Consumer Buying Behaviour

The most The most important thing is important thing is to forecast where to forecast where customers are customers are moving, and be in moving, and be in front of them.front of them.

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Consumer Behavior

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

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Types of buyer

• Individual buyer• Business buyer

Influence of Social science on buyer behaviour studies

• Economics: Human is a rational buyer who wants to take maximum utility out of fixed/minimum price.

• Psychology: Acc. To psychology any human activity is directed towards meeting certain needs. ( maslow`s Need Hierarchy)

• Sociology & anthropology: Effect of reference group, society, role in society, etc.

•

Buying Behaviour Model

• The Economic Model: A man divide his fixed income in a certain rational way.

• Learning model: Behaviour can be manipulated by the drives, stimuli etc.

• Psychoanalytical model: Consumer has the set of deep rooted motives that drives him to purchase or not to purchase

• Sociological Model

• Nicosia Model: This Model establish the link between consumer and the firm.

• --- Advertising message of the firm influence the predisposition of the consumer

• The consumer develops the attitude for the product

• Search for the information• If all these activities have positive impact,

purchase the product.

• All the activities are divide into four basic fields:

• Field one—it has two subfields: Firm & consumer

• Advertising message by the firm• Depending upon the situation consumer

develops the attitude.

• Field two: Search & evaluation• Field three: Act of purchase• Field four: use of purchase item• Feedback of field is used to know the sales

result

The Howard-Sheth Model

• Inputs in the form of stimuli• Output beginning with the attention given to

stimulus & ending with purchase

Factors Influencing Consumer Behavior

Cultural

Culture

Cultural

Culture

Social

Reference Groups

Family

Roles & Status

Social

Reference Groups

Family

Roles & Status

Personal

Age & Life-Cycle Stage

Occupation

Economic Situation

Lifestyle

Personality & Self-Concept

Personal

Age & Life-Cycle Stage

Occupation

Economic Situation

Lifestyle

Personality & Self-Concept

Psychological

Motivation

Perception

Learning

Psychological

Motivation

Perception

Learning

Maslow’s Hierarchyof Needs

Psychological needs(food, water, shelter)Psychological needs(food, water, shelter)1

Safety needs(security, protection)

Safety needs(security, protection)

2

Social needs(sense of belonging, love)

Social needs(sense of belonging, love)3

Esteem needs(self-esteem, recognition)

Esteem needs(self-esteem, recognition)

4

Self-actualization

(self-developmentand realization)

Self-actualization

(self-developmentand realization)

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Characteristics Affecting Consumer Behavior

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes– Selective attention– Selective distortion– Selective retention

Psychological Factors

Characteristics Affecting Consumer Behavior

Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea

Psychological Factors

Buying motives

• Product motives (emotional & rational)• Patronage motives

Buying habits

• Buying habits vary according to the type of goods-----

• Convenience goods• Shopping goods• Specialty goods

Buying process

• Problem recognition• Awareness• Comprehension• Attitude• Legitimization• Trial ( depend on the product category)• Adoption• Post purchase behaviour

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Five stage Consumer Decision-Making Process

Postpurchase BehaviorPostpurchase Behavior

Purchase Purchase

Evaluation of Alternatives Evaluation of Alternatives

Information Search Information Search

Need Recognition Need Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all stepsall steps

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all stepsall steps

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High involvement & low involvement situations

Classification of Business buyers

• Buyers in agriculture sector• Buyers in industrial sector• Buyers in service sector• Resellers• Buyers in govt. sector• Buyers in non profit business

The Buyer Decision Process for New Products

Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.

• Stages in the process include:

Classification of consumer according to their readiness to try new products

• Innovators• Early adopters• Early majority• Late majority• Laggards

Business Buyer: buying patterns

• Goes through long negotiation• Frequency of purchase• Size of order• Several participants in buying decision• Distribution channel

Speciality due to characteristics of Market/product

• Buying clout• Concentration of Buyer• Direct, one to one Relation with buyer• Technical support to buyer• New product diffusion is slower• Buyer may buy through intermediaries• Closer monitoring of supply sources/ prices of products• Derived demand• More of rational buyer• Business buying is partnering

The Indian consumer

• Demographics• Size of population• Literacy rate• A vast educated manpower• Diversity, the hallmark--- religious, linguistic,

dress & food habits• Geographic Spread

Favourable shift in consumption in past liberalization years

• According to Centre for monitoring Indian Economy :

• Food and beverage account for large part of consumption expenditure. But share of food has declined from 50.37(1998-99)% to 45.68( 1993-94)

• Share of transport and communication: 11.26---14.51

• Medical and health care—3.38-4.25

• Consumption of furniture and household appliances- 3.05-3.25

• 50 percent increase in education expenditure

Changes in life style and buying habits

• Ready to eat food are popular now• Vacuum cleaner and cooking ranges have

entered into households• Shift in woman`s attitude towards cooking• Yesterday`s luxuries are becoming necessities

Classification of Indian consumers based on economic status

• The affluent group• The middle class• The relatively poorer section• The BPL section

The middle class explosion

• Size--300 million• As The consumption community• Not confined to big cities• Constructive discontentment• The phenomenon of second• Voting for credit purchase

The main segment in middle class

• The middle class male• The middle class woman• The middle class teenager

The middle class male

• A security seeking class• A blend of traditional and non-traditional • Middle class male prefer ready-made• Travel on increase• Prestige conscious• Strong family ties• He is not the sole decision maker

The middle class woman

• Cautious, but not averse to change• Quality conscious as well as cost conscious• Leisure seeking• Aware of new technology• Good sense of grooming• New self concept