CONSUMER BEHAVIOR LECTURE

CONSUMER BEHAVIOR LECTURE

by Kristabelle Jingco

Customers are the most important  ​people in the organization. The success of any organization is dependent on its satisfied customers. Therefore, one of the primary goals of any  marketing strategy should be to identify and meet the need of consumers. When consumers disappear, the organization should also desiapper from the market.

​Consumer Behavior

• "is the study of ​how people buy, what the buy, when they buy, and why they buy" - Kolter

Open Ended

Do you think consumer behavior is a decision making process?

Open Ended

Why or why not?

​Consumer behavior is a process.

It includes the behavior ​that the consumers display is searching, collecting information, evaluating, purchasing, using, post purchase evaluation, and disposing products and services.

​Buying Decision Process

is the decision making process undertaken by consumers in egard to a potential market transaction before, during and after the purchse of product or service. ​

​Stages of Buying Decision Process

Open Ended

As a consumer, how can you that you recognized a problem?

​Stage 1 - Need Recognition (awareness)

​It happens when there is a lag between the consumer's actual situation and the ideal ad desired one

​Causes of need recognition

• ​Internal Stimuli - it is physiologcal need felp by the individual. E.g.: Hunger or Thirst.

• ​Functional Need- the need is related to a feature or specific functions of the product or happens to be the asnwer to a function problem. E.g.: computer with a more powerful vide card to be able to play the latest video games.

• ​Social Need: hte need comes from a desire for integration and belongingness in the social environment or for social recognition. E.g.: buying a new fashionble bag to look good at school.

• ​Need for Change: the need has its origin in desire from the cnsumer to change. E.g.: prchase of new furniture to cange the decoration of house.

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​Even if the core cause is vanity or convenience, at the most basic level, almost all purchases are driven by real or perceived physiological or emotional needs. The causes for these stimuli can be social (wanting to look cool and well dressed) or functional (needing a better computer to do work more effectively), but they speak to the same basic drivers.

We buy groceries because without food in the house, we’ll be hungry. We buy new clothes because we’ll be cold, or we feel like everyone else has the latest handbag of the season, and we don’t want to be left out.

Open Ended

As a consumer, how do you seek information of a product that you want to buy?

​Stage 2: Information Search (research)

​Once the need is identified, the consumers seek information about possible solutions to the problem. They will search more o less information depending on a complexity of the choices to be made but also level of involvement.

Types of Search Activities​

​1. Specific - Specific kind of activities are directly related to the problem. These kinds of requirements need immediate assistance.

​2. Ongoing - Consumers go on with their research for a particular period of time if they decide or if they want to buy a particular product. Ongoing activities basically show the work in progress.

​3. Incidental - Now, anything that we observe incidentally or just accidentally or naturally comes under incidental research. Such information can be observed in our daily routine lives.

Types of Information:​

• Internal information - it is the information already prsent in the cnsumer's memory. It comes from previous experiences they had wit ha product or brand. This is sufficient for the purchasing of everyday products that he consumer knows.​

• ​External Information - it is the information on a product or brand received from and obtained by friends or family, by reviews from other consumers, from the press, official business sources such as advertising or a seller's speech.

Open Ended

How do you evaluate the product or service to you are planning to buy?

​Stage 3: Evaluation of Alternative (consideration)

​The consumers will evaluate on the basis of the most suitable to their needs. THey choose the one they think s best fo them.

​2 Aspects in Evaluating Alternative

• ​Objective Characteristics - it includes features and functionality of the product (Features, functionality, price, ease of use)

• ​Subjective Characteristics - it includes perception and perceived value of the brand by the consumer or its reputation. Feelings about a brand (based on previous experience or input from past customers)

​This stage of decision making porcess is critical, because many consumers are not able to make a rational decision by weighing alternative. Consumers evaluate alternatives based on PRICES, DESIGN, UALITY, FEATURE, PERFORMANCE, POPULARITY, etc.

​Stage 4: Purchase Decision (conversion)

​The next step in the decision making process is to prchase the product. The consumer has decided which product to buy or not to buy anything at all. If he decides to make a purchase, he makes all necessary arrangements to acquire the product. He chooses the brandshop and time of purchase.

​Alright, now it’s money time. This is the stage when customers are ready to buy, have decided where and what they want to buy, and are ready to pull out their credit cards. 

But wait! Not so fast. You can still lose a customer at this stage. This is the stage when the purchasing experience is key – it’s imperative to make it as easy as possible.

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​Let’s say your potential customer has gotten to the checkout stage of his purchase, and has second thoughts: What if the recipient wants a different camera? What if the product is missing a key feature that the recipient would want? How difficult will it be for the recipient to return the product if it doesn’t meet their needs?

This shopper will likely abandon his cart, and go back to the research stage. Maybe he’ll end up back on your site, but maybe he won’t. Your goal at this stage is to get him to complete the purchase now, so you don’t lose him forever.

​Strategies for optimizing in the conversion stage

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Many businesses choose to display reviews on checkout pages. This can be effective if done correctly. You need to focus on building trust, but don’t distract the customer from completing the purchase.

If you want to display user-generated content during checkout, use site reviews rather than customer photos or product reviews, and make sure they aren’t clickable. You want to focus on building trust and not distracting.

​Stage 5: Post-Purchase Evaluation

​The next step in the process is an evaluation of the product after the purchase. The level of satisfaction that the consumer will experience will depend largely on how many of his expectations were met. Based on the level of satisfaction or dissatisfaction, he will decide whether or not to buy the same product next time.

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​The marketers sometimes need to assure the consumer that the choice made by them is the right one. The seller can mention or even highlight the important features or attributes and benefits of the product to address and solve their concerns if any.

A high level of post-purchase dissonance is negatively related to the level of satisfaction which the consumer draws out of product usage. To reduce post-purchase dissonance, consumers may sometimes even return or exchange the product.