customer retention

Consumer Decision
Making Model
By Schiffman & Kanuk,
2004
Engel-Kollat Blakwell Model - Buyer Decision Making
process
Gary Armstrong and Philip Kotler Model Outcome analysis
/Post Purchase
Behavior
Purchase
Decision
Evaluation of
Alternatives • Service –
satisfaction and
• Collective for dissatisfaction
Information high ticket • Repeat purchase
Processing products
• Personal Sources
• Commercial
Need Recognition channels
• Experiential
• Digital Media
• Exposure
• Aspiration
• Marketers
 Information Search
 Primarily from personal sources depending less on commercial sources

 Also depends on experiential sources. Exhibitions and trade shows help.

 In case of “high involvement” products visit to a company outlet is essential.

 Marketers induce product trials, sampling, experiential buying.

 Evaluation of Alternatives
 Depends on kind of product and the buying situation

 Major attributes are price and quality

 Shortest cycle is for convenience goods and highest for new products or high
ticket size products.

 Consumer durables fall in between

 Marketers need to understand the product-specific evaluation process

 The Purchase Decision

 Final choice guided by perceived risks as well as the opinion leaders, family and
friends

 Paucity of information increases the perceived risk

 Collective decision for high ticket items

 Decision makers are now educated, aware of new technologies and receptive to
new concepts and ideas
 Post Purchase Behaviour
 Dissatisfaction leads to return of product

 Negative publicity about the company and the product


A satisfied customer leads to brand equity and “ word of mouth” publicity
The Product Adoption Process
Product Awareness

Product Interest

Product Evaluation

Product Trial

Product Adoption
 Factors Influencing Consumer Behavior

Cultural Social Personal Psychological

• Culture • Reference • Age and life cycle stage • Motivation
• Sub-culture groups • Occupation • Perception
• Social Class • Family • Economic situation • Learning
• Roles and • Lifestyle • Beliefs and Attitudes
status • Personality and self
concept

THE CHANGES INFLUENCING CONSUMER BEHAVIOUR

Other Social Influencers

 Millennials

 Social Media

 Celebrity Brand Ambassadors , Regional Celebrities

Case Study - Patanjali
 Patanjali Ayurved came into the FMCG market and
flourished nearly instantly

 fastest growing FMCG company in India that only deals

with herbal products.

 more than 2,500 products and manufacturers over 300

ayrved medicines

 year 2019, it earned revenue worth $ 1.2 billion

 profit of more than INR 9000 crores in 2019, whereas

Baidyanath’s turnover is only INR 700 crore in the same
year
Reasons
 Marketing strategy revolved around connecting modern India with its culture and
heritage of medicine, Ayurved.

 products are 10%-30% lower in cost than other FMCG products.

 shift in Indian consumers’ lifestyle towards natural and ayurvedic products.

 Strategies
 1. Targeted Marketing Strategy
 2. Face Value
 3. Digital Marketing Strategy of
Patanjali
 4. Marketing efforts on converting
youngsters to appreciate it’s products.
 5. Different types of media and online
platforms for promoting a product.
 Make in India
Patanjali Ayurvet has done great research on their target
audience and understands the message they should put across
through their advertisements and which campaign medium is
most effective for their strategy.
Rate on a scale of 1 to 5
 Trust / Brand Name/ Brand Image

 Quality

 Product Features

 Advertisements / Brand Ambassador

 Product Price
Brand Name Rural Brand Ambassador Brand Personality

Pulse Polio, Navratan Oil

Coca-Cola, Tata Sky

Aircel, TVS
Idea (What an idea
Sirji!)
Kurkure

regional actors
Brand Name Rural Brand Ambassador Brand Personality

Pulse Polio, Navratan Oil Amitabh Bachchan Rugged, conventional, self-

confident
Coca-Cola, Tata Sky Aamir Khan Smart, simple
Aircel, TVS Mahinder Singh Dhoni Jovial, youthful, cool
Idea (What an idea Abhishek Bachchan Smart, colourful, modern
Sirji!)
Kurkure Juhi Chawla Beautiful, homely
Brand Sets Consideration during Evaluation
Consumer Decision Making: Brand sets

1. Evoked sets: consideration set, usually small

2. Inept set: excluded
3. Inert set: indifferent
- Unknown brands – selective exposure (organic food items)
- Unacceptable brands – quality , features, inappropriate positioning
- Brands perceived not beneficial (skin care, food)
- Overlooked brands due to poor positioning
- Does not fit the perception
How to deal with inert sets

 Missing information

 Replenishment of stocks

 Availability of variants (kellogs)

 Introduction of new product categories/ innovations

How to conduct Consumer Behavior Analysis

 Break Your audience into segments

 Identify selling points for each segment

 Collect as much data as possible

 Check numbers against qualitative data

 Make changes accordingly

RECAP
 Why consumer behavior study is important?

 Factors affecting consumer behavior

 Consumer Decision Making Model

 Brand Consideration Set

 How to conduct Consumer Behavior Analysis

Post Purchase Behavior
- Understanding Customer Behavior
Post Purchase Evaluation

 Post Purchase Dissonance

 Post Purchase Usage

 Post Purchase Disposition

Post Purchase Dissonance

 Doubt or anxiety
The probability of a consumer experiencing post-purchase dissonance, as well as the
magnitude of such dissonance, is a function of :
 Degree of commitment/irrevocability of the decision (big ticket purchase or difficult to
access markets)
 Importance of decision to customer. (eg: house)
 Difficulty of choosing among the alternatives (Highly dissimilar alternatives/ unselected
alternatives have desirable features)
 Individual’s tendency to experience anxiety.
Reducing Post Purchase Dissonance

 Dissonance is uncomfortable and will motivate the person to reduce it.

 Individuals experiencing dissonance will avoid situations that produce more
dissonance
To reduce dissonance, the customer might:
1. Increase the desirability of the brand purchased
2. Decrease the desirability of rejected alternatives
3. Decrease the importance of the purchase decision
4. Reverse the purchase decision (return before use)
Post Purchase Usage & Satisfaction

Function of the closeness between expectations and the product’s perceived

performance.
- If performance fall short of expectations the consumer is disappointed.
- If the performance meets expectations the consumer is satisfied.
- If the performance exceeds expectations the consumer is delighted.

Product claim must truthfully represent the product’s likely performance.

Post Purchase actions

Dissatisfied Customer
 Abandon or return the product
 Non use
 Exchange
Monitoring by Marketers

 To ensure product usage = ideal usage, monitoring is important

Monitoring can indicate:

– New uses for existing products.
– Needed product modifications.
– Appropriate advertising themes.
– Opportunities for new products.
How do Marketers reduce dissonance

1. Match product to needs of consumer

2. Focus on benefits, product, packaging, promotion, warranties, return

policies, credit, installations, service etc.

3. Provide post decision positive information.

Post purchase Disposition

 Disposition of the product or the products’ container may occur before,

during, or after product use

Associated with :
 Physical product (used products selling platforms / e waste)
 Packaging – (Bottles)
 Promotional material
When consumer finds items no longer useful (Parents & instructional manuals)
Negative Purchase Evaluation

 No re-purchase
 Switch to competitor brands
 Negative Word of Mouth
 Complain
 Initiate Legal action
Customer Delight

 process of exceeding a customer's expectations to create a positive

experience with your product or brand.
 Delight is about providing a remarkable experience to users through focusing
on their needs, interests, and wishes.

 Delight involves surpassing all expectations customers have throughout every

interaction with your business
e.g. visiting your blog, checking out your website's pricing page,
chatting with a sales rep, or asking for help using your product
Who is responsible for Customer Delight

 Attract – Marketing Team

 Engage – Sales Team

 Delight – Service Team

Satisfied customers are good for the company, delighted
customers are more likely to become loyal customers and
brand advocates for the company.

 Provide timely, almost instant support.

 Clearly publish company contact information.
 Offer each customer a personalized experience.
 Give loyal customers preferential treatment.
 Treat customers like people, not numbers.
 Solve (potential and current) customers' problems.
 Help customers succeed.
 Listen to customer feedback.
 Be enthusiastic.
 Be unexpected.
 Build a community
Amazon

 Free shipping above a certain limit,

 automatic refunds,
 price guarantees

 Amazon has built a brilliant and intuitive user interface that everyone can use
at ease.
Apple

 Apple operates a personalized support portal where you can view every Apple
product you have ever bought and receive support for the same.

 Maintain a positive, upbeat tonality when interacting with customers.

Empathize with them, and give every issue, no matter how trivial or complex,
the same level of attention.
Zappos - Idea to sell happiness over products & services

 online retail company

 free shipping for any number of back-and-forth transactions,
 offer a 365-days return policy if a customer is not satisfied with the product,
 never outsourced customer service so as to capture the local culture and
persona in their experience
 A Zappos customer service rep once made a record-breaking 10:29 hours
customer service call.
 To a customer who forgot about his return request amidst losing a loved one,
Zappos sent the item for free along with a basket of flowers.
 For a defective item, Zappos offered a complete refund, two pairs of new
shoes with a suggestion to donate the extra one to charity.
Starbucks

 An average customer visits Starbucks 6 times a month

 Their most loyal customer visit upto 16 times

“I love Starbucks, but not necessarily the prices. But I will keep paying those
prices as long as they continue their exceptional customer service. Recently,
my daughter spilled her vanilla bean frappuccino shortly after ordering it
and they were quick to get her a new one. That goes a long way in my book.
Keep up the amazing service!”
Virgin Atlantic

 “Every complaint is a chance to turn a customer into a lifelong friend”, says

Richard

 Like this – a passenger who was not satisfied with the meal he was served on
his Mumbai to Heathrow flight wrote a funny complaint to Richard. How
Richard responded goes on to show that he indeed walks the talk. He invited
the passenger to be part of the food advisory board of Virgin Atlantic where
the customer’s insights and wit could be put to good use. The passenger
joined!

 You will learn more from unhappy customers than happy customers.