Decision Making and Consumer

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Analyzing consumer markets

Objectives

* How do consumer characteristics influence buying behaviour? * What major psychological processes influence consumer responses to the marketing program? * How do consumers make purchasing decisions?

* In what ways do consumers stray from a deliberate rational decision process?

Contents
Introduction4
What influences Consumer behavior?5
Cultural factors5
Social factors6
Personal factors7
Key psychological processes9
Motivation9
Perception10
Learning11
Emotion12
Memory12
The buying decision process14
Behavioral decision theory & behavioral economics20

Introduction

The aim of marketing is to meet and satisfy target customers' need and want better than competitors. Marketers must have a thorough understanding of how consumers think, feel, and act and offer clear value to each and every target consumer. Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means understanding customers-gaining a 360-degree view of both their daily lives and the changes that occur during their lifetimes so the right products are always marketed to the right customers in the right way. So we are going to explore individual consumer buying dynamism. Model of Consumer beha-vior

Model of Consumer beha-vior

Fig 1.1
Fig 1.1
The starting point for understanding consumer behavior is the stimulus-response model shown in figure 1.1. Marketing and environmental stimuli enter the consumer's consciousness, and a set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions. The marketer's task is to understand what happens in the consumer's consciousness between the arrival of the outside marketing stimuli and the ultimate purchase decisions. What influences Consumer behavior?

Consumer behavior is the study of how individuals, groups and organizations select, buy, use and dispose of goods, services, idea or experiences to satisfy their needs and wants. A Consumer's buying behavior is influenced by cultural, social, and personal factors.

Cultural factors

Culture is the fundamental determinant of a person’s wants & behavior. Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups and geographic regions.

Virtually all human societies exhibit social stratification, most often in the form of social classes, relatively homogeneous and enduring divisions in a society, hierarchically ordered and with members who share similar values, interest and behavior. Social Classes

Upper uppers
Upper uppers

Lower uppers
Lower uppers

Upper middles
Upper middles

Middle
Middle

Working
Working

Upper lowers
Upper lowers

Lower lowers
Lower lowers

Social factors

Such as Reference groups, Family and Social roles and statuses affect our buying behavior. Reference groups
A person’s references groups are all the groups that have a direct or indirect influence on their behavior * Membership groups
* Primary groups
* Secondary groups
* Aspirational groups
* Dissociative groups

Groups having a direct influence are called membership groups, some of these are Primary groups with whom the person interacts continuously and informally such as family, friends, neighbors and coworkers. People also belong to Secondary groups such as religious, professional and trade-union, which tend to be more formal and require less continuous interaction. People are also influenced by groups to which they don’t belong. Aspirational groups are those a person hops to join; Dissociative groups are those values or behavior an individual rejects. Marketers must determine how to reach and influence the group’s opinion leaders opinion leaders are often highly...
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