Consumer Behavior Notes

Introduction

Consumer behavior is the study of how individuals, groups, or organizations make decisions to purchase, use, and dispose of goods, services, experiences, or ideas. Understanding consumer behavior helps businesses tailor their strategies to meet consumer needs effectively.

Key Concepts

1. Consumer Decision-Making Process:

   • Problem Recognition: Realizing the need or problem that requires a purchase.

   • Information Search: Gathering information about possible solutions.

   • Evaluation of Alternatives: Comparing different products or brands.

   • Purchase Decision: Choosing and purchasing a product.

   • Post-Purchase Behavior: Reflecting on the purchase decision, including satisfaction or dissatisfaction.

2. Factors Influencing Consumer Behavior:

   • Psychological Factors:

     • Motivation: Drives that compel consumers to take action.

     • Perception: How consumers interpret information and form opinions.

     • Learning: Changes in behavior due to experiences.

     • Beliefs and Attitudes: Personal convictions and feelings about products or services.

   • Personal Factors:

     • Age and Life Cycle Stage: Different needs and preferences at various stages of life.

     • Occupation: Influences purchasing power and preferences.

     • Economic Situation: Affects spending patterns and choices.

     • Lifestyle: The way individuals live and spend their time and money.

   • Social Factors:

     • Family: Family members' influence on purchase decisions.

     • Roles and Status: Social roles and status can shape buying behavior.

     • Reference Groups: Groups that influence an individual's attitudes or behaviors.

   • Cultural Factors:

     • Culture: The set of values, perceptions, and behaviors learned from society.

     • Subculture: Groups within a culture with shared value systems.

     • Social Class: Division based on socio-economic status influencing preferences.

3. Types of Buying Behavior:

   • Complex Buying Behavior: High involvement with significant differences between brands (e.g., buying a car).

   • Dissonance-Reducing Buying Behavior: High involvement with few perceived differences between brands (e.g., buying insurance).

   • Habitual Buying Behavior: Low involvement with few differences between brands (e.g., buying groceries).

   • Variety-Seeking Buying Behavior: Low involvement with significant differences between brands (e.g., buying snacks).

4. Models of Consumer Behavior:

   • Economic Model: Assumes consumers are rational and seek to maximize utility.

   • Psychological Model: Focuses on psychological factors like motivation and perception.

   • Sociological Model: Emphasizes social relationships and cultural influences.

   • Psychoanalytic Model: Based on Freud's theories, focusing on unconscious desires.

5. Consumer Attitudes and Change:

   • Attitude Components: Cognitive (beliefs), affective (feelings), and behavioral (actions).

   • Attitude Change Strategies: Changing beliefs, changing the importance of beliefs, or adding new beliefs.

6. Customer Satisfaction and Loyalty:

   • Customer Satisfaction: The fulfillment of consumer expectations.

   • Customer Loyalty: A deeply held commitment to rebuy or repatronize a preferred product or service.

7. Consumer Research Methods:

   • Qualitative Methods: In-depth interviews, focus groups, and ethnographic research to understand consumer motivations and feelings.

   • Quantitative Methods: Surveys and experiments to gather statistical data on consumer behavior.

8. Influence of Digital and Social Media:

   • Online Reviews and Ratings: Affect consumer perceptions and decisions.

   • Social Media Influencers: Impact buying behavior through recommendations.

   • Personalization and Targeted Advertising: Using data analytics to tailor marketing efforts to individual consumers.