Consumer Behaviour: Buying Roles and Scope

Consumer Behaviour: Week 1

• Defines a consumer as an individual or organizational unit that engages in the consumption of a transaction with a marketer or entity, covering both household and business markets

Five Buying Roles

• Initiator: The one who suggests the purchase

• Influencer: The one whose opinion influences the decision

• Decider: The one who makes the decision

• Buyer: The one who makes the purchase

• User: The one who uses the product

• Consumer behavior encompasses actions directly involved in obtaining, consuming, and disposing of economic goods and services, accounting for the decision processes that precede these actions

Nature & Scope

• It involves understanding consumer needs and wants
• Understanding how consumers think, feel, comprehend, and select from various competing brands
• Understanding how environment influences

Modern Customer Changes

• Shift towards individualism
• Trade-up and value conscious
• Focus on health and fitness
• Increased consumer assertiveness
• Boom in online shopping

Indian Consumers

• Characterized by diverse segments based on social class, place of inhabitance, caste, and race
• They are highly sensitive consumers, influenced by a value orientation
• Family orientation is a key influence

Common Indian Traits

• Include shopping malls, conservation, and a growing segment of working women

Purchasing Patterns

• They have shifted and rural markets are growing both quantitatively and qualitatively

Rural Markets

• Are growing quicker now
• Increasing agricultural output has contributed to this growth
• Increased education, greater exposure to mass media, innovative pricing, non-conventional distribution, and growing interaction with urban consumers are all factors

Impact of 5-Stage Consumer Decision Process

• Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Post-purchase behavior can have an impact

Benefits of Foreseeing Trends

• Companies can gain
• Marketing channels can be crafted
• Quickness to respond to change can be gained

Worldwide Changing Trends

• Trends include shifts in demographics and an aging population
• Increased focus on fitness along with single-parent households
• More women are now in work force
• Growing numbers in the middle class

Technological Factors

• There is growing innovative senior care in US-based markets

• There is jewelry-based jewelry based brands

• 24/7 interconnected world, increased access to information, smart products, and tech-savvy customers is impacting modern markets

Public Policy

• Economic pragmatism over ideology
• Increasing consumer rights
• Regional economic integration impacts markets

Consumerism

• Is a social movement that seeks to augment the rights and powers of buyers in relation to sellers

Marketer's Response

• Marketers can directly identify people who need, use, and purchase products

Consumer Protection Act, 1986

• Landmark legislation that addresses socioeconomic concerns

Complaints Filed

• Can be based on unfair trade practices, defective goods, deficiency in service, excess prices, and unlawful goods

Consumer Court

• District forums can file claim up to Rs. 20 lakh
• State Commissions above 20 lakh but < 1 crore
• National, above 1 crore

Consumerism

• A social movement to align the rights and powers of buyers in relation to sellers

Marketer's Response

• Enables managers to spot and attend to consumeer needs
• Need to directly identify people who need, use & purchase products

Redressal

• Repair or replace defective goods
• Refund money or remove deficiency
• Can also refund extra charges

Need for Market Segmentation

• Aids in the selection of a target market
• Enhanced market research methods handle large databases with detailed personal information
• Facilitates targeting of appropriate and profitable segments

Segmentation

• Is the process of dividing consumers based on homogenous needs

Steps for market segmentation

• Analyze consumer-product rotation
• Relevant base for market segmentation
• Choose a suitable segmenting strategy

Micro-marketing

• Treating each customer as a single segment or targeting specific customers in a niche market

Targeting

• Potential customers toward whom marketing efforts are directed

Target Types

• Undifferentiated
• Concentrated
• Multi-segment

Motivation

• State of drive or arousal

Steps

• Drive or arousal
• Goal directedness
• Motivational conflicts

Conflicts

• Approach - approach
• Avoidance - avoidance
• Approach - avoidance

Outcome

Intrinsic Motivation

• Is tied to tasks
• Examples are pleasure, a passion etc

Extrinsic

• Is external
• The most common example is money

Theories of Motivation

Monothematic Theories

• Innate motive = libido

Maslow's Need Hierarchy

• Self-actualization
• Esteem needs
• Belongingness & love needs
• Safety needs
• Biological & physiological needs

Murray's List of Psychogenic Needs

• Ambition: Success, recognition etc.
• Materialistic: Obtaining and keeping tings
• Power: Autonomy, aggression, deference, etc.
• Affection: Affiliation, rejection
• Information: Seeking knowledge

Theories

• Dichter's consumption motives, dichotomy
• Autonomy vs. dominance

Consumer Involvement

• Entails most dependable approach to comprehend the psycholodgy of prospective customers, how much to apply time, energy and thought to purchase
• Types include high & low involvement, and rational Vs emotional

FCB is the Foote, Cone & Belding Matrix

• There are two dimensions relating to it: Think/feel & High/low levels

Asian Paints

• Used elegant paint and improved technology
• "Every home has a story to tell"
• Promoted by Souf Alikhan
• 2015 campaign "Every colour has a story to tell"
• Taps into esteem needs (Maslow) and ambition needs (Murray) aligning with Dichter's consumption motives

Motivational Process (Asian Paints)

Drive

• Hedonic Needs.

• Aesthetic pleasure

• Goal-directedness for a specific look.

• Quality, elegance, exclusivity

• Paints failed to differentiate from Mia Paints USP wise.

• Presently the brand emphasized on Environment Friendly Healthy Paint

Key Metrics for Good Paint as USP

• Healthy paint could be an USP but not enough to be chosen over AP due to Indians doing rituals before entering home

• Also, adore free paints used by Nippon

• The brand recently focused on the recent taglines like 'Kuch Change karos Chalo Paint Karo' but do not relate to eco-friendlinesd

• The company should implement new desiguer prints, create booklets for design-oriented They should offer design painted to the interior decorators

• Strengthen automatic painting segment for strategy, and differentiate offering in segment.

The active process of the selection is one of sorting out and Interpreting the info brought to the brain by the senses

Levels of Perception Thresholds

• Absolute threshold: a measurement that determines lowest level at which an individual experiences a sensation.
• Sensory input can be boosted by Attractive Packaging and Point of purchase displays.
• Terminal threshold: The max value of a stimulus that can still be noticed
• Differential threshold: Measurement that determines the minimal noticeable difference between the two brands (JND)
• Subliminal perception :Occurs where stimulus is provided to customers gets completely unnoticed ie. (When the stimulus is much below absolute threshold

Weber's law

• The stronger the first stimulus, the bigger one added must be in order to make the change appear different to someone. It can be measured as being proportionate to the amount of stimulus (K)

Process of Perception

• Consists of Selection, Organization and Interpretation. These all rests on the verocity that consumers opt for a small sample range to keep them feeling exposed or consiuous.

Gestalt Psychology

• Is the school of psychology developed on principales of percetual
  Our understanding of how & that we percave thimgs comes from it, the theory that the sum of something is the sum of its parts (also known as the Omphalos principle)

Two Major Parts Gestalt

• figure-ground.
• optical illusion

Interpretation Measures

Application of learned correlation between percept attaches meaning to harbative stimuli Attach meaning to harlative stimuli or signs

"Schemas/Scripts - Schemas and Scripts of knowledge used in interpretation

• Schemas are collections of beliefs, which may be for either actions/sensations/beliefs
• Scripts are a certain sequences such as those that may occur about peoples day to day activities. Consume Imagery

Perceptual Distortion (Halo effect) can also factor in.

Types of Traits

Personality can be characterized by its individual dynamic organisation - which is to say its internal workings are only specific to that said person but can also be said as

• It Reflects individual differences, so can not be generalised.
• No Two people are alike.
• Divided by traits, which can also be called personalities
• Is a steady or permanent traits

The 2 main Types of Traits

Individual theory of personality and the single trait theory - this may explain certain habits and ways people engage with the community

Inner Directed & Outer directed - Certain ones may like to start trends or innovative habits/behavious, - whereas others will try to conform to outside habits.

Traits In Modern Times

In modern times, this manifests with brand identity People use brand loyalty to advertise or gain acceptance from certain aspects of their society. It is the multi or complex traits here that matter the most.

###Freudian theory

• There is 3 elements elaborately explains the theory: the ID, and ego
• One is conscious from birth and functions as both a stimulant to instigate behavior
• Sources includes all psychic energy. This constitutes of the personallity - one could say it is like their core and what guides them through

The Ego

• is the the way person deals with reality through conscious and unconcious mind The Superego
• This stage is reached at 8 + years old
• The actions becomes materialised (standards and ideals)

Brand Personality

• The persona is just as important - its relation with customer is just as important. Meaning can be transferred within a brand One has to go through three stages to gain a following. Once a trend has been endorsed, a community would rise!

Consumer Learning

• This constitutes changing pattern of responses of customers arising/derived from their current experiances, and knowledge that they acquired or gained over a long period of time.

Behavious

• They can be classified into pysichal symbolic & affective

Motivation

Is the use of certain cues & how the responses may be reinforced! These may all become interwound with consumerism

Consumers may be influenced simply by a combination of unlearned & conditioned stimulus!

Cognative Learning

Use a combinations of individual's pyschic capabilities to create the illusion of influence, this way a person can learn new habits to satify desires and instincts and have them attributed to the influence.

There is various forms of influence

• Iconic Role learning

• Vicarious learning

• Reasoning

• The attitude of people varies & can factor in with some of the beliefs they had prior.