Amity School of Business Marketing Management - I Module – IV Ruchi Khandelwal

1. Amity School of BusinessMarketing Management - IModule – IVRuchi Khandelwal

2. The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose off products, services, experiences, or ideas to satisfy needs and the impacts that these processes have. Consumer Behavior

3. Marketing and Other Stimuli Model of Consumer Behavior Product Price Place Promotion Economic Technological Political Cultural Characteristics Affecting Consumer Behavior (Cultural, social, Personal, Psychological Buyer’s Decision Process Buyer Buyer’s Response Purchase Timing Purchase Amount Product Choice Brand Choice Dealer Choice

4. Cultural Social Personal Psychological Factors influencing Consumer Behavior

5. Includes: Culture Sub Culture Social Class Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions. Cultural Factors

6. Each culture consists of smaller sub cultures that provides more specific identification for their members. When sub cultures grow large companies often design specialized marketing programs to serve them, such programs are known as diversity marketing. Multicultural marketing grew out of careful marketing research, which revealed that different ethnic and demographic niches did not always respond favorably to mass market advertising. Cultural Factors

7. Social Class Indian marketers use a term called Socioeconomic Classification (SEC), which uses a combination of the education and occupation of the chief wage earner of the household to classify buyers in the urban areas. This classifies all the urban households into eight broad categories namely A1, A2, B1, B2, C, D, E1, and E2;with A1 signifying the highest purchase potential and E2 signifying the lowest. People behave similarly within a particular social class. Social classes differ in dress, speech patterns, recreational preferences etc. Individuals can move up or down the social ladder. Social classes show distinct product and brand preferences, differ in media preferences. Cultural Factors

8. Includes Reference Groups Family Social Role Status Reference Groups: All the groups that have a direct or indirect influence on person’s attitude and behavior. Expose people to new behavior, lifestyles and influence attitude and self concept. Create pressure for conformity. Social Factors

9. Direct Influence: Membership Groups Primary Groups Secondary Groups People are also influenced by groups to which they do not belong. Aspirational Groups Dissociative Groups Opinion leader- a person in informal, product-related communications who offers advice or information about a specific product or product category. Social Factors

10. Family: Two families in a buyers life can be distinguished: Family of orientation: Family of procreation: Roles and Status: A person participates in many groups- family, clubs, organizations. Person’s position in each can be defined in terms of role and status. Role consists of activity a person is expected to perform. Each role carries a status. Social Factors

11. Includes Personality and Self Concept Age and Stage in Lifecycle Occupation & Economic circumstances Lifestyle Personality & Self-Concept Personality is a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environment stimuli. Consumers often use and choose brands that have a brand personality consistent with their own actual self-concept, ideal self-concept or other’s self-concept. Age and Stage in Lifecycle: People buy different goods and services over a lifetime. Consumption is shaped by family life cycle. Personal Factors

12. Bachelor Stage Newly Married couple Full nest I Full Nest II Young, Single, Few Financial Burdens, Fashion Opinion leaders. Buy Basic Home equipment, Car, Furniture, Vacations Young, No children, Highest purchase rate and highest average purchase of durables: cars, appliances, furniture Youngest Child under 6. Home purchasing at Peak. Liquid assets low. Buys: washers, Dryers, Baby Food, Toys, Skates. Youngest child 6 or over. Financial Position better. Less influenced by advertising,. Buy Larger size packages. Buy: many foods, Bicycles, music lessons, pianos Personal Factors Stages in Family Life Cycle

13. Full Nest III Empty Nest I Empty Nest II Solitary Survivor Old married Couples with dependent children. Some children gets jobs. Hard to influence with advertising. High average purchase of durables, unnecessary appliances. Older married couples. No children living with the. Head of household working. Most satisfied with financial position and money saved. Interested in travel, recreation, making gifts and contributions. Buy: vacations, home improvements. Older married. Head of household retired. Drastic cut in Income. Keep home. Buy; Medical Care products Retired. Same medical and product needs. Special need for attention, affection and security. Personal Factors Stages in Family Life Cycle

14. Occupation and Economic Circumstances: Occupation also influences consumption patterns. Some organizations tailor their products to suit certain occupational groups. Economic Circumstances: Disposable Income, savings and assets, attitude towards spending and saving. Lifestyle A lifestyle is a person’s pattern of living in the world as expressed in his or her activities, interests and opinions (AIO dimensions). Personal Factors

15. SRI Values and Lifestyles Typology (VALS 2) Classifies people according to how they spend their time and money Divides consumers into eight groups based on two major dimensions: primary motivation and resources Primary Motivation groups include Ideals-oriented consumers Achievement-oriented buyers Self-expression-oriented buyers Consumers within each orientation are further classified into those with abundant resources and those with minimal resources depending on whether they have high or low levels of income, education, health, self-confidence, energy and other factors. Personal Factors

16. VALS Lifestyle Classification

17. LOHAS Consumers who worry about the environment, want products to be produced in a sustainable way, and spend money to advance their personal development and potential have been named “LOHAS” (Lifestyles of Health and Sustainability) The market for LOHAS products encompasses things like organic foods, energy-efficient appliances, alternative medicine, yoga tapes, ecotourism etc. Personal Factors

18. Includes Motivation Perception Beliefs & Attitudes Learning Motivation A person has many needs Biogenic: Physiological Psychogenic: Psychological When aroused to a sufficient level of intensity that drives a person to act, need becomes a motive. Maslow’s Theory Herzberg’s Theory Psychological Factors

19. Perception: Process by which an individual selects, organizes and interprets information. People may have different perceptions of the same object because of: Selective attention Selective distortion Selective retention Psychological Factors

20. Beliefs and Attitudes: Belief is a descriptive thought that a person holds about something. People belief about a product will influence their buying decisions. Attitude is a person’s enduring favorable or unfavorable evaluations, feelings and action tendencies towards some object or idea. Learning The interplay of drives, stimuli, cues, responses and reinforcement. Psychological Factors

21. Buying Roles

22. High Involvement Low Involvement Complex Buying Behaviour Variety-Seeking Buying Behaviour Significant differences between brands Dissonance-reducing Buying Behaviour Habitual Buying Behaviour Few differences between brands Types of Buying Behavior(Model given by Henry Assael)

23. Buying Decision Process Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Post-purchase Behavior

24. To be resold Give it away Get rid of it temporarily Rent it Lend it Trade it To be used Product Get rid permanently Use it to serve original purpose Direct to consumer Sell it Convert it to serve a new purpose Through middlemen Keep It Throw it away To intermediary Store it

25. Introspective method Retrospective method Prospective method Prescriptive method Profiling the Customer Buying Decision Process