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Consumer Behaviour Prof Sameer Kulkarni Consumer Behaviour Prof Sameer Kulkarni

Consumer Mind: A Black Box Stimulus Company Controlled Product Price Advertising Promotion Display Distribution Consumer Mind: A Black Box Stimulus Company Controlled Product Price Advertising Promotion Display Distribution Social Word of Mouth Reference Group Buy Consumer Mind (Black Box) Response No Buy

Customer Decision Making Process Awareness Values • Differ Pleasure vs. • Instant Pleasure Technology Customer Decision Making Process Awareness Values • Differ Pleasure vs. • Instant Pleasure Technology Development/ New Generations CUSTOMER Social Structure • Individualism vs. • Collectivism Borderless Competition Media Drivers of Change Personality • Assertive • Exhibitionist • Self Concept • Life-Style • Aspirations

How they Buy ? • High involvement products: Ø High price Ø Complex features How they Buy ? • High involvement products: Ø High price Ø Complex features Ø Significant differences between alternatives Ø High perceived risk Ø Reflect self concept of buyer Ø E. g. Selection of a Car

How they Buy ? • Low involvement products Ø Alternatives within the same product How they Buy ? • Low involvement products Ø Alternatives within the same product class are similar Ø Does not reflect buyers self concept Ø Frequent brand switching behaviour • E. g. buying a bathing bar (Toilet Soap)

Purchase decision in low involvement products Problem/need Recognition Evaluation of Alternatives Decision Purchase decision in low involvement products Problem/need Recognition Evaluation of Alternatives Decision

Theory of evoked set (Howard & sheth’s theory) Total Set (All Brands) Awareness Set Theory of evoked set (Howard & sheth’s theory) Total Set (All Brands) Awareness Set (Brands aware of) Consideration Set (Brands Considered) Decision Set (Brand Decided) Purchase Set Total Set IFB , Whirlpool LG Samsung Godrej Awareness Set IFB , Whirlpool LG , Samsung Consideration Set Whirlpool , LG Samsung Decision Set Whirlpool, Godrej Purchase Set Godrej

Its not product but the Situation • Routinized response • Limited problem solving • Its not product but the Situation • Routinized response • Limited problem solving • Extensive problem solving

Types of Buying Behavior High Involvement Low Involvement Significant Differences Between Brands Complex Buying Types of Buying Behavior High Involvement Low Involvement Significant Differences Between Brands Complex Buying Behaviour Variety Seeking Buying Behaviour Few Differences Between Brands Dissonance Reducing Buying Behaviour Habitual Buying Behaviour

Motivational reasons • Sheth’s consumer motives – Five dimensions of motivation concerning products/services benefits Motivational reasons • Sheth’s consumer motives – Five dimensions of motivation concerning products/services benefits • • • Functional – utility or function performed Aesthetic/emotional – appearance or attractiveness Social – status or esteem value Situational – unexpected benefit Curiosity – interest aroused

Purchase decision in high involvement products Need Recognition Development of Decision Criteria Search for Purchase decision in high involvement products Need Recognition Development of Decision Criteria Search for Alternatives Evaluation of Alternatives Decision

Routinized response (straight re buy) • • Customer is aware of his /her choice Routinized response (straight re buy) • • Customer is aware of his /her choice Decision is based on personal experience Spends little /no time in choosing an alternative Perceives low risks

Limited problem solving (modified re buy) • Launch of a new product which leads Limited problem solving (modified re buy) • Launch of a new product which leads in a change in the customer’s decision criteria. • Buying leads to trial purchase • Brand extension helps in removing obstacles • Perceives moderate risk

Extensive problem solving (new task) • • • Requires extensive learning Awareness about alternatives Extensive problem solving (new task) • • • Requires extensive learning Awareness about alternatives is zero Has no decision criteria Unable to evaluate different brands Relocating to a new & unknown environment

Rational behind behaviour Psychological Factors Economic Factors Buyer Motivations Rational behind behaviour Psychological Factors Economic Factors Buyer Motivations

Psychological Factors ØMotivation ØLearning ØPerception Psychological Factors ØMotivation ØLearning ØPerception

Motivation (Sigmund Freud) Id (Irrational/emotional) Ego (Extremely rational) Super Ego (Moral) Socially accepted methods Motivation (Sigmund Freud) Id (Irrational/emotional) Ego (Extremely rational) Super Ego (Moral) Socially accepted methods

Influence on Buyer Behaviour Cultural Culture Subculture Social Class Social Reference Group Family Roles Influence on Buyer Behaviour Cultural Culture Subculture Social Class Social Reference Group Family Roles & Statuses Personal Age life cycle state Occupation Economic circumstances Life style personality and self concept Psychological Motivation Perception Learning Beliefs and attitudes Buyer

Values motivates in buying • • • Functional value Conditional value Social value Emotional Values motivates in buying • • • Functional value Conditional value Social value Emotional value Knowledge value (according to Sheth , Newman & Gross)

Learning Theory • Human behaviour is learnt v. One learns @ the pain of Learning Theory • Human behaviour is learnt v. One learns @ the pain of punishment v. Or @ the lure of rewards • Directing human behaviour is done by developing stimuli and cues which bring to fore the latent need • Attractive advertisement , shelf display, packaging, how to use instructions , store layout , availability & sales persons are examples of cues developed by a marketer.

Basis of Differences • Gender differences – hunter=men, nurse=women • Intelligence differences – caste, Basis of Differences • Gender differences – hunter=men, nurse=women • Intelligence differences – caste, class, education, etc. • Personality differences – job specializations

 • Plato stated more than 2000 years ago: “No two persons are born • Plato stated more than 2000 years ago: “No two persons are born exactly alike; but each differs from the other in natural endowments, one being suited for one occupation and the other for another. ”

Cognitive dissonance theory • Leon Festinger-1957 , wrote theory of cognitive dissonance • Psychological Cognitive dissonance theory • Leon Festinger-1957 , wrote theory of cognitive dissonance • Psychological discomfort caused by inconsistency among a person’s beliefs , attitudes / actions e. g. smoking • Varies in intensity based on importance of issue & degree of inconsistency

Lifestyles (Indian Perspective) • Need Driven • Internally Driven Survivors Sustainers Be longer I-am-me Lifestyles (Indian Perspective) • Need Driven • Internally Driven Survivors Sustainers Be longer I-am-me Experiment Socially Conscious Emulator Achiever • Outer Driven • Integrated

Buyer lifestyle • Survivors: Price conscious , not very knowledgeable , depressed. • Sustainers: Buyer lifestyle • Survivors: Price conscious , not very knowledgeable , depressed. • Sustainers: Strugglers , swayed by brand guarantee , impulse buyers. • Belongers: Conventional conservative , nostalgic , unexperimental. • Emulators : Ambitious , upwardly mobile , status conscious , buy to impress others. • Achievers : Leaders , work in hi tech top line products. • I-am-me: Young , Self engrossed , impulsive. • Experimental : Pursue a rich inner life , High sense of social resp. • Integrate : Fully matured psychologically ,